8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of Earliest Event Reported): November 28, 2008

Glu Mobile Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	001-33368	91-2143667
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
2207 Bridgepointe Parkway, Suite 250, San Mateo, California		94404
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (650) 532-2400

Not Applicable
______________________________________________
Former name or former address, if changed since last report

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

[  ]  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))

Item 2.05 Costs Associated with Exit or Disposal Activities.

On November 28, 2008, Glu Mobile Inc. (the "Company") approved a restructuring initiative, consisting primarily of headcount reductions and exiting certain leased properties, to reduce global operating expenses. The Company expects to complete the restructuring no later than March 31, 2009. The Company’s estimates of the restructuring charges and the amounts of each major type of cost associated with the planned restructuring include (i) costs related to employee severance payments and (ii) charges related to the exiting of certain leased corporate offices.

As a result, the Company expects to incur total charges, on a pre-tax basis, of approximately $1.3 million to $1.5 million in the fourth quarter of 2008 to implement this initiative as follows: (i) employee severance costs (which will result in future cash expenditures) of between approximately $625,000 to $675,000 and (ii) facility exit costs (non-cash charges) of between approximately $700,000 and $800,000. The Company expects that appro ximately $230,000 of the estimated employee severance costs will be paid in the fourth quarter of 2008 with the remainder being paid in the first quarter of 2009.

A copy of the press release issued by the Company on December 2, 2008 announcing the above-described restructuring initiative is attached to this Report as Exhibit 99.01. Exhibit 99.01 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in the accompanying Exhibit 99.01 shall not be incorporated by reference into any registration statement or other document filed by the Company with the Securities and Exchange Commission (the "SEC"), whether made before or after the date of this Report, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing to th is Exhibit 99.01.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 1, 2008, the Company’s Compensation Committee of the Board of Directors, at the request of L. Gregory Ballard, the Company’s Chief Executive Officer, approved a reduction in Mr. Ballard’s annual base salary from $375,000 to $281,250 (the "Salary Reduction"); provided, however, that for purposes of any severance or other payments to which Mr. Ballard may be entitled in connection with a change of control of the Company pursuant to any agreement or arrangement between Mr. Ballard and the Company, including but not limited to that certain Change of Control Severance Agreement, between the Company and Mr. Ballard, dated as of January 31, 2007, as such may be amended from time to time, Mr. Ballard’s annual base salary shall be deemed to be $375,000 (or such higher salary as may then be in effect), irrespective of the Salary Reduction.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.01 Press Release issued by Glu Mobile Inc., dated December 2, 2008.

This Report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, including the Company’s expectations regarding the implementation of the restructuring initiative and the Company’s estimates of the future restructuring charges and payments, including the timing thereof. These forward-looking statements reflect the Company’s current expectations and estimates and are subject to various risks and uncertainties that could cause actual results to differ materially from any forward-looking statement in this Report, including the risk that all of the components of the restructuring initiative are not finalized and the total costs and charges, and the timing of such costs and charges, may vary from the estimates provided due to changes in the scope or assumptions underlying the Company’s restructuring plans and other risks detailed under the caption “Risk Factors” ; in the Company’s Form 10-Q filed with the SEC on November 14, 2008 and the Company’s other SEC filings. The Company is under no obligation, and expressly disclaims any obligation, to update or alter these forward-looking statements whether as a result of new information, future events of otherwise.

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.

	Glu Mobile Inc.
December 2, 2008	By:	/s/ L. Gregory Ballard
		Name: L. Gregory Ballard
		Title: Chief Executive Officer

Exhibit Index

Exhibit No.	Description
99.01	Press Release issued by Glu Mobile Inc., dated December 2, 2008.

EX-99.01

GLU MOBILE ANNOUNCES GLOBAL COST REDUCTIONS TO REDUCE OPERATING EXPENSES AND IMPROVE LIQUIDITY

SAN MATEO, Calif. – December 2, 2008 – Glu Mobile Inc. (NASDAQ: GLUU) today announced that it is reducing headcount and operating expenses across its global organization. As a result of these and previous actions, the Company will reduce total annualized non-GAAP operating expenses by approximately $13 million, or 19 percent from its second quarter 2008 levels. When these actions are completed and the benefits are fully realized beginning in the first quarter of 2009, total non-GAAP operating expenses in 2009 are expected to be approximately $57 million.

“These decisions are difficult but necessary given the increasing economic headwinds facing our industry and the softening in consumer spending,” said Greg Ballard, chief executive officer. “By realigning our operations and resources worldwide, we are able to improve our financial performance in the near term while continuing to invest in key growth opportunities in the mobile games industry, especially surrounding high-end handsets and new platforms such as iPhone, Android and N-Gage. In addition, I have asked the Board to reduce my salary by 25% as part of our cost reduction efforts until the Company is demonstrating consistent progress toward our long-term goals.”

“This reduction in headcount and other operating expenses continues our focus on expense controls that began late in the second quarter of 2008 across all areas of our business to better position the Company’s financial foundation and support our growth initiatives,” said Eric R. Ludwig, senior vice president and chief financial officer. “These actions will improve our liquidity in 2009, and we continue to explore other avenues to improve our available cash and credit positions.”

The Company currently estimates that, in connection with the workforce reduction, it will incur pre-tax restructuring charges in the fourth quarter of 2008 related to estimated severance costs in the range of approximately $625,000 to $675,000. Substantially all of these charges will result in future cash expenditures, of which the Company believes approximately $230,000 will be paid in the fourth quarter of 2008 and the remainder will be paid in the first quarter of 2009. Additionally, the Company expects to record a pre-tax, non-cash facility closure charge in the range of approximately $700,000 to $800,000 in the fourth quarter of 2008.

Use of Non-GAAP Financial Measures

To supplement Glu’s unaudited condensed consolidated financial statements presented in accordance with GAAP, Glu uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Glu’s results of operations as determined in accordance with GAAP. The non-GAAP financial measures used by Glu include non-GAAP gross profit, non-GAAP operating income (loss), non-GAAP net income (loss) and historical and estimated non-GAAP basic and diluted earnings (loss) per share. These non-GAAP financial measures exclude the following items from Glu’s consolidated statements of operations:

— Acquired in-process technology

— Amortization of intangibles

— Stock-based compensation

— Gain on sale of assets

— Impairment of auction-rate securities

— Restructuring

— MIG earnout

— Transitional expenses

— Impairment of goodwill

Glu may consider whether other significant non-recurring items that arise in the future should also be excluded in calculating the non-GAAP financial measures it uses.

Glu believes that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding Glu’s performance by excluding certain items that may not be indicative of Glu’s core business, operating results or future outlook. Glu’s management uses, and believes that investors benefit from referring to, these non-GAAP financial measures in assessing Glu’s operating results, as well as when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate comparisons of Glu’s performance to prior periods.

For complete information regarding our non-GAAP financial information, please refer to Glu’s November 4, 2008 press release regarding its third quarter financial results and certain non-GAAP financial information available in the Investor Relations section of Glu’s website, www.glu.com.

Cautions Regarding Forward-Looking Statements

This news release contains forward-looking statements, including those regarding our expectation that we will reduce total annualized non-GAAP operating expenses by approximately $13 million, or 19 percent from our second quarter 2008 levels; our expectation that, when these reductions are completed and the benefits are fully realized beginning in the first quarter of 2009, total non-GAAP operating expenses in 2009 will be approximately $57 million; our belief that realigning our operations and resources worldwide will enable us to improve our financial performance in the near term while continuing to invest in growth opportunities; our belief that high-end handsets and new platforms, such as iPhone, Android and N-Gage, represent the key growth in the mobile games industry; our belief that the reduction in headcount and other operating expenses will better position our financial foundation and support our growth initiatives; our belief that our cost reductions will improve our liquidity in 2009; our belief that will be able to continue to explore other avenues to improve our available cash and credit positions; our estimation that we will incur pre-tax restructuring charges in the fourth quarter of 2008 related to estimated severance costs in the range of approximately $625,000 to $675,000; our expectation that substantially all of these charges will result in future cash expenditures, of which we believe approximately $230,000 will be paid in the fourth quarter of 2008 and the remainder will be paid in the first quarter of 2009; and our expectation that we will record a pre-tax, non-cash facility closure charge in the range of approximately $700,000 to $800,000 in the fourth quarter of 2008. These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Investors should consider important risk factors, which include: the risk that our reduction in operating expenses will not be sufficient to realize the anticipated approximately $13 million, or 19 percent cost reduction over our second quarter of 2008 levels; the risk that these cost reductions may result in greater than anticipated reductions in anticipated revenue and may not succeed in improving our financial performance in the near term; and the risk that investment in what we believe to be key growth opportunities in the mobile games industry, particularly high-end handsets and new platforms such as iPhone, Android and N-Gage, may prove unsuccessful; the risk that these cost reductions will not result in improving our financial foundation and supporting our growth initiatives; the risk that these cost reductions actions will not improve our liquidity position in 2009; the risk that we may be unable to successfully implement measures to improve our available cash and credit positions, including entering into a new credit facility to replace our credit facility that expires in February 2009; the risk our estimated restructuring charges may be greater than we currently anticipate and/or occur in periods other than we currently anticipate; the risk that our title plan roadmaps for the remainder of 2008 and for 2009, including for high-end platforms, may be less successful than we anticipate or that we will not release the titles on the schedules that we currently anticipate or at all; the risk that we may have insufficient working capital to effectively execute our business strategy, including exploitation of the new high-end platforms while continuing to address the traditional mobile phone market; the risk that we may lose a key intellectual property license; the risk that growth of next generation handsets and advanced networks does not grow as significantly in 2009 as we anticipate; the risk that our development expenses for games for high-end handsets are greater than we anticipate; the risk that we may be unable to tightly managing expenses to improve operating margins while still making the strategic investments necessary for meeting the market needs in 2009 and beyond; the risk that our recently and newly launched games are less popular than anticipated; the risk that changes in wireless carrier plans with their customers may adversely impact sales of our games; the risk that sales of our original IP titles will not continue to favorably impact product mix; the risk that our newly released games will be of a quality less than desired by reviewers and consumers; the risk that mobile games market is smaller than anticipated; and other risks detailed under the caption “Risk Factors” in our Form 10-Q filed with the Securities and Exchange Commission on November 14, 2008 and our other SEC filings. You can locate these reports through our website at http://www.glu.com/corp/Pages.investors. We are under no obligation, and expressly disclaim any obligation, to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.

About Glu

Glu (NASDAQ:GLUU) is a leading global publisher of mobile games. Its portfolio of top-rated games includes original titles Super K.O. Boxing!, Stranded and Brain Genius, and titles based on major brands from partners including Atari, Activision, Konami, Harrah’s, Hasbro, Warner Bros., Microsoft, PlayFirst, PopCap Games, SEGA and Sony. Founded in 2001, Glu is based in San Mateo, Calif. and has offices in London, France, Germany, Spain, Italy, Sweden, Poland, Russia, China, Brazil, Chile, Canada and Mexico. Consumers can find high-quality, fresh entertainment created exclusively for their mobile phones wherever they see the ‘g’ character logo or at www.glu.com.

GLU MOBILE, GLU, SUPER K.O. BOXING!, STRANDED, BRAIN GENIUS and the ‘g’ character logo are trademarks of Glu Mobile Inc.

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CONTACT:
Media:
Glu Mobile
Jill Braff, Senior Vice President, Global Publishing, 650-532-2442
jill.braff@glu.com
or
Investor Relations:
The Blueshirt Group
Todd Friedman / Stacie Bosinoff, 415-217-7722
todd@blueshirtgroup.com
stacie@blueshirtgroup.com