NEW YORK, Aug. 14, 2014 /PRNewswire/ -- YOU On Demand
Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company"), a
leading Video On Demand service provider in China delivering Hollywood movies to mobile and TV screens,
today announced its operating results for the three- and six-month
periods ended June 30, 2014 (a full
copy of its quarterly report on Form 10-Q will be posted at
www.sec.gov). Chairman Shane
McMahon, CEO Weicheng Liu and
President and CFO Marc Urbach are
hosting an investor update conference call today at 4:30 p.m. ET to discuss the Company's recent
results. To join the webcast, please visit the 'Webcasts and
Events' section of the YOD corporate website,
http://corporate.yod.com. Otherwise, the toll-free dial-in
is: 877/407-3107; international callers should dial:
201/493-6796.
Shane McMahon, Chairman of YOU On
Demand, commented, "During the first half of 2014 we successfully
pivoted the Company's strategy and its resources to prioritize our
IPTV, OTT and Mobile platforms. Given the exciting potential of
these fast-growing distribution modes, which are increasingly
popular amongst China's tech-savvy
and most active consumers of entertainment, YOU On Demand expects
to continue generating positive momentum from this strategic shift.
As a result, we expect to generate both improved operating
efficiencies and enhanced financial results during the second half
of this year."
YOU On Demand CEO Weicheng Liu,
stated, "Building on the growing popularity of our YOU Hollywood
App with Huawei device users, Xiaomi OTT Box owners and other early
adopters, we recently softly launched our Hollywood App
independently via popular app stores and online channels. We
believe select advertising, marketing and social media outreach,
combined with word-of-mouth recommendations and endorsements from
satisfied App users, will help promote our unique, differentiated
service to an appreciative audience of China's most ardent movie fans."
YOU On Demand President & CFO Marc
Urbach commented, "During this critical phase in our
organization's corporate development, the senior financial and
operations teams will continue striving to combine our strong,
unlevered balance sheet, with conservative expense management and
moderate levels of fixed overhead costs. There are many
opportunities that lie ahead and we expect to best leverage these
by maintaining our fiscally prudent strategy for the long-term
benefit of the Company's shareholders."
2014 Q2 Operating Results
Revenue for the quarter ended June 30,
2014 increased to $183,000, up
from $51,000 in the year-ago Q2 and
up 33% over Q1 2014. Gross loss for the quarter
declined to $674,000, down from
$739,000 in the comparable 2013
period. Total operating expenses for the quarter fell 10.6% to
$2.5 million, reflecting a
combination of content revenue-sharing agreements and disciplined
corporate overhead levels. The loss from operations of $3.2 million for the quarter was down from a
$3.5 million loss from operations in
the comparable 2013 period. The net loss from continuing operations
for the quarter was $1.1 million –
which included a $1.5 million change
in the fair value of warrant liabilities – versus $3.5 million net loss from continuing operations
in the comparable 2013 period. The net loss attributable to YOU on
Demand shareholders amounted to $793,000, down from approximately $3.3 million net loss in Q2 2013. The basic and
diluted per share loss was $0.05,
compared to a $0.22 basic and diluted
per share loss in the year-ago Q2.
Cash and cash equivalents increased from $3.8 million at December
31, 2013, to $15.6 million at
June 30, 2014.
YOU On Demand is maintaining full-year 2014 revenue guidance of
$3 million.
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.
About YOU On Demand Holdings, Inc.
(http://corporate.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.
CONTACT:
|
|
Jason
Finkelstein
|
Robert Rinderman or
Norberto Aja
|
YOU On
Demand
|
JCIR
|
212-206-1216
|
212-835-8500
|
jason.finkelstein@yod.com
|
YOD@jcir.com
|
@youondemand
|
|
– Financial
Tables Follow –
YOU On Demand
Holdings, Inc., Its Subsidiaries and Variable Interest
Entity
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
182,696
|
|
$
50,619
|
|
$
320,377
|
|
$
51,557
|
Cost of
revenue
|
857,179
|
|
790,019
|
|
1,733,117
|
|
1,638,604
|
Gross
loss
|
(674,483)
|
|
(739,400)
|
|
(1,412,740)
|
|
(1,587,047)
|
|
|
|
|
|
|
|
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
2,270,657
|
|
2,073,537
|
|
3,911,297
|
|
4,050,767
|
|
Professional
fees
|
76,231
|
|
223,051
|
|
261,715
|
|
474,485
|
|
Depreciation and
amortization
|
139,590
|
|
173,394
|
|
289,550
|
|
466,227
|
|
Impairments of
long-lived assets
|
-
|
|
311,249
|
|
-
|
|
311,249
|
Total operating
expense
|
2,486,478
|
|
2,781,231
|
|
4,462,562
|
|
5,302,728
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(3,160,961)
|
|
(3,520,631)
|
|
(5,875,302)
|
|
(6,889,775)
|
|
|
|
|
|
|
|
|
|
Interest & other
income (expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(28,321)
|
|
(29,704)
|
|
(2,317,059)
|
|
(59,064)
|
|
Change in fair value
of warrant liabilities
|
1,501,632
|
|
(4,885)
|
|
(937,386)
|
|
(30,290)
|
|
Change in fair value
of contingent consideration
|
589,994
|
|
(42,046)
|
|
(113,132)
|
|
(83,694)
|
|
Gain (loss) on
investment in unconsolidated entities
|
(5,349)
|
|
2,275
|
|
(10,257)
|
|
(719)
|
|
Gain (loss) on sale
of subsidiary
|
-
|
|
-
|
|
755,426
|
|
-
|
|
Loss on dissolution
of variable interest entity
|
-
|
|
-
|
|
(27,463)
|
|
-
|
|
Other
|
(15,015)
|
|
71,777
|
|
(67,681)
|
|
70,596
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
|
|
|
|
|
|
|
before income
taxes and noncontrolling interest
|
(1,118,020)
|
|
(3,523,214)
|
|
(8,592,854)
|
|
(6,992,946)
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
32,495
|
|
29,821
|
|
55,437
|
|
60,961
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
(1,085,525)
|
|
(3,493,393)
|
|
(8,537,417)
|
|
(6,931,985)
|
|
|
|
|
|
|
|
|
|
Net loss from
discontinued operations
|
-
|
|
(97,823)
|
|
-
|
|
(334,398)
|
|
|
|
|
|
|
|
|
|
Net
loss
|
(1,085,525)
|
|
(3,591,216)
|
|
(8,537,417)
|
|
(7,266,383)
|
|
|
|
|
|
|
|
|
|
Plus: Net loss
attributable to noncontrolling interests
|
292,560
|
|
310,771
|
|
527,344
|
|
641,173
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to YOU On Demand shareholders
|
(792,965)
|
|
(3,280,445)
|
|
(8,010,073)
|
|
(6,625,210)
|
Dividends on
preferred stock
|
-
|
|
-
|
|
(16,402,161)
|
|
-
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to YOU on Demand common shareholders
|
$
(792,965)
|
|
$ (3,280,445)
|
|
$ (24,412,234)
|
|
$ (6,625,210)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share:
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$
(0.05)
|
|
$
(0.22)
|
|
$
(1.50)
|
|
$
(0.44)
|
|
Loss from
discontinued operations
|
-
|
|
nil
|
|
-
|
|
(0.01)
|
|
Basic and diluted
loss per share
|
$
(0.05)
|
|
$
(0.22)
|
|
$
(1.50)
|
|
$
(0.45)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
16,598,990
|
|
14,938,780
|
|
16,267,036
|
|
14,771,261
|
|
|
|
|
|
|
|
|
|
YOU On Demand
Holdings, Inc., Its Subsidiaries and Variable Interest
Entity
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2014
|
|
2013
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 15,671,408
|
|
$
3,822,889
|
|
Accounts receivable,
net
|
182,601
|
|
175,211
|
|
Licensed content,
current
|
725,450
|
|
428,322
|
|
Prepaid
expenses
|
316,249
|
|
330,013
|
|
Debt issuance costs,
net
|
-
|
|
128,879
|
|
Other current
assets
|
58,994
|
|
48,928
|
Total current
assets
|
16,954,702
|
|
4,934,242
|
|
|
|
|
|
Property and
equipment, net
|
428,812
|
|
499,858
|
Licensed content,
noncurrent
|
79,868
|
|
162,646
|
Intangible assets,
net
|
2,456,201
|
|
2,621,527
|
Goodwill
|
6,105,478
|
|
6,105,478
|
Investment in
unconsolidated entities
|
658,436
|
|
673,567
|
Other noncurrent
assets
|
224,876
|
|
-
|
Total
assets
|
$
26,908,373
|
|
$
14,997,318
|
|
|
|
|
|
LIABILITIES,
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
354,532
|
|
$
656,545
|
|
Deferred
revenue
|
26,941
|
|
68,969
|
|
Accrued expenses and
liabilities
|
1,301,692
|
|
1,075,944
|
|
Deferred license
fees
|
1,364,716
|
|
1,200,764
|
|
Contingent purchase
price consideration liability
|
691,876
|
|
578,744
|
|
Convertible
promissory note
|
3,000,000
|
|
3,000,000
|
|
Warrant
liabilities
|
901,197
|
|
1,344,440
|
Total current
liabilities
|
7,640,954
|
|
7,925,406
|
|
|
|
|
|
Deferred income tax
liability
|
70,372
|
|
125,809
|
Convertible
promissory note
|
-
|
|
2,000,000
|
Total
liabilities
|
7,711,326
|
|
10,051,215
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Convertible
redeemable preferred stock, $.001 par value; 50,000,000
|
|
|
|
|
shares
authorized
|
|
|
|
|
Series A - 7,000,000
shares issued and outstanding, liquidation preference
|
|
|
|
|
of
$3,500,000 at June 30, 2014 and December 31, 2013,
respectively
|
1,261,995
|
|
1,261,995
|
|
Series C - 0 and
87,500 shares issued and outstanding, liquidation
preference
|
|
|
|
|
of
$0 and $350,000 at June 30, 2014 and December 31, 2013,
respectively
|
-
|
|
219,754
|
|
Series D 4% - 0 and
2,285,714 shares issued and outstanding, liquidation
preference
|
|
|
|
|
of
$0 and $4,000,000 at June 30, 2014 and December 31, 2013,
respectively
|
-
|
|
4,000,000
|
|
|
|
|
|
Equity:
|
|
|
|
|
Preferred Series E
stock, $.001 par value; 16,500,000 shares authorized, 13,428,571
and 0 shares issued
and outstanding, liquidation preference of $23,500,000 and $0 at
June 30, 2014 and December 31, 2013,
respectively
|
13,429
|
|
-
|
|
Common stock, $.001
par value; 1,500,000,000 shares authorized, 17,410,220 and
15,794,762 shares
issued at June 30, 2014 and December 31, 2013,
respectively
|
17,410
|
|
15,794
|
|
Additional paid-in
capital
|
111,566,478
|
|
67,417,025
|
|
Accumulated
deficit
|
(90,346,752)
|
|
(65,856,053)
|
|
Accumulated other
comprehensive loss
|
(1,402,245)
|
|
(715,090)
|
Total YOU On
Demand equity
|
19,848,320
|
|
861,676
|
Noncontrolling
interests
|
(1,913,268)
|
|
(1,397,322)
|
|
|
|
|
|
Total
equity
|
17,935,052
|
|
(535,646)
|
|
|
|
|
|
Total liabilities,
convertible redeemable preferred stock and equity
|
$
26,908,373
|
|
$
14,997,318
|
|
|
|
|
|
SOURCE YOU On Demand Holdings, Inc.