(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
(State or Other Jurisdiction of Incorporation or Organization) |
91-2143667
(IRS Employer Identification No.) |
|
2207 Bridgepointe Parkway,
Suite 250 San Mateo, California (Address of Principal Executive Offices) |
94404
(Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, par value $0.0001 per share | NASDAQ Global Market |
Large accelerated filer o | Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o |
Item 1. | Business |
1
| We completed our acquisition of Superscape, adding an additional studio in Moscow and 3-D capabilities to our development team and completed the integration of MIG. | |
| During the second half of 2008, we reduced our total operating expenses by approximately 19% from second quarter 2008 levels to better align expenses with our revenue expectations. | |
| We restructured our MIG earnout and bonus payments from stock and cash payments due in 2009 to all cash payments due in 2009 and 2010. | |
| We renegotiated and extended until December 2010 our $8.0 million line of credit. |
| continue to create high-quality games; | |
| expand our development and publishing capabilities to include next-generation devices, as well as other attractive platforms for our games; | |
| seek to establish leadership in emerging distribution channels, including direct-to-consumer digital storefronts and app stores; | |
| invest in our studio and technical development capabilities; | |
| leverage and grow our portfolio of games, including creating additional franchises of games based on our original intellectual property; |
2
| leverage and strengthen our carrier distribution relationships; and | |
| strengthen our licensing relationships. |
3
| the perceived attractiveness of the title or brand; | |
| the past success of the game or of other games previously introduced by a publisher; | |
| the number of handsets for which a version of the game is available; | |
| the relationship with the applicable carrier; | |
| the carriers economic incentives with respect to the particular game, such as the revenue split percentage; and | |
| the level of marketing support, including marketing development funds. |
4
| development platforms; | |
| porting tools and processes; | |
| broad development capabilities; | |
| application hosting; | |
| provisioning and billing capabilities; | |
| merchandising and marketing platform; and | |
| thin client-server platform. |
5
| significantly greater revenues and financial resources; | |
| stronger brand and consumer recognition regionally or worldwide; | |
| the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products; | |
| more substantial intellectual property of their own from which they can develop games without having to pay royalties; | |
| pre-existing relationships with brand owners or carriers that afford them access to intellectual property while blocking the access of competitors to that same intellectual property; | |
| greater resources to make acquisitions; | |
| lower labor and development costs; and | |
| broader global distribution and presence. |
6
Item 1A. | Risk Factors |
7
| respond to market developments, including next-generation platforms, technologies and pricing and distribution models; | |
| maintain and grow our non-carrier, or off-deck, distribution, including through our website and third-party direct-to-consumer distributors; | |
| maintain our current, and develop new, wireless carrier relationships, particularly in international markets; | |
| maintain and expand our current, and develop new, relationships with third-party branded content owners; | |
| retain or improve our current revenue-sharing arrangements with carriers and third-party branded content owners; | |
| maintain and develop greater consumer awareness of our games based on our own intellectual property and the Glu brand; | |
| continue to develop new high-quality mobile games that achieve significant market acceptance, particularly for new next-generation handsets; | |
| continue to port existing mobile games to new mobile handsets; | |
| continue to develop and upgrade our technology; | |
| continue to enhance our information processing systems; | |
| expand our development capacity in countries with lower costs; | |
| execute our business and marketing strategies successfully; and | |
| attract, integrate, retain and motivate qualified personnel. |
8
| the number of new mobile games released by us and our competitors, including those for next-generation platforms; | |
| the timing of release of new games by us and our competitors, particularly those that may represent a significant portion of revenues in a period; | |
| the popularity of new games and games released in prior periods; | |
| changes in prominence of deck placement for our leading games and those of our competitors; | |
| the strength or weakness in consumer demand for new mobile devices; | |
| the expiration of existing content licenses for particular games; | |
| the timing of charges related to impairments of goodwill, intangible assets, prepaid royalties and guarantees; | |
| changes in pricing policies by us, our competitors or our carriers and other distributors; | |
| changes in pricing policies by our carriers related to downloading content, such as our games; |
9
| changes in the mix of original and licensed games, which have varying gross margins; | |
| the timing of successful mobile handset launches; | |
| the timeliness and accuracy of reporting from carriers; | |
| the seasonality of our industry; | |
| fluctuations in the size and rate of growth of overall consumer demand for mobile handsets, mobile games and related content; | |
| strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; | |
| our success in entering new geographic markets; | |
| changes in accounting rules, such as those governing recognition of revenue; | |
| the timing of compensation expense associated with equity compensation grants; and | |
| decisions by us to incur additional expenses, such as increases in marketing or research and development. |
| significantly greater revenues and financial resources; | |
| stronger brand and consumer recognition regionally or worldwide; | |
| the capacity to leverage their marketing expenditures across a broader portfolio of mobile and non-mobile products; | |
| more substantial intellectual property of their own from which they can develop games without having to pay royalties; | |
| pre-existing relationships with brand owners or carriers that afford them access to intellectual property while blocking the access of competitors to that same intellectual property; | |
| greater resources to make acquisitions; | |
| the ability or willingness to offer competing products at no charge or supported by in-game advertising; | |
| lower labor and development costs; and | |
| broader global distribution and presence. |
10
| price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole, such as the recent and continuing unprecedented volatility in the financial markets; | |
| changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; | |
| actual or anticipated fluctuations in our operating results; |
11
| the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections; | |
| failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company or our industry, our failure to meet these estimates or failure of those analysts to initiate or maintain coverage of our stock; | |
| ratings or other changes by any securities analysts who follow our company or our industry; | |
| announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, capital raising activities or capital commitments; | |
| the publics response to our press releases or other public announcements, including our filings with the SEC; | |
| lawsuits threatened or filed against us; and | |
| market conditions or trends in our industry or the economy as a whole. |
| requiring us to dedicate a portion of our expected cash from operations to service our debt, thereby reducing the amount of expected cash flow available for other purposes, including funding our operations; | |
| increasing our vulnerability to downturns in our business, to competitive pressures and to adverse economic and industry conditions; | |
| limiting our ability to pursue acquisitions that may be accretive to our business; and | |
| limiting our flexibility in planning for, or reacting to, changes in our business and our industry. |
12
13
| our board of directors is classified into three classes of directors with staggered three-year terms; | |
| only our chairman of the board, our lead independent director, our chief executive officer, our president or a majority of our board of directors is authorized to call a special meeting of stockholders; | |
| our stockholders are able to take action only at a meeting of stockholders and not by written consent; | |
| only our board of directors and not our stockholders is able to fill vacancies on our board of directors; | |
| our certificate of incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval; and | |
| advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before a meeting of stockholders. |
14
15
16
| challenges caused by distance, language and cultural differences; | |
| multiple and conflicting laws and regulations, including complications due to unexpected changes in these laws and regulations; | |
| foreign currency exchange rate fluctuations; | |
| difficulties in staffing and managing international operations; | |
| potential violations of the Foreign Corrupt Practices Act, particularly in certain emerging countries in East Asia, Eastern Europe and Latin America; | |
| greater fluctuations in sales to end users and through carriers in developing countries, including longer payment cycles and greater difficulty collecting accounts receivable; | |
| protectionist laws and business practices that favor local businesses in some countries; | |
| potential adverse foreign tax consequences; | |
| foreign exchange controls that might prevent us from repatriating income earned in countries outside the United States, particularly China; | |
| price controls; | |
| the servicing of regions by many different carriers; | |
| imposition of public sector controls; | |
| political, economic and social instability; | |
| restrictions on the export or import of technology; | |
| trade and tariff restrictions and variations in tariffs, quotas, taxes and other market barriers; and | |
| difficulties in enforcing intellectual property rights in certain countries. |
17
18
19
| diversion of management time and a shift of focus from operating the businesses to issues related to integration and administration; | |
| declining employee morale and retention issues resulting from changes in compensation, management, reporting relationships, future prospects or the direction of the business; | |
| the need to integrate each acquired companys accounting, management, information, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not implemented; | |
| the need to implement controls, procedures and policies appropriate for a larger public company that the acquired companies lacked prior to acquisition; | |
| in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries; and | |
| liability for activities of the acquired companies before the acquisition, including violations of laws, rules and regulations, commercial disputes, tax liabilities and other known and unknown liabilities. |
20
21
22
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
23
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
High | Low | |||||||
Year ended December 31, 2007
|
||||||||
First quarter (beginning March 22, 2007)
|
$ | 12.29 | $ | 10.00 | ||||
Second quarter
|
$ | 14.67 | $ | 9.78 | ||||
Third quarter
|
$ | 14.10 | $ | 7.61 | ||||
Fourth quarter
|
$ | 10.41 | $ | 4.77 | ||||
Year ended December 31, 2008
|
||||||||
First quarter
|
$ | 5.72 | $ | 3.75 | ||||
Second quarter
|
$ | 5.77 | $ | 3.85 | ||||
Third quarter
|
$ | 4.70 | $ | 1.86 | ||||
Fourth quarter
|
$ | 2.00 | $ | 0.22 |
24
25
Number of
|
||||||||||||
Securities
|
||||||||||||
Remaining
|
||||||||||||
Number of
|
Available for
|
|||||||||||
Securities to be
|
Weighted-
|
Future Issuance
|
||||||||||
Issued Upon
|
Average
|
Under Equity
|
||||||||||
Exercise of
|
Exercise Price
|
Compensation
|
||||||||||
Outstanding
|
of Outstanding
|
Plans (Excluding
|
||||||||||
Options,
|
Options,
|
Securities
|
||||||||||
Warrants and
|
Warrants
|
Reflected in
|
||||||||||
Plan Category
|
Rights | and Rights | Column (a)) | |||||||||
(a) | (b) | (c) | ||||||||||
Equity compensation plans approved by security holders
|
4,867,383 | $ | 7.7912 | 1,313,647 | (1) | |||||||
Equity compensation plans not approved by security holders
|
262,400 | (2) | 4.4247 | 337,600 | (3) | |||||||
Total:
|
5,129,783 | 5.1797 | 1,651,247 | (4) |
(1) | Represents 597,238 shares available for issuance under our the 2007 Plan, which plan permits the grant of incentive and non-qualified stock options, stock appreciation rights, restricted stock, stock awards and restricted stock units; and 716,409 shares available for issuance under the ESPP. In addition, 525,575 shares subject to outstanding options under the 2001 Plan may be re-issued under the 2007 Plan pursuant to the pour over provision described above. | |
(2) | Represents outstanding options under the Inducement Plan. | |
(3) | Represents shares available for issuance under the Inducement Plan, which plan permits the grant of non-qualified stock options. | |
(4) | Excludes 887,524 shares available for issuance under the 2007 Plan and 295,841 shares available for issuance under the ESPP, which in each case were added to the respective share reserve on January 1, 2009 pursuant to the evergreen provisions described above. |
26
27
29
Item 6.
Selected
Financial Data
Year Ended December 31,
2008
2007
2006
2005
2004
(In thousands, except per share amounts)
$
89,767
$
66,867
$
46,166
$
25,651
$
7,022
22,562
18,381
13,713
7,256
1,359
6,313
355
1,645
231
11,309
2,201
1,777
2,823
126
1,103
40,184
20,582
15,845
12,827
1,716
49,583
46,285
30,321
12,824
5,306
32,140
22,425
15,993
14,557
6,474
26,066
13,224
11,393
8,515
3,692
20,971
16,898
12,072
8,434
3,468
261
275
616
616
26
1,744
450
1,110
59
1,500
69,498
(1,040
)
151,790
51,841
41,574
32,572
13,660
(102,207
)
(5,556
)
(11,253
)
(19,748
)
(8,354
)
(1,356
)
1,965
(872
)
541
(69
)
(103,563
)
(3,591
)
(12,125
)
(19,207
)
(8,423
)
(3,126
)
265
(185
)
1,621
101
(106,689
)
(3,326
)
(12,310
)
(17,586
)
(8,322
)
(315
)
(3
)
(106,692
)
(3,326
)
(12,310
)
(17,901
)
(8,322
)
(17
)
(75
)
(63
)
(1,351
)
(3,130
)
$
(106,692
)
$
(6,473
)
$
(12,385
)
$
(17,964
)
$
(9,673
)
$
(3.63
)
$
(0.14
)
$
(2.48
)
$
(4.37
)
$
(5.45
)
(0.07
)
(0.02
)
(0.02
)
(0.89
)
(0.14
)
$
(3.63
)
$
(0.28
)
$
(2.50
)
$
(4.46
)
$
(6.34
)
29,379
23,281
4,954
4,024
1,525
(1)
Includes stock-based compensation expense as follows:
28
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Year Ended December 31,
2008
2007
2006
2005
2004
(In thousands, except per share amounts)
$
714
$
939
$
207
$
158
$
28
5,174
674
322
132
59
2,097
2,186
1,211
987
454
Year Ended December 31,
2008
2007
2006
2005
2004
(In thousands)
$
19,166
$
59,810
$
12,573
$
21,616
$
8,393
92,076
161,505
81,799
49,498
37,608
14,000
4,339
10,125
724
76,363
57,190
31,495
$
26,794
$
129,461
$
(25,185
)
$
(17,393
)
$
(1,418
)
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
our expectations and beliefs regarding future conduct and
growth of the business;
our expectations regarding competition and our ability to
compete effectively;
our belief that for us to succeed in 2009 and beyond, we must
publish mobile games on next-generation platforms that are
widely accepted and commercially successful;
our expectations regarding development of future products;
our beliefs regarding trends for our business, and the
markets in which we compete, including that next-generation
platforms represent the growth area for the mobile gaming
industry;
the assumptions underlying our Critical Accounting Policies
and Estimates, including forecasts, comparable companies and
other assumptions used to estimate the fair value of our
goodwill;
our assumptions regarding the impact of Recent Accounting
Pronouncements applicable to us;
our assessments and estimates that determine our effective
tax rate and valuation allowance;
our belief that our cash and cash equivalents, borrowings
under our revolving credit facility, cash flows from operations
and our ability to repatriate cash from foreign locations will
be sufficient to meet our working capital needs, contractual
obligations, debt service obligations, capital expenditure
requirements and similar commitments for at least the next
12 months from the date of this report;
our expectation that we will generate cash from operations in
the latter half of 2009;
Table of Contents
our expectation that we will be able to maintain compliance
with the financial and other covenants in our credit facility;
and
our assessments and beliefs regarding the future outcome of
pending legal proceedings and the liability, if any, that we may
incur as a result of those proceedings.
Overview that discusses at a high level our operating results
and some of the trends that affect our business;
Critical Accounting Policies and Estimates that we believe are
important to understanding the assumptions and judgments
underlying our financial statements;
Recent Accounting Pronouncements;
Results of Operations, including a more detailed discussion of
our revenues and expenses; and
Liquidity and Capital Resources, which discusses key aspects of
our statements of cash flows, changes in our balance sheets and
our financial commitments.
30
Table of Contents
revenue recognition;
advance or guaranteed licensor royalty payments;
31
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short-term investments;
business combinations purchase accounting;
long-lived assets;
goodwill;
stock-based compensation; and
income taxes.
32
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33
Table of Contents
34
Table of Contents
35
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Year Ended December 31,
2008
2007
(In thousands)
$
89,767
$
66,867
36
Table of Contents
Year Ended December 31,
2008
2007
(In thousands)
$
22,562
$
18,381
6,313
11,309
2,201
$
40,184
$
20,582
$
89,767
$
66,867
55.2
%
69.2
%
Year Ended December 31,
2008
2007
(In thousands)
$
32,140
$
22,425
35.8
%
33.5
%
37
Table of Contents
Year Ended December 31,
2008
2007
(In thousands)
$
26,066
$
13,224
29.0
%
19.8
%
Year Ended December 31,
2008
2007
(In thousands)
$
20,971
$
16,898
23.4
%
25.3
%
38
Table of Contents
Year Ended December 31,
2007
2006
(In thousands)
$
66,867
$
46,166
39
Table of Contents
Year Ended December 31,
2007
2006
(In thousands)
$
18,381
$
13,713
355
2,201
1,777
$
20,582
$
15,845
$
66,867
$
46,166
69.2
%
65.7
%
Year Ended December 31,
2007
2006
(In thousands)
$
22,425
$
15,993
33.5
%
34.6
%
Year Ended December 31,
2007
2006
(In thousands)
$
13,224
$
11,393
19.8
%
24.7
%
40
Table of Contents
Year Ended December 31,
2007
2006
(In thousands)
$
16,898
$
12,072
25.3
%
26.1
%
41
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
3,772
$
2,343
$
2,047
(5,889
)
(951
)
(11,018
)
(31,673
)
(8,227
)
1,007
332
62,923
11,252
42
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43
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Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA).
We must
maintain, measured on consolidated basis as of the end of each
of the following periods, EBITDA of at least the following:
$
(1,672,000
)
$
(2,832,000
)
$
(812,000
)
$
1,572,000
$
4,263,000
$
5,092,000
$
5,257,000
$
5,298,000
$
6,073,000
Minimum Domestic Liquidity:
We must maintain
at the lender an amount of cash, cash equivalents and short-term
investments of not less than the greater of: (a) 20% of our
total consolidated unrestricted cash, cash equivalents and
short-term investments, or (b) 15% of outstanding
obligations under the credit facility.
44
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Payments Due by Period
Less than
Total
1 Year
1-3 Years
3-5 Years
Thereafter
(In thousands)
$
8,353
$
3,114
$
4,108
$
1,131
$
14,043
10,634
2,984
425
24,125
14,000
10,125
4,399
4,399
(1)
We have entered into license and development arrangements with
various owners of brands and other intellectual property so that
we can create and publish games for mobile handsets based on
that intellectual property. Pursuant to some of these
agreements, we are required to pay guaranteed royalties over the
term of the contracts regardless of actual game sales. Certain
of these minimum payments totaling $12.5 million have been
recorded as liabilities in our consolidated balance sheet
because payment is not contingent upon performance by the
licensor.
45
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(2)
We have issued $25.0 million of notes payable to former
shareholders of MIG. One of the former officers of MIG must
continue to provide services through June 30, 2009 to be
fully vested in the special bonus, and as a result, we did not
record $875,000 of the special bonus that is subject to vesting.
(3)
As of December 31, 2008, unrecognized tax benefits and
potential interest and penalties are classified within
Other long-term liabilities on our consolidated
balance sheets. As of December 31, 2008, the settlement of
our income tax liabilities cannot be determined, however, the
liabilities are not expected to become due within the next
twelve months.
46
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Item 7A.
Quantitative
and Qualitative Disclosures about Market Risk
47
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48
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Item 8.
Financial
Statements and Supplementary Data
Page
50
51
52
53
54
55
49
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50
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51
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands, except per share data)
$
89,767
$
66,867
$
46,166
22,562
18,381
13,713
6,313
355
11,309
2,201
1,777
40,184
20,582
15,845
49,583
46,285
30,321
32,140
22,425
15,993
26,066
13,224
11,393
20,971
16,898
12,072
261
275
616
1,744
1,110
59
1,500
69,498
(1,040
)
151,790
51,841
41,574
(102,207
)
(5,556
)
(11,253
)
919
2,953
682
(78
)
(880
)
(1,063
)
(2,197
)
(108
)
(491
)
(1,356
)
1,965
(872
)
(103,563
)
(3,591
)
(12,125
)
(3,126
)
265
(185
)
(3
)
(106,692
)
(3,326
)
(12,310
)
(17
)
(75
)
(3,130
)
$
(106,692
)
$
(6,473
)
$
(12,385
)
$
(3.63
)
$
(0.14
)
$
(2.48
)
(0.02
)
(0.14
)
$
(3.63
)
$
(0.28
)
$
(2.50
)
29,379
23,281
4,954
52
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Accumulated
Redeemable Convertible
Additional
Deferred
Other
Total
Preferred Stock
Common Stock
Paid-In
Stock-based
Comprehensive
Accumulated
Stockholders
Comprehensive
Shares
Amount
Shares
Amount
Capital
Compensation
Income (loss)
Deficit
Equity Deficit
Loss
(In thousands, except per share data)
12,258
$
57,190
5,081
$
1
$
19,254
$
(1,657
)
$
(1,324
)
$
(33,667
)
$
(17,393
)
(12,310
)
(12,310
)
$
(12,310
)
3,423
19,098
342
194
194
14
152
152
20
7
7
(578
)
578
(153
)
153
1,050
538
1,588
43
43
75
(75
)
(75
)
2,609
2,609
2,609
$
(9,701
)
15,681
76,363
5,457
1
19,894
(388
)
1,285
(45,977
)
(25,185
)
(3,326
)
(3,326
)
$
(3,326
)
7,300
74,758
74,758
(15,681
)
(76,380
)
15,681
2
76,378
76,380
1,985
1,985
3,130
(3,130
)
4
1
1
(17
)
17
3,541
258
3,799
46
46
17
(17
)
(17
)
268
225
225
upon exercise of warrants
313
(806
)
auction-rate securities
806
795
795
795
$
(2,531
)
29,023
3
179,924
(113
)
2,080
(52,433
)
129,461
(106,692
)
(106,692
)
$
(106,692
)
(6
)
6
(4,315
)
(4,315
)
7,888
96
7,984
18
18
258
231
231
63
101
101
240
916
916
(910
)
(910
)
(910
)
$
(107,602
)
$
29,584
$
3
$
184,757
$
(11
)
$
1,170
$
(159,125
)
$
26,794
53
Table of Contents
Year Ended December 31,
2008
2007
2006
(In thousands)
$
(106,692
)
$
(3,326
)
$
(12,310
)
2,756
2,116
1,503
11,570
2,476
2,393
3,669
3,799
1,740
9,591
10
1,014
477
122
74
101
18
2,901
(690
)
(522
)
1,110
59
1,500
69,498
6,313
355
(806
)
806
(1,040
)
411
(352
)
99
(94
)
230
1,783
(2,672
)
(4,176
)
(8,320
)
(2,039
)
(258
)
314
(2,598
)
(1,497
)
(1,825
)
1,555
(1,982
)
(499
)
(1,270
)
(1,285
)
1,258
166
1,037
3,959
642
2,505
258
436
181
(2,943
)
(36
)
(1,418
)
(368
)
171
184
(5,889
)
(951
)
(11,018
)
(73,600
)
(24,850
)
2,800
79,550
35,300
(3,772
)
(2,343
)
(2,047
)
1,040
(30,008
)
(693
)
(12,874
)
(7,396
)
(31,673
)
(8,227
)
1,007
12,000
74,758
231
225
194
101
7
(12,060
)
(949
)
332
62,923
11,252
(1,420
)
248
166
(38,650
)
53,993
1,407
57,816
3,823
2,416
$
19,166
$
57,816
$
3,823
$
$
361
$
912
$
2,297
$
835
$
487
$
$
$
19,018
$
$
3,130
$
$
$
17
$
75
$
$
(1,985
)
$
$
4,315
$
$
54
Table of Contents
55
Table of Contents
56
Table of Contents
wireless subscribers directly contract with the carriers, which
have most of the service interaction and are generally viewed as
the primary obligor by the subscribers;
carriers generally have significant control over the types of
games that they offer to their subscribers;
carriers are directly responsible for billing and collecting
fees from their subscribers, including the resolution of billing
disputes;
carriers generally pay the Company a fixed percentage of their
revenues or a fixed fee for each game;
carriers generally must approve the price of the Companys
games in advance of their sale to subscribers, and the
Companys more significant carriers generally have the
ability to set the ultimate price charged to their
subscribers; and
the Company has limited risks, including no inventory risk and
limited credit risk.
57
Table of Contents
Year Ended December 31,
2008
2007
2006
21.4
%
23.0
%
20.6
%
*
*
12.6
*
*
11.3
*
*
10.6
*
Revenues from the customer were less than 10% during the period.
58
Table of Contents
59
Table of Contents
Three years
Three years
Three years
Shorter of the estimated useful life or remaining term of lease
60
Table of Contents
61
Table of Contents
62
Table of Contents
Year Ended December 31,
2008
2007
2006
$
(106,692
)
$
(6,473
)
$
(12,385
)
29,399
23,263
5,260
(20
)
(82
)
(306
)
29,379
23,281
4,954
$
(3.63
)
$
(0.28
)
$
(2.50
)
63
Table of Contents
Year Ended December 31,
2008
2007
2006
3,702
14,853
194
119
210
20
20
81
306
4,607
3,436
2,135
4,746
7,429
17,508
NOTE 3
ACQUISITIONS
64
Table of Contents
$
8,593
4,353
1,507
182
9,190
7,400
330
1,110
13,432
46,097
(2,567
)
(585
)
(367
)
(3,768
)
(7,287
)
$
38,810
65
Table of Contents
Year Ended December 31,
2008
2007
$
92,480
$
81,361
50,025
47,684
(109,275
)
(18,073
)
(3.72
)
(0.78
)
66
Table of Contents
67
Table of Contents
$
1,899
843
20
71
490
2,200
8,510
400
110
59
23,390
37,992
(21
)
(567
)
(106
)
(694
)
(2,934
)
(3,830
)
(7,458
)
$
30,534
68
Table of Contents
Year Ended December 31,
2007
2006
$
69,543
$
47,112
46,379
28,579
(6,596
)
(18,214
)
(0.28
)
(3.67
)
69
Table of Contents
$
2,518
2,271
89
2,700
1,300
400
100
1,500
22,828
33,706
(4,247
)
(4,777
)
(1,180
)
(10,204
)
$
23,502
70
Table of Contents
December 31,
2006
$
48,588
31,702
(15,541
)
(3.14
)
Classified on Balance Sheet
Purchased
Realized
Aggregate
Cash and Cash
Short-term
Cost
Loss
Fair Value
Equivalents
Investments
$
124
$
$
124
$
124
$
$
124
$
$
124
$
124
$
$
2,800
$
(806
)
$
1,994
$
$
1,994
50,968
50,968
50,968
$
53,768
$
(806
)
$
52,962
$
50,968
$
1,994
71
Table of Contents
Aggregate
Fair Value
Level 1
$
124
$
124
124
19,042
$
19,166
December 31,
2008
2007
$
4,644
$
3,200
386
1,368
2,628
2,196
3,055
1,694
10,713
8,458
(5,852
)
(4,641
)
$
4,861
$
3,817
72
Table of Contents
December 31,
2008
2007
$
20,294
$
18,737
(468
)
(368
)
$
19,826
18,369
Balance at
Balance at
Beginning of
End of
Year
Additions
Deductions
Year
$
368
$
148
$
48
$
468
$
466
$
64
$
162
$
368
$
207
$
259
$
$
466
December 31,
2008
2007
$
3,409
$
2,190
4,399
3,973
2,461
2,660
1,529
856
$
11,798
$
9,679
73
Table of Contents
December 31, 2008
December 31, 2007
Estimated
Gross
Accumulated
Net
Gross
Accumulated
Net
Useful
Carrying
Amortization
Carrying
Carrying
Amortization
Carrying
Life
Value
Expense
Value
Value
Expense
Value
2.5 yrs
$
13,370
$
(10,478
)
$
2,892
$
5,018
$
(4,172
)
$
846
1 yr
1,126
(1,126
)
1,553
(1,553
)
6 yrs
185
(119
)
66
256
(118
)
138
5 yrs
18,463
(3,845
)
14,618
10,922
(1,117
)
9,805
5 yrs
2,744
(1,029
)
1,715
2,651
(183
)
2,468
9 yrs
432
(50
)
382
404
(2
)
402
3 yrs
540
(285
)
255
218
(96
)
122
36,860
(16,932
)
19,928
21,022
(7,241
)
13,781
6 yrs
1,201
(809
)
392
1,656
(840
)
816
2 yrs
525
(525
)
725
(725
)
1,726
(1,334
)
392
2,381
(1,565
)
816
$
38,586
$
(18,266
)
$
20,320
$
23,403
$
(8,806
)
$
14,597
74
Table of Contents
Amortization
Amortization
Included in
Included in
Total
Cost of
Operating
Amortization
Revenues
Expenses
Expense
$
7,066
$
200
$
7,266
4,221
191
4,412
2,859
2,859
2,743
2,743
2,676
2,676
364
364
$
19,929
$
391
$
20,320
75
Table of Contents
Effects of
Effects of
Foreign
Foreign
Impairment
January 1,
Goodwill
Currency
December 31,
Goodwill
Currency
of
December 31,
2007
Acquired
Adjustments
Exchange
2007
Acquired
Adjustments
Exchange
Goodwill
2008
$
11,414
$
$
12
$
$
11,426
$
13,445
$
$
$
(24,871
)
$
27,313
13
534
27,860
(2,506
)
(25,354
)
7,880
96
7,976
15,510
409
(19,273
)
4,622
$
38,727
$
7,880
$
25
$
630
$
47,262
$
13,445
$
15,510
$
(2,097
)
$
(69,498
)
$
4,622
76
Table of Contents
Minimum
Operating
Net
Lease
Sub-lease
Lease
Payments
Income
Payments
$
3,353
$
239
$
3,114
2,297
2,297
1,811
1,811
986
986
145
145
$
8,592
$
239
$
8,353
77
Table of Contents
Minimum
Guaranteed
Royalties
$
10,634
2,640
344
425
$
14,043
78
Table of Contents
$
6,000
$
3,000
$
5,000
$
1,500
$
1,500
$
1,500
$
1,500
20,000
$
937
$
937
$
1,563
$
1,563
5,000
79
Table of Contents
Minimum
Loan
Payments
$
14,193
11,100
25,293
1,168
24,125
14,000
$
10,125
80
Table of Contents
$
(1,672
)
$
(2,832
)
$
(812
)
$
1,572
$
4,263
$
5,092
$
5,257
$
5,298
$
6,073
81
Table of Contents
82
Table of Contents
Number
Exercise
of Shares
Price
Outstanding
Term
per
Under
(Years)
Share
Warrant
7
9.03
106
106
83
Table of Contents
84
Table of Contents
85
Table of Contents
Options Outstanding
Weighted
Weighted
Average
Average
Aggregate
Shares
Number of
Exercise
Contractual
Intrinsic
Available
Shares
Price
Term (Years)
Value
474
2,226
$
2.02
1,000
(1,653
)
1,653
7.30
655
(655
)
3.17
(342
)
0.61
476
2,882
5.03
1,766
(1,775
)
1,775
9.15
350
(350
)
9.16
(271
)
0.84
817
4,036
6.75
1,471
(2,607
)
2,607
3.07
1,226
(1,226
)
6.89
28
0.75
(287
)
0.81
935
5,130
$
5.18
5.40
$
10
4,524
$
5.34
5.38
$
10
1,954
$
6.04
4.95
$
8
86
Table of Contents
Options Outstanding
Options Exercisable
Weighted
Average
Remaining
Weighted
Weighted
Range of
Contractual
Average
Aggregate
Average
Aggregate
Exercise
Number
Life
Exercise
Intrinsic
Number
Exercise
Intrinsic
Outstanding
(in Years)
Price
Value
Exercisable
Price
Value
318
1.19
$
0.67
$
10
290
$
0.69
$
8
947
5.51
0.89
823
6.34
3.58
532
3.78
545
4.14
4.40
156
4.49
628
5.13
4.85
154
4.81
668
4.60
5.78
174
5.81
541
6.99
10.45
318
10.47
356
6.28
11.30
194
11.29
52
8.37
11.66
20
11.66
252
7.49
11.88
116
11.88
5,130
5.40
$
5.18
$
10
1,954
$
6.04
$
8
Year Ended December 31,
2008
2007
2006
%
%
%
2.34
%
4.25
%
4.77
%
4.08
5.24
6.07
43
%
52
%
74
%
87
Table of Contents
Year Ended December 31,
2008
2007
2006
$
714
$
939
$
207
5,174
674
322
2,097
2,186
1,211
$
7,985
$
3,799
$
1,740
88
Table of Contents
Year Ended December 31,
2008
2007
2006
$
(45,654
)
$
(1,221
)
$
(5,714
)
(57,909
)
(2,370
)
(6,411
)
$
(103,563
)
$
(3,591
)
$
(12,125
)
Year Ended December 31,
2008
2007
2006
$
52
$
(52
)
$
2
(20
)
(1
)
(3,835
)
56
(568
)
(3,781
)
(16
)
(569
)
655
281
384
655
281
384
52
(52
)
2
(20
)
(1
)
(3,180
)
337
(184
)
$
(3,126
)
$
265
$
(185
)
89
Table of Contents
Year Ended December 31,
2008
2007
2006
34.0
%
34.0
%
34.0
%
(0.6
)
1.9
(0.1
)
(3.2
)
(1.6
)
0.3
7.7
2.2
(0.4
)
(0.6
)
(4.2
)
(11.9
)
(0.4
)
(18.0
)
(3.9
)
(22.8
)
(3.9
)
(0.3
)
1.1
(4.9
)
(9.4
)
(1.1
)
(25.0
)
(3.0
)%
7.4
%
(1.5
)%
December 31, 2008
December 31, 2007
US
Foreign
Total
US
Foreign
Total
$
439
$
1,234
$
1,673
$
190
$
238
$
428
21,796
25,858
47,654
9,098
1,659
10,757
1,104
228
1,332
1,426
146
1,572
1,593
1,593
1,262
249
1,511
979
272
1,251
885
885
753
753
1,560
1,560
$
28,639
$
27,569
$
56,208
$
12,446
$
2,315
$
14,761
$
$
(402
)
$
(402
)
$
$
(1,020
)
$
(1,020
)
(2,461
)
(2,461
)
(2,656
)
(2,656
)
(3,025
)
(447
)
(3,472
)
(14
)
(14
)
(92
)
(1
)
(93
)
25,614
24,245
49,859
12,354
(1,362
)
10,992
(25,614
)
(26,706
)
(52,320
)
(12,354
)
(1,294
)
(13,648
)
$
$
(2,461
)
$
(2,461
)
$
$
(2,656
)
$
(2,656
)
90
Table of Contents
Year Ended December 31,
2008
2007
$
2,208
$
575
401
367
53
113
1,153
(256
)
$
2,406
$
2,208
91
Table of Contents
Year Ended December 31,
2008
2007
2006
$
43,046
$
35,997
$
25,475
4,913
6,813
4,810
8,883
132
62
9,588
5,284
2,704
20,274
15,421
10,715
3,063
3,220
2,400
$
89,767
$
66,867
$
46,166
Year Ended December 31,
2008
2007
2006
$
3,208
$
1,806
$
1,956
790
1,146
1,407
863
865
117
$
4,861
$
3,817
$
3,480
92
Table of Contents
For the Three Months Ended
2007
2008
March 31
June 30
September 30
December 31
March 31
June 30
September 30
December 31
(In thousands)
$
15,698
$
16,377
$
16,651
$
18,141
$
20,592
$
23,704
$
23,894
$
21,577
4,292
4,388
4,587
5,114
5,488
5,399
5,753
5,920
234
1,921
4,158
552
553
483
613
1,708
3,135
3,247
3,220
4,844
4,941
5,070
5,727
7,196
8,768
10,921
13,298
10,854
11,436
11,581
12,414
13,396
14,936
12,973
8,279
4,713
5,577
5,863
6,272
6,520
8,861
9,223
7,536
3,075
3,131
3,326
3,692
5,782
6,042
6,004
8,239
4,009
4,263
4,149
4,477
5,395
6,096
5,085
4,395
67
67
67
74
68
69
67
57
59
1,039
71
46,618
22,880
75
86
126
1,458
(1,040
)
10,824
13,038
13,405
14,574
18,879
21,225
67,123
44,565
30
(1,602
)
(1,824
)
(2,160
)
(5,483
)
(6,289
)
(54,150
)
(36,286
)
(522
)
1,017
1,299
171
608
(94
)
(1,894
)
25
(492
)
(585
)
(525
)
(1,989
)
(4,875
)
(6,383
)
(56,044
)
(36,261
)
(272
)
(313
)
(228
)
1,078
(1,130
)
(213
)
(822
)
(961
)
3
(5
)
$
(764
)
$
(898
)
$
(753
)
$
(911
)
$
(6,002
)
$
(6,601
)
$
(56,866
)
$
(37,222
)
$
(0.59
)
$
(0.03
)
$
(0.03
)
$
(0.03
)
$
(0.21
)
$
(0.23
)
$
(1.93
)
$
(1.26
)
93
Table of Contents
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A.
Controls
and Procedures
Item 9B.
OTHER
INFORMATION
94
Table of Contents
Item 10.
Directors,
Executive Officers and Corporate Governance
55
President, Chief Executive Officer and Director
40
Senior Vice President of Global Publishing
37
Vice President, General Counsel and Secretary
38
Senior Vice President of Global Product Development and Chief
Technology Officer
39
Senior Vice President, Chief Financial Officer and Assistant
Secretary
43
Vice President, Global Human Resources
95
Table of Contents
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
96
Table of Contents
Item 14.
Principal
Accountant Fees and Services
Item 15.
Exhibits
and Financial Statement Schedules
97
Table of Contents
By:
By:
President, Chief Executive Officer and Director
(Principal Executive Officer)
March 13, 2009
Senior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
March 13, 2009
Lead Independent Director
March 13, 2009
Director
March 13, 2009
98
Table of Contents
Director
March 13, 2009
Director
March 13, 2009
Director
March 13, 2009
Director
March 13, 2009
Director
March 13, 2009
99
Table of Contents
Incorporated by Reference
Exhibit
Filing
Filed
Agreement and Plan of Merger, dated as of November 28,
2007, by and among Glu Mobile Inc., Maverick Acquisition Corp.,
Awaken Limited, Awaken (Beijing) Communications Technology Co.
Ltd., Beijing Zhangzhong MIG Information Technology Co. Ltd.,
Beijing Qinwang Technology Co. Ltd., each of Wang Bin, Wang Xin
and You Yanli, and Wang Xin, as Representative (the MIG
Merger Agreement).
8-K
001-33368
2
.01
12/03/07
Amendment to the MIG Merger Agreement.
8-K
001-33368
2
.01
12/30/08
Recommended Cash Offer by Glu Mobile Inc. for Superscape Group
plc.
8-K
001-33368
2
.01
01/25/08
Form of Acceptance, Authority and Election by Glu Mobile Inc.
for Superscape Group plc.
8-K
001-33368
2
.02
01/25/08
Restated Certificate of Incorporation of Glu Mobile Inc.
S-1/A
333-139493
3
.02
02/14/07
Amended and Restated Bylaws of Glu Mobile Inc.
8-K
001-33368
99
.01
10/28/08
Form of Registrants Common Stock Certificate.
S-1/A
333-139493
4
.01
02/14/07
Amended and Restated Investors Rights Agreement, dated as
of March 29, 2006, by and among Glu Mobile Inc. and certain
investors of Glu Mobile Inc. and the Amendment No. 1 and
Joinder to the Amended and Restated Investor Rights Agreement
dated May 5, 2006, by and among Glu Mobile Inc. and certain
investors of Glu Mobile Inc.
S-1
333-139493
4
.02
12/19/06
Written Consent and Agreement to Convert entered into as of
February 28, 2007 by and among Glu Mobile Inc. and Granite
Global Ventures II, L.P. and TWI Glu Mobile Holdings Inc.
S-1/A
333-139493
10
.32
03/06/07
Form of Indemnity Agreement.
S-1
333-139493
10
.01
12/19/06
2001 Stock Option Plan, form of option grant used from
December 19, 2001 to May 2, 2006, form of option grant
used from December 8, 2004 to May 2, 2006 and forms of
option grant used since May 2, 2006.
S-1/A
333-139493
10
.02
01/22/07
2007 Equity Incentive Plan and forms of(a) Notice of Stock
Option Grant, Stock Option Award Agreement and Stock Option
Exercise Agreement,(b) Notice of Restricted Stock Award and
Restricted Stock Agreement,(c) Notice of Stock Appreciation
Right Award and Stock Appreciation Right Award
Agreement,(d) Notice of Restricted Stock Unit Award and
Restricted Stock Unit Agreement and(e) Notice of Stock
Bonus Award and Stock Bonus Agreement.
S-1/A
333-139493
10
.03
02/16/07
2007 Employee Stock Purchase Plan, as amended on April 20,
2007.
10-Q
001-33368
10
.02
08/14/08
2007 Employee Stock Purchase Plan, as amended on
January 22, 2009.
X
Forms of Stock Option Award Agreement (Immediately Exercisable)
and Stock Option Exercise Agreement (Immediately Exercisable)
under the Glu Mobile Inc. 2007 Equity Incentive Plan.
10-Q
001-33368
10
.05
08/14/08
Table of Contents
Incorporated by Reference
Exhibit
Filing
Filed
Interim CFO Retention Agreement between Glu Mobile Inc. and Eric
R. Ludwig, dated as of May 9, 2008.
10-Q
011-33368
10
.04
08/14/08
Change of Control Severance Agreement, dated as of
October 10, 2008, between L. Gregory Ballard and Glu Mobile
Inc.
X
Form of Change of Control Severance Agreement, dated as of
October 10, 2008, between Glu Mobile Inc. and each of Jill
S. Braff, Kevin S. Chou, Alessandro Galvagni, Eric R. Ludwig and
Thomas M. Perrault.
X
2008 Executive Bonus Plan of Glu Mobile Inc., as amended on
April 9, 2008.
10-Q
011-33368
10
.03
8/14/08
Glu Mobile Inc. 2009 Executive Bonus Plan, dated as of,
February 25, 2009.
8-K
011-33368
10
.01
03/03/09
Description of 2009 Target Bonuses under the 2009 Executive
Bonus Plan of Glu Mobile Inc. (contained in Item 5.02 of
the
Form 8-K).
8-K
011-33368
03/03/09
Summary of Compensation Terms of Kevin S. Chou, dated as of
October 31, 2008.
10-Q
011-33368
10
.02
11/14/08
Offer Letter, dated as of July 17, 2008, between Glu Mobile
Inc. and Thomas M. Perrault.
10-Q
011-33368
10
.01
11/14/08
Salary Compensation Terms of L. Gregory Ballard, dated as of
January 1, 2009 (contained in Item 5.02 of Form 8-K).
8-K
011-33368
12/02/08
Non-Employee Director Compensation Program, dated as of
October 31, 2006.
10-Q
011-33368
10
.01
08/14/08
Non-Employee Director Compensation Program, dated as of
January 28, 2009.
X
Lease Agreement at San Mateo Centre II and III
dated as of January 23, 2003, as amended on June 26,
2003, December 5, 2003, October 11, 2004 and
May 31, 2005, by and between CarrAmerica Realty, L.P. and
Glu Mobile Inc.
S-1
333-139493
10
.05
12/19/06
Sublease dated as of August 22, 2007, between Oracle USA,
Inc., and Glu Mobile Inc.
8-K
001-33368
10
.1
08/28/07
BREW Application License Agreement dated as of February 12,
2002 by and between Cellco Partnership (d.b.a. Verizon Wireless)
and Glu Mobile Inc.
S-1/A
333-139493
10
.11.1
01/10/07
BREW Developer Agreement dated as of November 2, 2001, as
amended, by and between Qualcomm Inc. and Glu Mobile Inc.
S-1/A
333-139493
10
.11.2
01/10/07
Form of Warrant dated as of May 2, 2006 by and between
Pinnacle Ventures I Equity Holdings LLC and Glu Mobile Inc., by
and between Pinnacle Ventures I Affiliates, L.P. and Glu Mobile
Inc., and by and between Pinnacle Ventures II Equity
Holdings, LLC and Glu Mobile Inc.
S-1
333-139493
10
.20
12/19/06
Form of Warrant to Purchase Common Stock issued
February 28, 2007 by Glu Mobile Inc. to Granite Global
Ventures II, L.P. and to TWI Glu Mobile Holdings Inc.
S-1/A
333-139493
10
.31
03/06/07
Table of Contents
Incorporated by Reference
Exhibit
Filing
Filed
Second Amendment to Loan and Security Agreement between Glu
Mobile Inc. and Silicon Valley Bank, dated November 4, 2008.
8-K
011-33368
10
.01
11/04/08
Amended and Restated Loan and Security Agreement dated as of
December 29, 2008, among Silicon Valley Bank, Glu Mobile
Inc., Glu Games Inc. and Superscape Inc
8-K
011-33368
10
.06
12/30/08
Form of Senior Subordinated Secured Promissory Note, between Glu
Mobile Inc. and each of the former shareholders of Beijing
Zhangzhong MIG Information Technology Co. Ltd., dated as of
December 29, 2008.
8-K
011-33368
10
.01
12/30/08
Secured Promissory Note in the principal amount of $2,500,000,
between Beijing Zhangzhong MIG Information Technology Co., Ltd.
and Wang Bin, dated as of December 29, 2008.
8-K
011-33368
10
.02
12/30/08
Secured Promissory Note in the principal amount of $2,500,000,
between Beijing Zhangzhong MIG Information Technology Co., Ltd.
and Wang Xin, dated as of December 29, 2008.
8-K
011-33368
10
.03
12/30/08
Security Agreement, among Glu Mobile Inc., and each of the
former shareholders of Beijing Zhangzhong MIG Information
Technology Co. Ltd. and Wang Xin, dated as of December 29,
2008.
8-K
011-33368
10
.04
12/30/08
Guaranty Agreement, among Glu Mobile Inc., Wang Bin and Wang
Xin, dated as of December 29, 2008.
8-K
011-33368
10
.05
12/30/08
List of Subsidiaries of Glu Mobile Inc.
X
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm.
X
Power of Attorney (included on signature page)
Certification of Principal Executive Officer Pursuant to
Securities Exchange Act
Rule 13a-14(a)/15d-14(a).
X
Certification of Principal Financial Officer Pursuant to
Securities Exchange Act
Rule 13a-14(a)/15d-14(a).
X
Certification of Principal Executive Officer Pursuant to
18 U.S.C. Section 1350 and Securities Exchange Act
Rule 13a-14(b).*
X
Certification of Principal Financial Officer Pursuant to
18 U.S.C. Section 1350 and Securities Exchange Act
Rule 13a-14(b).*
X
#
Indicates management compensatory plan or arrangement.
+
Certain portions of this exhibit have been omitted and have been
filed separately with the SEC pursuant to a request for
confidential treatment under Rule 406 of the Securities Act
of 1933 and
Rule 24b-2
as promulgated under the Securities Exchange Act of 1934.
*
This certification is not deemed filed for purposes
of Section 18 of the Securities Exchange Act, or otherwise
subject to the liability of that section. Such certification
will not be deemed to be incorporated by reference into any
filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that Glu Mobile Inc.
specifically incorporates it by reference.
1 | Includes 290,223 and 295,851 shares of Common Stock automatically added on January 1, 2008 and January 1, 2009, respectively, pursuant to this Section 1. |
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COMPANY: | GLU MOBILE INC. | |||||||||
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By: | /s/ Eric R. Ludwig | |||||||||
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Title: | SVP and CFO | ||||||||
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EMPLOYEE: | /s/ L. Gregory Ballard | |||||||||
Signature | ||||||||||
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L. Gregory Ballard | ||||||||||
Printed Name |
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4
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COMPANY: | GLU MOBILE INC. | |||||||||
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By: | |||||||||
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Title: | |||||||||
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EMPLOYEE:
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Signature | ||||||||||
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Printed Name |
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Annual Retainer Fee:
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$ | 20,000 | ||
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Annual Lead Independent Director Fee:
|
$ | 15,000 | ||
|
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Annual Committee Fees:
|
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Audit Committee Chair
|
$ | 15,000 | ||
Audit Committee Member (other than Chair)
|
$ | 5,000 | ||
Compensation Committee Chair
|
$ | 15,000 | ||
Compensation Committee Member (other than Chair)
|
$ | 5,000 | ||
Nominating and Governance Committee Chair
|
$ | 5,000 | ||
Nominating and Governance Committee Member (other than Chair)
|
$ | 5,000 |
State or Other | ||||
Jurisdiction of | ||||
Incorporation or | ||||
Name of Subsidiary(1) | Which Does Business As | Organization | ||
|
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Beijing Zhangzhong MIG
Information Technology
Co. Ltd.
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MIG | Peoples Republic Of China | ||
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Glu Mobile Limited
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Glu Mobile Limited | Hong Kong | ||
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Glu Mobile Limited
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Glu Mobile Limited | United Kingdom | ||
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Maverick Mobile Entertainment (Beijing)
Limited
|
Maverick Mobile Entertainment (Beijing) Limited | Peoples Republic Of China | ||
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Superscape Inc.
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Glu Mobile Inc. | Delaware | ||
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Superscape Group Limited
|
Superscape Group Limited | United Kingdom |
1. | I have reviewed this Annual Report on Form 10-K of Glu Mobile Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 13, 2009 | /s/ L. Gregory Ballard | |||
L. Gregory Ballard | ||||
President and Chief Executive Officer
(Principal Executive Officer) |
||||
1. | I have reviewed this Annual Report on Form 10-K of Glu Mobile Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: March 13, 2009 | /s/ Eric R. Ludwig | |||
Eric R. Ludwig | ||||
Senior Vice President and Chief Financial Officer
(Principal Financial Officer) |
Date: March 13, 2009 | By: | /s/ L. Gregory Ballard | ||
L. Gregory Ballard | ||||
President and Chief Executive Officer
(Principal Executive Officer) |
Date: March 13, 2009 | By: | /s/ Eric R. Ludwig | ||
Eric R. Ludwig | ||||
Senior Vice President and Chief Financial Officer
(Principal Financial Officer) |
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