##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    March 31,
    2011ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file number
    001-14944
 MAD CATZ INTERACTIVE,
    INC.
 (Exact name of Registrant as
    specified in its charter)
  Canada

Not Applicable(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)7480 Mission Valley Road, Suite 101
    San Diego, California(Address of principal
    executive offices)

92108(Zip
    Code)   Registrants telephone number, including area code:
 (619) 683-9830
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, no par value

NYSE Amex
    Toronto Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Form 10-K Form 10-K. þ
  Rule 12b-2
 Large accelerated filer o

Accelerated filer o

Non-accelerated filero
    (Do not check if a smaller reporting company)

Smaller reporting company þ   Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 





MAD CATZ
    INTERACTIVE, INC.
    ANNUAL REPORT ON
    FORM 10-K
    FOR THE FISCAL YEAR ENDED MARCH 31, 2011
    TABLE OF CONTENTS
   
 PagePART IItem 1.


Business


2Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


23Item 2.


Properties


23Item 3.


Legal Proceedings


24Item 4.


Reserved


24PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


25Item 6.


Selected Financial Data


27Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


28Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


42Item 8.


Financial Statements and Supplementary Data


43Item 9.


Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


43Item 9A.


Controls and Procedures


43Item 9B.


Other Information


43PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


44Item 11.


Executive Compensation


44Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


44Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


44Item 14.


Principal Accounting Fees and Services


44PART IVItem 15.


Exhibits, Financial Statement


45EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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FORWARD
    LOOKING STATEMENTS
  Form 10-K
  TRADEMARKS
  and/or
  CURRENCY
   1




---



##### Table of Contents



PART I  Item 1.
    Business  Form 10-K,
      Recent
    Acquisitions
      Corporate
    Structure
  Jurisdiction ofSubsidiary

IncorporationMad Catz, Inc.

Delaware1328158 Ontario Inc.

Ontario, CanadaMad Catz Europe, Limited

England and WalesMad Catz Interactive Asia Limited

Hong KongMad Catz Technological Development (Shenzhen) Co., Ltd

Peoples Republic of ChinaWinkler Atlantic Holdings Limited

British Virgin IslandsMad Catz GmbH

GermanySaitek S.A.

FranceTritton Technologies Inc.

DelawareFX Unlimited Inc.

DelawareXencet USA, Inc.

DelawareSingapore Holdings Inc.

DelawareMad Catz (Asia) Limited

Hong KongMad Catz Co., Ltd

Japan    2




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(416) 360-8600. (619) 683-9830.
  Overview
    Our
    Products
  and/or
      Rock Band tm tm tm tm
   3




---



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Mad
    Catz Strategy
      
    continuing to increase the flow of premium products across our
    major brands: Mad Catz (casual gaming); Saitek (simulation);
    Cyborg (pro-gaming); Eclipse (home and office); and Tritton
    (audio and PC);
    continuing our discipline in working capital management and
    product placement profitability;
    integrating V Max into our organization ;
    expanding our audio business category;
    expanding our direct sales business through our online sites and
    tradeshows; 4




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
    expanding our global sales reach, with particular focus on the
    Asia-Pacific region;
    expanding our outreach to targeted gaming community niches;
    continuing to license rights to offer accessories aligned with
    leading videogame titles;
    continuing to pursue videogame publishing and distribution
    opportunities, with a particular emphasis on hardware-videogame
    bundles; and
    continuing to identify strategic opportunities for the expansion
    of products in adjacent and compatible categories, including
    transactions with companies for which products Mad Catz can
    leverage its global distribution capabilities.  Intellectual
    Property Needed to Produce our Products
    Rock Band
    Rock Band
    Product
    Development and Support
    and/or
 5




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Manufacturing
    Distribution
    Principal
    Markets
    Customers
    non-U.S. entities.
  Competitive
    Environment
   6




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Employees
    LocationUnited States


83United Kingdom


37Germany


21France


7Hong Kong


33Spain


1China


75Total


257     Executive
    Officers of the Registrant
    Name

Position

AgeDarren Richardson

President, Chief Executive Officer and Director of Mad Catz
    Interactive, Inc. and MCI


50Allyson Evans

Chief Financial Officer of Mad Catz Interactive, Inc. and MCI


42Brian Andersen

Chief Operating Officer of Mad Catz Interactive, Inc.


35Whitney Peterson

Vice President Corporate Development and General Counsel of MCI


46   Darren Richardson
 7




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Allyson Evans
  Brian Andersen
  Whitney Peterson
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K www.madcatz.com 1-800-SEC-0330. www.sec.gov
  (http://www.sedar.com),
 8




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Item 1A.
    Risk
    Factors  You should consider each of the following factors, as well as
    the other information in this Annual Report, and in our other
    filings with the SEC, before deciding whether to invest in or
    continue to hold our common stock. The risks and uncertainties
    described below are not the only ones we face. Additional risks
    and uncertainties not presently known to us or that we currently
    consider immaterial may also impair our business operations. If
    any of the following risks actually occur, our business and
    financial results could be harmed. In that case, the trading
    price of our common shares could decline. You should also refer
    to the other information set forth in this Annual Report,
    including our financial statements and the related notes.
  Risks
    Concerning Our Customers and Products
  A
    significant portion of our revenue is derived from a few large
    customers.
      Our
    operating results are exposed to changes in exchange
    rates.
    One or
    more of our largest customers may directly import or manufacture
    private-label products that are identical or very similar to our
    products. This could cause a significant decline in our sales
    and profitability.
   9




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A
    significant portion of our revenue is derived from a few core
    product categories.
    Our
    financial results are dependent on timely introduction of new
    products, and any failure or delay in the introduction of new
    products to the marketplace may have a material adverse effect
    on our business, results of operations, financial condition and
    liquidity. Our product mix constantly changes.
        We
    depend upon third parties to develop products and
    videogames.
    New
    game platforms and development for multiple consoles create
    additional technical and business model uncertainties that could
    impact our business.
   10




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Changes
    to current game platforms or introductions of new game platforms
    may result in our products becoming inoperable or less desirable
    on some game platforms and/or for some games, which would reduce
    sales of our products and adversely affect our business, results
    of operations, financial condition and liquidity.
  and/or
  We are
    subject to various environmental laws and regulations that could
    impose substantial costs upon us and may adversely affect our
    business, operating results and financial
    condition.
    Errors
    or defects contained in our products, failure to comply with
    applicable safety standards or a product recall could result in
    delayed shipments or rejection of our products, damage to our
    reputation and expose us to regulatory or other legal
    action.
   11




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If we
    do not accurately forecast demand for particular products, we
    could incur additional costs or experience manufacturing delays,
    which would reduce our gross margins or cause us to lose
    sales.
    
    If our forecasts of demand are too high, we may accumulate
    excess inventories of products, which could lead to markdown
    allowances or write-offs affecting some or all of such excess
    inventories. We may also have to adjust the prices of our
    existing products to reduce such excess inventories.
    If demand for specific products increases beyond what we
    forecast, our suppliers and third-party manufacturers may not be
    able to increase production rapidly enough to meet the demand.
    Our failure to meet market demand would lead to missed
    opportunities to increase our base of users, damage our
    relationships with retailers and harm our business.
    Rapid increases in production levels to meet unanticipated
    demand could result in increased manufacturing errors, as well
    as higher component, manufacturing and shipping costs, including
    increased air freight, all of which could reduce our profit
    margins and harm our relationships with retailers and consumers.  Our
    pricing and product return policies and other promotional
    activities may negatively impact our sales and profitability and
    harm our business, results of operations, financial condition
    and liquidity.
      We may
    not be able to comply with the terms of our license agreements,
    which may result in the loss of one or more of the
    licenses.
   12




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Some
    of our license agreements with videogame console developers have
    expired or may expire within the next fiscal year, which could
    limit our product offerings and significantly reduce our
    revenues.
      The
    collectibility of our receivables depends on the continued
    viability and financial stability of our retailers and
    distributors.
    Risks
    Concerning Our Suppliers
  The
    manufacture and supply of our products are dependent upon a
    limited number of third parties, and our success is dependent
    upon the ability of these parties to manufacture and supply us
    with sufficient quantities of our products and on the continued
    viability and financial stability of these third-party
    suppliers.
   13




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Any
    disruption of shipping and product delivery operations globally
    could harm our business.
    Risks of
    Doing Business Internationally
  Any
    loss of Chinas Normal Trade Relations NTR with
    the United States, or any changes in tariffs or trade policies,
    could increase our manufacturing expenses and make it more
    difficult for us to manufacture our products in China, if at
    all.
    Our
    manufacturing relationships in China may be adversely affected
    by changes in the political, economic and legal environment in
    China.
    and/or
   14




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There
    are numerous risks associated with our international operations,
    any number of which could harm our business.
      
    unexpected changes in regulatory requirements, taxes, trade laws
    and tariffs;
    political instability and the potential reversal of current
    favorable policies encouraging foreign investment or foreign
    trade by host countries;
    differences in labor laws, labor unrest and difficulties in
    staffing and managing international operations;
    longer payment cycles;
    fluctuations in currency exchange rates;
    potential adverse tax consequences;
    limitations on imports or exports of components or assembled
    products, or other travel restrictions;
    differing intellectual property rights and protections;
    delays from doing business with customs brokers and governmental
    agencies; and
    higher costs of operations.    Intellectual
    Property Risks
  We may
    be faced with legal challenges related to our products,
    including that our products infringe third parties
    intellectual property rights. These challenges could cause us to
    incur significant litigation or licensing expenses or could
    prohibit us from producing or marketing some or all of our
    products entirely.
   15




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Our
    intellectual property rights may not prevent our competitors
    from using our technologies or similar technologies to develop
    competing products, which could weaken our competitive position
    and harm our financial results.
    If our
    products are copied or knocked-off, our sales of
    these products may be materially reduced and our profitability
    may be negatively affected.
    Financing
    Risks
  We
    depend upon the availability of capital under our credit
    facility to finance our operations. Any additional financing
    that we may need may not be available on favorable terms, or at
    all.
       16




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Funding
    for our future growth may depend upon obtaining new financing,
    which may be difficult to obtain given prevalent economic
    conditions and the general credit crisis.
    Accounts
    receivable represent a large portion of our assets, a large
    portion of which are owed by a few customers. If these accounts
    receivable are not paid, we could suffer a significant decline
    in cash flow and liquidity which, in turn, could limit our
    ability to pay liabilities and purchase an adequate amount of
    inventory.
    Increases
    in interest rates may increase our interest expense and
    adversely affect our profitability and cash flow and our ability
    to service indebtedness.
    We
    have a substantial amount of goodwill on our balance sheet that
    may have the effect of decreasing our earnings or increasing our
    losses in the event that we are required to recognize an
    impairment charge to goodwill.
     17




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General
    Risk Factors
  Acquired
    companies can be difficult to integrate, disrupt our business
    and adversely affect our operating results. The benefits we
    anticipate may not be realized in the manner
    anticipated.
      
    difficulties in integrating operations, technologies, services
    and personnel of the acquired companies;
    potential loss of customers of the acquired companies;
    diversion of financial and management resources from existing
    operations;
    potential loss of key employees of the acquired companies;
    integrating personnel with diverse business and cultural
    backgrounds;
    preserving the development, distribution, marketing and other
    important relationships of the acquired companies;
    assumption of liabilities of the acquired companies; and
    inability to generate sufficient revenue and cost savings to
    offset acquisition costs. 18




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
    incur additional debt;
    make large and immediate one-time write-offs and restructuring
    and other related expenses;
    become subject to intellectual property or other
    disputes; and
    create goodwill or other intangible assets that could result in
    significant impairment charges
    and/or
    amortization expense in the future.    We
    must stay at the forefront of technology and any inability to do
    so would have a material adverse effect on our results of
    operations, financial condition and liquidity.
    Current
    economic, political and market conditions may adversely affect
    our revenue growth and operating results.
    Natural
    disasters or other events outside of our control may damage our
    facilities or the facilities of third parties on which we depend
    for the manufacture and distribution of our
    products.
   19




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Our
    operations are vulnerable because we have limited redundancy and
    backup systems. Any failure of our data information systems
    could negatively impact our financial results.
  day-to-day
  Our
    business is seasonal and our financial results vary from period
    to period.
      We are
    constantly looking for opportunities to grow our business and
    diversify our product line. If we fail to successfully manage
    the expansion of our business, our sales may not increase
    commensurately with our capital investments, which would cause
    our profitability to decline.
    Possible
    increase in value to Chinese currency vis-à-vis U.S.
    currency could have a material impact on the cost of our
    products.
  CNY/U.S. dollar
   20




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Failure
    to attract, retain and motivate skilled personnel would have a
    material adverse effect on our results of operations, financial
    condition or liquidity.
      Competition
    for market acceptance and retail shelf space and pricing
    competition affects our revenue and profitability.
    
    the availability of significant financial resources;
    the quality of products;
    reviews received for products from independent reviewers;
    access to retail shelf space;
    the success of the game console for which the products were
    developed;
    the price at which the products are sold; and
    the number of other competing products for the system for which
    the products were developed.      Any
    future terrorist attacks and other acts of violence or war may
    affect the demand for videogame and PC accessories, which may
    negatively affect our operations and financial
    results.
   21




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Volatility
    in the mass-market and consumer electronic retail sectors could
    have a material adverse effect on our sales.
    Risk
    Factors Related to Our Internal Controls
  If we fail to maintain an adequate system of internal
    controls, we may not be able to accurately report our financial
    results, which could cause current and potential shareholders to
    lose confidence in our financial reporting and in turn affect
    the trading price of our common stock.
    Risk
    Factors Related to Our Shares
  Penny
    stock rules may negatively impact the liquidity of our common
    stock.
    Volatility
    of share price and absence of dividends.
    
    our or our competitors announcements of technological
    innovations or new products by us or our competitors;
    governmental regulatory actions;
    developments with our strategic alliances and collaborators;
    developments concerning our proprietary rights or the
    proprietary rights of our competitors (including litigation); 22




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
    period-to-period
    fluctuations in our operating results;
    changes in estimates of our performance by securities analysts;
    market conditions for consumer technology stocks in
    general; and
    other factors not within our control.    There
    can be no assurance that the holders or purchasers of our common
    stock will be able to resell their shares at prices equal to or
    greater than their cost.
    Investors
    may not be able to secure foreign enforcement of civil
    liabilities against management.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties  92108-4406.
        2005-8
     23




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Item 3.
    Legal
    Proceedings  Circuit City Stores, Inc., et al., Debtors, Alfred H. Siegel,
    as Trustee for Circuit City, Inc., Liquidating Trust v. Mad
    Catz, Inc. and Saitek Industries Limited, Mad Catz, Inc.,
    dba Saitek Industries Limited No. 08-35653 10-03763 10-03255.
  Ogma LLC. v. Activision Blizzard, Inc., et al.
    Item 4.
    (Reserved) 24




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities  Market
    Information
    NYSE Amex

Toronto Stock Exchange(U.S. $)

(Canadian $)High

Low

High

LowFiscal 2011Fourth Quarter

$
2.19


$
0.84


$
2.11


$
0.83Third Quarter


1.06



0.42



1.05



0.36Second Quarter


0.53



0.39



0.54



0.41First Quarter


0.49



0.36



0.50



0.34Fiscal 2010Fourth Quarter

$
0.57


$
0.33


$
0.59


$
0.36Third Quarter


0.54



0.32



0.55



0.33Second Quarter


0.50



0.24



0.50



0.27First Quarter


0.47



0.22



0.50



0.20   Holders
    Dividends
   25




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Issuer
    Purchases of Equity Securities
      ASSUMES $100
    INVESTED ON MARCH 31, 2006
    ASSUMES DIVIDEND REINVESTED
    FISCAL YEAR ENDED MARCH 31, 2011
  
  Fiscal Year Ended3/31/2006


3/31/2007


3/31/2008


3/31/2009


3/31/2010


3/31/2011Mad Catz Interactive, Inc.

$
100.00


$
148.21


$
110.71


$
55.45


$
85.71


$
391.07SIC Code Index


100.00



114.63



125.17



77.28



113.97



137.38AMEX Market Index


100.00



111.42



115.88



78.31



111.32



134.03S&P/TSX Composite Total Return


100.00



127.82



124.19



94.85



148.17



183.89    26




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Item 6.
    Selected
    Financial Data  Form 10-K.
  Years Ended March 31,2011


2010


2009


2008


2007(In thousands of U.S. dollars, except share and per share
    data)Consolidated Statements of Operations Data:Net sales

$
183,974


$
119,012


$
112,563


$
87,737


$
99,797Cost of sales


130,605



82,616



80,558



58,841



74,703Gross profit


53,369



36,396



32,005



28,896



25,094Operating expenses:Sales and marketing


14,316



11,452



13,216



10,304



8,923General and administrative


13,794



12,118



14,968



11,004



8,244Research and development


4,678



2,657



1,076



1,516



1,406Goodwill impairment










27,887







Acquisition related items


873















Amortization


951



1,758



2,344



987



Total operating expenses


34,612



27,985



59,491



23,811



18,573Operating income (loss)


18,757



8,411



(27,486
)


5,085



6,521Interest expense, net


(2,897
)


(2,460
)


(2,094
)


(1,156
)


(1,109
)Foreign exchange gain (loss), net


1,195



(270
)


(462
)


1,703



256Other income


247



252



361



280



262Income (loss) before income taxes


17,302



5,933



(29,681
)


5,912



5,930Income tax expense


(6,367
)


(1,470
)


(2,933
)


(2,744
)


(2,225
)Net income (loss)

$
10,935


$
4,463


$
(32,614
)

$
3,168


$
3,705Net income (loss) per share  basic

$
0.20


$
0.08


$
(0.59
)

$
0.06


$
0.07Net income (loss) per share  diluted

$
0.18


$
0.08


$
(0.59
)

$
0.06


$
0.07Shares used in calculation:Basic


55,429,673



55,098,549



55,088,960



54,843,688



54,244,383Diluted


66,924,206



55,103,237



55,088,960



55,314,438



55,036,591Consolidated Selected Balance Sheet Data:Cash

$
3,734


$
2,245


$
2,890


$
5,230


$
2,350Working capital


6,199



10,053



4,697



8,789



14,351Goodwill and intangible assets, net


16,069



11,294



13,585



44,024



19,331Total assets


75,534



51,549



55,601



91,321



55,218Bank loan


5,408



3,829



13,272



11,470



1,345Convertible notes payable including interest


14,828



16,096



16,051



14,901



Total shareholders equity


24,097



11,334



6,417



41,315



37,227  27




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  This section contains forward-looking statements involving
    risks and uncertainties. Our actual results could differ
    materially from those anticipated in these forward-looking
    statements as a result of certain factors including those set
    out in Part I General Information, Item 1A Risk
    Factors elsewhere in this Annual Report. The following
    discussion should be read in conjunction with our consolidated
    financial statements and related notes contained elsewhere in
    this Annual Report.
  Overview
  Our
    Business
      Seasonality
    and Fluctuation of Sales
    Foreign
    Currency
    Critical
    Accounting Policies
   28




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Revenue
    Recognition
  60-day
  Customer
    Marketing Programs
      product-by-product
        Allowance
    for Doubtful Accounts
     29




---



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Inventory
    Valuation
      Valuation
    of Goodwill
    Share-Based
    Payments
   30




---



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Valuation
    of Deferred Income Taxes
       31




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##### Table of Contents



RESULTS
    OF OPERATIONS
  Fiscal
    Year Ended March 31, 2011 Compared to Fiscal Year Ended
    March 31, 2010
  Net
    Sales
    Year Ended


Year EndedMarch 31, 2011


March 31, 2010


$


%Net Sales


% of Total


Net Sales


% of Total


Change


ChangeUnited States

$
107,528



59
%

$
63,223



53
%

$
44,305



70
%Europe


66,834



36
%


49,005



41
%


17,829



36
%Canada


5,547



3
%


3,109



3
%


2,438



78
%Other countries


4,065



2
%


3,675



3
%


390



11
%Consolidated net sales

$
183,974



100
%

$
119,012



100
%

$
64,962



55
%   Rock Band 3 Super Street
    Fighter IV
  Rock Band 3
  Rock Band 3
    Year Ended


Year EndedMarch 31, 2011


March 31, 2010Net Sales


% of Total


Net Sales


% of Total1st

    quarter

$
19,911



11
%

$
22,378



19
%2nd

    quarter


37,409



20
%


21,603



18
%3rd

    quarter


92,957



51
%


48,763



41
%4th

    quarter


33,697



18
%


26,268



22
%Total

$
183,974



100
%

$
119,012



100
%   Rock Band 3 Call of Duty:
    Modern Warfare 2 Super Street Fighter IV
 32




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##### Table of Contents



Year Ended March 31,2011


2010Xbox 360


31
%


31
%PlayStation 3


17
%


17
%PC


15
%


22
%Wii


14
%


13
%Handheld Consoles


3
%


4
%PlayStation 2


1
%


2
%GameCube


1
%


2
%All others


18
%


9
%Total


100
%


100
%     Year Ended March 31,2011


2010Specialty controllers


28
%


24
%Audio


27
%


15
%Controllers


15
%


28
%Accessories


12
%


24
%Games and bundles(a)


11
%


1
%PC


7
%


8
%Total


100
%


100
%     (a)
    
    Games category includes GameShark videogame enhancement products
    in addition to videogames with the Rock Band videogame and
    related accessories.    Year Ended March 31,2011


2010Mad Catz


61
%


69
%Tritton


14
%



%Cyborg


7
%


6
%Saitek


6
%


12
%Eclipse


3
%


6
%All others


9
%


7
%Total


100
%


100
%   Gross
    Profit
   33




---



##### Table of Contents



Year Ended March 31,2011


2010% of





% of


$


%Amount


Net Sales


Amount


Net Sales


Change


ChangeNet sales

$
183,974



100
%

$
119,012



100
%

$
64,962



55
%Cost of sales


130,605



71
%


82,616



69
%


47,989



58
%Gross profit

$
53,369



29
%

$
36,396



31
%

$
16,973



47
%   Rock Band 3
  Operating
    Expenses
    March 31,


% of


March 31,


% of


$


%2011


Net Sales


2010


Net Sales


Change


ChangeSales and marketing

$
14,316



8
%

$
11,452



10
%

$
2,864



25
%General and administrative


13,794



7
%


12,118



10
%


1,676



14
%Research and development


4,678



3
%


2,657



2
%


2,021



76
%Acquisition related items


873















873



100
%Amortization of intangibles


951



1
%


1,758



2
%


(807
)


(46
)%Total operating expenses

$
34,612



19
%

$
27,985



24
%

$
6,627



24
%   Sales and Marketing Expenses.
  General and Administrative.
  Research and Development.
  Acquisition related items.
 34




---



##### Table of Contents



Amortization of Intangibles.
  Interest
    Expense, net, Foreign Exchange Gain (Loss) and Other
    Income
    March 31,

% of

March 31,

% of

$

%2011

Net Sales

2010

Net Sales

Change

ChangeInterest expense, net

$
(2,897
)


2
%

$
(2,460
)


2
%

$
437



18
%Foreign exchange gain (loss)

$
1,195



1
%

$
(270
)



%

$
1,465



543
%Other income

$
247




%

$
252




%

$
(5
)


(2
)%     Provision
    for Income Taxes
    March 31,

Effective

March 31,

Effective

$

%2011

Tax Rate

2010

Tax Rate

Change

Change$
6,367



36.8
%

$
1,470



24.8
%

$
4,897



333.1
%    35




---



##### Table of Contents



Fiscal
    Year Ended March 31, 2010 Compared to Fiscal Year Ended
    March 31, 2009
  Net
    Sales
    Year Ended


Year EndedMarch 31, 2010


March 31, 2009


$


%Net Sales


% of Total


Net Sales


% of Total


Change


ChangeUnited States

$
63,223



53
%

$
65,003



58
%

$
(1,780
)


(3
)%Europe


49,005



41
%


41,442



37
%


7,563



18
%Canada


3,109



3
%


1,974



2
%


1,135



58
%Other countries


3,675



3
%


4,144



3
%


(469
)


(11
)%Consolidated net sales

$
119,012



100
%

$
112,563



100
%

$
6,449



6
%       Year Ended


Year EndedMarch 31, 2010


March 31, 2009Net Sales


% of Total


Net Sales


% of Total1st

    quarter

$
22,378



19
%

$
23,226



21
%2nd

    quarter


21,603



18
%


25,750



23
%3rd

    quarter


48,763



41
%


40,817



36
%4th

    quarter


26,268



22
%


22,770



20
%Total

$
119,012



100
%

$
112,563



100
%   Call of Duty: Modern Warfare 2 Super Street Fighter IV Rock
    Band Rock Band
    2 Street Fighter IV
 36




---



##### Table of Contents



Year Ended March 31,2010


2009Xbox 360


31
%


19
%PC


22
%


29
%PlayStation 3


17
%


8
%Wii


13
%


16
%Handheld Consoles


4
%


10
%PlayStation 2


2
%


3
%GameCube


2
%


2
%All others


9
%


13
%Total


100
%


100
%     Year Ended March 31,2010


2009Controllers


28
%


23
%Specialty controllers


24
%


16
%Accessories


24
%


46
%Audio


15
%


7
%PC


8
%


6
%Games and bundles(a)


1
%


1
%All others


0
%


1
%Total


100
%


100
%     (a)
    
    Games category includes GameShark videogame enhancement products
    in addition to videogames with related accessories.    Year Ended March 31,2010


2009Mad Catz


69
%


63
%Tritton



%



%Cyborg


6
%


8
%Saitek


12
%


13
%Eclipse


6
%


9
%All others


7
%


7
%Total


100
%


100
%   Gross
    Profit
   37




---



##### Table of Contents



Year Ended March 31,2010


2009% of





% of


$


%Amount


Net Sales


Amount


Net Sales


Change


ChangeNet sales

$
119,012



100
%

$
112,563



100
%

$
6,449



6
%Cost of sales


82,616



69
%


80,558



72
%


2,058



3
%Gross profit

$
36,396



31
%

$
32,005



28
%

$
4,391



14
%     Operating
    Expenses
    March 31,


% of


March 31,


% of


$


%2010


Net Sales


2009


Net Sales


Change


ChangeSales and marketing

$
11,452



10
%

$
13,216



12
%

$
(1,764
)


(13
)%General and administrative


12,118



10
%


14,968



13
%


(2,850
)


(19
)%Research and development


2,657



2
%


1,076



1
%


1,581



147
%Goodwill impairment







%


27,887



25
%


(27,887
)


(100
)%Amortization of intangibles


1,758



2
%


2,344



2
%


(586
)


(25
)%Total operating expenses

$
27,985



24
%

$
59,491



53
%

$
(31,506
)


(53
)%   Sales and Marketing Expenses.
  General and Administrative.
  Research and Development.
  Goodwill Impairment.
  Amortization of Intangibles.
 38




---



##### Table of Contents



Interest
    Expense, net, Foreign Exchange Gain (Loss) and Other
    Income
    March 31,

% of

March 31,

% of

$

%2010

Net Sales

2009

Net Sales

Change

ChangeInterest expense

$
(2,460
)


2
%

$
(2,094
)


2
%

$
(366
)


17
%Foreign exchange (loss) gain

$
(270
)



%

$
(462
)



%

$
192



(42
)%Other income

$
252




%

$
361




%

$
(109
)


(30
)%     Provision
    for Income Taxes
    March 31,

Effective

March 31,

Effective

$

%2010

Tax Rate

2009

Tax Rate

Change

Change$
1,470



24.8
%

$
2,933



(9.9
)%

$
(1,463
)


(49.9
)%     Liquidity
    and Capital Resources
  Sources
    of Liquidity
    Form 10-K.
   39




---



##### Table of Contents



Form 10-K.
             40




---



##### Table of Contents



Contractual
    Obligations and Commitments
    Payments Due ($000s)Less Than








More ThanTotal


1 Year


1-3 Years


4-5 Years


5 YearsBank loan (see Note 7 of Notes to Consolidated Financial
    Statements)

$
5,450


$
5,450


$



$




Convertible notes payable (see Note 8 of Notes to
    Consolidated Financial Statements)


14,828



14,828











Operating leases (see Note 11 of Notes to Consolidated
    Financial Statements)


4,644



1,545



2,998



101



Royalty & license guaranteed commitments (see
    Note 11 of Notes to Consolidated Financial Statements)


824



714



110







Total

$
25,746


$
22,537


$
3,108


$
101


$
     NON-GAAP FINANCIAL
    MEASURES
   41




---



##### Table of Contents



Years Ended March 31,2011


2010


2009(In thousands of U.S. dollars)Net income (loss)

$
10,935


$
4,463


$
(32,614
)Adjustments:Interest expense, net


2,897



2,460



2,094Income tax expense


6,367



1,470



2,933Depreciation and amortization


2,764



3,766



4,193EBITDA


22,963



12,159



(23,394
)Goodwill impairment










27,887Adjusted EBITDA

$
22,963


$
12,159


$
4,493   Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Market
    Risk
    Foreign
    Currency Exchange Rate Risk
    Interest
    Rate Risk
   42




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  Page F-l
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(b) Rule 13a-15(e)
  Managements
    Report on Internal Control over Financial Reporting
  Rule 13a-15(f).
      Changes
    in Internal Controls over Financial Reporting
    Item 9B.
    Other
    Information   43




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K.
    http://www.madcatz.com
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   44




---



##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules    Financial Statements
  page F-1.
  Financial Statement Schedules
    Exhibits Regulation S-K)
    2
.1(1)

Stock Purchase Agreement dated as of May 28, 2010, by and
    between Mad Catz Interactive, Inc., Mad Catz, Inc., Tritton
    Technologies Inc. and the Stockholders of Tritton Technologies
    Inc. Portions of this exhibit (indicated by asterisks) have been
    omitted pursuant to a request for confidential treatment
    pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.3
.1(2)

Articles of Incorporation and Amendments thereto.3
.2(3)

By-Laws of the Company, as amended to date.3
.3(4)

Amendment to By-Law No. 2.4
.1(5)

Form of Warrant, issued April 21, 2011.10
.1(6)

Guarantee dated September 25, 2000, by 1328158 Ontario Inc.
    in favor of Congress Financial Corporation (Canada).10
.2(6)

General Security Agreement dated September 25, 2000, by Mad
    Catz, Inc. and FX Unlimited, Inc. in favor of Congress Financial
    Corporation (Central).10
.3(6)

Guarantee dated September 25, 2000, by Mad Catz, Inc. in
    favor of Congress Financial Corporation (Central).10
.4(7)

Amended and Restated General Security Agreement dated as of
    November 30, 2001, by Mad Catz, Inc. and FX Unlimited, Inc.
    in favor of Congress Financial Corporation (Central).10
.5(7)*

Amended and Restated Incentive Stock Option Plan of Mad Catz
    Interactive, Inc.10
.6(7)*

Form of Incentive Stock Option Plan.10
.7(8)*

Employment Agreement dated May 18, 2000, by and between Mad
    Catz, Inc. and Darren Richardson.10
.8(9)*

Amendment to Employment Agreement dated April 1, 2004, by
    and between Mad Catz Interactive, Inc. and Darren Richardson.
    Portions of this exhibit (indicated by asterisks) have been
    omitted pursuant to a request for confidential treatment
    pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.10
.9(10)

Xenon Game Peripheral Licensing Certification Agreement dated
    May 12, 2005, by and between Mad Catz, Inc. and
    Microsoft Corporation. Portions of this exhibit (indicated by
    asterisks) have been omitted pursuant to a request for
    confidential treatment pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.10
.11(11)*

Mad Catz Interactive, Inc. Stock Option Plan  200710
.12(12)*

Stock Option Agreement under the Mad Catz Interactive, Inc.
    Stock Option Plan  200710
.14(13)

First Amending Agreement dated as of November 20, 2007, by
    and between Mad Catz, Inc. and Wachovia Capital Finance
    Corporation (Central).10
.15(13)

Pledge and Security Agreement dated November 20, 2007, by
    Winkler Atlantic Holdings Limited in favor of Wachovia Capital
    Finance Corporation (Central).10
.16(13)

Guarantee dated November 20, 2007, by Saitek Industries
    Limited in favor of Wachovia Capital Finance Corporation
    (Central). 45




---



##### Table of Contents



10
.17(13)

General Security Agreement dated November 20, 2007, by
    Saitek Industries Limited in favor of Wachovia Capital Finance
    Corporation (Central).10
.18(14)*

Amendment to Employment Agreement dated December 31, 2008,
    by and between Mad Catz Interactive, Inc. and Darren Richardson.10
.20(14)*

Director Compensation Table10
.21(14)

Waiver and Amendment Letter Agreement dated March 18, 2009,
    by and between Mad Catz, Inc. and Wachovia Capital Finance
    Corporation (Central).10
.22(14)

Third Amended and Restated Loan Agreement dated as of
    June 23, 2009, by and between Mad Catz, Inc. and Wachovia
    Capital Finance Corporation (Central).10
.23(14)

General Security Agreement dated June 23, 2009, by Winkler
    Atlantic Holdings Limited in favor of and Wachovia Capital
    Finance Corporation (Central).10
.24(14)

Guarantee dated June 23, 2009, by Winkler Atlantic Holdings
    Limited in favor of Wachovia Capital Finance Corporation
    (Central).10
.25(14)

Negative Pledge Agreement dated June 23, 2009, by Saitek
    Elektronik Vertriebs Gmbh in favor of and Wachovia Capital
    Finance Corporation (Central).10
.26(14)

Guarantee dated June 23, 2009, by Saitek Elektronik
    Vertriebs Gmbh in favor of Wachovia Capital Finance Corporation
    (Central).10
.27(14)

First Amendment to Stock Pledge Agreement dated June 23,
    2009, by and between Mad Catz, Inc. and Wachovia Capital Finance
    Corporation (Central).10
.29(15)

Xbox 360 Accessory License Agreement effective March 23,
    2009, by and between Mad Catz, Inc. and Microsoft Corporation.
    Portions of this exhibit (indicated by asterisks) have been
    omitted pursuant to a request for confidential treatment
    pursuant to
    Rule 24b-2
    under the Securities Exchange Act of 1934.10
.30(16)

First Amending Agreement, dated as of September 30, 2010,
    between Mad Catz, Inc. and Wells Fargo Capital Finance, LLC,
    successor by merger to Wachovia Capital Finance Corporation
    (Central)10
.31(5)

Securities Purchase Agreement, dated April 17, 201110
.32(5)

Form of Registration Rights Agreement, dated April 21, 201121
.1

Subsidiaries of the Company.23
.1

Consent of KPMG LLP, Independent Registered Public Accounting
    Firm.31
.1

Certifications of Registrants Chief Executive Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certifications of Registrants Chief Financial Officer
    pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certifications of Registrants Chief Executive Officer
    pursuant to 18 U.S.C. Section 1350, as created by
    Section 906 of the Sarbanes-Oxley Act of 2002. These
    certifications are being furnished solely to accompany this
    Annual Report on
    Form 10-K
    and are not being filed for purposes of Section 18 of the
    Securities Exchange Act of 1934, as amended, and are not to be
    incorporated by reference into any filing of the Company.32
.2

Certifications of Registrants Chief Financial Officer
    pursuant to 18 U.S.C. Section 1350, as created by
    Section 906 of the Sarbanes-Oxley Act of 2002. These
    certifications are being furnished solely to accompany this
    Annual Report on
    Form 10-K
    and are not being filed for purposes of Section 18 of the
    Securities Exchange Act of 1934, as amended, and are not to be
    incorporated by reference into any filing of the Company.     (1)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2010 and incorporated herein by
    reference.(2)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2001 and incorporated herein by
    reference.(3)
    
    This document was filed as an exhibit to the Registrants
    Registration Statement on Form 20-F, dated June 1, 1999,
    filed with the Securities and Exchange Commission on
    June 3, 1999 and incorporated herein by reference. 46




---



##### Table of Contents



(4)
    
    This document was filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission for the
    quarterly period ended September 30, 2007 and incorporated
    herein by reference.(5)
    
    This document was filed as an exhibit to the Registrants
    Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 21, 2011 and incorporated herein by reference.(6)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2000 and incorporated herein by
    reference.(7)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2002 and incorporated herein by
    reference.(8)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2003 and incorporated herein by
    reference.(9)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 20-F
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2004 and incorporated herein by
    reference.(10)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2005 and incorporated herein by
    reference.(11)
    
    This document was filed as an exhibit to the Registrants
    Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    September 16, 2011 and incorporated herein by reference.(12)
    
    This document was filed as an exhibit to the Registrants
    Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission
    October 9, 2007 and incorporated herein by reference.(13)
    
    This document was filed as an exhibit to the Registrants
    Current Report on Form
    8-K filed
    with the Securities and Exchange Commission for the fiscal year
    ended November 20, 2007 and incorporated herein by
    reference.(14)
    
    This document was filed as an exhibit to the Registrants
    Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission for the fiscal
    year ended March 31, 2009 and incorporated herein by
    reference.(15)
    
    This document was filed as an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission for the
    quarterly period ended June 30, 2009 and incorporated
    herein by reference.(16)
    
    This document was filed as an exhibit to the Registrants
    Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    October 6, 2010 and incorporated herein by reference.*
    
    Denotes management contract or compensatory plan or arrangement. 47




---



##### Table of Contents



SIGNATURES
    MAD CATZ INTERACTIVE, INC.
  By:
    /s/  Darren
    Richardson  Darren Richardson
 President and Chief Executive Officer
      Signature

Title

Date/s/  Darren
    RichardsonDarren
    Richardson

President and Chief Executive Officer (Principal Executive
    Officer)

June 14, 2011/s/  Allyson
    EvansAllyson
    Evans

Chief Financial Officer
    (Principal Financial Officer and Principal Accounting Officer)

June 14, 2011/s/  Thomas
    BrownThomas
    Brown

Director

June 14, 2011/s/  Robert
    MolyneuxRobert
    Molyneux

Director

June 14, 2011/s/  William
    WoodwardWilliam
    Woodward

Director

June 14, 2011  48




---



##### Table of Contents



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS  Index to Consolidated Financial Statements


F-1Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-4Consolidated Statements of Shareholders
    Equity and Comprehensive Income (Loss)


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7  F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm             F-2




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.Consolidated Balance SheetsMarch 31, 2011 and 2010
  2011


2010(In thousands of U.S. dollars, except share data)ASSETSCurrent assets:Cash

$
3,734


$
2,245Accounts receivable, net of allowances of $6,301 and $4,848 at
    March 31, 2011 and 2010, respectively


19,846



14,620Other receivables


329



123Inventories


27,978



16,975Deferred tax assets


85



17Income tax receivable






21Prepaid expenses and other current assets


2,343



1,410Total current assets


54,315



35,411Deferred tax assets


590



766Other assets


639



626Property and equipment, net


3,921



3,452Intangible assets, net


5,606



2,828Goodwill


10,463



8,466Total assets

$
75,534


$
51,549LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Bank loan

$
5,408


$
3,829Accounts payable


13,700



11,871Accrued liabilities


11,048



7,988Convertible notes payable


14,500



Contingent consideration, current


1,542



Income taxes payable


1,918



1,670Total current liabilities


48,116



25,358Contingent consideration


2,897



Other long-term liabilities


424



357Convertible notes payable






14,500Total liabilities


51,437



40,215Commitments and contingenciesShareholders equity:Common stock, no par value, unlimited shares authorized;
    57,029,350 and 55,098,549 shares issued and outstanding at
    March 31, 2011 and 2010


50,648



48,865Accumulated other comprehensive loss


(10
)


(55
)Accumulated deficit


(26,541
)


(37,476
)Total shareholders equity


24,097



11,334Total liabilities and shareholders equity

$
75,534


$
51,549    F-3




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.Consolidated Statements of OperationsYears Ended March 31, 2011, 2010 and
    2009
  2011


2010


2009(In thousands of U.S. dollars, exceptshare and per share data)Net sales

$
183,974


$
119,012


$
112,563Cost of sales


130,605



82,616



80,558Gross profit


53,369



36,396



32,005Operating expenses:Sales and marketing


14,316



11,452



13,216General and administrative


13,794



12,118



14,968Research and development


4,678



2,657



1,076Goodwill impairment










27,887Acquisition related items


873







Amortization of intangible assets


951



1,758



2,344Total operating expenses


34,612



27,985



59,491Operating income (loss)


18,757



8,411



(27,486
)Interest expense, net


(2,897
)


(2,460
)


(2,094
)Foreign exchange gain (loss), net


1,195



(270
)


(462
)Other income


247



252



361Income (loss) before income taxes


17,302



5,933



(29,681
)Income tax expense


(6,367
)


(1,470
)


(2,933
)Net income (loss)

$
10,935


$
4,463


$
(32,614
)Net income (loss) per share:Basic

$
0.20


$
0.08


$
(0.59
)Diluted

$
0.18


$
0.08


$
(0.59
)Number of shares used in per share computations:Basic


55,429,673



55,098,549



55,088,960Diluted


66,924,206



55,103,237



55,088,960    F-4




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.Consolidated Statements of Shareholders
    Equity and Comprehensive Income (Loss)Years Ended March 31, 2011, 2010 and
    2009
  AccumulatedOther





TotalCommon Stock


Comprehensive


Accumulated


ShareholdersShares


Amount


Income (Loss)


Deficit


Equity(In thousands of U.S. dollars, except share data)Balance at March 31, 2008


54,973,549


$
47,717


$
2,923


$
(9,325
)

$
41,315Stock option exercises


125,000



57











57Stock-based compensation






481











481Comprehensive loss:Net loss














(32,614
)


(32,614
)Foreign currency translation adjustment










(2,822
)






(2,822
)Total comprehensive loss


















(35,436
)Balance at March 31, 2009


55,098,549


$
48,255


$
101


$
(41,939
)

$
6,417Stock-based compensation






610











610Comprehensive income:Net income














4,463



4,463Foreign currency translation adjustment










(156
)






(156
)Total comprehensive income


















4,307Balance at March 31, 2010


55,098,549


$
48,865


$
(55
)

$
(37,476
)

$
11,334Stock issued for acquisition


158,518



260











260Stock option exercises


1,772,283



920











920Stock-based compensation






603











603Comprehensive income:Net income














10,935



10,935Foreign currency translation adjustment










45







45Total comprehensive income


















10,980Balance at March 31, 2011


57,029,350


$
50,648


$
(10
)

$
(26,541
)

$
24,097    F-5




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Consolidated
    Statements of Cash Flows
 Years
    Ended March 31, 2011, 2010 and 2009
  2011


2010


2009(In thousands of U.S. dollars)Cash flows from operating activities:Net income (loss)

$
10,935


$
4,463


$
(32,614
)Adjustments to reconcile net income (loss) to net cash provided
    by (used in) operating activities:Depreciation and amortization


2,764



3,766



4,193Amortization of deferred financing fees


249



176



56Stock-based compensation


603



610



481Goodwill impairment










27,887Loss on disposal of assets


6



89



Contingent consideration


710







Provision (benefit) for deferred income taxes


290



59



2,657Changes in operating assets and liabilities:Accounts receivable


(4,781
)


864



(2,388
)Other receivables


(209
)


332



98Inventories


(8,462
)


763



2,401Prepaid expenses and other current assets


(856
)


77



(15
)Other assets


(88
)


53



(106
)Accounts payable


(761
)


(1,731
)


(3,127
)Accrued liabilities


2,818



1,877



(1,443
)Income taxes receivable/payable


85



1,324



(226
)Net cash provided by (used in) operating activities


3,303



12,722



(2,146
)Cash flows from investing activities:Purchases of property and equipment


(2,056
)


(2,718
)


(1,403
)Cash paid for Tritton acquisition, net of cash received


(1,189
)






Cash paid for V Max acquisition


(378
)






Net cash used in investing activities


(3,623
)


(2,718
)


(1,403
)Cash flows from financing activities:Borrowings on bank loan


168,923



99,907



97,708Repayments on bank loan


(167,344
)


(109,350
)


(95,906
)Payment of financing fees


(100
)


(496
)


Payment of Saitek completion note






(847
)


Repayments on notes payable


(803
)






Proceeds from exercise of stock options


920







57Net cash provided by (used in) financing activities


1,596



(10,786
)


1,859Effects of foreign exchange on cash


213



137



(650
)Net increase (decrease) in cash


1,489



(645
)


(2,340
)Cash, beginning of year


2,245



2,890



5,230Cash, end of year

$
3,734


$
2,245


$
2,890Supplemental cash flow information:Income taxes paid

$
6,497


$
1,007


$
673Interest paid

$
3,750


$
2,243


$
822Supplemental disclosures of noncash investing and financing
    activities:Note payable issued

$



$



$
847Restructuring and transaction costs










282Acquisitions:Fair value of assets acquired in acquisitions, net of cash
    received


3,457Intangible assets


3,700







Goodwill


2,001







98Deferred tax assets










1,031Liabilities assumed in acquisitions


(2,800
)






Notes payable assumed in acquisition


(803
)






Stock issued for acquisition


(260
)Contingent consideration liability, net of $472 working capital
    adjustment


(3,728
)






Net cash paid for acquisitions

$
1,567


$



$
1,129    F-6




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes
    to Consolidated Financial Statements
 (In U.S.
    dollars)
  (1)
    Organization
    and Description of Business    (2)
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    Use of
    Estimates
    Concentration
    of Credit Risk
    Fair
    Value of Financial Instruments and Fair Value
    Measurements
   F-7




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
     
    Level 1:  Quoted prices in active markets
    for identical assets or liabilities.
    Level 2:  Quoted prices for similar assets
    or liabilities in active markets; quoted prices for identical or
    similar instruments in markets that are not active; and
    model-derived valuations in which all significant inputs are
    observable in active markets.
    Level 3:  Valuations derived from
    valuation techniques in which one or more significant inputs are
    unobservable in active markets.    Balance as of

Basis of Fair Value MeasurementsMarch 31, 2011

Level 1

Level 2

Level 3Liabilities:Contingent consideration, net of working capital (Note 3)

$
(4,439
)

$



$



$
(4,439
)     Balance at March 31, 2010

$
Tritton acquisition  initial contingent consideration
    balance


3,466Changes in working capital adjustment


263Increases during the year  acquisition related expense


710Balance at March 31, 2011

$
4,439   Revenue
    Recognition
  60-day
    Allowance
    for Doubtful Accounts and Other Allowances
   F-8




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Inventories
  first-in, first-in,
  Property
    and Equipment
    Molds

3 yearsComputer equipment and software

3 yearsManufacturing and office equipment

3 - 5 yearsFurniture and fixtures

5 yearsLeasehold improvements

Shorter of estimated useful life or remaining life of lease     Intangible
    Assets
    Useful Life(Years)Trademarks


4 - 15Customer relationships


3 - 6Product lines


2 - 3Copyrights


5Website


4Other


1 - 3   Goodwill
     F-9




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Impairment
    of Long-Lived Assets
    Royalties
    and Intellectual Property Licenses
     F-10




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Advertising
    and Research and Development
    Income
    Taxes
      Foreign
    Currency Translation
      Net
    Income (Loss) per Share
   F-11




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Years Ended March 31,2011


2010


2009Numerator:Net income


10,935



4,463



(32,614
)Effect of convertible notes payable


1,232







Numerator for diluted net earnings per share


12,167



4,463



(32,614
)Denominator:Weighted average shares used to compute basic EPS


55,429,673



55,098,549



55,088,960Effect of convertible debt


10,217,744







Effect of dilutive share-based awards


1,276,789



4,688



Denominator for diluted net earnings per share


66,924,206



55,103,237



55,088,960Basic earnings per share


0.20



0.08



(0.59
)Diluted earnings per share


0.18



0.08



(0.59
)       Stock-Based
    Compensation
     F-12




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Comprehensive
    Income (Loss)
    (3)
    Acquisitions  Tritton
    Technologies Inc.
      Consideration:Cash paid

$
1,350Preliminary working capital adjustment, net of holdback


(472
)Fair value of contingent consideration


4,200Total purchase price

$
5,078     F-13




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Recognized amounts of identifiable assets acquired and
    liabilities assumed as of March 31, 2011 (in thousands)Net working capital

$
(256
)Property, plant and equipment and other assets


120Goodwill


1,514Other intangible assets


3,700Total purchase price

$
5,078     Intangible assets acquired:Customer relationships

$
900Trademark and trade names


2,800Total intangible assets acquired

$
3,700            F-14




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  V Max
    Simulation Corporation
    (4)
    Inventories    March 31,2011


2010Raw materials

$
749


$
1,431Semi finished goods


195



115Finished goods


27,034



15,429Inventories

$
27,978


$
16,975     (5)
    Property
    and Equipment    March 31,2011


2010Molds

$
6,162


$
6,400Computer equipment and software


3,264



2,734Manufacturing and office equipment


1,128



1,013Furniture and fixtures


467



383Leasehold improvements


789



62311,810



11,153Less: Accumulated depreciation and amortization


(7,889
)


(7,701
)Property and equipment, net

$
3,921


$
3,452    F-15




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (6)
    Intangible
    Assets and Goodwill    March 31, 2011


March 31, 2010Accumulated


Net Book





Accumulated


Net BookCost


Amortization


Value


Cost


Amortization


ValueTrademarks

$
8,269


$
4,772


$
3,497


$
5,472


$
4,445


$
1,027Customer relationships


4,179



2,070



2,109



3,199



1,415



1,784Product lines


3,217



3,217







3,194



3,187



7Other


111



111







110



100



10Intangible assets

$
15,776


$
10,170


$
5,606


$
11,975


$
9,147


$
2,828       FutureAmortizationYear ending March 31, 2012

$
961Year ending March 31, 2013


954Year ending March 31, 2014


749Year ending March 31, 2015


429Year ending March 31, 2016


429Thereafter


2,084$
5,606     Balance at March 31, 2009

$
8,467Translation adjustment


(1
)Balance at March 31, 2010


8,466Increase due to Tritton acquisition


1,514Increase due to V Max acquisition


487Translation adjustment


(4
)Balance at March 31, 2011

$
10,463     (7)
    Bank
    Loan   F-16




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    (8)
    Convertible
    Notes Payable      (9)
    Stock-Based
    Compensation     F-17




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2011


2010


2009Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseOptions


Price


Options


Price


Options


PriceOutstanding, beginning of year


7,575,900


$
0.58



7,396,275


$
0.58



3,835,334


$
0.80Granted


1,475,000



0.61



725,000



0.33



3,925,000



0.46Exercised


(1,772,283
)


0.52











(125,000
)


0.46Expired/canceled


(841,358
)


0.73



(545,375
)


0.87



(239,059
)


0.75Outstanding, end of year


6,437,259


$
0.58



7,575,900


$
0.58



7,396,275


$
0.58Exercisable, end of year


3,451,530


$
0.63



4,052,873


$
0.63



2,535,002


$
0.64Vested and expected to vest, end of year


6,215,419


$
0.58



7,329,288


$
0.58



7,055,986


$
0.63         2011

2010

2009Assumptions:Expected volatility

83% - 86%

85%

74% - 75%Risk-free interest rate

1.88% - 2.47%

2.47%

2.18% - 3.11%Dividend yield





Expected term

5 years

5 years

1 - 5 years    F-18




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (10)
    Income
    Taxes    Years Ended March 31,2011


2010


2009Income (loss) before income taxes:Domestic (U.S.)

$
8,101


$
777


$
(16,563
)Foreign


9,201



5,156



(13,118
)$
17,302


$
5,933


$
(29,681
)Income tax expense (benefit):Current:Federal (U.S.)

$
3,143


$
7


$
(630
)State (U.S.)


824



204



56Foreign


2,110



1,200



850Total current


6,077



1,411



276Deferred:Federal (U.S.)










2,467State (U.S.)










459Foreign


290



59



(269
)Total deferred


290



59



2,657Income tax expense

$
6,367


$
1,470


$
2,933     Years Ended March 31,2011


2010


2009Income tax expense (benefit) using the Companys Canadian
    statutory tax rates

$
5,385


$
1,940


$
(9,906
)Income taxed in jurisdictions other than Canada


(477
)


(823
)


1,468Goodwill impairment










7,511Change in valuation allowance


1,118



76



3,665Other


341



277



195$
6,367


$
1,470


$
2,933  F-19




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    March 31,2011


2010Deferred tax assets:Tax loss carryforwards

$
10,623


$
10,300Difference between book and tax basis of inventories


1,015



691Difference between book and tax basis of accounts receivables


671



394Deferred fees not currently deductible


147



100Accruals and reserves not currently deductible


609



845Difference between book and tax basis of intangible assets,
    property & equipment


1,058



1,090Unclaimed depreciation on property and equipment


253



242Goodwill and intangibles


1,154



500Unclaimed scientific research expenditures


237



226Other


158



15215,925



14,540Less valuation allowance


(13,150
)


(13,236
)Net deferred tax assets

$
2,775


$
1,304Deferred tax liabilities:Federal liability on state tax loss

$
232


$
235Prepaid liabilities


165



139Goodwill and intangibles


1,846



147Net deferred tax liabilities

$
2,243


$
521Net deferred tax assets

$
532


$
783      F-20




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
                   F-21




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (11)
    Commitments
    and Contingencies  Litigation
  Circuit City Stores, Inc., et al., Debtors, Alfred H. Siegel,
    as Trustee for Circuit City, Inc., Liquidating Trust v. Mad
    Catz, Inc. and Saitek Industries Limited, Mad Catz, Inc.,
    dba Saitek Industries Limited No. 08-35653 10-03763 10-03255.
    Leases
    Year ending March 31:2012

$
1,5452013


1,2702014


1,0472015


6812016


101Thereafter


$
4,644   Royalty
    and License Agreements
   F-22




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year ending March 31:2012

$
7142013


110$
824   (12)
    Employee
    Savings Plan    (13)
    Geographic
    and Product Line Data    2011


2010


2009Net sales:United States

$
107,528


$
63,223


$
65,003Europe


66,834



49,005



41,442Canada


5,547



3,109



1,974Other countries


4,065



3,675



4,144$
183,974


$
119,012


$
112,563       2011


2010Property and equipment:United States

$
1,074


$
787Europe


161



160Other countries


2,686



2,505$
3,921


$
3,452     Year Ended March 31,2011


2010


2009Specialty Controllers

$
56,499


$
31,557


$
20,723Audio


55,299



19,321



8,492Controllers


30,873



36,476



29,124Accessories


24,291



30,865



58,982Games


23,436



1,792



1,225PC


14,884



10,167



7,399All others


102



746



2,124Total

$
205,384


$
130,924


$
128,069  F-23




---



##### Table of Contents



MAD CATZ
    INTERACTIVE, INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  (14)
    Quarterly
    Financial and Market Information
    (Unaudited)  Quarter EndedJune 30

Sept. 30

Dec. 31

Mar 31(Amounts in thousands, except per share data)Fiscal 2011 Consolidated:Net sales

$
19,911


$
37,409


$
92,957


$
33,697Gross profit


5,944



10,505



26,401



10,519Operating income (loss)


(807
)


1,928



15,984



1,652Net income (loss)


(1,375
)


1,128



9,696



1,486Net income (loss) per share  basic


(0.02
)


0.02



0.18



0.03Net income (loss) per share  diluted


(0.02
)


0.02



0.15



0.03Common stock price per share:High


0.49



0.53



1.06



2.19Low


0.36



0.39



0.42



0.84Fiscal 2010 Consolidated:Net sales

$
22,378


$
21,603


$
48,763


$
26,268Gross profit


6,623



6,757



15,941



7,075Operating income (loss)


41



(128
)


7,711



787Net loss


(996
)


(971
)


5,592



838Net loss per share  basic


(0.02
)


(0.02
)


0.10



0.02Net loss per share  diluted


(0.02
)


(0.02
)


0.09



0.02Common stock price per share:High


0.47



0.50



0.54



0.57Low


0.22



0.24



0.32



0.33   (15)
    Subsequent
    Events       F-24