8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2007

MAD CATZ INTERACTIVE, INC.

(Exact Name of Registrant as Specified in Charter)

Canada	001-14944	N/A
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

7480 Mission Valley Road, Suite 101
San Diego, California 92108

(Address of Principal Executive Offices)

(619) 683-9830

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 425 under the Exchange Act (17 CFR 240.14.a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.01: Completion of Acquisition or Disposition of Assets
	Item 9.01. Financial Statements and Exhibits
SIGNATURES
EXHIBIT 23.1
EXHIBIT 99.1
EXHIBIT 99.2
EXHIBIT 99.3

Item 2.01: Completion of Acquisition or Disposition of Assets

          On November 20, 2007, Mad Catz Interactive, Inc., a corporation organized under the Canada Business Corporations Act (the “Company”), completed the acquisition of all of the issued share capital of Winkler Atlantic Holdings Limited (“WAHL”). The Company’s acquisition of WAHL was reported in a Current Report on Form 8-K filed with the Securities and Exchange Commission on November 20, 2007 (the “Initial Form 8-K”). The Initial Form 8-K is incorporated herein by reference. The Company is filing this Amended Current Report on Form 8-K/A to include the financial statements and unaudited pro forma financial information required by Item 9.01 of Form 8-K, which were excluded from the Initial Form 8-K in reliance on Items 9.01(a) and 9.01(b).

Item 9.01. Financial Statements and Exhibits

          (a) Financial statements of business acquired. The audited consolidated financial statements of WAHL and subsidiaries, including, the consolidated balance sheets as of February 28, 2007 and 2006, the consolidated statements of operations, statements of shareholder’s deficit and comprehensive income (loss) and statements of cash flows for the fiscal years ended February 28, 2007 and 2006 and the notes thereto, and the Independent Auditors’ Report thereon, are filed as Exhibit 99.1 to this current report on Form 8-K/A.

           The unaudited financial statements of WAHL and subsidiaries, including the consolidated balance sheet as of August 31, 2007, and the consolidated statements of operations and cash flows for the six month periods ended August 31, 2007 and 2006 and the notes to the consolidated financial statements are filed as Exhibit 99.2 to this current report on Form 8-K/A.

           (b) Pro forma financial information. The unaudited pro forma condensed consolidated financial statements of the Company giving effect to the acquisition of WAHL, including the unaudited pro forma condensed consolidated statements of operations for the fiscal year ended March 31, 2007 and for the six month period ended September 30, 2007 are filed as Exhibit 99.3 to this current report on Form 8-K/A.

          (d) Exhibits.

23.1	Consent of KPMG LLP, Independent Auditors
99.1	Audited consolidated financial statements of WAHL as of and for the fiscal years ended February 28, 2007 and 2006
99.2	Unaudited consolidated financial statements of WAHL as of August 31, 2007 and for the six month periods ended August 31, 2007 and 2006
99.3	Unaudited pro forma condensed consolidated statements of operations of the Company for the fiscal year ended March 31, 2007 and for the six month period ended September 30, 2007

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: May 28, 2008	MAD CATZ INTERACTIVE, INC.
	By:	/s/ Stewart Halpern
	Name:   Stewart Halpern
	Its: Chief Financial Officer

EX-23.1

Exhibit 23.1

Consent of Independent Auditors

The Board of Directors
Mad Catz Interactive, Inc.:

We consent to incorporation by reference in the registration statement (No. 333-103798) on Form S-8 of Mad Catz Interactive, Inc. of our report dated May 27, 2008, relating to the consolidated balance sheets of Winkler Atlantic Holdings Limited and subsidiaries as of February 28, 2007 and 2006, and the related consolidated statements of operations, shareholder’s deficit and comprehensive income (loss), and cash flows for the years then ended, which report appears in the Form 8-K/A of Mad Catz Interactive, Inc. dated November 14, 2007.

/s/  KPMG LLP  

San Diego, California
May 27, 2008

EX-99.1

Exhibit 99.1

TABLE OF CONTENTS

	Page
INDEPENDENT AUDITORS’ REPORT		2
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS AS OF FEBRUARY 28, 2007 AND 2006		3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED FEBRUARY 28, 2007 AND 2006		4
CONSOLIDATED STATEMENTS OF SHAREHOLDER’S DEFICIT AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED FEBRUARY 28, 2007 AND 2006		5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED FEBRUARY 28, 2007 AND 2006		6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED FEBRUARY 28, 2007 AND 2006		7-14

-1-

Independent Auditors’ Report

The Board of Directors
Winkler Atlantic Holdings Limited:

We have audited the accompanying consolidated balance sheets of Winkler Atlantic Holdings Limited and subsidiaries (the Company) as of February 28, 2007 and 2006, and the related consolidated statements of operations, shareholder’s deficit and comprehensive income (loss), and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Winkler Atlantic Holdings Limited and subsidiaries as of February 28, 2007 and 2006, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP  

San Diego, California
May 27, 2008

-2-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets
February 28, 2007 and 2006
(In thousands except for share information)

	2007			2006
ASSETS
Current assets:
Cash	$	4,146		$	526
Marketable securities		132			705
Accounts receivable, net of allowances of $1,998 and $1,676, respectively		6,779			3,740
Other receivables		617			830
Due from affiliates		539			1,015
Inventories		4,362			3,113
Prepaid expenses and other current assets		39			73
Total current assets		16,614			10,002
Property and equipment, net		228			163
Other assets		95			84
Total assets	$	16,937		$	10,249
LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Bank line of credit	$	—		$	2,935
Accounts payable		2,433			1,137
Due to affiliates		3,406			1,945
Accrued liabilities		2,365			1,400
Total current liabilities		8,204			7,417
Notes payable to shareholder		40,766			44,953
Total liabilities		48,970			52,370
Shareholder’s deficit:
Common stock, $1 par value, 5,000 shares authorized; 2 shares issued and outstanding		—			—
Additional paid-in capital		10,304			—
Accumulated other comprehensive income		509			779
Accumulated deficit		(42,846	)		(42,900	)
Total shareholder’s deficit		(32,033	)		(42,121	)
Total liabilities and shareholder’s deficit	$	16,937		$	10,249

See accompanying notes to consolidated financial statements.

-3-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended February 28, 2007 and 2006
(In thousands)

	2007			2006
Net sales	$	37,205		$	30,052
Cost of sales		27,157			23,185
Gross profit		10,048			6,867
Operating expenses:
Sales and marketing		4,097			3,139
General and administrative		5,656			5,755
Research and development		2,977			2,933
Total operating expenses		12,730			11,827
Operating loss		(2,682	)		(4,960	)
Interest expense, net		(72	)		(222	)
Foreign exchange gain		6			(39	)
Other income, net		2,803			3,623
Income (loss) before income taxes		55			(1,598	)
Provision for income taxes		1			1
Net income (loss)	$	54		$	(1,599	)

See accompanying notes to consolidated financial statements.

-4-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statements of Shareholder’s Deficit and Comprehensive Income (Loss)
Years ended February 28, 2007 and 2006
(In thousands except for share information)

								Accumulated
						Additional		Other						Total
	Common Stock					Paid-In		Comprehensive			Accumulated			Shareholder
	Shares			Amount		Capital		Income (Loss)			Deficit			Deficit
Balance at February 28, 2005		2		$	—	$	—	$	237		$	(41,301	)	$	(41,064	)
Comprehensive income (loss):
Net loss		—			—		—		—			(1,599	)		(1,599	)
Foreign currency translation adjustment		—			—		—		379			—			379
Unrealized gains on marketable securities, net of tax		—			—		—		163			—			163
Total comprehensive income (loss)		—			—		—		—			—			(1,057	)
Balance at February 28, 2006		2			—		—		779			(42,900	)		(42,121	)
Conversion of shareholder loan into equity		—			—		10,304		—			—			10,304
Comprehensive income (loss):
Net income		—			—		—		—			54			54
Foreign currency translation adjustment		—			—		—		(328	)		—			(328	)
Unrealized gains on marketable securities, net of tax		—			—		—		58			—			58
Total comprehensive income (loss)		—			—		—		—			—			(216	)
Balance at February 28, 2007		2	$		—	$	10,304	$	509		$	(42,846	)	$	(32,033	)

See accompanying notes to consolidated financial statements.

-5-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended February 28, 2007 and 2006
(In thousands)

	2007			2006
Cash flows from operating activities
Net income (loss)	$	54		$	(1,599	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		147			92
(Decrease) increase in provision for doubtful accounts		(23	)		98
Increase in provisions for sales reserves		361			187
Loss on sale or disposals of property and equipment		1			32
(Gain) loss on sale of marketable securities		(172	)		69
Changes in operating assets and liabilities:
Accounts receivable		(3,361	)		50
Other receivables		213			(489	)
Inventories		(1,249	)		3,834
Prepaid expenses and other current assets		34			12
Other assets		(11	)		(4	)
Accounts payable		1,296			(2,087	)
Due from/to affiliates		1,937			(4,784	)
Accrued liabilities		965			175
Net cash used in operating activities		192			(4,414	)
Cash flows from investing activities
Sale of marketable securities		640			743
Purchase of marketable securities		—			(37	)
Purchases of property and equipment		(213	)		(74	)
Net cash provided by investing activities		427			632
Cash flows from financing activities
Proceeds (payments) from/on bank line of credit		(2,935	)		1,415
Proceeds from notes payable to shareholder		5,621			1,938
Net cash provided by financing activities		2,686			3,353
Effects of foreign exchange on cash		315			(127	)
Net increase (decrease) in cash		3,620			(556	)
Cash and cash equivalents at beginning of year		526			1,082
Cash and cash equivalents at end of year	$	4,146		$	526
Supplemental disclosure of non-cash financing activities—conversion of shareholder loan into equity	$	10,304		$	—
Supplemental cash flow information:
Income taxes paid	$	1		$	1
Interest paid	$	73		$	200

See accompanying notes to consolidated financial statements.

-6-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

NOTE 1–SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Description of Business

Winkler Atlantic Holdings Limited (“Winkler”) is a corporation organized under the laws of the British Virgin Islands. Winkler has the following wholly-owned operating subsidiaries: (i) Saitek Industries Ltd. (“Saitek Hong Kong”), a corporation organized under the laws of Hong Kong, (ii) Saitek Industries Ltd. (“Saitek US”), a corporation organized under the laws of the state of Delaware, (iii) Saitek Elektronik Vertriebs GmbH (“Saitek Germany”), a corporation organized under the laws of Germany, (iv) Saitek Plc (“Saitek UK”), a corporation organized under the laws of England and Wales, and (v) Saitek SA (“Saitek France”), a corporation organized under the laws of France (collectively referred to as “the Company”).

Saitek Hong Kong was a dormant company until December 1, 2006 when it was reactivated in contemplation of the sale of certain entities under the control of Winkler. Saitek Hong Kong provides certain product development and marketing services and sources products primarily from Saitek Electronic Manufacturing Services, an unconsolidated Company affiliated by common ownership, located in China, for the other subsidiaries. Prior to December 1, 2006, the business activity, revenue and profits of Saitek Hong Kong resided within Saitek Winkler Limited, an unconsolidated company affiliated by common ownership located in Hong Kong.

The Company’s products are designed, manufactured (primarily through third parties), marketed and distributed for both PC and console based video game systems. The Company’s products include mice, keyboards, headsets, PC gaming controllers, as well as other PC peripherals.

Principles of Consolidation

The consolidated financial statements include the accounts of Winkler and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the useful lives of fixed assets; allowances for doubtful accounts and sales returns; price protection; cooperative advertising and the valuation of fixed assets, inventories and investments. Actual results could differ from those estimates.

Concentration of Credit Risk

Credit risk is primarily concentrated in accounts receivable. The Company generally does not require collateral on accounts receivable because a majority of its customers are large, well capitalized, established retail entities with operations throughout the United States, Europe, and Asia. The Company maintains an allowance for doubtful accounts. During the years ended February 28, 2007 and 2006, the Company derived 32% and 31% of its sales, respectively, from three major customers, which represented 53% and 58% of accounts receivable at February 28, 2007 and 2006, respectively. The loss of one of these customers could have a material adverse effect on the Company.

Fair Value of Financial Instruments

The carrying values of the Company’s financial instruments, including cash, marketable securities, accounts receivable, other receivables, accounts payable, due to and from affiliates, accrued liabilities and bank line of credit approximate their fair values due to the relatively short-term maturity of these instruments. It is impracticable to determine fair value of the notes payable to shareholder because of the related party nature of the notes payable.

Cash and Cash Equivalents

The Company considers all highly liquid debt and equity instruments with maturities of 90 days or less to be cash equivalents.

Marketable Securities

The Company evaluates its investments in accordance with the provisions of Statement of Financial Standards (“SFAS”) No. 115, Accounting for Certain Investments in Debt and Equity Securities. Based on the Company’s intent, investment policies and ability to liquidate equity securities, the Company classifies short-term investment securities as available-for-sale, within current assets which are carried at fair value, with unrealized gains and losses

-7-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

reported as accumulated other comprehensive income (loss) within shareholder’s deficit. The cost basis of securities sold is based on the specific identification method and all such realized gains and losses are recorded as a component within other income in the consolidated statement of operations. The Company reviews the carrying values of its investments and writes down such investments to estimated fair value by a charge to the statements of operations when the severity and duration of a decline in the value of an investment is considered to be other than temporary. The cost of securities sold or purchased is recorded on the settlement date.

Accounts Receivable

Accounts receivable are recorded net of an allowance for doubtful accounts and other sales related allowances. When evaluating the adequacy of the allowance for doubtful accounts, the Company analyzes known uncollectible accounts, the aging of accounts receivable, historical bad debts, customer credit-worthiness and current economic trends.

Other sales related allowances include those for sales returns, volume rebates, price protection, and cooperative advertising. When estimating future product returns, the Company makes an assessment of the rate and lag period by which customers will return the Company’s products by considering historical trends and information regarding inventory levels and demand and acceptance of the Company’s products by the end consumer. Allowances for cooperative advertising and volume rebates are based upon programs negotiated with specific customers.

Accounts receivable allowances consist of the following (in thousands):

	Balance at the			Additions
	Beginning of			Revenue			Expenses and Other					Balance at End of
Description	Period			Reductions (A)			Costs (B)			Deductions (C)		Period
YEAR ENDED FEBRUARY 28, 2006
Allowance for Doubtful Accounts	$	(63	)	$	—		$	(98	)	$	51	$	(110	)
Cooperative Advertising, Price Protection, Volume Rebate and Sales Returns	$	(1,379	)	$	(5,717	)	$	—		$	5,530	$	(1,566	)
YEAR ENDED FEBRUARY 28, 2007
Allowance for Doubtful Accounts	$	(110	)	$	—		$	23		$	16	$	(71	)
Cooperative Advertising, Price Protection, Volume Rebate and Sales Returns	$	(1,566	)	$	(6,513	)	$	—		$	6,152	$	(1,927	)

(A)	Includes increases in allowances for sales returns, price protection, cooperative advertising and other sales allowances including volume discounts. Amounts reflect the translation effect of using the average exchange rate for the revenue reduction items and the year-end exchange rate for the balance sheet item (allowance account).
(B)	Includes increases and reversals in allowance for doubtful accounts. Amounts reflect the translation effect of using the average exchange rate for expense items and the year-end exchange rate for the balance sheet item (allowance account).
(C)	Includes actual write-offs of uncollectible accounts receivable, net of recoveries (credits) issued for other sales allowances and the reversal of unused cooperative advertising funds.

Inventories

Inventories usually consists of finished goods and are stated at the lower of cost, determined using the first-in, first-out method, or market. The Company regularly reviews inventory quantities on hand and in the retail channel in order to recognize any loss of utility in the period incurred.

Revenue Recognition

The Company evaluates the recognition of revenue based on the applicable provisions of Staff Accounting Bulletin No. 104, Revenue Recognition. Accordingly, the Company recognizes revenue when (1) there is persuasive evidence that an arrangement with the customer exists, which is generally a customer purchase order, (2) the products are delivered, which occurs when the risk of loss has been transferred to the customer, (3) the selling price is fixed or determinable and (4) collection of the customer receivable is deemed probable. The Company’s payment arrangements with customers typically provide net 30 day terms.

Amounts billed to customers for shipping and handling is included in net sales, and costs incurred related to shipping and handling is included in cost of sales.

Certain allowances for estimated future returns are provided upon recognition of revenue. We provide for anticipated returns of inventory in accordance with SFAS No. 48, Revenue Recognition When the Right of Return Exists, by reducing revenue for the units estimated to be returned. This estimate is periodically adjusted based on historical and anticipated rates of returns.

Cooperative advertising with retailers is recorded when revenue is recognized in accordance with Emerging Issues Task Force Issue (“EITF”) No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). Such consideration is characterized as a reduction of sales as the Company does not receive a separate identifiable benefit and the fair value of the benefit cannot be reasonably estimated.

-8-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation expense is provided for using the straight-line method over the estimated useful life of the assets which range from two to thirteen years. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term. Major improvements and betterments are capitalized.

Long-lived Assets

The Company assesses potential impairments of its long-lived assets when events or changes in circumstances indicate that the assets’ carrying value may not be recoverable in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. An impairment loss would be recognized when the carrying value amount of a long-lived asset (asset group) is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). As of February 28, 2007 and 2006, there were no impairments of
long-lived assets.

Research and Development and Advertising

Research and development and advertising costs are expensed as incurred. Advertising costs amounted to $2.9 million and $2.0 million for the years ended February 28, 2007 and 2006, respectively. Cooperative advertising with retailers is recorded when revenue is recognized. Costs are recognized as a reduction of sales as the Company does not receive a separate identifiable benefit, and the fair value of the benefit cannot be reasonably estimated. Research and development costs amounted to $3.0 million and $2.9 million for the years ended February 28, 2007 and 2006, respectively. The Company received reimbursements for certain product development expenses from an unconsolidated related party totaling $2.7 million and $3.3 million for the years ended February 28, 2007 and 2006, respectively. The reimbursements were recorded as other income in the consolidated statements of operations.

Income Taxes

The Company utilizes the asset and liability method of accounting for income taxes as set forth in SFAS No. 109, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. The Company also determines its tax contingencies in accordance with SFAS No. 5, Accounting for Contingencies. The Company records estimated tax liabilities to the extent the contingencies are probable and can be reasonably estimated.

-9-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

Foreign Currency Translation

The Company’s foreign subsidiaries utilize their local currency as their functional currency. The accounts of these foreign subsidiaries have been translated into United States dollars using the current exchange rate at the balance sheet date for assets and liabilities and the average exchange rate for the fiscal year for revenues and expenses. Cumulative translation gains or losses are recorded as accumulated other comprehensive income (loss) in shareholder deficit. Gains or losses resulting from transactions that are made in a currency different from the functional currency are recognized in earnings as they occur.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and certain changes in equity that are excluded from net income (loss). Accumulated other comprehensive income (loss) represents net unrealized gains and losses from foreign currency translation adjustments and net unrealized gains and losses from investments in marketable securities.

Recent Accounting Pronouncements

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation 48, Accounting for Uncertainty in Income Taxes: an Interpretation of FASB SFAS Statement No. 109 (“FIN 48”). FIN 48 clarifies SFAS No. 109, Accounting for Income Taxes, to indicate a criterion that an individual tax position would have to meet for some or all of the benefit of that position to be recognized in an entity’s financial statements. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company believes that the adoption of FIN 48 will not have a material effect on the Company’s financial position and results of operation.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and accordingly, does not require any new fair value measurements. SFAS No. 157 was initially effective for financial statements issued for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued staff position FAS No. 157-2, which delays the effective date of SFAS No. 157 for certain nonfinancial assets and liabilities for fiscal years beginning after November 15, 2008. The Company is in the process of evaluating the impact of the adoption of SFAS No. 157 to its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115, which permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159

-10-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

is expected to expand the use of fair value measurement, which is consistent with the FASB’s long-term measurement objectives for accounting for financial instruments. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS No. 157, Fair Value Measurements. As described above, the Company does not expect that the adoption of SFAS No. 157 or SFAS No. 159 will have a material impact on its financial position or results of operations.

NOTE 2 — MARKETABLE SECURITIES

The cost basis, gross unrealized holding gains, gross unrealized holding losses and fair value of available-for-sale securities at February 28, 2007 and 2006 were as follows (in thousands):

			Gross		Gross
			unrealized		unrealized
	Cost		holding		holding			Estimated
	basis		gains		(losses)			fair value
At February 28, 2007
Available for sale:
Equity securities	$	74	$	58	$	—		$	132
At February 28, 2006
Available for sale:
Equity securities	$	542	$	171	$	(8	)	$	705

The fair values of equity securities are based on quoted market prices at the reporting date for those or similar investments.

Proceeds from the sale of equity securities available for sale were $640,000 and $743,000 in 2007 and 2006, respectively; gross realized gains included in other income in 2007 and 2006 were $184,000 and $6,000, respectively. Gross realized losses included in other income in 2007 and 2006 were $12,000 and $75,000, respectively. As of February 28, 2007 and 2006, there were no impairments of marketable securities.

NOTE 3 — PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands):

	February 28,
	2007			2006
Furniture and fixtures	$	285		$	299
Computer equipment and software		504			565
Machinery and equipment		137			—
Leasehold improvements		73			63
		999			927
Less accumulated depreciation and amortization		(771	)		(764	)
	$	228		$	163

Depreciation and amortization expense was $147,000 and $92,000 for the periods ended February 28, 2007 and 2006, respectively.

-11-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

NOTE 4 — BANK LINE OF CREDIT

The Company had a revolving line of credit at Saitek US for $1.5 million with First Bank of Long Beach; the line was available through August 2006 and was secured by substantially all of the assets of Saitek US and a letter of credit for $1.0 million secured by Winkler. Interest was payable in monthly installments on the unpaid principal at the prime rate. At February 28, 2006, the prime rate was 7.5% and the outstanding principal was $1.3 million. The line of credit was fully repaid prior to February 28, 2007 and was not renewed.

The Company had a credit facility at Saitek Germany for Euro 1.5 million ($1.8 million) with HSBC Trinkaus and Burkhardt. This facility was secured by a guarantee for Euro 1.5 million ($1.8 million) from Winkler through the parent company’s bank, HSBC Guyerzeller and the Company had a standby letter of credit with Citibank for Euro 500,000 ($660,000) at February 28, 2007. The interest rate on the total facility was 6%. At February 28, 2006, there was Euro 1.0 million ($1.2 million) outstanding at a rate of 6%. The facility was fully repaid prior to February 28, 2007 and was not renewed.

At February 28, 2006 the Company had a business overdraft facility at Saitek U.K. for £500,000 ($871,000) with National Westminster Bank. This facility was secured by a guarantee from Winkler through the parent company’s bank HSBC Guyerzeller for £550,000 ($958,000). The interest rate was 5.5% for borrowings up to the limit and 8.5% for borrowings in excess of the limit. At February 28, 2006, there was £270,615 ($471,000) outstanding. The facility expired on June 16, 2006 and was not renewed.

NOTE 5 — INCOME TAXES

     Income (loss) before income taxes consists of the following (in thousands):

	Fiscal Years Ended February 28,
	2007			2006
Income (loss) before income taxes:
Domestic	$	(317	)	$	(643	)
Foreign		372			(955	)
Total income (loss) before income taxes	$	55		$	(1,598	)

Income tax expense was $1,000 related to state income taxes in the U.S. for the years ended February 28, 2007 and 2006.

The provision for income taxes reconciles to the amount computed by applying the statutory rate (0%) to income before income taxes as follows (in thousands):

	Fiscal Years Ended February 28,
	2007						2006
	$			%			$			%
Tax at federal statutory rate	$	—			0	%	$	—			0	%
Foreign tax rate differential		245			451			(506	)		(32	)
Valuation allowance		(302	)		(462	)		494			31
Other		58			12			13			1
	$	1			1	%	$	1			—	%

Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as shown below (in thousands):

-12-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

	February 28,
	2007			2006
Deferred tax assets:
Net operating loss carryforwards	$	7,368		$	6,984
Accounts receivable reserves		555			381
Inventory writedowns and other reserves		326			297
Other		—			138
Total deferred tax assets		8,249			7,800
Deferred tax liabilities:
Depreciation and amortization		(6	)		(4	)
Other		(145	)		—
Total deferred tax liabilities		(151	)		(4	)
Net deferred tax assets before valuation allowance		8,098			7,796
Valuation allowance		(8,098	)		(7,796	)
Net deferred tax assets	$	—		$	—

The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing prudent and feasible profits. In assessing the realizability of its deferred tax assets, management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies. As a result of this analysis of all available evidence, both positive and negative, management does not believe that it is more likely than not that the net deferred tax assets will be realized. Accordingly, the total net deferred tax asset of $8.1 million and $7.8 million at February 28, 2007 and February 28, 2006, respectively, has been fully offset by a valuation allowance. The valuation allowance increased by $302,000 for the year ended February 28, 2007.

At February 28, 2007, the Company has federal and state net operating loss carryforwards of approximately $1.7 million which will begin to expire in fiscal 2024 and fiscal 2011, respectively. Additionally, the Company has foreign net operating loss carryforwards of approximately $21.7 million that have no expiration.

NOTE 6 — COMMITMENTS AND CONTINGENCIES

Leases

The Company leases office space and certain equipment for business use under non-cancelable operating leases. Rental expense charged to operations was $464,000 and $410,000 for the years ended February 28, 2007 and 2006, respectively. Annual future minimum rental payments required under operating leases as of February 28, 2007 are as follows (in thousands):

-13-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Years Ended February 28, 2007 and 2006

Year ending February 28:
2008	$	463
2009		431
2010		272
2011		146
2012		26
	$	1,338

Other Commitments

The Company has a long term contract for market research services which requires fixed quarterly payments. Annual payments required under this contract are as follows (in thousands):

Year ending February 28:
2008	$	177
2009		177
2010		15
2011		—
2012		—
	$	369

Legal Matters

In the ordinary course of its business, the Company is party to various legal actions, which management believes are incidental to the operation of the business of the Company. Management believes that the outcome of such legal proceedings to which the Company is currently a party will not have a material adverse effect upon the Company’s consolidated results of operations, financial position or cash flows.

NOTE 7 — EMPLOYEE SAVINGS PLANS

The Company has defined contribution plans which are available to all employees who meet eligibility requirements. The Company’s contributions to the plans were $88,000 and $43,000 for the years ended February 28, 2007 and 2006, respectively.

NOTE 8 — GEOGRAPHIC DATA

The Company’s sales, accounts receivable — trade and property, plant and equipment are attributed to the following geographic regions (in thousands):

	2007						2006
			Accounts		Property,				Accounts		Property,
			Receivable,		and				Receivable,		and
	Net Sales		net		Equipment, net		Net Sales		net		Equipment, net
Europe	$	19,984	$	2,045	$	117	$	17,148	$	1,367	$	138
North America		15,927		4,001		25		12,904		2,373		25
Rest of world		1,294		733		86		—		—		—
	$	37,205	$	6,779	$	228	$	30,052	$	3,740	$	163

Sales are attributed to geographic regions based on the location of the customer.

During the year ended February 28, 2007, three customers individually accounted for at least 10% of the Company’s sales, with one customer accounting for 12% and the second and third for 10%, respectively, for a combined total of 32% of consolidated sales. During the year ended February 28, 2006 two customers individually accounted for at least 10% of the Company’s sales, with one customer accounting for 11%, and the second for 10%, for a combined total of 21% of consolidated sales.

NOTE 9 — RELATED PARTY TRANSACTIONS

Transactions with affiliated companies not disclosed elsewhere in the financial statements or notes thereto are as follows:

Fees are paid to Saitek Industries Limited for certain services provided to the Company, including strategic and financial management services. Service fees were $186,000 and $117,000 during the fiscal years ending February 28, 2007 and 2006, respectively.

The Company purchases a significant portion of its inventory from Saitek Electronic Manufacturing Services, an unconsolidated company affiliated by common ownership. Purchases from this supplier amounted to approximately $23.0 million and $13.0 million for the years ended February 28, 2007 and 2006, respectively. From March 1, 2005 through November 30, 2006 these purchases were made through Saitek Winkler Limited, an unconsolidated Hong Kong company affiliated by common ownership. Subsequent to November 30, 2006 these purchases were made through Saitek Hong Kong, a wholly owned consolidated subsidiary. In addition, Saitek UK charged certain product development and other costs to Saitek Winkler Limited through November 30, 2006 and recognized these charges as other income. For the year ended February 28, 2006 these amounts totaled $3.3 million and for the period March 1, 2006 through November 30, 2006 these amounts totaled $2.7 million.

Accounts receivable from affiliated companies at February 28, 2007 and 2006, was $539,000 and $1.0 million, respectively. Accounts payable due to affiliated companies at February 28, 2007 and 2006, was $3.4 million and $1.9 million, respectively.

During the period ended February 28, 2007, Winkler Atlantic Trust, a party related by common ownership, converted $10.3 million of loans to the Company into equity. These loans had been previously made to fund the operations of the Company. These loans were not collateralized, bore no interest and were due upon demand. The Company recorded the conversion of $10.3 million for the year ended February 28, 2007 in additional paid-in capital in the consolidated statements of shareholder deficit and comprehensive income (loss).

NOTE 10 — DIFFERENCES BETWEEN ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES AND IN CANADA

The consolidated financial statements have been prepared in accordance with U.S. GAAP. In certain respects, U.S. GAAP differs from accounting principles generally accepted in Canada (“Canadian GAAP”). Under Canadian GAAP marketable securities are short term investments carried at the lower of cost or market. As such, unrealized holding gains would not be recognized under Canadian GAAP, however, there is no reconciling difference for the Company between reported net income under U.S. GAAP and Canadian GAAP for the year ended February 28, 2007. Also, Canadian GAAP does not recognize comprehensive income (loss) or accumulated other comprehensive income (loss). However, the U.S. GAAP presentation of the foreign currency translation adjustment in the consolidated statements of shareholder’s deficit is consistent with Canadian GAAP. Other than the aforementioned there are no material differences in these consolidated financial statements between U.S. GAAP and Canadian GAAP.

NOTE 11 — SUBSEQUENT EVENTS

On September 30, 2007, the shareholder of the Company forgave the remaining outstanding loans to the Company, which totaled $38.4 million. From February 28, 2007 through September 30, 2007, there were repayments of $2.4 million.

On November 14, 2007, the Company’s shareholder entered into an acquisition agreement with Mad Catz Interactive, Inc. (“Mad Catz”), a corporation organized under the Canada Business Corporations Act, to sell all shares of the Company to Mad Catz. The acquisition closed on November 20, 2007. The purchase price consisted of $30.0 million, subject to post-closing working capital adjustments and less any indebtedness of the Company or its subsidiaries at the closing less any amounts the Company or its subsidiaries are required to pay as bonuses or commissions as a result of the transaction. The initial $29.5 million of consideration was paid by a cash payment of $15.0 million and the issuance of $14.5 million of convertible loan notes dated November 20, 2007.

-14-

EX-99.2

Exhibit 99.2

TABLE OF CONTENTS

	Page
UNAUDITED CONSOLIDATED BALANCE SHEET AS OF AUGUST 31,2007		2
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST 31, 2007 AND 2006		3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED AUGUST 31, 2007 AND 2006		4
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED AUGUST 31, 2007 AND 2006		5-7

-1-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Unaudited Consolidated Balance Sheet
August 31, 2007
(In thousands except for share information)

	2007
ASSETS
Current assets:
Cash	$	2,538
Accounts receivable, net of allowance of $1,605		3,043
Other receivables		905
Due from affiliates		281
Inventories		5,849
Prepaid expense and other current assets		62
Total current assets		12,678
Property and equipment, net		392
Other assets		278
Total assets	$	13,348
LIABILITIES AND SHAREHOLDER’S DEFICIT
Current liabilities:
Accounts payable	$	3,400
Due to affiliates		4,059
Accrued liabilities		1,526
Total current liabilities		8,985
Notes payable to shareholder		38,380
Total liabilities		47,365
Shareholder’s deficit:
Common stock, $1 par value, 5,000 shares authorized; 2 shares issued and outstanding		—
Additional paid-in capital		10,304
Accumulated other comprehensive income		552
Accumulated deficit		(44,873	)
Total shareholder’s deficit		(34,017	)
Total liabilities and shareholder’s deficit	$	13,348

See accompanying notes to unaudited consolidated financial statements.

-2-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
Six months ended August 31, 2007 and 2006
(In thousands)

	2007			2006
Net sales	$	16,030		$	11,763
Cost of sales		10,245			8,499
Gross profit		5,785			3,264
Operating expenses:
Sales and marketing		2,007			1,449
General and administrative		4,211			3,565
Research and development		1,752			1,513
Total operating expenses		7,970			6,527
Operating loss		(2,185	)		(3,263	)
Interest income (expense), net		38			(38	)
Foreign exchange gain (loss)		(4	)		—
Other income		124			1,541
Loss before income taxes		(2,027	)		(1,760	)
Provision for income taxes		—			—
Net loss	$	(2,027	)	$	(1,760	)

See accompanying notes to unaudited consolidated financial statements.

-3-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
Six months ended August 31, 2007 and 2006
(in thousands)

	2007			2006
Cash flows from operating activities
Net loss	$	(2,027	)	$	(1,760	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		179			98
Decrease in provision for doubtful accounts and sales reserves		(393	)		(553)
Gain on sale of marketable securities		(82	)		(2	)
Changes in current assets and liabilities:
Accounts receivable		4,129			1,792
Other receivables		(288	)		(382	)
Due from affiliates		258			(354	)
Inventories		(1,487	)		(3,050	)
Prepaid expenses and other current assets		(23	)		5
Other assets		(183	)		(6	)
Accounts payable		967			419
Accrued liabilities		(839	)		98
Due to affiliates		653			2,485
Net cash provided by (used in) operating activities		864			(1,210	)
Cash flows from investing activities
Sale of marketable securities		156			23
Purchase of property and equipment		(343	)		(96	)
Net cash used in investing activities		(187	)		(73	)
Cash flows from financing activities
Proceeds from notes payable to shareholder		—			3,641
Payments on notes payable to shareholder		(2,386	)		—
Payments on bank line of credit		—			(2,464	)
Net cash (used in) provided by financing activities		(2,386	)		1,177
Effects of foreign exchange on cash		101			415
Net (decrease) increase in cash and cash equivalents		(1,608	)		309
Cash and cash equivalents — beginning of period		4,146			526
Cash and cash equivalents — end of period	$	2,538		$	835
Supplemental cash flow information:
Income taxes paid	$	—		$	—
Interest paid	$	18		$	43

See accompanying notes to unaudited consolidated financial statements.

-4-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Unaudited Notes to Consolidated Financial Statements
Six Months Ended August 31, 2007 and 2006

NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business and Summary of Significant Accounting Policies

Winkler Atlantic Holdings Limited (“Winkler”) is a corporation organized under the laws of the British Virgin Islands. Winkler has the following wholly-owned operating subsidiaries: (i) Saitek Industries Ltd., a corporation organized under the laws of Hong Kong, (ii) Saitek Industries Ltd., a corporation organized under the laws of the state of Delaware, (iii) Saitek Elektronik Vertriebs GmbH, a corporation organized under the laws of Germany, (iv) Saitek Plc, a corporation organized under the laws of England and Wales, and (v) Saitek SA, a corporation organized under the laws of France (collectively referred to as “the Company”).

Saitek Hong Kong was a dormant company until December 1, 2006 when it was reactivated in contemplation of the sale of certain entities under the control of Winkler. Saitek Hong Kong provides certain product development and marketing services and sources products primarily from China for the other subsidiaries. Prior to December 1, 2006, the business activity, revenue and profits of Saitek Hong Kong resided within Saitek Electronic Manufacturing Services, an unconsolidated company affiliated by common ownership.

The Company’s products are designed, manufactured (primarily through third parties), marketed and distributed for both PC and console-based video game systems. The Company’s products include mice, keyboards, headsets, PC gaming controllers, as well as other PC peripherals.

The accompanying interim consolidated balance sheet as of August 31, 2007, and the statements of operations and cash flows for the six months ended August 31, 2007 and 2006 are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim information and with Article 10 of Regulation S-X. In the opinion of the Company’s management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments consisting of normal recurring adjustments necessary for the fair presentation of the Company’s financial position at August 31, 2007 and its results of operations and cash flows for the six months ended August 31, 2007 and 2006. The results of operations for the six months ended August 31, 2007 are not necessarily indicative of the results to be expected for any other interim period or any fiscal year.

These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for Winkler Atlantic Holdings Limited filed as Exhibit 99.1 of the Current Report on Form 8-K/A of Mad Catz Interactive, Inc. dated November 14, 2007.

Principles of Consolidation

The consolidated financial statements include the accounts of Winkler and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include

-5-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Unaudited Notes to Consolidated Financial Statements
Six Months Ended August 31, 2007 and 2006

the useful life of fixed assets; allowances for doubtful accounts and sales returns; price protection; cooperative advertising and the valuation of fixed assets, inventory and investments. Actual results could differ from those estimates.

Inventories

Inventories usually consists of finished goods and are stated at the lower of cost, determined using the first-in, first-out method, or market. The Company regularly reviews inventory quantities on hand and in the retail channel in order to recognize any loss of utility in the period incurred.

Revenue Recognition

The Company evaluates the recognition of revenue based on the applicable provisions of Staff Accounting Bulletin No. 104, Revenue Recognition. Accordingly, the Company recognizes revenue when (1) there is persuasive evidence that an arrangement with the customer exists, which is generally a customer purchase order, (2) the products are delivered, which occurs when the risk of loss has been transferred to the customer, (3) the selling price is fixed or determinable and (4) collection of the customer receivable is deemed probable. The Company’s payment arrangements with customers typically provide net 30 day terms.

Amounts billed to customers for shipping and handling is included in net sales, and costs incurred related to shipping and handling is included in cost of sales.

Certain allowances for estimated future returns are provided upon recognition of revenue. We provide for anticipated returns of inventory in accordance with SFAS No. 48, Revenue Recognition When the Right of Return Exists by reducing revenue and the related cost of sales for the units estimated to be returned. This estimate is periodically adjusted based on historical and anticipated rates of returns.

Cooperative advertising with retailers is recorded when revenue is recognized in accordance with Emerging Issues Task Force Issue (“EITF”) No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products). Such consideration is characterized as a reduction of sales as the company does not receive a separate identifiable benefit and the fair value of the benefit cannot be reasonably estimated.

Research and Development

Research and development costs amounted to $1.7 million and $1.5 million for the periods ended August 31, 2007 and 2006, respectively. The Company got reimbursed from an unconsolidated related party for $1.4 million for the period ended August 31, 2006. The reimbursement is recorded as other income in the consolidated statement of operations.

Comprehensive Loss

SFAS No. 130, Reporting Comprehensive Income, requires classification of other comprehensive income in a financial statement and display of other comprehensive income separately from retained earnings and additional paid-in capital. Other comprehensive income primarily includes foreign currency translation adjustments and net unrealized gains and losses from investments in marketable securities.

Comprehensive loss for the six months ended August 31, 2007 and 2006 consists of the following components (in thousands):

	Six Months Ended
	August 31,
	2007			2006
Net loss	$	(2,027	)	$	(1,760	)
Foreign currency translation adjustment		43			456
Unrealized gain on marketable securities, net of tax		—			185
Comprehensive loss	$	(1,984	)	$	(1,119	)

-6-

WINKLER ATLANTIC HOLDINGS LIMITED AND SUBSIDIARIES
Unaudited Notes to Consolidated Financial Statements
Six Months Ended August 31, 2007 and 2006

Geographic Data

The Company’s accounts receivable and property and equipment are attributed to the following geographic regions (in thousands):

	August 31, 2007
	Accounts		Property
	Receivable,		and
	net		Equipment, net
Europe	$	1,407	$	145
North America		1,615		30
Rest of world		21		217
	$	3,043	$	392

The Company’s sales are attributed to the following geographic regions (in thousands):

	Six months ended
	August 31,
	2007		2006
Net sales:
Europe	$	7,066	$	5,553
North America		7,094		6,210
Rest of world		1,870		—
	$	16,030	$	11,763

Revenue is attributed to geographic regions based on the location of the customer. During the six months ended August 31, 2007, one customer individually accounted for 10% of the Company’s gross sales. During the six months ended August 31, 2006, two customers individually accounted for at least 10% of the Company’s gross sales, one accounted for 11% and the second for 10% of the Company’s gross sales for a combined total of 21% of gross sales.

At August 31, 2007, four customers individually accounted for at least 10% of total accounts receivable, one accounted for 32%, the second for 15%, the third for 13% and the fourth for 12% for a combined total of 72% of accounts receivable.

NOTE 2—NOTES PAYABLE TO SHAREHOLDER

At August 31, 2007, the balance of $38.4 million was owed to a shareholder, Winkler Atlantic Trust, a party related by common ownership. These loans were made to fund the operations of the Company. Subsequent to August 31, 2007, the shareholder of the Company forgave all outstanding loans to the Company.

NOTE 3 — SUBSEQUENT EVENTS

On September 30, 2007, the shareholder of the Company forgave the remaining outstanding loans to the Company. These loans totaled $38.4 million.

On November 14, 2007, the Company’s shareholder, entered into an acquisition agreement with Mad Catz Interactive, Inc. (“Mad Catz”), a corporation organized under the Canada Business Corporations Act, to sell all shares of the Company to Mad Catz. The acquisition closed on November 20, 2007. The purchase price consisted of $30.0 million, subject to post-closing working capital adjustments and less any indebtedness of the Company or its subsidiaries at the closing less any amounts the Company or its subsidiaries are required to pay as bonuses or commissions as a result of the transaction. The initial $29.5 million of consideration was paid by a cash payment of $15.0 million and the issuance of $14.5 million of convertible loan notes dated November 20, 2007.

-7-

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

Mad Catz Interactive, Inc. (“Mad Catz”, “MCI”, “the Company”, “our” or “we”) acquired Winkler Atlantic Holdings Limited and subsidiaries (“WAHL”) on November 20, 2007. The acquisition of WAHL has been accounted for using the purchase method of accounting and, accordingly, the tangible and intangible assets and liabilities assumed were recorded at their estimated fair values as of the date of the acquisition. Our preliminary allocation of the purchase price is pending completion of several elements, including the finalization of our independent appraisal for purposes of the valuation of acquired intangible assets. Accordingly, there may be material adjustments to the allocation of the purchase price.

The unaudited pro forma condensed consolidated financial statements are based on estimates and assumptions which are preliminary and have been made solely for the purposes of developing such pro forma information. The estimated pro forma adjustments arising from the acquisition are derived from the preliminary estimated fair value of assets acquired and liabilities assumed, and the related allocation of the purchase price consideration. The final determination of the purchase price allocation will be based on the established fair value of the assets acquired, including the fair value of the identifiable intangible assets, and liabilities assumed as of November 20, 2007 (the acquisition date). The excess of the purchase price over the fair value of net assets acquired is allocated to goodwill. The final determination of the purchase price, fair values, and resulting goodwill may differ significantly from what is reflected in these unaudited pro forma condensed consolidated financial statements.

A pro-forma condensed consolidated balance sheet for MCI has not been included as the acquisition of WAHL was included in MCI’s consolidated balance sheet as of December 31, 2007. Reference is made to MCI’s quarterly report on Form 10-Q for the quarter ended December 31, 2007.

The following unaudited pro forma condensed statements of operations combine the statement of operations data for MCI and WAHL for the year ended March 31, 2007 and for the six months ended September 30, 2007 as if the acquisition had been completed on April 1, 2006. The pro forma financial information is based upon the historical consolidated financial statements of MCI and WAHL and the assumptions, estimates and adjustments which are described in the notes to the unaudited pro forma condensed consolidated financial statements. The assumptions, estimates and adjustments are preliminary and have been made solely for purposes of developing such pro forma information. The unaudited pro forma condensed consolidated financial statements include adjustments that have been made to reflect the preliminary purchase price allocations. These preliminary allocations represent estimates made for purposes of these unaudited pro forma condensed consolidated financial statements and are subject to change upon a final determination of fair value.

The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the consolidated results of operations of MCI that would have been reported had the acquisition occurred on the date indicated, nor do they represent a forecast of the consolidated results of operations for any future period. Furthermore, no effect has been given in the unaudited pro forma condensed consolidated statements of operations for synergistic benefits or cost savings that may be realized through the combination of MCI and WAHL or costs that may be incurred in integrating the two companies. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes, together with management’s discussion and analysis of financial condition and results of operations, contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2007, which is on file with the SEC, and the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2007 and the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 2007, each of which is incorporated herein by reference, and the historical financial statements and related notes of WAHL included in this Form 8-K/A. A summary of the estimated purchase price allocation to the fair value of assets acquired and liabilities assumed is as follows (in thousands):

-1-

Cash consideration				$	14,956
Convertible loan notes					14,500
Transaction costs					1,500
Restructuring costs					1,000
				$	31,956
Preliminary allocation of purchase price as of December 31, 2007:
Current assets excluding inventories	$	13,135
Inventories		5,976
Property and equipment, net		524
Accounts payable and other liabilities		(13,221	)
				$	6,414
Fair value of identifiable intangible assets acquired:
Product lines		3,200
Customer relationships		3,100
Trademarks and trade names		1,100
Covenant not-to-compete		50
					7,450
Goodwill					18,092
				$	31,956

The amount allocated to the intangible assets represents the Company’s preliminary estimate of the identifiable intangible assets acquired from WAHL, which include product lines, customer relationships, trademarks and trade names and covenant not-to-compete.

Because our fiscal year differs from WAHL’s, WAHL’s unaudited consolidated statement of operations for the six months ended August 31, 2007 and audited consolidated statement of operations for the fiscal year ended February 28, 2007 have been used in preparing the unaudited pro forma condensed consolidated financial statements. Management believes that effect of this difference is immaterial for pro forma financial information purposes.

The pro forma information presented is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the acquisition had been completed on the dates indicated, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon information and assumptions available at the time of the filing of this Form 8-K/A.

You should read this information in conjunction with the:

§ accompanying notes to the unaudited pro forma condensed consolidated financial statements;

-2-

§	separate unaudited historical consolidated financial statements of MCI as of and for the six month period ended September 30, 2007 included in MCI’s quarterly report on Form 10-Q for the quarter ended September 30, 2007;
§	separate unaudited historical consolidated financial statements of MCI as of and for the nine month period ended December 31, 2007 included in MCI’s quarterly report on Form 10-Q for the quarter ended December 31, 2007;
§	separate audited historical consolidated financial statements of MCI as of and for the fiscal year ended March 31, 2007, included in the MCI annual report on Form 10-K for the fiscal year ended March 31, 2007; and
§	separate historical consolidated financial statements of WAHL as of and for the six month period ended August 31, 2007 (unaudited) and as of and for the year ended February 28, 2007 (audited), included elsewhere in this Form 8-K/A.

The unaudited pro forma condensed consolidated financial statements do not include the effects of any operating efficiencies or cost savings expected from the acquisition.

- 3 -

Mad Catz Interactive, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR SIX MONTHS ENDED SEPTEMBER 30, 2007
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	HISTORICAL						PRO FORMA
	MCI			WAHL			ADJUSTMENTS			NOTES			PRO FORMA
	9/30/07			8/31/07
Net sales	$	31,431		$	16,030		$	—					$	47,461
Cost of sales		21,799			10,245			—						32,044
Gross profit		9,632			5,785			—						15,417
Operating expenses
Sales and marketing		3,679			2,007			—						5,686
General and administrative		4,277			4,211			1,071			(A	)		9,559
Research and development		613			1,752			—						2,365
Total operating expenses		8,569			7,970			1,071						17,610
Operating income (loss)		1,063			(2,185	)		(1,071	)					(2,193	)
Interest (expense) income, net		(209	)		38			(974	)		(B	)		(1,145	)
Foreign exchange gain (loss), net		336			(4	)		—						332
Other income		151			124			—						275
Income (loss) before income taxes		1,341			(2,027	)		(2,045	)					(2,731	)
Income tax expense (benefit)		651			—			(472	)		(C	)		179
Net income (loss)	$	690		$	(2,027	)	$	(1,573	)				$	(2,910	)
Basic net income (loss) per share	$	0.01											$	(0.06	)
Diluted net income (loss) per share	$	0.01											$	(0.06	)
Weighted average shares issued and outstanding
Basic		54,664,487												54,664,487
Diluted		55,531,186												54,664,487

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

- 4 -

Mad Catz Interactive, Inc.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2007
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

	HISTORICAL						PRO FORMA
	MCI			WAHL			ADJUSTMENTS			NOTES			PRO FORMA
	3/31/07			2/28/07
Net sales	$	99,721		$	37,205		$	—					$	136,926
Cost of sales		74,703			27,157			(4,608	)		(D	)		97,252
Gross profit		25,018			10,048			4,608						39,674
Operating expenses
Sales and marketing		8,923			4,097			46			(D	)		13,066
General and administrative		8,244			5,656			5,533			(A	) (D)		19,433
Research and development		1,406			2,977			—						4,383
Total operating expenses		18,573			12,730			5,579						36,882
Operating income (loss)		6,445			(2,682	)		(971	)					2,792
Interest expense, net		(1,109	)		(72	)		(1,996	)		(B	)		(3,177	)
Foreign exchange gain		256			6			—						262
Other income		338			2,803			(2,683	)		(E	)		458
Income before income taxes		5,930			55			(5,650	)					335
Income tax expense (benefit)		2,225			1			(2,050	)		(C	)		176
Net income	$	3,705		$	54		$	(3,600	)				$	159
Basic net income per share	$	0.07											$	0.00
Diluted net income per share	$	0.07											$	0.00
Weighted average shares issued and outstanding
Basic		54,244,383												54,244,383
Diluted		55,036,591												55,036,591

See accompanying notes to unaudited pro forma condensed consolidated financial statements.

- 5 -

MAD CATZ INTERACTIVE, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
Year Ended March 31, 2007 and Six Months Ended September 30, 2007

1. Basis of Presentation

The accompanying unaudited pro forma condensed consolidated financial statements are based on the historical financial information of Mad Catz Interactive, Inc. (“MCI”) and Winkler Atlantic Holdings Limited (“WAHL”) after giving effect to the acquisition of WAHL by MCI using the purchase method of accounting and applying the assumptions and adjustments described in the accompanying notes.

The unaudited pro forma condensed consolidated statements of operations for the six months ended September 30, 2007 and for the twelve months ended March 31, 2007 combines the historical results for MCI for each of the periods presented, and the historical results for WAHL for each of the periods presented, as if the acquisition had occurred as of the beginning of each period presented.

2. Pro Forma Adjustments

The following pro forma adjustments are included in the unaudited pro forma condensed consolidated statements of operations:

(A)	Reflects an estimate of annual amortization of $2.2 million for the year ended March 31, 2007 and $1.1 million for the six months ended September 30, 2007 related to the establishment of intangible assets in connection with the acquisition of WAHL.
(B)	Reflects an estimated increase in interest expense of $878,000 for the year ended March 31, 2007 and $425,000 for the six months ended September 30, 2007 related to the draw down of MCI’s credit facility with Wachovia Capital Finance Corporation. In addition, includes an estimated increase in interest expense, associated with the 7.5% convertible loan notes due $4.5 million on the second anniversary of issuance and $10.0 million on the third anniversary of issuance, of $1.1 million for the year ended March 31, 2007 and $549,000 for the six months ended September 30, 2007.
(C)	Reflects the recognition of the income tax benefit of the above pro forma adjustments at an appropriate estimated tax rate.
(D)	Reflects the consolidation of Saitek Hong Kong as of the beginning of the year. Saitek Hong Kong was a dormant company until December 1, 2006 when it was reactivated in contemplation of the sale of certain entities under the control of WAHL. The pro forma adjustment also includes the elimination of profit in inventory for the period from March 1, 2006 through November 30, 2006.
(E)	Reflects the reversal of reimbursement for research and development activities from Saitek Winkler Limited, an unconsolidated related party, during the period prior to December 1, 2006 and the consolidation of Saitek Hong Kong as of the beginning of the year.

3. Differences Between Accounting Principles Generally Accepted in the United States and in Canada

     The pro-forma condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. In certain respects, U.S. GAAP differs from Canadian GAAP. Reconciliation of net income determined in accordance with U.S. GAAP to net loss determined under Canadian GAAP follows (in thousands, except per share amount):

	March 31,
	2007
Net income, as reported	$	159
Effective interest on convertible notes (a)		(701	)
Net (loss) in accordance with Canadian GAAP	$	(542	)
Net (loss) per share in accordance with Canadian GAAP basic and diluted	$	(0.01	)

     The area of material difference between United States and Canadian GAAP and the impact on the consolidated financial statements of the Company are described below.

(a) Effective Interest Method- Convertible Debt

     Under U.S. GAAP, these statements reflect the accounting for the issuance of convertible notes entirely as debt as no amount was required to be bifurcated for the conversion feature under U.S. GAAP. In accordance with Canadian GAAP, the pro forma interest expense adjustment, net of tax, reflects the bifurcation of the equity classified conversion feature from the convertible debt instrument using the residual method and the accretion of the carrying amount of the debt using the effective interest method.

- 6 -