##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from  to
 Commission File No. 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
    
    92108(Address of principal executive offices)
    
    (Zip Code)
 (619) 683-9830
(Registrants telephone number, including area code)
 
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ




---



##### 



MAD CATZ INTERACTIVE, INC.
FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2009
TABLE OF CONTENTS
  
 PART I  FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of September 30, 2009 and March 31, 2009
    
    
    3Condensed Consolidated Statements of Operations for the three and six months ended September 30,
2009 and 2008
    
    
    4Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2009 and 2008
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9Item 4. Controls and Procedures
    
    
    16PART II  OTHER INFORMATION
    
    
    17Item 1. Legal Proceedings
    
    
    17Item 1a. Risk Factors
    
    
    17Item 4. Submission of Matters to a Vote of Security Holders
    
    
    17Item 6. Exhibits
    
    
    17SIGNATURES
    
    
    18EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 MAD CATZ INTERACTIVE, INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
   September 30,
    
    
    March 31,2009
    
    
    2009AssetsCurrent assets:Cash
    
    $
    6,298
    
    
    $
    2,890Accounts receivable, net of allowances of $6,797
and $5,926 at September 30, 2009 and March 31,
2009, respectively
    
    
    12,484
    
    
    
    15,524Other receivables
    
    
    400
    
    
    
    471Income tax receivable
    
    
    760
    
    
    
    759Inventories
    
    
    33,794
    
    
    
    17,774Deferred tax assets
    
    
    19
    
    
    
    19Prepaid expenses and other current assets
    
    
    1,752
    
    
    
    1,491Total current assets
    
    
    55,507
    
    
    
    38,928Deferred tax assets
    
    
    367
    
    
    
    484Other assets
    
    
    683
    
    
    
    362Property and equipment, net
    
    
    2,983
    
    
    
    2,242Intangible assets, net
    
    
    3,789
    
    
    
    5,118Goodwill
    
    
    8,450
    
    
    
    8,467Total assets
    
    $
    71,779
    
    
    $
    55,601Liabilities and Shareholders EquityCurrent liabilities:Bank loan
    
    $
    19,293
    
    
    $
    13,272Accounts payable
    
    
    22,938
    
    
    
    13,528Accrued liabilities
    
    
    6,393
    
    
    
    5,929Note payable
    
    
    847
    
    
    
    847Income taxes payable
    
    
    500
    
    
    
    655Total current liabilities
    
    
    49,971
    
    
    
    34,231Convertible notes payable
    
    
    14,500
    
    
    
    14,500Other long-term liabilities
    
    
    1,138
    
    
    
    453Total liabilities
    
    
    65,609
    
    
    
    49,184Shareholders equity:Common stock, no par value, unlimited shares
authorized; 55,098,549 shares issued and
outstanding at September 30, 2009 and March 31,
2009
    
    
    48,563
    
    
    
    48,255Accumulated other comprehensive income
    
    
    1,513
    
    
    
    101Accumulated deficit
    
    
    (43,906
    )
    
    
    (41,939
    )Total shareholders equity
    
    
    6,170
    
    
    
    6,417Total liabilities and shareholders equity
    
    $
    71,779
    
    
    $
    55,601
  3




---



##### Table of Contents



MAD CATZ INTERACTIVE, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    21,603
    
    
    $
    25,750
    
    
    $
    43,981
    
    
    $
    48,976Cost of sales
    
    
    14,846
    
    
    
    18,027
    
    
    
    30,571
    
    
    
    33,156Gross profit
    
    
    6,757
    
    
    
    7,723
    
    
    
    13,410
    
    
    
    15,820Operating expenses:Sales and marketing
    
    
    2,609
    
    
    
    3,835
    
    
    
    5,051
    
    
    
    6,965General and administrative
    
    
    3,045
    
    
    
    3,630
    
    
    
    6,097
    
    
    
    8,405Research and development
    
    
    691
    
    
    
    475
    
    
    
    1,292
    
    
    
    938Amortization of intangible assets
    
    
    590
    
    
    
    602
    
    
    
    1,172
    
    
    
    1,214Total operating expenses
    
    
    6,935
    
    
    
    8,542
    
    
    
    13,612
    
    
    
    17,522Operating loss
    
    
    (178
    )
    
    
    (819
    )
    
    
    (202
    )
    
    
    (1,702
    )Interest expense, net
    
    
    (525
    )
    
    
    (525
    )
    
    
    (993
    )
    
    
    (992
    )Foreign exchange loss, net
    
    
    (106
    )
    
    
    (101
    )
    
    
    (419
    )
    
    
    (173
    )Other income
    
    
    65
    
    
    
    82
    
    
    
    96
    
    
    
    218Loss before income taxes
    
    
    (744
    )
    
    
    (1,363
    )
    
    
    (1,518
    )
    
    
    (2,649
    )Income tax expense (benefit)
    
    
    227
    
    
    
    (124
    )
    
    
    449
    
    
    
    (633
    )Net loss
    
    $
    (971
    )
    
    $
    (1,239
    )
    
    $
    (1,967
    )
    
    $
    (2,016
    )Basic net loss per share
    
    $
    (0.02
    )
    
    $
    (0.02
    )
    
    $
    (0.04
    )
    
    $
    (0.04
    )Diluted net loss per share
    
    $
    (0.02
    )
    
    $
    (0.02
    )
    
    $
    (0.04
    )
    
    $
    (0.04
    )Weighted average shares  basic
    
    
    55,098,549
    
    
    
    55,098,549
    
    
    
    55,098,549
    
    
    
    55,079,423Weighted average shares  diluted
    
    
    55,098,549
    
    
    
    55,098,549
    
    
    
    55,098,549
    
    
    
    55,079,423
  4




---



##### Table of Contents



MAD CATZ INTERACTIVE, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   Six Months EndedSeptember 30,2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (1,967
    )
    
    $
    (2,016
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    2,084
    
    
    
    2,165Amortization of deferred financing fees
    
    
    90
    
    
    
    36Increase in sales reserves
    
    
    5,838
    
    
    
    6,446Provision (benefit) for deferred income taxes
    
    
    117
    
    
    
    (135
    )Loss on disposal or sale of assets
    
    
    63
    
    
    
    Stock-based compensation
    
    
    308
    
    
    
    161Changes in operating assets and liabilities:Accounts receivable
    
    
    (2,565
    )
    
    
    (9,218
    )Other receivables
    
    
    71
    
    
    
    (683
    )Inventories
    
    
    (15,572
    )
    
    
    (5,684
    )Prepaid expenses and other current assets
    
    
    (253
    )
    
    
    12Other assets
    
    
    (206
    )
    
    
    (94
    )Accounts payable
    
    
    9,672
    
    
    
    4,622Accrued liabilities
    
    
    1,181
    
    
    
    428Income taxes receivable/payable
    
    
    (150
    )
    
    
    (1,108
    )Net cash used in operating activities
    
    
    (1,289
    )
    
    
    (5,068
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,422
    )
    
    
    (850
    )Net cash used in investing activities
    
    
    (1,422
    )
    
    
    (850
    )Cash flows from financing activities:Proceeds from stock option exercises
    
    
    
    
    
    
    56Payment of financing fees
    
    
    (200
    )
    
    
    Repayments on bank loan
    
    
    (41,070
    )
    
    
    (38,346
    )Borrowings on bank loan
    
    
    47,092
    
    
    
    41,421Net cash provided by financing activities
    
    
    5,822
    
    
    
    3,131Effects of foreign exchange on cash
    
    
    297
    
    
    
    195Net increase (decrease) in cash
    
    
    3,408
    
    
    
    (2,592
    )Cash, beginning of period
    
    
    2,890
    
    
    
    5,230Cash, end of period
    
    $
    6,298
    
    
    $
    2,638Supplemental cash flow information:Income taxes paid
    
    $
    642
    
    
    $
    409Interest paid
    
    $
    426
    
    
    $
    373Supplemental disclosure of non-cash investing and financing activities:Lease incentives recorded as deferred rent
    
    $
    
    
    
    $
    136Note payable issued for final Saitek acquisition working capital
purchase price adjustment
    
    $
    
    
    
    $
    847
  5




---



##### Table of Contents



MAD CATZ INTERACTIVE, INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 (1) Basis of Presentation
     Recently Adopted Accounting Pronouncements
      6




---



##### Table of Contents






(2) Stock-Based Compensation
  7




---



##### Table of Contents



3) Inventories
  September 30,
    
    
    March 31,2009
    
    
    2009Raw materials
    
    $
    2,521
    
    
    $
    949Finished goods
    
    
    31,273
    
    
    
    16,825Inventories
    
    $
    33,794
    
    
    $
    17,774
 (4) Bank Loan
  (5) Convertible Notes Payable
  (6) Completion Note
  (7) Comprehensive Loss
  Three Months Ended
    
    
    Six Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net loss
    
    $
    (971
    )
    
    $
    (1,239
    )
    
    $
    (1,967
    )
    
    $
    (2,016
    )Foreign currency translation adjustment
    
    
    88
    
    
    
    (715
    )
    
    
    1,412
    
    
    
    (1,490
    )Comprehensive loss
    
    $
    (883
    )
    
    $
    (1,954
    )
    
    $
    (555
    )
    
    $
    (3,506
    )
  (8) Basic and Diluted Net Loss per Share
   8




---



##### Table of Contents



(9) Geographic Data
  Three months ended
    
    
    Six months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales:United States
    
    $
    11,531
    
    
    $
    14,343
    
    
    $
    25,141
    
    
    $
    27,069Europe
    
    
    8,504
    
    
    
    9,963
    
    
    
    15,829
    
    
    
    19,467Canada
    
    
    500
    
    
    
    322
    
    
    
    1,357
    
    
    
    562Other countries
    
    
    1,068
    
    
    
    1,122
    
    
    
    1,654
    
    
    
    1,878$
    21,603
    
    
    $
    25,750
    
    
    $
    43,981
    
    
    $
    48,976
  (10) Subsequent Events
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 This section contains forward-looking statements and forward looking information (collectively
forward-looking statements) as defined in applicable securities legislation 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 under
Forward-looking Statements herein and in Item 1A. Risk Factors in our Annual Report on Form
10-K for the fiscal year ended March 31, 2009 and in Part II Other Information  Item 1A. Risk
Factors in this Quarterly Report on Form 10-Q . The following discussion should be read in
conjunction with our condensed consolidated financial statements and related notes included in this
Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2009.
 Overview
 Our Business
  Seasonality and Fluctuation of Sales
  Potential Fluctuations in Foreign Currency
  9




---



##### Table of Contents



Critical Accounting Policies
  10




---



##### Table of Contents



RESULTS OF OPERATIONS
 Net Sales
  Three months ended September 30,
    
    
    $
    
    
    %2009
    
    
    %of total
    
    
    2008
    
    
    %of total
    
    
    Change
    
    
    ChangeUnited States
    
    $
    11,531
    
    
    
    54
    %
    
    $
    14,343
    
    
    
    56
    %
    
    $
    (2,812
    )
    
    
    (20
    )%Europe
    
    
    8,504
    
    
    
    39
    %
    
    
    9,963
    
    
    
    39
    %
    
    
    (1,459
    )
    
    
    (15
    )%Canada
    
    
    500
    
    
    
    2
    %
    
    
    322
    
    
    
    1
    %
    
    
    178
    
    
    
    55
    %Other countries
    
    
    1,068
    
    
    
    5
    %
    
    
    1,122
    
    
    
    4
    %
    
    
    (54
    )
    
    
    (5
    )%Consolidated net sales
    
    $
    21,603
    
    
    
    100
    %
    
    $
    25,750
    
    
    
    100
    %
    
    $
    (4,147
    )
    
    
    (16
    )%
 Six months ended September 30,
    
    
    $
    
    
    %2009
    
    
    %of total
    
    
    2008
    
    
    %of total
    
    
    Change
    
    
    ChangeUnited States
    
    $
    25,141
    
    
    
    57
    %
    
    $
    27,069
    
    
    
    55
    %
    
    $
    (1,928
    )
    
    
    (7
    )%Europe
    
    
    15,829
    
    
    
    36
    %
    
    
    19,467
    
    
    
    40
    %
    
    
    (3,638
    )
    
    
    (19
    )%Canada
    
    
    1,357
    
    
    
    3
    %
    
    
    562
    
    
    
    1
    %
    
    
    795
    
    
    
    141
    %Other countries
    
    
    1,654
    
    
    
    4
    %
    
    
    1,878
    
    
    
    4
    %
    
    
    (224
    )
    
    
    (12
    )%Consolidated net sales
    
    $
    43,981
    
    
    
    100
    %
    
    $
    48,976
    
    
    
    100
    %
    
    $
    (4,995
    )
    
    
    (10
    )%
    Three months ended
    
    
    Six months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008PC
    
    
    32
    %
    
    
    30
    %
    
    
    28
    %
    
    
    32
    %Xbox 360
    
    
    26
    %
    
    
    17
    %
    
    
    29
    %
    
    
    14
    %PlayStation 3
    
    
    11
    %
    
    
    7
    %
    
    
    15
    %
    
    
    9
    %Wii
    
    
    11
    %
    
    
    18
    %
    
    
    10
    %
    
    
    18
    %Handheld Consoles(a)
    
    
    5
    %
    
    
    12
    %
    
    
    6
    %
    
    
    12
    %PlayStation 2
    
    
    2
    %
    
    
    4
    %
    
    
    2
    %
    
    
    4
    %GameCube
    
    
    2
    %
    
    
    3
    %
    
    
    2
    %
    
    
    3
    %Xbox
    
    
    0
    %
    
    
    1
    %
    
    
    0
    %
    
    
    1
    %All others
    
    
    11
    %
    
    
    8
    %
    
    
    8
    %
    
    
    7
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 
 (a)
    
    Handheld consoles include Sony PSP and Nintendo Game
Boy Advance, Game Boy Advance SP, DS, DS Lite, DSi and
Micro. 11




---



##### Table of Contents



Three months ended
    
    
    Six months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Specialty controllers
    
    
    35
    %
    
    
    16
    %
    
    
    35
    %
    
    
    16
    %Accessories
    
    
    23
    %
    
    
    43
    %
    
    
    22
    %
    
    
    45
    %Controllers
    
    
    22
    %
    
    
    22
    %
    
    
    22
    %
    
    
    19
    %Personal computer products
    
    
    9
    %
    
    
    9
    %
    
    
    9
    %
    
    
    10
    %Audio
    
    
    9
    %
    
    
    6
    %
    
    
    9
    %
    
    
    7
    %Games(a)
    
    
    2
    %
    
    
    4
    %
    
    
    3
    %
    
    
    3
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 
 (a)
    
    Games include GameShark videogame enhancement products in addition to videogames with related accessories. Gross Profit
   Three months ended September 30,% of Net
    
    
    
    
    
    
    % of Net
    
    
    $
    
    
    %2009
    
    
    Sales
    
    
    2008
    
    
    Sales
    
    
    Change
    
    
    ChangeNet sales
    
    $
    21,603
    
    
    
    100.0
    %
    
    $
    25,750
    
    
    
    100.0
    %
    
    $
    (4,147
    )
    
    
    (16.1
    )%Cost of sales
    
    
    14,846
    
    
    
    68.7
    %
    
    
    18,027
    
    
    
    70.0
    %
    
    
    (3,181
    )
    
    
    (17.6
    )%Gross profit
    
    $
    6,757
    
    
    
    31.3
    %
    
    $
    7,723
    
    
    
    30.0
    %
    
    $
    (966
    )
    
    
    (12.5
    )%
 Six months ended September 30,% of Net
    
    
    
    
    
    
    % of Net
    
    
    $
    
    
    %2009
    
    
    Sales
    
    
    2008
    
    
    Sales
    
    
    Change
    
    
    ChangeNet sales
    
    $
    43,981
    
    
    
    100.0
    %
    
    $
    48,976
    
    
    
    100.0
    %
    
    $
    (4,995
    )
    
    
    (10.2
    )%Cost of sales
    
    
    30,571
    
    
    
    69.5
    %
    
    
    33,156
    
    
    
    67.7
    %
    
    
    (2,585
    )
    
    
    (7.8
    )%Gross profit
    
    $
    13,410
    
    
    
    30.5
    %
    
    $
    15,820
    
    
    
    32.3
    %
    
    $
    (2,410
    )
    
    
    (15.2
    )%
  Operating Expenses
  Three months ended September 30,% of Net
    
    
    
    
    
    
    % of Net
    
    
    $
    
    
    %2009
    
    
    Sales
    
    
    2008
    
    
    Sales
    
    
    Change
    
    
    ChangeSales and marketing
    
    $
    2,609
    
    
    
    12.1
    %
    
    $
    3,835
    
    
    
    14.9
    %
    
    $
    (1,226
    )
    
    
    (32.0
    )%General and administrative
    
    
    3,045
    
    
    
    14.1
    %
    
    
    3,630
    
    
    
    14.1
    %
    
    
    (585
    )
    
    
    (16.1
    )%Research and development
    
    
    691
    
    
    
    3.2
    %
    
    
    475
    
    
    
    1.8
    %
    
    
    216
    
    
    
    45.5
    %Amortization
    
    
    590
    
    
    
    2.7
    %
    
    
    602
    
    
    
    2.3
    %
    
    
    (12
    )
    
    
    (2.0
    )%Total operating expenses
    
    $
    6,935
    
    
    
    32.1
    %
    
    $
    8,542
    
    
    
    33.1
    %
    
    $
    (1,607
    )
    
    
    (18.8
    )%
 12




---



##### Table of Contents



Six months ended September 30,% of Net
    
    
    
    
    
    
    % of Net
    
    
    $
    
    
    %2009
    
    
    Sales
    
    
    2008
    
    
    Sales
    
    
    Change
    
    
    ChangeSales and marketing
    
    $
    5,051
    
    
    
    11.5
    %
    
    $
    6,965
    
    
    
    14.2
    %
    
    $
    (1,914
    )
    
    
    (27.5
    )%General and administrative
    
    
    6,097
    
    
    
    13.9
    %
    
    
    8,405
    
    
    
    17.2
    %
    
    
    (2,308
    )
    
    
    (27.5
    )%Research and development
    
    
    1,292
    
    
    
    2.9
    %
    
    
    938
    
    
    
    1.9
    %
    
    
    354
    
    
    
    (37.7
    )%Amortization
    
    
    1,172
    
    
    
    2.7
    %
    
    
    1,214
    
    
    
    2.5
    %
    
    
    (42
    )
    
    
    (3.5
    )%Total operating expenses
    
    $
    13,612
    
    
    
    30.9
    %
    
    $
    17,522
    
    
    
    35.8
    %
    
    $
    (3,910
    )
    
    
    (22.3
    )%
 Sales and Marketing.
 General and Administrative.
 Research and Development.
 Amortization.
 Interest Expense, Foreign Exchange Loss and Other Income
  Three months ended September 30,% of Net
    
    
    
    
    
    
    % of Net
    
    
    $
    
    
    %2009
    
    
    Sales
    
    
    2008
    
    
    Sales
    
    
    Change
    
    
    ChangeInterest expense
    
    $
    (525
    )
    
    
    2.4
    %
    
    $
    (525
    )
    
    
    2.0
    %
    
    $
    
    
    
    
    0.0
    %Foreign exchange loss
    
    $
    (106
    )
    
    
    0.5
    %
    
    $
    (101
    )
    
    
    0.4
    %
    
    $
    (5
    )
    
    
    (5.0
    )%Other income
    
    $
    65
    
    
    
    0.3
    %
    
    $
    82
    
    
    
    0.3
    %
    
    $
    (17
    )
    
    
    (20.7
    )%
 Six months ended September 30,% of Net
    
    
    
    
    
    
    % of Net
    
    
    $
    
    
    %2009
    
    
    Sales
    
    
    2008
    
    
    Sales
    
    
    Change
    
    
    ChangeInterest expense
    
    $
    (993
    )
    
    
    2.3
    %
    
    $
    (992
    )
    
    
    2.0
    %
    
    $
    (1
    )
    
    
    (0.1
    )%Foreign exchange loss
    
    $
    (419
    )
    
    
    1.0
    %
    
    $
    (173
    )
    
    
    0.4
    %
    
    $
    (246
    )
    
    
    (142.2
    )%Other income
    
    $
    96
    
    
    
    (0.2
    )%
    
    $
    218
    
    
    
    0.5
    %
    
    $
    (122
    )
    
    
    (56.0
    )%
    13




---



##### Table of Contents



Income Tax Expense (Benefit)
  Three months ended September 30,Effective
    
    
    
    Effective
    
    $
    
    %2009
    
    Tax Rate
    
    2008
    
    Tax Rate
    
    Change
    
    ChangeIncome tax expense (benefit)
    
    $
    227
    
    
    (30.5)%
    
    $(124)
    
    
    9.1
    %
    
    $
    351
    
    
    
    283.1
    %Six months ended September 30,Effective
    
    
    
    Effective
    
    $
    
    %2009
    
    Tax Rate
    
    2008
    
    Tax Rate
    
    Change
    
    ChangeIncome tax expense (benefit)
    
    $
    449
    
    
    (29.6)%
    
    $(633)
    
    
    23.9
    %
    
    $
    1,082
    
    
    
    170.9
    %
  Liquidity and Capital Resources
 Sources of Liquidity
 As of and for thesix months endedSeptember 30,(in thousands)
    
    2009
    
    
    2008
    
    
    ChangeCash
    
    $
    6,298
    
    
    $
    2,638
    
    
    $
    3,660Percentage of total assets
    
    
    8.8
    %
    
    
    2.7
    %Cash used in operating activities
    
    $
    (1,263
    )
    
    $
    (5,068
    )
    
    $
    3,805Cash used in investing activities
    
    
    (1,422
    )
    
    
    (850
    )
    
    
    (572
    )Cash provided by financing activities
    
    
    5,821
    
    
    
    3,131
    
    
    
    2,690Effects of foreign exchange on cash
    
    
    272
    
    
    
    195
    
    
    
    77Net increase (decrease) in cash
    
    $
    3,408
    
    
    $
    (2,592
    )
    
    
    6,000
  Cash Flows from Operating Activities
  th, st st
 14




---



##### Table of Contents



Cash Flows from Investing Activities
  Cash Flows from Financing Activities
    Contractual Obligations and Commitments
   EBITDA
  Three months ended
    
    
    Six months endedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net loss
    
    $
    (971
    )
    
    $
    (1,239
    )
    
    $
    (1,967
    )
    
    $
    (2,016
    )Adjustments:Interest expense
    
    
    525
    
    
    
    525
    
    
    
    993
    
    
    
    992Income tax expense (benefit)
    
    
    227
    
    
    
    (124
    )
    
    
    449
    
    
    
    (633
    )Depreciation and amortization
    
    
    1,048
    
    
    
    1,063
    
    
    
    2,084
    
    
    
    2,165EBITDA
    
    $
    829
    
    
    $
    225
    
    
    $
    1,559
    
    
    $
    508
 15




---



##### Table of Contents



Forward-Looking Statements
    
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control over Financial Reporting
  16




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    Election of Directors
 For
    
    Withheld
    
    Invalid
    
    Non-VotesThomas R. Brown
    
    
    13,202,122
    
    
    
    805,320
    
    
    
    0
    
    
    
    0Darren Richardson
    
    
    12,582,505
    
    
    
    1,424,937
    
    
    
    0
    
    
    
    0Robert J. Molyneux
    
    
    13,193,226
    
    
    
    814,216
    
    
    
    0
    
    
    
    0William Woodward
    
    
    13,194,322
    
    
    
    813,120
    
    
    
    0
    
    
    
    0
 2.
    
    Proposal to appoint KPMG LLP as our Independent Registered Public
Accounting Firm and Auditor and to authorize the Board of Director to
approve the Independent Registered Public Accounting Firm and
Auditors remuneration.
 For
    
    Withheld
    
    Invalid
    
    Non-Votes13,779,526
    
    227,916
    
    0
    
    0
 
 Item 6. Exhibits
 31.1
    
    Certification of Registrants Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Registrants Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification 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. This certification is being furnished solely to accompany this
Quarterly Report on Form 10-Q and is not being filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and is not to be incorporated by reference into any filing of the Company.32.2
    
    Certification 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. This certification is being furnished solely to accompany this
Quarterly Report on Form 10-Q and is not being filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, and is not to be incorporated by reference into any filing of the Company.
 17




---



##### Table of Contents



MAD CATZ INTERACTIVE, INC.November 10, 2009
    /s/ Darren RichardsonDarren RichardsonPresident and Chief Executive OfficerNovember 10, 2009
    /s/ Stewart A. HalpernStewart A. HalpernChief Financial Officer 18