NEULION, INC. CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollars, unless otherwise noted) As of December 31, --------------------------- 2012 2011 $ $ ------------ ------------ASSETSCurrentCash and cash equivalents 11,108,107 12,346,882Accounts receivable, net 4,193,949 3,494,077Other receivables 348,891 309,764Inventory 416,541 797,436Prepaid expenses and deposits 1,185,051 1,189,311Due from related parties 899,967 734,452 ------------ ------------Total current assets 18,152,506 18,871,922Property, plant and equipment, net 3,446,648 4,294,476Intangible assets, net 4,015,301 6,609,465Goodwill 11,327,626 11,327,626Other assets 161,913 226,266 ------------ ------------Total assets 37,103,994 41,329,755 ------------ ------------LIABILITIES AND EQUITYCurrentAccounts payable 9,813,237 9,597,359Accrued liabilities 4,766,668 5,314,308Due to related parties 12,282 13,298Deferred revenue 5,715,102 6,624,693Convertible note, net of discount 320,560 -- ------------ ------------Total current liabilities 20,627,849 21,549,658Long-term deferred revenue 1,134,075 1,050,495Other long-term liabilities 357,852 432,159Deferred tax liability 911,978 299,094 ------------ ------------Total liabilities 23,031,754 23,331,406 ------------ ------------Redeemable preferred stock, net (par value: $0.01; authorized: 50,000,000; issued and outstanding: 28,089,083) Class 3 Preference Shares (par value: $0.01; authorized: 17,176,818; issued and outstanding: 17,176,818) 10,000,000 10,000,000 Class 4 Preference Shares (par value: $0.01; authorized; 10,912,265; issued and outstanding: 10,912,265) 4,894,683 4,864,591 ------------ ------------Total redeemable preferred stock 14,894,683 14,864,591 ------------ ------------Stockholders' equity (deficit)Common stock (par value: $0.01; authorized: 300,000,000; issued and outstanding: 164,207,147 and 140,012,310, respectively) 1,642,072 1,400,122Additional paid-in capital 83,138,137 77,257,524Promissory notes receivable (209,250) (209,250)Accumulated deficit (85,393,402) (75,314,638) ------------ ------------Total shareholders' (deficit) equity (822,443) 3,133,758 ------------ ------------Total liabilities and shareholders' equity (deficit) 37,103,994 41,329,755 ------------ ------------ NEULION, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in U.S. dollars, unless otherwise noted) Years ended December 31, ----------------------------- 2012 2011 $ $ ------------- -------------Revenue Services revenue 37,178,431 36,612,650 Equipment revenue 1,804,495 3,053,732 ------------- ------------- 38,982,926 39,666,382 ------------- -------------Costs and Expenses Cost of services revenue, exclusive of depreciation and amortization shown separately below 12,280,658 13,985,258 Cost of equipment revenue 1,413,760 2,391,212 Selling, general and administrative, including stock-based compensation 23,541,296 25,612,668 Research and development 6,672,778 6,201,372 Depreciation and amortization 4,407,474 5,367,289 ------------- ------------- 48,315,966 53,557,799 ------------- -------------Operating loss (9,333,040) (13,891,417) ------------- -------------Other income (expense) Gain (loss) on foreign exchange (56,244) 12,985 Investment income, net 1,326 31,898 Discount on convertible note (77,922) -- Loss on dissolution of majority-owned subsidiary -- (227,402) ------------- ------------- (132,840) (182,519) ------------- -------------Consolidated net and comprehensive loss before income taxes (9,465,880) (14,073,936) Deferred income taxes (612,884) (299,094) ------------- -------------Consolidated net and comprehensive loss (10,078,764) (14,373,030) Net loss attributable to non-controlling interest -- 21,485 ------------- -------------Net and comprehensive loss attributable to controlling interest (10,078,764) (14,351,545) Adjustment to the carrying amount of redeemable preferred stock -- 153,233 ------------- -------------Net and comprehensive loss attributable to NeuLion, Inc. common stockholders (10,078,764) (14,198,312) ------------- -------------Net loss per weighted average number of shares of common stock outstanding - basic and diluted $ (0.07) $ (0.10) ------------- -------------Weighted average number of shares of common stock outstanding - basic and diluted 146,899,685 139,610,112 ------------- ------------- NEULION, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. dollars, unless otherwise noted) Years ended December 31, --------------------------- 2012 2011 $ $ ------------ ------------OPERATING ACTIVITIESConsolidated net loss (10,078,764) (14,373,030)Adjustments to reconcile net loss to cash used in operating activities Depreciation and amortization 4,407,474 5,367,289 Discount on convertible note 77,922 -- Stock-based compensation 1,627,231 1,647,422 Loss on dissolution of majority-owned subsidiary -- 227,402 Deferred income taxes 612,884 299,094Changes in operating assets and liabilities Accounts receivable (699,872) (1,199,419) Inventory 380,895 105,578 Prepaid expenses, deposits and other assets 68,613 (145,778) Other receivables (39,127) (13,610) Due from related parties (165,515) 527,324 Accounts payable 215,878 3,449,839 Accrued liabilities (524,327) (92,865) Deferred revenue (684,793) 694,434 Long-term liabilities (74,307) (63,116) Due to related parties (1,016) 13,272 ------------ ------------Cash used in operating activities (4,876,824) (3,556,164) ------------ ------------INVESTING ACTIVITIESPurchase of property, plant and equipment, net (1,106,700) (1,875,825) ------------ ------------Cash used in investing activities (1,106,700) (1,875,825) ------------ ------------FINANCING ACTIVITIESConvertible note 545,628 --Private placement, net 4,199,121 4,849,546 ------------ ------------Cash provided by financing activities 4,744,749 4,849,546 ------------ ------------Net decrease in cash and cash equivalents during the year (1,238,775) (582,443)Cash and cash equivalents, beginning of year 12,346,882 12,929,325 ------------ ------------Cash and cash equivalents, end of year 11,108,107 12,346,882 ------------ ------------
