Rock Band 4 Publisher Mad Catz Receives Audit Opinion With Going Concern Paragraph

Mad Catz Interactive today announced that its audited financial statements for the fiscal year ending March 31, 2015 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 25, 2015, contained a going concern paragraph in the audit opinion from its independent registered public accounting firm. The going concern paragraph is due to uncertainties about Mad Catz’ ability to comply with certain debt covenants under their credit facility that is required to finance operations.

This announcement is made pursuant to NYSE MKT Company Guide Section 610(b), which requires separate disclosure of receipt of an audit opinion containing a going concern paragraph. This announcement does not represent any change or amendment to the Company’s consolidated financial statements or to its Annual Report on Form 10-K for the fiscal year ended March 31, 2015.

More still, Mad CatzĀ  today announced that it entered into new financing facilities (collectively, the “Financing Facilities”) with NewStar Business Credit LLC (“NSBC”) and Faunus Group International, Inc. (“FGI”) to provide combined financing on eligible accounts receivable and inventories up to $30.0 million, and increasing to $45.0 million from September 1, 2015 through December 31, 2015.

On June 30, 2015, Mad Catz, Inc. (“MCI”), a wholly-owned subsidiary of the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with NSBC to provide for a $20.0 million revolving line of credit (which increases to $35.0 million from September 1, 2015 through December 31, 2015) subject to the availability of eligible accounts receivable and inventories, which changes throughout the year. The Loan Agreement expires on June 29, 2018.

In addition, on June 30, 2015, Mad Catz Europe Ltd. (“MCE”), a wholly-owned subsidiary of the Company, entered into a Master Facilities Agreement (the “Facilities Agreement”) with FGI to provide for a $10.0 million secured demand credit facility subject to the availability of eligible accounts receivable and inventories, which changes throughout the year. The Facilities Agreement has a three-year term, although FGI may terminate the facility at any time upon at least three months’ notice.

At the closing of the Financing Facilities, the Company will use the proceeds to pay in full the obligations outstanding under the credit facility with Wells Fargo Capital Finance, LLC (“Wells Fargo”), and the agreement with Wells Fargo will be terminated. – See more at: http://globenewswire.com/news-release/2015/07/02/749506/10140516/en/Mad-Catz-R-Reports-New-Bank-Financing-Facilities.html#sthash.uged7scF.dpuf