Good day. And welcome to the Mandalay Digital Fiscal 2015 Second Quarter Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions). After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Ghen Laraya, Vice President, Business and Legal. Please go ahead.

Thank you. And welcome everyone to Mandalay Digital’s fiscal 2015 second quarter earnings conference call. I’m Ghen Laraya. With me today are Bill Stone, Mandalay’s Chief Executive Officer; Andrew Schleimer, our Executive Vice President and Chief Financial Officer; and joining us on the call is Jud Bowman, Chief Executive Officer of Appia. Statements made on this call including those during the question-and-answer session may contain forward-looking statements that are subject to risks and uncertainties. Please refer to the Safe Harbor Statement included in today’s press release, as well as Mandalay’s periodic filings with the SEC for a complete discussion of the risks and uncertainties that could cause actual results to differ materially from those you may perceive today. We will be discussing certain non-GAAP financial results. The press release issued earlier today contains a reconciliation of these non-GAAP financial results to their most comparable GAAP measures. Further, as stated in the press releases that were issued today, we have prepared a slide presentation to accompany some of management’s prepared remarks that can be find on ir.mandalaydigital.com, we invite you to follow along. Now it is my pleasure to turn the call over to Bill Stone.

Yes. Thanks Ghen and thank you all for joining us today. We’ve got a lot to get through and we’ll try to do it efficiently. I want to thank Jud for being on the call today to help describe the opportunity we see for Digital Turbine and Appia together. As you saw earlier this afternoon, we announced a transformative agreement to acquire Appia, who is the largest independent app installed platform. We’re truly excited about this combination, so we’ll touch on this first and what it means for the future of Digital Turbine and our competitive positioning. I’ll then move into our second quarter results and provide some color on both the prior quarter and the current quarter and then we’ll have Andrew take you through the financials in depth and we’ll open it up for some Q&A. Again as Ghen said, we have the slides uploaded on our website, which I’ll be walking through. So, I’m going to start on the presentation on slide 3. Digital Turbine and Appia investment highlights. This slide shows the key motivators behind the Appia deal, which is designed to capture a crucial window of opportunity to accelerate our scale and exploring marketplace. The combination of Digital Turbine and Appia creates a single unique mobile app and app ecosystem that offers an app agnostic approach through which wireless carriers, OEMs and distributors can enhance their own revenue generation as the majority of app installs today goes to both Facebook and Google. This transaction is truly transformative for Digital Turbine, as it vertically integrates our largest ad partner. It’s timely now impart because of the ramp that we’ve begun to experience with our carrier partners with new device rollouts and integrating application sales at this particular time, makes operational and financial sense. At closing, we…

Thanks Bill. So I’m going to talk about two things for the next couple of minutes. The first thing is to share a little bit of background on Appia and the second thing is to talk about how this transaction came about and why we’re so excited about joining forces of Mandalay Digital. We founded Appia six years ago, the month that Apple launched the App Stores. So, we’ve been here since the beginning. And we held a belief that the smartphone and apps are the transformational technology platform of our time. So now forward six years, and over 100 billion app downloads from the App Store and Google Play, the number of apps has now surged pass 2 million. And as the number of apps continues to increase exponentially, app discovery is becoming a harder and harder problem for consumers and also for app developers, game developers and brands that are trying to get their apps discovered. Since 2008, Appia has focused on creating solutions to help those marketers in driving mobile app discovery, while achieving higher lifetime value user acquisition and positive return on ad spend. We’ve grown to become the number one independent app-install network driving more than 85 million sponsored app installed to-date on behalf of hundreds of advertisers and agencies including 60 of the top 100 grossing apps on the App Store and Google Play, only Facebook has driven more app-installs. So, now I want to talk about how this transaction came about. It started earlier this year as a partnership combining Appia’s app-install network and advertisers with the Digital Turbine class room for app-installs both Ignite and IQ. And in short, as we progressed in the commercial launch with different operators around the world and partnership with Mandalay, the numbers were nothing short of…

Yes, thanks Jud. I appreciate that. We at Mandalay Digital were so excited about this transaction and I’m really looking forward to personally just get a chance to get down in North Caroline later this month and spend some time with the Appia team to really work through like what Jud has said in more details. Now I’m going to turn the call over to Andrew Schleimer, our CFO and he’ll take you through the financial aspects of the transaction in the deal process.

Thanks Bill. Let’s turn to slide 6 to look at the deal structure and economics. The Appia transaction is structured so that current Appia shareholders will receive from Mandalay, a number of Mandalay shares, equivalent to $100 million with Appia’s net debt and transaction expenses. At an agreed upon price of $4.50 per Mandalay share and assuming a calendar of first quarter 2015 closing, we will issue to Appia shareholders approximately 19 million shares. At yesterday’s closing price of Mandalay common stock of $3.50 per share, this values Appia’s equity at approximately $65 million. Appia’s investors include their founder and CEO, Jud Bowman, as well as strategic investors, Trident Capital, Venrock, DCM, Noro-Moseley, Wakefield Group, Relay Ventures and Eric Schmidt’s TomorrowVentures. All of whom have been long-term supporters of Appia and are themselves extremely excited about this transaction and its potential. These new Mandalay investors have agreed to lock ups on issued shares that will be released in three equal tranches at the 6, 9 and 12 month mark after closing. Appia’s net debt is estimated to be approximately $10 million, which Mandalay will assume. We plan to refinance this indebtedness business following the closing. Both Silicon Valley Bank and North Atlantic Capital are Appia’s current lenders. Let’s turn to slide 7 to look a bit more closely at the financial rational for this transaction. Appia recorded unaudited revenue of approximately $30 million for the 12 months ended September 30, 2014. That said, on the revenue side, we see an opportunity to potentially generate up to $14 million in synergies on app-installs currency projected to be sourced by third-parties, of which Appia is one. On the cost side, we estimate that we can realize approximately $2 million in cost synergies from the elimination of overlapping campaign management and CPI infrastructure…

Yes, thanks Andrew. And so now I’m going to take you through our second quarter highlights and focusing on key strategic milestones achieve during the quarter. And our top-line was lighter than we expected leading to our haircutting our fiscal ‘15 outlook, the momentum that we’re building in the third quarter is very encouraging and that it confirms the strong and growing demand for our products and we are seeing sequential acceleration by month. But the first and second quarter. In terms of why results were light on revenue, it was a combination of primarily four things. On first was the lower device sell through at a large U.S. operator; second was the loss of traffic that we previously disclosed through a large DT Pay Australia customer; and third was the slower than expected ramp of Ignite globally; and finally was fourth, exchange translation which was approximately $300,000. Let me take these factors one by each, as we’ve already remediated the factors that are under control. First with respect to DT Pay in Australia, we’ve now launched numerous new customers on DT Pay and are on track to fully make up the negative impact from our customer’s loss of traffic during this current quarter. However last quarter, this customer did negatively impact our results by approximately $700,000. Second, with respect to Ignite customer ramps and with MSAI in particular, we’ve had some technical and marketing challenges in the Indian market. We believe those have now been overcome and have a plane in place with MSAI to ramp their devices. This should become material from tens of thousands per month today to hundreds of thousands per month by early 2015. And third, the sell-through of devices at any customer continues to be our biggest opportunity and our biggest risk. With our…

Thanks Bill. Please note that all comparisons will be made to the prior sequential quarter unless specifically noted, because we believe this is a better indicator of how our business is performing given the vast differences between our company now and at this time last year. As you’ll recall, we divested Twistbox, a non-core operating business in fiscal 2014 in the fourth quarter, so that business’s results are reflected as discontinued operations. Unless otherwise noted, my discussion today will refer to results from continuing operations. Revenue for the fiscal second quarter was $5.5 million, compared with $5.6 million for the fiscal 2015 first quarter. 84% of second quarter revenue is generated from our content and pay products as we refer to content in the aggregate. For the second quarter, 77% of our revenue we generated from customers in the Asia-Pacific region, down 11 percentage points from the first quarter, demonstrating the growing diversity of our business. EMEA revenues were about 12% of total with remaining coming from the United States. We continue to believe that customers in the United States will become a much larger percentage of our total revenue base due to the recent and upcoming launches of Ignite and IQ products here at home. Although, our second quarter results do not yet include a meaningful contribution from Ignite and IQ, revenue generated from these product was roughly 10% this quarter. And advertising revenue which is how we characterize Ignite and IQ, grew significantly again in October and November respectively with November revenue to-date being higher than for all of July and August combined. Gross profit grew to $1.8 million or 33% of revenue for the second quarter of fiscal ‘15, up from $1.4 million or 26% of revenues for the first quarter of fiscal ‘15, primarily related to…

We will now begin the question-and-answer session. (Operator Instructions). The first question comes from Mike Malouf of Craig-Hallum Capital Group. Please go ahead.

Great guys. A lot to digest here, but let me start off with just a couple of questions on the transaction. Can you talk a little bit more about the revenue synergies? How do you get to the revenue synergies and perhaps just address how much of your business at least on the ad side was coming from Appia? Thanks.

Yes, sure. So, let me take the second part Mike and then I’ll turn it over to Andrew to get into some of the specifics on the synergies. Right now today the majority, but not all of the advertising revenue that we’re gaining is running through Appia. And so, therefore the revenue synergies are appearing right off the gate. And as Appia expands their advertising relationships, we believe we can get that up to a 100% overtime. So, that’s the reason for the vertical integration and doing the transaction as far as the synergies and some stocks, Andrew talk about that.

Yes. I think when we think about the revenue synergies and cost synergies collectively Mike; first let’s take the revenue, what we obviously think about our business and have provided a 2015 revenue forecast and we put it in that forecast our revenues, our sales that go to third-parties. So, the way that we’ve modeled or thought about our synergies as a percentage of loads ultimately being able to be grossed up as if now we are going directly to the advertiser ourselves. So, we would then retain 100% of the fee that we would otherwise be paying to third-parties and capture that on a revenue line.

Got it. Okay, that’s helpful. And then can you give us a sense of how much gross margin Appia typically took from their revenue?

Yes, Appia took roughly 20% plus third-parties in general, we’ve seen anywhere from 20% to 30%. And as we streamline our business and look to be not only the distributor, the advertiser and the publisher with the direct link to the advertiser, we expect to retain as much of that as possible as obviously Appia has a substantial amount of reach.

Okay. So, for instance if you were selling a CPI slot for $3, they would get $0.06 of that revenue, is that what you’re saying?

That’s correct. So, the best way to think about it is, third-parties go out and obtain advertising inventory for gross price, call $3. They then sell it back to us for $2.40. That $2.40 would be our gross revenue, net of carrier fee. Our gross revenue pro forma for the transaction would be $3.

Got it. And then on that $0.60 that Appia will get, what would be the gross margin to Appia?

So, we’re not on this call talking about Appia’s forward-looking or even historical profitability. But what I will say is, when we’ll look at the combination, we look at Mandalay plus Appia being profitable in fiscal ‘16 and the revenue synergies on top of that following to the bottom-line. But remember, Mike, the expectations that we’re going to be able to take those synergies and ultimately realize a maximum amount of gross profit, because it’s all enhancement in revenue, we’re just getting a higher price through being the selling on.

Yes, got it. And then just a couple of questions on Ignite. Bill, you mentioned that your average open rates were in the 30% range. Can you talk a little bit about your expectations. Are they still in that 50% range, sounds like you’re moving those up. Are you figuring out how to get them up and just a little bit more color on that would be helpful?

Yes, sure. The few things there to provide. Number one is, what I’d call the attribution or the industry call the attribution window. So, we’re using a 30-day attribution window, so we see the open rates climb overtime. And since we’ve just seen a lot of the opens happen or the right sell-through just happened recently, we still have a couple of more weeks to see those open rates continue to climb as people discover the applications. So that be one specific thing that gives us confidence that will continue to move up. Second is, we have seen campaign that we’ve run that have got nothing to the mid to high 60s and we’ve seen that both here in the United States, as well as other markets. So that we come back to the 50 and why we’re comfortable with that. And just a couple of other operational things around improving the breadth of campaigns we can do some tracking technologies, as well as integrating some Verizon’s segmentation and targeting database work they have through a program called Precision. The combination of all of those things is what gives us comfort in terms of the 50%, but it’s going to take some time to grow into the 50% for all those reasons I just mentioned.

Okay, great. And then one last question. Andrew, I think you mentioned that EBITDA for the December quarter is projected to be positive. Is that what you said on the call?

Yes, I think in Bill’s commentary, the expectation is for us to be adjusted EBITDA positive for December.

For the December quarter or for December, the month?

For the month of December.

For the month of December. Okay. So that obviously assume…

Indicating the point of which based upon the current ramp that Bill described, we expect to turn the corner.

Okay. So for all intents and purposes what you’re saying is that you’re moving the profitability targets from the December quarter to the March quarter. Is that correct?

That’s technically correct. Yes. We’ll be turning the corner in December and then adjusted EBITDA positive for the entire first calendar quarter or fourth fiscal quarter.

Got it. All right. Well, congratulations on the transaction and I look forward to seeing you when you’re -- get on the road.

We will see you often, Mike. Thanks for the support.

The next question comes from Jon Hickman of Ladenburg Thalmann. Please go ahead.

Thanks for taking my question. Andrew, going out to 2016, the fiscal year, you said you are going to be profitable. Does that mean GAAP profitability for the combined company?

Yes -- my commentary. So first of all we didn’t revenue guidance solely for Mandalay. We’re not giving additional guidance on Mandalay fiscal ‘15 on this call. We expect Appia to be profitable for our fiscal ‘16, then obviously I described a case where we could achieve synergies which obviously would enhance the profitability profile of the company.

And then could you elaborate on the cost side? You said in press release 2 million.

Yes absolutely. And we can get into specifics here but the general thought is in addition to overlapping, obviously corporate functionality which are somewhat easily identifiable with companies of the size and scale both of these companies, we’ll see a portion of our cost synergies achievable in the period of time subsequent to closing from that time. But more importantly, as we discussed on our last call Jon, we were going to make an investment in 2016 absent this transaction to ramp and scale our top-line with folks that Appia actually has today. So there is a substantial amount of overlapping cost and expense supporting revenue growth, CPI infrastructure namely that provides us the opportunity to see cost savings from the combination.

Okay. And then can I ask, Jud, a question?

Sure, go ahead.

Your business today, how do you -- I guess that you have the relationship with the advertisers. What’s the process to actually get the app installed, if you don’t use Facebook, so how are you doing it without Ignite?

Sure, that’s a great question. The way the model works today and we’ve driven 85 million and counting app installs with this -- through our publisher network is that the user turns on their phone, opens an app or a mobile website, sees an ad and we serve hundreds of millions of these ads every day, so they see an ad, say the is for price line, it says click here to download price line, the takes them to either the appropriate link in the App Store or Google Play and then the user clicks the install button and then lastly they open the app on their phone, the price line app. So, that’ the current process that Appia goes through; it’s about a six or seven step process. And that process works through. We’ve driven 85 million app installs and counting that way. By comparison to Mandalay, process that we’re doing with Digital Turbine in partnership is the user gets their phone from say Verizon, the ad is preloaded on to the handset. So the first step is back to the model, they open their firm and they click on the price line app which is preloaded. So, it’s a two step process. So, we’ve taken out four or five of the steps in the flow. And obviously that’s why I was alluding to earlier in terms of the order of magnitude increase that we’ve seen in the conversion rate from this model, it’s a game changer.

Okay. Thank you very much. So, it’s mostly through mobile ads and people responding to the ad. I got it. One last question, the T-Mobile, how many devices are you expecting on T-Mobile for the December quarter?

Yes, Jon we’re not able to unfortunately give out any guidance for them. It’s included in the 1 million guidance though that we’ve given for the fiscal year on IQ.

No, I mean Ignite isn’t T-Mobile doing Ignite?

Yes. So right now that’s baked into the $8 million guidance figure that we gave but we’re not going to break out T-Mobile on a specific customer basis.

Okay. Thank you. Appreciated.

Appreciated.

The next question comes from Bill Sutherland of Emerging Growth Equities. Please go ahead.

Thanks very much. So, just a couple of clarifying term questions here. On the short fall that you guys are going to see now with the Ignite installs for the year. Bill, I think you said it’s mostly related to non-U.S. just want a little more color on that and whether the U.S. side is on track.

Yes, sure Bill, couple of comments; first internationally. I specifically called out MSAI. They moved more smartphones in India than the largest operators do here in the United States. So, they move to tremendous amount of volume that was baked into our revenue forecast. MSAI decided to do some hosting and other technical things internal to that market with some of the global things that we’ve been doing with the customers. And so consequently had some technical integration things; we’ve work through those. But as a result of that, that pushed down the ramp for MSAI into early next year. So, we’re still optimistic that that ramp is going to occur; we just had been working through some technical issues here. And so that was part of the Ignite take down was before that. But I think as I said in the comments that that take down is also on a very much lower CPI rate; and talking about rates that are anywhere from $0.10 to $0.25 to $0.30. So it’s a much lower CPI market there. But that was number one. And then number two internationally is we signed agreement with Vodafone and we expected Vodafone Australia to be launched; they will be launching over the next couple of months with Ignite across all of their devices. We thought they were going to launch with a couple of devices to go that was part of our forecast, but they made a decision across entire device line-up and that will be occurring over the next few months, but that was another reason. But that’s the international side. On the U.S. side, we take a forecast from our large customers and then we give that a haircut and fact that in to our numbers that we guide out to. If they sell0 more than that, great; if they don’t sell more than that then that’s a problem for us as it relates to revenue. And so, the really important point we want to get across to you and to all investors is that once we are across all of those devices, which we anticipate starting to be in April then this issue goes away. We’re not dependent upon whether the LG is selling well or not selling well or the Samsung well or not selling well or not selling well, the HTC. And so, that’s really the variable in the short-term that creates some of the choppiness. And some of the results that we’ve seen just over the last 10 days our results of particular device selling really well. So, I think the takeaway here is that model is working. It’s just got to get on more devices and that’s why as we’re working on ramp with all these customers around the globe that’s what’s really going to drive revenue growth for the company.

Okay. So, the lion share of the takedown is Vodafone, I should say India and Vodafone Australia and then there is just some lightness in terms of the sell-through that you’re looking for on a couple of phones here in the U.S.

Correct.

Okay. And Bill, I think you also referenced not only open rates, but U.S. CPI and you said it was averaging where?

Yes. So, we’re north of $2 today on currency rates. And I think I want to make the point here to kind of build on Andrew’s answer to Mike’s question that $2 is right. So, to the extent that’s going through a third-party that’s marked up by another 20%.

Right, right. A couple of more. What are you seeing in terms of the mix of CPI deals that you source versus the carriers?

Yes. So, I think an important point here is that to the extent any carrier is monetizing their own deal, we share in the revenue. And I think it was a little bit of confusion as it related to some of the things that came out with the Verizon release on their preloading of apps. If they’re getting paid, then we’re getting paid. If they’re doing it for other reasons, then we’re not and there are some contractual issues around how much of that they can do. But with that being said, the vast, vast majority today is being sourced by us. What we’re seeing is a global trend not just here in the U.S. is that the operators and OEMs and other distribution partners want us and Appia to go do that work for them not just in terms of the relationships, but the infrastructure and campaign management process. The operators just aren’t set up to do that. So, for them to partner with companies like us and Appia makes a ton of sense in terms of reducing their cost structure and overhead to do this.

And actually on Appia, I had one question there. ,So the revenue synergies I understand if you’re sourcing I mean the Appia is the network that you’re using, but are you going to be using other networks for certain apps that just aren’t available on Appia or am I not thinking about that correctly?

Yes, sure. So, the vast, vast majority of the apps that we’re sourcing are available on Appia and if they’re not and we find them from somewhere else, we can usually through our strong relationships with the Appia team find them. So, I think especially as the companies together that will continue to increase and grow. There always will be edge cases where maybe there is a need for local apps in India or local apps in the Philippines or some other markets where perhaps you don’t have that kind of reach and you need the local applications. And so in those cases of course we’ll go to look for partners. But I think the vast majority and the tonnage here that we’re going to be driving as far as the revenue ramp will be coming through the joint combination of Digital Turbine and Appia.

Okay. And on Xyo are you guys -- probably not a lot of revenue, but is that in the revised guidance for F15 and kind of how much impact is it?

Yes. So, as far as the revised guidance and I think one of the reasons Mike’s question on the adjusted EBITDA breakeven is that we do include our Xyo cost employees as part of that. On the revenue side, we’ve not modeled any of that into our guidance. And so, to the extent those customer relationships begin to ramp and grow that revenue would be incremental to our guidance. And so, we’re just in the process over the last say 30 days of transitioning over those relationships from Xyo to us. And overall I can say it’s going great, but I don’t want to get to a point where we’re putting our guidance to share.

Okay. And then just real last from me on IQ, any thoughts or color you can give us on how those metrics are trending by some initial launches for that? Thanks.

Yes. So, we’ve been extremely pleased with the IQ rollout so far. We’re seeing more than 60% of the customers that interact with the what we call the Aptek or IQ Aptek coming back and using that again. And that’s really key to the business model as we go forward in time is that with Ignite you get a pre-load customers out of the box and then that’s what that’s it. With IQ you have the opportunity to engage the customer with the entire like the device whether it’s one, two, three years whatever it is for how long they hold it. So, the fact that we’re seeing the re-engagement where people open it up, use it, explore, come back again and then download applications whether those are sponsored apps that we’re doing with Appia or whether those are free apps that we’re getting from somewhere else, we’re seeing great engagement coming back for us. So, so far so good, but similar to the Ignite story, we just got to get it on more devices with the models working.

Thanks Bill.

The next question comes from [Bob Johnson of Morgan]. Please go ahead.

Yes. Hi congratulations. A couple of questions here, first how did we come about the purchase price for Appia, how do you come up with that value?

Yes, sure. Andrew will take that for you.

Yes, sure. We’ve got obviously any negotiations you sit on the table and you determine based upon a whole bunch of valuation metrics thereby that’s been clear for an M&A transaction and there is obviously a value to us as we acquire based upon the synergies that we believe we can achieve in the combination relative to our strategic plan. And then clearly triangulate the valuation with other metrics in the industry comparables et cetera. That being said, we’ve read on a $100 million obviously as a transaction value inclusive of all net debt and net of other items, transaction expenses and other and they agreed upon what Appia shareholders would view Mandalay as an agreed upon value per share $4.50 to determine a number of shares for the company.

And what about the lockup period here now, how does that transpire? Because again typical deals like this in a small cap situation, shorts will come in and destroy ahead of time, based upon the loss of expiration dates, and any thoughts about that?

Yes. Our expectation, obviously we understand the optics around lockups, but our expectation is our folks that are taking -- folks that are taking Mandalay’s stock are gaining this for the long haul. They’ve made representation, not legal representations, but obviously have made representations to us that they believe by in the combination and trying to doing the deal. And we’re comfortable and confident that as we progress as a combined business, we both grow, demonstrate the synergies that these are long-term holders of Mandalay paper.

What about then the -- I’m just trying to understand what’s the end game? Do you plan perhaps one day to sell the company to perhaps Google or someone like that at some point in the future with all these acquisitions that you’ve made so far?

Yes, sure. So, let me make a couple of points. The first is if you just kind of take a step back and look at what’s happening right now and you saw for example Yahoo! acquired company called BrightRoll, you’ve seen Twitter, a company called MoPub and we can go down a long list of acquisitions. So basically what you’re seeing is large publishing networks that have a tremendous amount of eyeballs partnering and acquiring advertising companies have strong relationships with advertisers and technology to really marry the two and bring them together. And that’s really what we’re talking about here today. We are a large publisher by just the fact we have so many operator relationships to be able to touch contracts, some of billion customers globally. So the idea of bringing the companies together I think is industry trend that you’re seeing right now. And you can go out and look at some of the comps that occurred on those kinds of transactions. But I think the end game here is that if you’ve got a broad audience, how do you monetize that audience and what we’re seeing in our belief and thesis is, is that carriers are going to have the most to say in this given they are true trillion dollars. We also believe that our large footprint is going to have tremendous scale and partnering with Appia is -- and doing this transaction is no brainer to bring those things together. So the end game for me is really about just building something special and unique and building a unique ecosystem where anybody who is touching the customer and wants to monetize mobile and doesn’t want to see some of those dollars getting side off to other third parties who wants a part of that, they can come to us and do that. That for me is the end game, that’s the multibillion dollar opportunity that we’re really focused on right now and Appia is a huge piece to us achieving that.

And are there any additional different pieces to what you have right now after this acquisition? Is there another perhaps merger moving forward of a privately held company that you’re perhaps thinking about, or are you all set as far as weighing into these moving forward?

Yes, I think right now and in the short-term, we’re focused on -- we integrated Xyo and that’s gone well. Now, we’ve got to focus on getting the Appia deal closed and obviously execute on our business and our core business and all things we just want in terms of the quarterly results and look forward, so that’s our focus right now, I mean not really to go out and look at additional M&A opportunities at least in the short-term.

Okay. And are you comfortable with the story right now to the street as far-- I mean this is a pretty big surprise to everybody. And I mean it’s actually a very nice surprise is just that you think that people are going to understand this or it will take some time for everyone to get a grasp on really what just happened?

Yes. I mean, I think it’s one of the reasons as we ask investors to contact Pondel, in terms of wanting to have some meetings with us regarding the roads. I think it’s important to continue to provide additional color and details to make sure all investors understand the strategic rationale of the financial parts of this deal. So, that will be part of our road show activity over the next few weeks to make sure we can deal with those deeper dive than we can on the call today and I’ll turn it over to Andrew for some additional comments.

Yes, I think one of the main reasons why we want to go out and touch everyone of you in persons is because we think sitting down and talking about the acquisition face-to-face, answering questions, telling stories going to be important such that there is not lost in translation. We do this obviously and it’s transformational for the company; it is largely synergistic. We want to make sure the folks see the value proposition and synergies, just going back to your original question on how do you price something like this. But at the end of the day, with myself, Jud and Bill in the room with each of you, you’ll have an opportunity to make sure you understand and appreciate what we’re trying to build.

Okay. Congratulations. Thanks for the answers.

Thank you very much.

The next question comes from Andrew D’Silva of Merriman Capital. Please go ahead. Andrew D’Silva - Merriman Capital: Hey guys, so I had to jump off the call for a second, there was other one. So, if you’ve answered this, just let me know and I’ll leave space. Can you kind of elaborate a little bit on the deal structure between how Appia and Mandalay will work? It’s more in effect, a transaction right. So, each transaction where you put an application on to a device, it’s cut essentially three ways, it would be one, Appia; two, Mandalay; and three, the carriers. Can you kind of break out percentages of how that was prior to this acquisition and if that’s going to be the way it goes forward after the acquisition as well?

Yes, sure. So Andy, I’ll take that one. So, how it will work is I really view Appia as now Digital Turbine -- get some feedback on the line here. Digital Turbine, supplier of advertising and media across all of our customers, across all of our regions. So, on a transaction basis, what will happen is Appia will secure the transaction for CPI rate of say $3 and then will turn around and share that with whatever our partner is whether that’s Verizon or Vodafone or whoever and then we’ve got direct share off that amount of money. So, you basically have those are the players in the transaction. And so, anyway what we can do is maybe take you offline to help you in terms of what that means in terms of some of the synergies and other things that Andrew spoke about in his comments. Andrew D’Silva - Merriman Capital: Okay. Yes, that’s fine. And then you put out a press release or I guess maybe kind of just an email last -- a few weeks ago and you was discussing some of your new mobile phone wins and some of the applications that you’ve been able to preload, some of them were obviously larger advertising relationships. Are you able to maintain the same ASPs for a high level advertiser as you are maybe a mid tier 1 or are you cutting difference how Facebook does because an application is being more popular, it’s more likely to be clicked through essentially better open rate performance therefore [that approach]?

Yes, sure. So, I don’t know if I’d really distinguish in terms of size of company, size of advertiser. What I would say is that in the ad-tech world, the availability of data and real-time response to whether something is working or not is really what drives value. So, one of the great things about mobile advertising and app-installs in general is that the advertiser or developer will know straight away whether or not the approach is working and they can continue to spend or not spend. And I knew that’s unlike me put spending money on ESPN and I may or may not know whether my ad worked. So, this is highly targeted, you get post and sell event data that gives you an immediate ROI on your spend and obviously if the post and sell event data is great, you’re going to spend more. If the post and sell event data is bad, you’re going to spend less. And so, our believe and some of the comments that Jud has made as well, as he said, when you have the home screen real estate of the operator and you take away the friction putting the application right in front of you, those are things that are going to help drive those metrics in CPI rates north. Andrew D’Silva - Merriman Capital: So I mean, I guess what I’m trying to get at is not all applications, not all advertising deals are certainly created equal. So, if you for example preload Facebook on to a phone, there is probably 90% chance that’s going to get you to get on the right phone. And then if you put a hotels.com on a phone and maybe that goes on a 40% or 30%, I’m just not talking about the costs, I don’t know the exact percentages. But there is no deals cut with them, because Facebook obviously is going to know that they are [jumbling] at when it comes that kind of a deal structure versus maybe a hotels.com, there is no advantages with the larger company or one that’s being more I guess clickable, that’s the right word?

Yes. So, I think the key there is really just about segmentation and targeting. So, your open rate percentage is all about getting to the right app, right customer, right time. And so for us, we just did a deal when we launched the Note 4, we preloaded Uber on to the Samsung Galaxy Note 4. Obviously preloading Uber in Alaska or Iowa makes no sense, it’s not going to get open if Uber is not there. So, preloading the app in where market says it’s going to increase your open rate, you’ve got take it app-by-app, if you buy a travel app, some more likely to download, examples you’ve provided I got different types of gaming apps, if I am male, female, old, young depends from where I am, all those kinds of factors matter. So, some of the comments I made around this Precision marketing tool that Verizon has with their subscribers is going to be key to getting the highest possible value on CPI rates, as well as the highest possible rates for open themselves as we rotate out campaigns. So, what we’re seeing right now is we’ve got a lot of room for improvement and even with all the things we can do to improve, the model is still working. And so we know the things we got to do to make it better. And so that’s really on us as a management to execute and make it happen. Andrew D’Silva - Merriman Capital: Okay, great. And just kind of a one macro technology question. Android’s latest operating system, Lollipop is coming out. Is there any hiccups that we could expect from that or do you think it’s just be steady stay going forward?

Yes. Two comments on Lollipop, Andy. The first comment is that it’s only about app preinstalled. It has nothing to do with the administration of campaigns, swapping out campaigns targeting segmentation the whole settlement process with advertisers, none of that is there. It’s just about installs which is one of like 10 things that have to happen to be successful in this space, that’s point one. Point two is that also the operators have to decide to accept it. So, ultimately remember that Verizon, Vodafone, T-Mobile et cetera are the ones writing the checks here. And so, if someone whether it’s an OEM or Google or anybody else is going to want to start preloading apps and doing on their own that’s going to be approved by the operator. And I think the general trend right now you’ve seen in the marketplace, we can talk about a variety of data points if you want, is that people are starting to distinct themselves from that and I think you’ve seen a variety of Google announcement where they’ve distinct themselves from some things they were trying to really push on OEMs and operators. Andrew D’Silva - Merriman Capital: Got it. All right, guys thanks. We can continue this conversation offline.

Thanks Andy.

The next question comes from Brian Alger of Wedbush. Please go ahead.

Hi guys, good afternoon and congratulations. Clearly a massive transaction for the company. Cut me and I’m sure everyone else --. Just a couple of housekeeping questions if I can. We ended the quarter at least in terms of the financial report here at 16.7 in cash, but I believe that was post Xyo. Where are we currently in terms of the cash?

Yes. So that transaction, excuse me that number was prior to Xyo. Yes, we announced, we closed Xyo subsequent to the end of the quarter. But at this point we’re not going to give any indication of where we are in cash, we believe we’re going to turn the corner here in December and then start making cash next quarter.

Okay. Xyo was $2.5 million cash payments all right?

We held back roughly, actually held by $375,000 of that cash for indemnification claims for 12 months.

Okay.

2.1.

All right, great. And with regards to Appia’s business, obviously it sounds like it’s doing really, really well with Ignite and Verizon and certainly happy to hear Jud’s comments on it. But I am curious when we merged the two companies together, are we going to continue to sell apps on other platforms to other publishers essentially the rest of Appia’s business?

Yes, yes. One of the things that we’ll be doing is we’ll go through with the Appia team and we’ll kind of go and have a lot of strategic conversations around kind of publish or not publish it, but at a high level the answer is yes. I think that’s -- Appia’s got a really impressive list of publishers, they’ve done amazing things with their publishers, they continue to add them. And I think they’ve got a lot of other technological things they are doing to really sit between the advertisers and publishers to maximize returns to allow the programmatic types of things that they were excited about as well. So, by all means yes. But in terms of just making a blanket statement of 100%, that will be something that Jud and myself and the rest of us will sit and talk about.

Right, understand. I mean I guess where I was coming from is it sounds like we have a pretty good handhold on in terms of the Android community certainly with Verizon and T-Mobile and Vodafone Australia. And through Appia, we should be seeing some revenues down the road from the Apple platforms as well.

Yes, absolutely. And I think if you go back and you remember Jud’ presentation at the Investor Day, he talked about some of the CPI on iOS and Android is closing the gap, but definitely there has been a premium there, we’ll be able to benefit from that as a combined company.

Okay, great. Guys congratulations.

Okay. Thanks.

We’ll see very soon.

Very sure.

Thank you very much for the support man.

The next question comes from [Rick Solemon], Private Investor. Please go ahead.

Hey guys, my congrats on the acquisition. Couple of questions, can you give us any kind of indication in terms of Appia’s growth rate and you said you were going to give gross margins. Just any indication about what that business looks like, whether it’s from last year to this year or any more information on Appia?

Yes. Andrew?

Yes, Appia is growing at a very, very healthy growth rate. Rick, I think at the end of the day the combination of A plus B is much more than C here. They did $30 million unaudited revenues for 12 months ended September 30th. The quarterly growth and ramp is far an excess of what those fourth quarters look like; the business is growing; the business is healthy; the business is on its way to profitability; there is a tremendous opportunity with their real time bidding platform where we can see some real explosive growth from there as well. We are very excited about the platform; we’re excited about the growth and fits hand in glove with [output] as well.

Great. And then in terms of next year’s guidance. Given the kind of uncertainties of the open rates and just launches and just how can you get us comfortable with $110 million to $130 million for next year?

Yes, sure. So Ricky, really what gets me personally comfortable is not having to bid on winners and losers of devices and that’s the situation we’re in today. And so once you’re across the line of a particular operator, this problems goes away. And if I know that operator excels $5 million, $10 million, $20 million, $50 million whatever it is and I can predict now with certainty that I’ll have our software across that device line up, then whatever device wins or loses any given quarter doesn’t necessarily negative impact my numbers or positively impact my numbers on a choppy basis like what we see today. So what gets me comfortable is then as we sit with our customers and then we plan out device roadmaps and we get better visibility when we’re across those entire device line ups. That gets me comfortable. So for example, we touched on Verizon and moving across their device line up; we touched on Vodafone Australia and moving across their lineup. Now, given their historical run rates versus on a per device basis, but rather on an aggregate basis, I can now forecast that. So that’s why we’re -- I know it’s a little bit counterintuitive to say you’re more comfortable with the future on the present. But it’s because of that dynamic. And the fact that on the device sample sizes that we have today it’s real. And so we can extrapolate those results in terms of CPI rates and open rates and so on and slots that we’re committing to and we can extrapolate those across the entire device line up and that extrapolation is what gets us comfortable with the guidance.

Right. But open rates, when you initially gave that you were assuming 50%. That’s what your assumption or did something change?

No, nothing is changed. It’s now in a place it says okay all the things that we touched on in the script and then some of the Q&A here, now adding this on.

Great. And can you give us any indication with acquisition when it would be accretive to EPS? Would that be ‘17 or is that -- would you think it will be 2016?

I’ll turn that one to Andrew.

Yes, I was expecting this one Rocky. We have given guidance on the revenue line. So, we think we haven’t given any new guidance on gross margin at this point as well as EBITDA or obviously net income and EPS. But what gets us excited about the deal in combination of two companies at similar points in their strategic growth trajectory, the opportunity to create up to $14 million of potential revenue synergies and then cost synergies which are very high margin given the fact that they’re being created by virtue of taking out the spread between what we otherwise would have gotten, excuse me what Appia would have taken from us. So, the synergies on their own is what gets us excited about financial consequences here.

Okay. Do you think you can give us that answer some point in the future?

Obviously as we’re growing above and the business evolves and everything comes together and the ramp comes together, we’ll be more than happy to provide more insight. But from where we sit today, we get excited about the combined company’s revenue profile, the potential revenue synergies here, the enhancement in absolute dollar and gross profit and absolute dollar EBITDA.

All right, great. Thanks again and congratulations.

Thank you, Ricky.

Thanks.

We have a follow-up from Jon Hickman of Ladenburg Thalmann. Please go ahead.

Hi. I was just wondering is it reasonable to attribute some of the weakness in Android sell-through, device sell-through to the launch of the iPhone 6?

No, I don’t think so at all. All the market share stats I’ve seen, Jon show actually Android gaining market share. I think on any particular device though, there is a lot of other factors that go into it. So yes, I wouldn’t characterize this as an Android versus iOS thing, I would just characterize it is to say by operator selling 10 Android phones in their lineup and year on 30% of them, then you’re subject to whatever happens on the other 70 that’s more of the dynamics here versus anything in an operating system level.

Okay, thanks.

Yes.

And we have reached our time limit for today’s question-and-answer session. I would like to turn the call back over to Mr. Stone for any closing remarks.

Yes, great. Thank you. Hey, thanks for all of you joining our call today, continue to value your support and the long-term vision of the company and what we’re building and announced here today. As Andrew mentioned, we’ll be meeting with our shareholders next week. And please contact Laurie or Matt at PondelWilkinson to request the meeting. And I am just giving guys the phone number again if you don’t have it or you can’t find; it’s (310) 279-5980. Thank you very much.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.