8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 19, 2008

KIT digital, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-25659	11-3447894
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

168 Fifth Avenue Suite 301New York, NY10010

(Address of principal executive offices) (Zip Code)

+1 (646) 502-7484

(Registrant’s telephone number, including area code)

Copy to:

Spencer G. Feldman, Esq.

Greenberg Traurig, LLP

MetLife Building

200 Park Avenue – 15th Floor

New York, New York 10166

Tel: +1 (212) 801-9200; Fax: +1 (212) 801-6400

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 (see General Instruction A.2. below):

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

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

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

EXPLANATORY NOTE

On May 23, 2008, KIT digital, Inc., a Delaware corporation (“KIT” or the “Company”), filed a Current Report on Form 8-K (the “May 8-K”) to report the company entered into a definitive Share Purchase Agreement (“Kamera SPA”) on May 19, 2008 with Kamera Content AB (“Kamera”), a company incorporated and organized under the laws of Sweden. Upon entry into the Kamera SPA, the Company assumed day-to-day management and control of Kamera.

This amendment is being filed to amend and supplement Item 9.01 of the May 8-K to include the financial statements and pro forma financial information required by parts (a) and (b) of Item 9.01 of Form 8-K.

Item 2.01 Completion of Acquisition or Disposition of Assets

Pursuant to the terms of Kamera SPA, the consummation of the acquisition was predicated upon several administrative items, including the physical delivery of Kamera stock certificates to the Company and a working capital calculation as of May 18, 2008 (the “Completion Items”). The Completion Items were satisfactory complied with by June 25, 2008, and as such the acquisition was completed on said date.

Item 9.01 Financial Statements and Exhibits.

a. Financial statements of business acquired.

The following financial statements of Kamera Content AB are filed as Exhibits 99.1 to this amendment and are incorporated in their entirety herein by reference:

Exhibit 99.1

Independent auditors’ report;

Consolidated balance sheets as of December 31, 2007 and 2006;

Consolidated statements of operations for the years ended December 31, 2007 and 2006;

Consolidated statements of cash flows for the years ended December 31, 2007 and 2006;

Notes to the consolidated financial statements.

The attached financial statements of Kamera Content AB have been prepared in accordance with generally accepted accounting principles in Sweden (Swedish GAAP). Those accounting principles differ from generally accepted accounting principles in the United States (US GAAP). Kamera Content AB is the parent company of a group consisting of two subsidiaries, Swegypt Company for Telecommunication (S.A.E) (‘Swegypt”) and Kamera (S) PTE LTD (“Kamera Singapore”). Swegypt is 55% owned by Kamera and Kamera Singapore is 95% owned by Kamera. Exhibit 99.1 includes the financial statements for the consolidation of the Kamera group.

b. Pro forma financial information.

The following pro forma financial information is furnished as Exhibit 99.2:

Exhibit 99.2

Unaudited pro forma condensed combined balance sheet as of March 31, 2008;

Unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2008;

Unaudited pro forma condensed combined statement of operations for the year ended December 31, 2007;

Notes to unaudited pro forma condensed combined financial statements.

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d. Exhibits.

Exhibit No.	Description
99.1	Audited consolidated financial statements of Kamera Content AB as of and for the years ended December 31, 2007 and 2006.
99.2	Unaudited condensed combined pro forma financial statements as of March 31, 2008 and for the three months ended March 31, 2008 and the year ended December 31, 2007.

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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.

KIT DIGITAL, INC.
By:	/s/ Jonathan Hirst
	Jonathan Hirst
	Chief Financial Officer

Date: July 21, 2009

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EX-99.1

Exhibit 99.1

Kamera Content AB

Corporate Identity Number 556666-2135

Annual report for the financial year 2007 and 2006

The Board of Directors and the Managing Director herewith submit the Annual Report and consolidated accounts.

Contents		Page
-	Administration Report	2
-	Report of Independent Certified Public Accountants	4
-	Consolidated Balance Sheets	5
-	Consolidated Statements of Operations	7
-	Consolidated Cash Flow Statements	8
-	Notes to the Consolidated Accounts	9

Unless otherwise stated, all amounts are in thousands of SEK.

Administration report

Information regarding the operations

This Annual report covers the financial year 2007/01/01-2007/12/31.

Kamera Content collaborates with copyright owners e.g. Associated Press Television News (APTN) and Disney ABC and offers publicists, practicing on the digital media market, administration and distribution of video contents such as news, sports and entertainment for publishing on the Internet or in mobile networks.

Result and financial position

The company’s turnover for the financial year 2007/01/01-2007/12/31 amounts to kSEK 16 837

The operating profit/loss is negative, kSEK -10 878

Significant events during the financial year

During the fall Kamera signed an agreement to distribute news clips for the global Internet and mobile market with the world’s largest news channel Disney ABC. Sales will begin in January 2008.

Profound discussions were undertaken regarding a merger with a company in Canada during the fall of 2007. Among other things, due to the uncertainties on the financial market, the discussions were halted in the beginning of November. This has affected the result for the financial year negatively, as great focus has been laid on the process by the management.

The balance sheet for liquidation purposes has been established as of 2007/09/30, 2007/10/31, 2007/11/30 and 2007/12/31. At the first three dates the share capital was intact, but at 2007/12/31 more than half of the share capital was consumed. An opening supervisory general meeting was conducted at 2008/03/31 and the general meeting decided to continue the operations.

Significant events after the end of the financial year

Kamera has initiated a new collaboration with SNTV, the world’s leading producer of sport news. The collaboration includes producing and distributing video clips for the global Internet and mobile market. Production and sales will begin in March 2008.

On May 19, the owners of Kamera made an agreement to dispose of all shares in Kamera Content AB. As of Monday 19th of May 2008 KIT Digital Llc will take over the operations and financial responsibility of Kamera Content AB, including the re-establishment of the share capital that is consumed by more than 50 percent.

Group structure

Kamera Content AB is the parent company of a group consisting of two subsidiaries, Swegypt Company for Telecommunication (S.A.E) (Corporate Identity Number: 200-039-784) and Kamera (S) PTE.LTD (Corporate Identity Number: 200604451W). Swegypt Company for Telecommunication (S.A.E) is owned by 55 % and Kamera (S) PTE.LTD is owned by 95% by Kamera Content AB.

Result and financial position

The result from the operations and the financial position at the end of the financial year are presented in the following income statement and balance sheet including notes to the accounts.

The amounts in the annual report are stated in kSEK.

2

Proposed appropriation of profits

Means at the disposition of the annual general meeting:
Balanced profits from preceding years	1 397
Net loss for the year	-6 967
	-5 570
Proposed appropriation of accumulated deficit
To be carried forward	-5 570
	-5 570

3

Report of Independent Certified Public Accountants

Board of Directors

Kamera Content AB

We have audited the accompanying consolidated balance sheets of Kamera Content AB  as of December 31, 2007 and 2006, and the related consolidated statements of operations, and cash flows for the years then ended, prepared in accordance with accounting principles generally accepted in Sweden.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 as established by the American Institute of Certified Public Accountants.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 Kamera Content AB as of December 31, 2007 and 2006, and the consolidated results of its operations and its consolidated cash flows for the years then ended in conformity with accounting principles generally accepted in Sweden.

Accounting principles generally accepted in Sweden vary in certain significant respects from accounting principles generally accepted in the United States of America.  Information relating to the nature and effect of such differences is presented in Note 16 to the consolidated financial statements.

GRANT THORNTON AB

Falun, Sweden

July 21, 2009

4

Kamera Content AB and Subsidiaries
Consolidated Balance Sheets	Note		2007-12-31		2006-12-31
(SEK in thousands)
Assets
Fixed assets
Intangible assets
Capitalized software development expenses	7		1 461		663
Goodwill	8		952		1 624
			2 413		2 287
Tangible fixed assets
Equipment and computers	9		939		1 067
Total fixed assets			3 352		3 354
Current assets
Current receivables
Accounts receivable - trade		1 979			2 962
Other current receivables			568		112
Prepaid expenses and accrued income	11		2 567		1 218
			5 114		4 292
Cash and bank balances			1 247		1 285
Total current assets			6 361		5 577
Total assets			9 713		8 931
Equity and liabilities
Equity	12
Share capital			227		227
Restricted reserve			336		336
Translation difference			-665		-186
Non-restricted reserves			1 397		8 986
Net loss for the year			-6 967		-7 589
Total equity			-5 672		1 774
Minority’s Share			403		203
Provisions
Negative goodwill	6		-		359
Total provisions			-		359
Long-term liabilities	13
Liabilities to credit institutions			3 500	2 000

5

Kamera Content AB and Subsidiaries
Consolidated Balance Sheets	Note		2007-12-31		2006-12-31
(SEK in thousands)
Total long-term liabilities			3 500	2 000
Current liabilities
Other current liabilities			4 465		619
Accounts payable - trade			3 716	1 938
Accrued expenses and deferred income	14		3 301	2 038
Total current liabilities			11 482		4 595
Total equity and liabilities			9 713		8 931
Pledged assets	15		3 500	2 000
Contingent liabilities		None		None

The accompanying footnotes form an integral part of these financial statements.

6

Kamera Content AB and Subsidiaries		Year ended
Consolidated Statements of Operations	Note	2007		2006
(SEK in thousands)
Gross profit (loss)	2, 3, 4		-145		2 226
Operating expenses
Personnel costs	5		-9 595		-9 670
Depreciation of tangible and intangible assets			-1 497		-855
Dissolving of negative goodwill			359		443
Operating loss			-10 878		-7 856
Income (loss) from financial items
Other interest income			4 045		14
Interest expenses and exchange rate differences			-329		-142
Total income (loss) from financial items			3 716		-128
Loss after financial items			-7 162		-7 984
Minority’s share of profit/loss			195		395
Net loss for the year			-6 967		-7 589

The accompanying footnotes form an integral part of these financial statements.

7

Kamera Content AB and Subsidiaries
Consolidated Cash Flow Statement s	1/1/2007		1/1/2006
(SEK in thousands)	12/31/2007		12/31/2006
Current operations
Net operating profit/loss		-10,878		-7,856
Adjustment for items not included in cash flow
Depreciation		1,497		855
Dissolving of negative goodwill		-359		-443
		-9,740		-7,444
Interest received and other		4,045		14
Interest paid and other		-329		-142
Cash flow from current operations before changes in working capital		-6,024		-7,572
Changes in working capital
Increase of receivables		-822		-935
Increase/reduction of other current liabilities		6,803		-1,698
Cash flow from current operations		-43		-10,205
Investment activities
Acquisition of tangible fixed assets		-325		-1,126
Acquisition of intangible assets		-1,170		-1,775
Cash flow from investment activities		-1,495		-2,901
Financing activities
New share issues		0		10,554
Loans raised		1,500		2,000
Cash flow from financing activities		1,500		12,554
Reduction of liquid funds		-38		-552
Liquid funds at beginning of year		1,285		1,837
Liquid funds at end of year		1,247		1,285

The accompanying footnotes form an integral part of these financial statements.

8

Notes

Note 1 Accounting and valuation principles

The accounts have been prepared in accordance with the Annual Accounts Act. Adopted accounting principles comply with the standards for small companies set out by the Swedish Accounting Standards Board.

The accounting principles remain unchanged compared to the previous year.

Consolidated accounts

Subsidiaries where the parent company directly or indirectly possess more than 50% of the votes, or in any other way posses a significant influence, are included in the consolidated accounts.

The group’s financial statement is prepared according to the purchase method, which means that the subsidiaries’ equity at the date of acquisition, adopted as the difference between assets and liabilities fair value, is eliminated as a whole. Only post-acquisition equity from the subsidiary is thus included in the group’s own equity.

Companies acquired during the year are included in the group’s accounts related to post-acquisition amounts.

Inter-Company profits are eliminated as a whole.

Shares in subsidiaries are accounted in the parent company’s financial statement with possible write-downs deducted. Only received dividends based on post-acquisition earnings are accounted as dividend from subsidiaries.

The consolidated accounts have been prepared using the acquisition method in accordance with Recommendation RR1:00 of the Swedish Financial Accounting Standards Council and includes all subsidiaries.

Revenue recognition

The Company’s revenue recognition for current account work is based on completed work, in line with BFN’s main heading in BFNAR 2003:3. Ongoing, not invoiced service assignments are recognized in the balance sheet at the rate of calculated invoice value of accrued work.

The company is, in line with BFN’s main heading in BFNAR 2003:3, recognizing revenues from completed service assignments based on fixed pricing at the rate of completed work, “percentage of completion”. At the calculation of accrued profit the degree of completion has been calculated as accrued expenses at the closing day, in relation to the calculated sum of expenses to complete the assignment.

Financial fixed assets

Financial assets which are intended to be held over a long period of time are reported at acquisition cost. If a financial fixed asset has, on balance sheet date, a value lower than its book value, the value of the asset is written down to lower value if it can be assumed that such reduction in value is permanent.

Accounts receivable 

Accounts receivable are reported as current assets at the amounts expected to be received after deductions for individually-assessed bad debts.

Receivables

Receivables with a maturity of more than 12 months after the closing date are stated as fixed assets, other receivables as current assets.

Foreign currencies

Receivables and liabilities in foreign currencies are valued at the closing day to the rate of exchange. Profit and loss of receivables and liabilities relating to operations are offset under other operating income or other operating expenses. Transactions in foreign currency are translated at the transaction day rate of exchange.

Tangible fixed assets

Tangible fixed assets are reported at acquisition cost reduced by the amount of depreciation. Expenses for improving the performance of the assets beyond their original level increase the asset's reported value. Expenses for repairs and maintenance are reported as costs.

9

Depreciation is allocated on a straight-line over the useful life of the asset. Subsequent costs are included in the assets carrying amount if appropriate.

The straight-line method of depreciation is utilized for all types of tangible fixed assets. The following periods of depreciation are applied:

Equipment	3 year
Computers	3 year

Write-downs

If there are indications of a decrease in value of an asset or a group of assets, an assessment of its carrying amount is made. When the carrying amount exceeds the calculated recoverable amount, the carrying amount is immediately written down to the recoverable amount.

Intangible assets

Goodwill

Expenses for acquired operations are balanced and depreciated linearly over its assessed useful life, normally up to five years.

Negative Goodwill

Negative group goodwill consists of the amount of the acquisition value that exceeds the fair value of the company’s share of acquired net assets. Negative goodwill is accounted for as other provisions. To the extent that negative goodwill is combined with expectations of future losses and expenses that have been identified in the acquisition and that can be measured in a reliable manner, but do not represent identifiable liabilities, the negative goodwill is accounted in the income statement when the future losses and expenses are realized. Dissolving of negative goodwill is disclosed in the income statement as a reduction of Operating expenses.

Expenses for the development of software

All expenses for the development or maintenance of software are normally expensed immediately. Expenses that are directly connected to identifiable and unique software controlled by the company, including probable financial benefits exceeding expenses within one year, are however capitalized as intangible assets. Capitalized expenditure for the development of software is depreciated linearly over its useful life, in the case of Kamera Content estimated to three years.

Write-downs of intangible assets If there are indications of a decrease in value of an asset or a group of assets, an assessment of its carrying amount is made, including goodwill. When the carrying amount exceeds the calculated recoverable amount, the carrying amount is immediately written down to the recoverable amount.

Note 2 Remuneration to auditors

	2007		2006
Audit
Grant Thornton AB		65		40
Other services
Grant Thornton AB		4		34
Total		69		74

Note 3 Abridged Income Statement 

The Income statement is, in accordance with ЕRL 3 chapter 11 §, disclosed in an abridged state due to reasons of competition. The parent company’s net sales was 16 837 kSEK (17 237 kSEK).

 Note 4 Transactions with related parties

Purchases and sales between Group companies

The percentages of purchases and sales regarding Group companies are listed below

Purchases  (Swegypt Company for Telecommunication

(S.A.E)): 9%

Sales : 0%

The same pricing principles apply to purchases and sales conducted between Group companies as with transactions with external parties.

10

Note 5 Personnel

	2007		2006
Average number of employees
Women (Sweden)		7		6
Men (Sweden)		9		15
Total		16		21
Salaries, remunerations, social costs and pension expenses
Salaries and remunerations for Board of Directors and managing director		587		483
Total salaries and remunerations to other employees		5 442		5 801
		6 029		6 284
Pension expenses for Board of Directors and managing director		13		40
Statutory and contractual social security contributions	2 009		1 946
Pension expenses, other employees		142		142
Total		8 193		8 412

Members of the Board and senior management

Parent Company

	2007				2006
	Number on  balance  sheet date	of whom men			Number on  balance  sheet date	of whom men
Members of the Board	4		100	%	5		100	%
Managing Director and other senior managers	5		80	%	4		75	%

Absence due to illness

	2007			2006
Total absence due to illness *		x	%		3	%
- Long-term absence due to illness		0	%		0	%

*Long term absence refers to a period of 60 consecutive days or more.

Other categories consist of fewer than 10 employees why information about these categories is not disclosed.

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Note 6 Negative goodwill

	2007		2006
Negative goodwill originating from the acquisition of Swegypt plt		359		802
Dissolving of negative goodwill		-359		-443
Closing residual value according to plan		-		359

Note 7 Capitalized software development expenses 

	2007		2006
Opening acquisition cost		852		-
Capitalization for the year		1 170		852
Closing accumulated acquisition cost	2 022			852
Opening depreciations		-189		-
Depreciation for the year		-372		-189
Closing accumulated depreciation		-561		-189
Closing residual value according to plan		1 461		663

Note 8 Goodwill

	2007		2006
Opening acquisition cost	2 016			1 093
- Acquisition		-		923
Closing accumulated acquisition cost	2 016		2 016
- Opening depreciation		-392		-31
- Depreciation		-672		-361
Closing accumulated depreciation		-1 064		-392
Closing residual value according to plan		952		1 624

Note 9 Equipment and computers

	2007		2006
Opening acquisition cost		1 421		294
Changes during the year
- Purchases		325		1 127
Closing accumulated acquisition cost		1 746		1 421
Opening depreciation		-354		-48
- Depreciation		-453		-306
Closing accumulated depreciation		-807		-354
Closing residual value according to plan		939		1 067

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Note 10 Participations in subsidiaries

Group	Number of  shares		Registered office	Proportion of  equity			Book value
Kamera (S) PTE.LTD.		190 000	Singapore		95	%		930
Swegypt Company for		687 500	Kairo		55	%		0

Telecommunication (S.A.E)

The result for Swegypt Copmany for Telecommunications (S.A.E) is, according to the last adopted income statement, -978 kSEK (for the prolonged financial year 2006/02/16-2007/12/31). Equity amounts to 22 kSEK at 2007/12/31.

The result for Kamera (S) PTE.LTD is, according to the last adopted income statement, -375 kSEK (fo the financial year 2007/01/01-2007/12/31). Equity amounts to -137 kSEK at 2007/12/31.

The amounts are translated to SEK using the year-end rate of exchange.

Note 11 Prepaid expenses and accrued income

	2007-12-31	2006-12-31
Prepaid rent	266	-
Accrued income	1 211	749
Other prepaid expenses	1 090	469
	2 567	1 218

Note 12 Change in equity

Group	Share- capital		Statutory reserve		Translation difference		Non-restricted reserves and Net profit/loss for the year		Total equity
Equity 2007/01/01		227		336		-186-		1 397		1 774
Translation difference		-		-		-479		-		-479
Net income for the year		-		-		-		-6 967		-6 967
Equity 2007-12-31		227		336		-665		-5 570		-5 672

The share capital consists of  2 086 000 A-shares at a par value of 0,1 SEK and 181 000 B-shares at a par value of 0,1 SEK.

Note 13 Long term liabilities

	2007-12-31		2006-12-31
Long-term liabilities
Liabilities to credit institutions	3 500	2 000
Total interest-bearing liabilities	3 500	2 000

The loan as a whole is raised from Almi fцretagspartner and has duration of 48 months. 

13

Note 14 Accrued expenses and deferred income

	2007-12-31		2006-12-31
Accrued royalty expenses	1 253		725
Accrued vacation pay, social expenses included	422		456
Accrued social security contributions	269		181
Deferred income	143		104
Other items	1 214		572
Total	3 301	2 038

Note 15 Pledged assets

	2007-12-31		2006-12-31
For own provisions and liabilities
Floating charges designated to liabilities to credit institutions	3 500	2 000
Total pledged assets	3 500	2 000

Note 16 Summary of significant differences between Swedish GAAP and U.S. GAAP

The annual financial statements included herein of Kamera Content AB were prepared in accordance with accounting principles generally accepted in Sweden (“Swedish GAAP”) which differ in certain significant respects from accounting principles generally accepted in the United States of America (“US GAAP”).Following is a summary of the significant adjustments to the consolidated statements of operations and the consolidated balance sheets as of and for the years ended December 31, 2007 and 2006 that would be required if US GAAP were to be applied instead of Swedish GAAP.

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Reconciliation of Net Loss
		Year ended
(Amounts in thousands of SEK)		December 31, 2007			December 31, 2006
Net loss under Swedish GAAP			(6,967	)		(7,589	)
Description of items having the effect of increasing reported income:
Addback: depreciation on Capitalized software development expenses	a.		372			189
Addback: depreciation on Goodwill	b. 2.		672			361
Extraordinary gain on acquisition of Swegypt	b. 2.		-			802
Description of items having the effect of decreasing reported income:
Expense capitalized software development expenses	a.		(1,170	)		(852	)
Addback: dissolving of negative goodwill	b. 3.		(359	)		(443	)
Amortization of intangible assets	b. 1.		(754	)		(754	)
Net loss under US GAAP			(8,206	)		(8,286	)

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Reconciliation of Consolidated Balance Sheet as at December 31, 2007					US GAAP
					Adjustments
	Swedish				Increase			US
	GAAP				(Decrease)			GAAP
Assets
Fixed assets
Intangible assets
Capitalized software development expenses		1,461		a.		(1,461	)		-
Intangible asset		-		b. 1.		2,261
				b. 1.		(2,073	)		188
Goodwill		952		b. 2.		1,064			2,016
		2,413							2,204
Tangible fixed assets
Equipment and computers		939							939
Total fixed assets		3,352							3,143
Current assets
Current receivables
Accounts receivable - trade		1,979							1,979
Other current receivables		568							568
Prepaid expenses and accrued income		2,567							2,567
		5,114							5,114
Cash and bank balances		1,247							1,247
Total current assets		6,361							6,361
Total assets		9,713							9,504
Equity and liabilities
Equity
Share capital		227							227
Restricted reserve		336				2,261			2,597
Translation difference		(665	)						(665	)
Non-restricted reserves		1,397				(1,231	)		166
Net loss for the year		(6,967	)			(1,239	)		(8,206	)
Total equity		(5,672	)						(5,881	)
Minority’s Share		403							403
Provisions
Negative goodwill		-							-
Total provisions		-							-
Long-term liabilities
Liabilities to credit institutions		3,500							3,500
Total long-term liabilities		3,500							3,500
Current liabilities
Other current liabilities		4,465							4,465
Accounts payable - trade		3,716							3,716
Accrued expenses and deferred income		3,301							3,301
Total current liabilities		11,482							11,482
Total equity and liabilities		9,713							9,504
Pledged assets		3,500							3,500
Contingent liabilities	None							None

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Reconciliation of Consolidated Balance Sheet as at December 31, 2006					US GAAP
					Adjustments
	Swedish				Increase			US
	GAAP				(Decrease)			GAAP
Assets
Fixed assets
Intangible assets
Capitalized software development expenses		663		a.		(663	)		-
Intangible asset		-		b. 1.		2,261
				b. 1.		(1,319	)		942
Goodwill		1,624		b. 2.		392			2,016
		2,287							2,958
Tangible fixed assets
Equipment and computers		1,067							1,067
Total fixed assets		3,354							4,025
Current assets
Current receivables
Accounts receivable - trade		2,962							2,962
Other current receivables		112							112
Prepaid expenses and accrued income		1,218							1,218
		4,292							4,292
Cash and bank balances		1,285							1,285
Total current assets		5,577							5,577
Total assets		8,931							9,602
Equity and liabilities
Equity
Share capital		227							227
Restricted reserve		336				2,261			2,597
Translation difference		(186	)						(186	)
Non-restricted reserves		8,986				(534	)		8,452
Net loss for the year		(7,589	)			(697	)		(8,286	)
Total equity		1,774							2,804
Minority’s Share		203							203
Provisions
Negative goodwill		359		b. 3.		(359	)		-
Total provisions		359							-
Long-term liabilities
Liabilities to credit institutions		2,000							2,000
Total long-term liabilities		2,000							2,000
Current liabilities
Other current liabilities		619							619
Accounts payable - trade		1,938							1,938
Accrued expenses and deferred income		2,038							2,038
Total current liabilities		4,595							4,595
Total equity and liabilities		8,931							9,602
Pledged assets		2,000							2,000
Contingent liabilities	None							None

17

a. Capitalization of software development expenses

Swedish GAAP allows for expenditures during the development phase to be capitalized as intangible assets if it is probable, with a high degree of certainty, that they will result in future economic benefits for the Company.

Under US GAAP, FASB Statement No. 86, Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed, spending on software development is broken down into the following three stages; research and development, software development costs once technological feasibility is established, and costs incurred once the product is available for general sale to customers.  Research and development costs are defined as those costs that occur prior to the software product reaching technological feasibility and are expensed as incurred in accordance with Statement of Financial Accounting Standards No. 2, Accounting for Research and Development Costs (“SFAS No. 2”). Software development costs incurred subsequent to establishing technological feasibility but prior to general release shall be capitalized.

The application of US GAAP requires that all capitalized research and development costs and corresponding amortization expense be reversed for all periods presented. Consequently, the application of SFAS No. 2 as of December 31, 2007 and 2006 results in a reduction of capitalized software development expenses of SEK 1,170 and SEK 852, respectively. Similarly, the net loss for the years ended December 31, 2007 and 2006 would decrease to reflect the reversal of the corresponding depreciation expense of the capitalized software development expenses by SEK 372 and SEK 189, respectively.

b. Intangible assets and goodwill

In accordance with Swedish GAAP, the Company amortizes intangible assets based on their statutory useful lives, which is 3 years for goodwill and 3-5 years for capitalized development expenditures. Negative goodwill is required to be disclosed as a provision under Swedish GAAP and reversals be netted e.g. against future losses in the acquired entity.

Under US GAAP, intangible assets and goodwill are covered in FASB Statement No. 141, Business Combinations and FASB Statement No. 142, Goodwill and Other Intangible Assets. Intangible assets are amortized over their expected useful lives, which can sometimes be different from the statutory useful lives and goodwill is not amortized.Under US GAAP, negative goodwill or the excess of fair value over cost would be allocated to reduce the costs of non-current assets acquired (except certain assets) and the remaining excess after reducing the cost of non-current assets acquired to zero would be recognized as extraordinary gain. That extraordinary gain generally is recognized in the period in which the business combination is completed.

1. The application of US GAAP requires that upon acquisition, the fair value of assets acquired are recorded. Consequently, under US GAAP a fair value of SEK 2,261 was recorded as of the end of March 2005 as an intangible asset with a life of three years. The net loss for the years ended December 31, 2007 and 2006 would increase to reflect the amortization of the intangible assets by SEK 754 and SEK 754, respectively. Also, an additional amount of amortization of the intangible asset of SEK 565 would have been recorded in 2005.

2. Additionally, under US GAAP goodwill is not amortized and thus the depreciation related to the goodwill would be reversed for SEK 1,064. Consequently, net loss for the years ended December 31, 2007 and 2006 would decrease for the amounts depreciated by SEK 672 and SEK 361, respectively. Also, an additional amount of SEK 31 would reverse that was recorded in 2005.

3. Under US GAAP, negative goodwill would not be recorded. Therefore, as of December 31, 2007 and 2006, net loss would increase for the reversal of the dissolving of negative goodwill of SEK 359 and SEK 443, respectively. In the year ended December 31, 2006, net loss would decrease for the extraordinary gain on the acquisition of Swegypt of SEK 802.

18

EX-99.2

Exhibit 99.2

KIT DIGITAL, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

On May 23, 2008, KIT digital, Inc., a Delaware corporation (“KIT” or the “Company”), filed a Current Report on Form 8-K (the “May 8-K”) to report the company entered into a Share Purchase Agreement (“Kamera SPA”) on May 19, 2008 with Kamera Content AB (“Kamera”), a company incorporated and organized under the laws of Sweden.

On May 19, 2008, KIT digital, Inc. (“KIT” or the “Company”) entered into a Share Purchase Agreement (“Kamera SPA”) with Kamera Content AB (“Kamera”). Pursuant to the Kamera SPA, KIT will acquire all of the outstanding equity interests of Kamera for approximately $7.5 million which consists of $4.5 million payable at Closing, $1.5 million payable six months from Closing and $1.5 million thirteen months from Closing. In addition, there is $3 million subject to Kamera achieving certain performance criteria and is payable twenty-one months from Closing, if such criteria is met. Kamera’s historical financial statements were prepared under accounting principles generally accepted in Sweden (Swedish GAAP). In order to prepare the unaudited pro forma condensed combined financial information, Kamera’s financial statements were adjusted to reflect the application of accounting principles generally accepted in the United States (U.S. GAAP). A discussion of the material differences between Swedish GAAP and U.S. GAAP is included in the notes to the financial statements in Exhibit 99.1.

The unaudited pro forma condensed combined balance sheet was prepared by combining the condensed balance sheet of KIT and the condensed balance sheets of Kamera, which include the parent company Kamera Content AB and the subsidiaries Swegypt Company for Telecommunication (S.A.E) (‘Swegypt”) and Kamera (S) PTE LTD (“Kamera Singapore”) as of March 31, 2008. The unaudited pro forma condensed combined balance sheet reflects the gross consideration paid by KIT for the acquisition of Kamera of $7.5 million of which $1.5 million is due six months from completion and is in current liabilities and $1.5 million is due thirteen months from completion and is in non-current liabilities assuming the transaction had been completed on March 31, 2008.

The unaudited pro forma condensed combined statement of operations was prepared by combining the condensed statement of operations of KIT and the condensed statement of operations of Kamera, which include the parent company Kamera Content AB and the subsidiaries Swegypt and Kamera Singapore for the three months ended March 31, 2008 and the year ended December 31, 2007.

The pro forma condensed combined financial statements should be read in conjunction with the separate financial statements and related notes thereto of KIT, as filed with the Securities and Exchange Commission (SEC) in its Annual Report on Form10-KSB filed April 1, 2008 and in its Quarterly Report on Form 10-Q filed May 15, 2008 and in conjunction with the separate financial statements and related notes thereto of Kamera included as Exhibit 99.1 to this Form 8-K/A.

These pro forma condensed combined financial statements are not necessarily indicative of the combined results of operations that would have occurred had the acquisition actually taken place at the beginning of the period indicated above or the future results of operations. In the opinion of KIT’s management, all significant adjustments necessary to reflect the effects of the acquisition that can be factually supported within SEC regulations covering the preparation of pro forma financial statements have been made. The pro forma adjustments as presented are based on estimates and certain information that is currently available to KIT’s management. Such pro forma adjustments could change as additional information becomes available, as estimates are refined or as additional events occur.

UNAUDITED PRO FORMA CONDENSED COMBINED

BALANCE SHEET

As of March 31, 2008

(in thousands of USD)

	Historical											Pro Forma				Pro Forma
	KIT			Kamera			Swegypt		Kamera Singapore			Adjustments				Combined
ASSETS
Cash and cash equivalents	$	5,580		$	318		$	3	$	32		$	(4,200	)	A	$	1,733
Other current assets		4,970			1,078			55		29			(300	)	F		5,832
Total current assets		10,550			1,396			58		61			(4,500	)			7,565
Intangible assets, net		651			226			0		0			2,274		B/E		3,151
Goodwill		1,123			132			0		0			4,504		C/E		5,759
Other non-current assets		1,277			235			73		0			(154	)	D		1,431
Total assets	$	13,601		$	1,989		$	131	$	61		$	2,124			$	17,906
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities	$	7,662		$	1,419		$	131		102		$	1,153		A	$	$10,467
Non-current liabilities		300			1,545			0		0			(45	)	A/F		1,800
Total liabilities		7,962			2,964			131		102			1,108				12,267
Minority interest		(172	)		66								(66	)			(172	)
Stockholders’ equity		5,811			(1,041	)		0		(41	)		1,082		G		5,811
Total liabilities and stockholders’ equity	$	13,601		$	1,989		$	131	$	61		$	2,124			$	17,906

See accompanying notes to unaudited pro forma condensed combined financial statements

2

UNAUDITED PRO FORMA CONDENSED COMBINED

STATEMENT OF OPERATIONS

For the Three Months Ended March 31, 2008

(in thousands of USD, except per share data)

	Historical												Pro Forma				Pro Forma
	KIT			Kamera			Swegypt			Kamera Singapore			Adjustments				Combined
Revenue	$	3,502		$	959		$	97		$	31		$	(69	)	I	$	4,520
Operating expenses		14,312			1,194			101			44			87		H/I		15,738
(Loss) from operations		(10,810	)		(235	)		(4	)		(13	)		(156	)			(11,218	)
Interest and other income		82			0			0			0							82
Interest and other expense		(14	)		(28	)		0			0							(42	)
Net (loss) before income taxes		(10,742	)		(263	)		(4	)		(13	)		(156	)			(11,178	)
Income tax expense		1																1
Net (loss) before minority interest		(10,743	)		(263	)		(4	)		(13	)		(156	)			(11,179	)
Minority interest		96			3													99
Net (loss) available to common shareholders	$	(10,647	)	$	(260	)	$	(4	)	$	(13	)	$	(156	)		$	(11,080	)
Basic and diluted net (loss) per common share	$	(0.27	)														$	(0.28	)
Weighted average common shares outstanding, basic and diluted		38,936,039																38,936,039

See accompanying notes to unaudited pro forma condensed combined financial statements

3

UNAUDITED PRO FORMA CONDENSED COMBINED

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2007

(in thousands of USD, except per share data)

	Historical												Pro Forma				Pro Forma
	KIT			Kamera			Swegypt			Kamera  Singapore			Adjustments				Combined
Revenue	$	13,929		$	2,496		$	289		$	118		$	(235	)	I	$	16,597
Operating expenses		48,167			3,996			343			172			389		H/I		53,120
(Loss) from operations		(34,238	)		(1,500	)		(54	)		(54	)		(624	)			(36,523	)
Interest and other income		725			600			0			0							1,325
Interest and other expense		(913	)		(49	)		(2	)		0							(964	)
Net (loss) before income taxes		(34,426	)		(949	)		(56	)		(54	)		(624	)			(36,162	)
Income tax expense		125			0			0			0							125
Net (loss) before minority interest		(34,551	)		(949	)		(56	)		(54	)		(624	)			(36,287	)
Minority interest		(13	)		29			0			0							(13	)
Net (loss) available to common shareholders	$	(34,564	)	$	(920	)	$	(56	)	$	(54	)	$	(624	)		$	(36,300	)
Basic and diluted net (loss) per common share	$	(0.99	)														$	(1.04	)
Weighted average common shares outstanding, basic and diluted		34,869,325																34,869,325

See accompanying notes to unaudited pro forma condensed combined financial statements

4

KIT DIGITAL, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Preliminary Purchase Price to Acquire Kamera Content AB

The aggregate cost of the acquisition of Kamera was approximately $7.5 million which consists of $4.5 million payable at Closing, $1.5 million payable six months from Closing and $1.5 million thirteen months from Closing. In addition, there is $3 million subject to Kamera achieving certain performance criteria and is payable twenty-one months from Closing, if such criteria is met. We have allocated the aggregate cost of the acquisition to Kamera’s net tangible and identifiable intangible assets based on their estimated fair values. The excess of the aggregate cost of the acquisition over the net estimated fair value of the tangible and identifiable intangible assets and liabilities assumed was recorded to goodwill. Below is a summary of the preliminary allocation of the aggregate cost of the acquisition. The final purchase price allocation will depend upon the final valuation of the assets acquired and the liabilities assumed upon the close of the acquisition. Consequently, the actual allocation of the purchase price could differ from that presented herein.

	Aggregate Cost of the Acquisition
	($ in thousands)
Intangible assets—developed technology	$	1,000
Intangible assets—customer relationships		1,500
Acquired assets and liabilities, net		364
Goodwill		4,636
Total	$	7,500

 Unaudited Pro Forma Condensed Combined Balance Sheet

The pro forma adjustments on the attached unaudited pro forma condensed combined balance sheets include the following:

A.) Represents the gross consideration for the acquisition of Kamera of $7.5 million, which consists of $4.5 million less $300,000 paid to Kamera as an advance or $4.2 million payable at Closing, $1.5 million due six months from Closing and is in current liabilities and $1.5 million due thirteen months from Closing and is in non-current liabilities assuming the transaction had been completed on March 31, 2008.

B.) Represents the estimated fair value of intangible assets separately identifiable from goodwill as of the acquisition of $2.5 million.

C.) Represents goodwill, which is the excess of the purchase price over the net estimated fair value of the tangible and identifiable intangible assets acquired and liabilities assumed, of $4,636,000.

D.) Represents the elimination entry for the investment in Kamera Singapore on Kamera Content AB books.

E.) Represents the elimination entry to writeoff the goodwill of $132,000 and intangibles of $226,000 on the books of Kamera Content AB before the acquisition.

F.) Represents the payback of the loans on the books of Kamera Content AB of $1,245,000 and the offset of the $300,000 paid to Kamera as an advance against the cash consideration, which will occur on closing of the Kamera acquisition.

G.) Represents the elimination of Kamera’s historical equity accounts.

5

Unaudited Pro Forma Condensed Combined Statements of Operations

The pro forma adjustments on the attached unaudited pro forma condensed combined statements of operations include the following:

H.) Represents the increase in amortization of intangible assets based on the estimated fair value of acquired intangible assets. We preliminarily identified approximately $2.5 million of amortizable intangible assets with an average estimated useful life of approximately 4 years. Identifiable intangible assets included developed technology and customer relationships. Amortization of these assets will be recorded to operating expenses depending on the type of asset. The purchase price allocation for Kamera is preliminary and will be finalized upon receipt of a final valuation report.

I.) Represents the elimination entry for intercompany sales between Kamera Content AB and Swegypt of $69,000 for the three months ended March 31, 2008 and $235,000 for the year ended December 31, 2007.

6