YOU On Demand Reports 2013 Q3 Results

NEW YORK, Nov. 14, 2013 /PRNewswire/ -- YOU On Demand Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company"), a leading multi-platform entertainment and Video On Demand (VOD) company in China, announced today its unaudited operating results for the three-month period ended September 30, 2013 (a full copy of its quarterly report on Form 10-Q will also be posted at www.sec.gov).

Conference Call: Chairman Shane McMahon and Chief Financial Officer Marc Urbach are hosting a conference call today beginning at 4:30 p.m. ET (1:30 p.m. PT). The dial-in numbers are (800) 621-4410 or (+1) (303) 223-2680 (international callers).

On November 5 (subsequent to the close of the 2013 third quarter), the Company announced that C Media Limited, a leading China-based mobile video service provider, raised its aggregate strategic investment in YOU On Demand to $6.0 million USD, with an additional $2.0 million USD Convertible Bridge Note financing. In addition, C Media and YOU On Demand jointly agreed to extend C Media's Phase 2 investment deadline – for up to $10.0 million USD of additional capital – to December 4, 2013. As previously disclosed in early July, C Media had made an initial $4.0 million USD investment in YOU On Demand.

In addition and also subsequent to quarter-end, the Company forged a mobile distribution agreement with Huawei, a leading global information and communications technology (ICT) solutions provider and the third largest global smartphone manufacturer. Per the agreement, Huawei is offering its mobile customers feature films through YOU On Demand's newly launched mobile application (App), YOU Cinema. The YOU Cinema App is now coming pre-loaded on Huawei Mate smartphones featuring various Hollywood titles.

Shane McMahon, Chairman of YOU On Demand, commented, "C Media's strategic investment, in multiple tranches, as well as our new mobile content distribution agreement with Huawei via the YOU Cinema App, are milestones for our organization. Partnering with these two respected China-based organizations provides us with the requisite resources to continue YOU On Demand's rapid expansion, awareness and brand recognition across multiple distribution platforms, especially in the mobile space. We also plan to deploy a portion of C Media's investment in further diversifying our array of entertainment content and continue building YOU On Demand's multi-platform brand."

YOD Q3 2013 Operating Results
Marc Urbach, YOU On Demand's President & CFO, commented, "We are delighted with the very strong relationship YOD has been developing with the C Media team over the past several months and we look forward to achieving additional milestones as defined in our business plan in the coming months, specifically with the financial and technological backing of C Media. We have been strengthening our balance sheet in recent quarters, reflecting their growing capital investment, plus the additional $4.7 million cash infusion we recently received following our divestiture of the non-core Jinan Broadband assets."

Revenue for the quarter ended September 30, 2013 amounted to $0.1 million, while total operating expenses declined approximately 35% to $2.0 million. This lower cost base helped lead to a more than 30% reduction in the Company's operating loss, to $2.6 million in Q3. A one-time $5.6 million gain on the sale of YOD's non-core Jinan Broadband assets resulted in net income of $3.0 million, or diluted EPS of $0.14 per share – based on 15.6 million weighted average shares outstanding at quarter-end.

The cash and cash equivalents balance at September 30, 2013 was $1.2 million, but this does not reflect the additional $2.0 million infusion from C Media on November 5, 2013, nor the remaining cash balance payment received from the sale of the legacy Jinan Broadband assets on November 1, 2013.

About YOU On Demand Holdings, Inc. (www.yod.com)
YOU On Demand (NASDAQ: YOD), is a leading multi-platform entertainment company delivering premium content, including leading Hollywood and China-produced movie titles, to customers across China via Subscription Video On Demand and Transactional Video On Demand. The Company has secured alliances with leading global media operators and content developers. YOU On Demand has content distribution agreements in place with many of Hollywood's top studios including Disney Media Distribution, Paramount Pictures, NBC Universal, Warner Bros., Miramax Films, Lionsgate and Magnolia Pictures, as well as a broad selection of the best content from Chinese filmmakers. The Company has a comprehensive end-to-end secure delivery system, governmental partnerships and approvals and offers additional value-added services. YOU On Demand has strategic partnerships with the largest media entities in China, a highly experienced management team with international background and expertise in Cable, Television, Film, Digital Media, Internet and Telecom. YOU On Demand is headquartered in New York, NY with its China headquarters in Beijing.

Safe Harbor Statement
This press release contains certain statements that may include "forward looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

CONTACT:
Jason Finkelstein	Robert Rinderman or Norberto Aja
YOU On Demand	JCIR – Investor Relations/Corporate Communications
212-206-1216	212-835-8500
jason.finkelstein@yod.com	YOD@jcir.com
@youondemand

- Financial Tables Follow -

YOU On Demand Holdings, Inc. and Its Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended				Nine Months Ended
		September 30,		September 30,		September 30,		September 30,
		2013		2012		2013		2012
		(unaudited)		(unaudited)		(unaudited)		(unaudited)

Revenue		$	95,295	$	4,176	$	146,852	$	1,699,702
Cost of revenue			712,327		714,250		2,350,931		2,739,032
Gross loss			(617,032)		(710,074)		(2,204,079)		(1,039,330)
Operating expense:
	Selling, general and administrative expenses		1,658,255		2,331,402		5,558,195		7,130,959
	Professional fees		147,091		138,063		772,403		1,078,855
	Depreciation and amortization		154,719		533,557		620,946		1,625,146
	Impairments of long-lived assets		-		-		311,249		-
Total operating expense			1,960,065		3,003,022		7,262,793		9,834,960

Loss from operations			(2,577,097)		(3,713,096)		(9,466,872)		(10,874,290)

Interest & other income / (expense)
	Interest income		611		360		1,185		2,763
	Interest expense		(30,429)		(27,802)		(90,067)		(47,699)
	Stock purchase right		-		-		-		(43,748)
	Change in fair value of warrant liabilities		(6,840)		(636,308)		(37,130)		(636,308)
	Change in fair value of contingent consideration		(15,649)		537,784		(99,343)		74,351
	Gain on investment in unconsolidated entities		8,592		64,797		7,873		52,291
	Loss on write-off of uncollectible loans		-		-		-		(473,698)
	Gain on deconsolidation of Shandong Media		-		141,814		-		141,814
	Other		(11,827)		(1,473)		58,769		(60,035)

Net loss before income taxes and non-controlling interest			(2,632,639)		(3,633,924)		(9,625,585)		(11,864,559)

Income tax benefit			21,168		96,026		82,129		266,126

Net loss from continuing operations			(2,611,471)		3,537,898		(9,543,456)		(11,598,433)

Net gain (loss) from discontinued operations
(including gain on disposal of $5,616,269)			5,589,872		(899,529)		5,255,474		(1,873,947)

Net income (loss)			2,978,401		(4,437,427)		(4,287,982)		(13,472,380)
Plus: Net loss attributable to non-controlling interests			193,512		389,274		834,685		1,482,536

Net income (loss) attributable to YOU On Demand shareholders			3,171,913		(4,048,153)		(3,453,297)		(11,989,844)
Dividends on preferred stock			(1,029,829)		-		(1,029,829)		-
Net income (loss) attributable to YOU On Demand common shareholders		$	2,142,084	$	(4,048,153)	$	(4,483,126)	$	(11,989,844)

Basic earnings per share
	Loss from continuing operations	$	(0.22)	$	(0.32)	$	(0.65)	$	(1.02)
	Gain (loss) from discontinued operations		0.36		(0.04)		0.35		(0.09)
	Basic earnings (loss) per shares	$	0.14	$	(0.36)	$	(0.30)	$	(1.11)

Diluted earnings (loss)per share
	Loss from continuing operations	$	(0.22)	$	(0.32)	$	(0.65)	$	(1.02)
	Gain (loss) from discontinued operations		0.36		(0.04)		0.35		(0.09)
	Diluted earnings (loss) per share	$	0.14	$	(0.36)	$	(0.30)	$	(1.11)
Weighted average shares outstanding
	Basic		15,553,097		11.293,895		15,034,841		10,765,931
	Diluted		15,553,097		11,293,895		15,034,841		10,765,931

You On Demand Holdings, Inc. and Its Subsidiaries
CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2013		2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,214,490	$	3,277,891
Marketable equity securities, available for sale		1,714		2,229
Accounts receivable, net		111,943		-
Licensed content, current		737,017		681,457
Prepaid expenses		279,452		412,669
Note receivable, sale of Jinan Broadband		3,911,088		-
Other current assets		4,684		135,486
Current assets of discontinued operations		-		1,498,852
Total current assets		6,260,388		6,008,584

Property and equipment, net		566,877		729,763
Licensed content, noncurrent		200,227		530,367
Intangible assets, net		2,705,635		3,416,858
Goodwill		6,105,478		6,105,478
Investment in unconsolidated entities		681,304		655,834
Non-current assets of discontinued operations		-		5,011,161
Total assets	$	16,519,909	$	22,458,045

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,575,448	$	885,366
Accrued expenses and liabilities		1,161,910		953,134
Deferred license fees, current		988,401		-
Other Current liabilities		36,429		708,367
Contingent purchase price consideration liability, current		426,124		368,628
Convertible promissory note		3,000,000		3,000,000
Warrant liabilities		915,510		878,380
Current liabilities of discontinued operations		-		5,197,450
Total current liabilities		8,103,822		11,991,325

Deferred license fees, concurrent		-		460,547
Contingent purchase price consideration liability		-		368,628
Deferred tax liability		154,946		237,075
Non-current liabilities of discontinued operations		-		68,774
Total liabilities		8,258,768		13,126,349

Commitments and Contingencies

Convertible redeemable preferred stock, $.001 par value; 50,000,000 shares authorize
Series A - 7,000,000 shares issued and outstanding, liquidation preference of $3,500,000 at September 30, 2013 and December 31, 2012, respectively		1,261,995		1,261,995
Series B - 0 and 7,866,800 shares issued and outstanding, liquidation preference of $0 and $3,933,400 at September 30, 2013 and December 31, 2012, respectively		-		3,223,575
Series C - 87,500 and 250, 00 shares issued and outstanding, liquidation preference of $350,000 and $1,000,000 at September 30, 2013 and December 31, 2012, respectively		219,754		627,868
Series D 4% - 2,285,714 and 0 shares issued and outstanding, liquidation preference of $4,000,000 and $0 at September 30, 2013 and December 31, 2012		3,711,794		-

Equity:

Common stock, $.001 par value; 1500,000,000 shares authorized, 15,793,314 and 13,742,394 shares issued at September 30, 2013 and December 31, 2012, respectively		15,793		13,742
Additional paid-in capital		67,438,268		62,388,502
Accumulated deficit		(62,477,818)		(58,841,664)
Accumulated other comprehensive (loss) income		(737,100)		604,632
Total YOU On Demand equity		4,239,143		4,165,212
Non-controlling interest		(1,171,545)		53,046

Total equity		3,067,598		4,218,258
Total liabilities and equity	$	16,519,909	$	22,458,045