As filed with the Securities and Exchange Commission on June 17,
2015
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
YOU ON DEMAND HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada |
20-1778374 |
(State or other jurisdiction of incorporation or |
(I.R.S. Employer Identification Number)
|
organization) |
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375 Greenwich Street, Suite 516, New York, New York 10013
212-206-1216
(Address, including zip code, and telephone number,
including area code
of registrants principal executive offices)
Copies of Correspondence to:
Weicheng Liu |
William N. Haddad |
Chief Executive Officer |
Reed Smith LLP |
YOU On Demand Holdings, Inc. |
599 Lexington Avenue |
Suite 2603, Tower A, Office Park |
New York, NY 10022 |
No. 10, Jintong West Road, Chaoyang District |
(212) 521-5400 |
Beijing, China 100020 |
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(86 10) 8590 - 6578 |
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(Name, address, including zip code, and telephone
number,
including area code, of agent for service)
A proximate date of commencement of proposed sale to the
public: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment for an offering
pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the
Securities Act, check the following box. [ ]
If this form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule
413(b) under the Securities Act, check the following box. [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check
one):
Large accelerated filer [ ] |
Accelerated filer [ ] |
Non-accelerated filer [ ] |
Smaller reporting company [X]
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CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to
be Registered |
Amount to
be Registered
(1) |
Proposed
Maximum Offering Price
Per Unit
(2) |
Proposed
Maximum Aggregate Offering Price
(2) |
Amount of
Registration Fee |
Common Stock, $0.001 par value |
4,921,054 |
$2.37 |
$11,662,897.98 |
$1,355.23 |
Common Stock, $0.001 par value, issuable upon
conversion of Series A Preferred Stock |
933,333 |
$2.37 |
$2,211,999.21 |
$257.03 |
Common Stock, $0.001 par value, issuable upon
conversion of Series E Preferred Stock |
6,857,140 |
$2.37 |
$16,251,421.8 |
$1,888.42 |
Common Stock, $0.001 par value, issuable upon
conversion of Series E Preferred Stock issuable upon conversion of
a promissory note |
1,938,411 |
$2.37 |
$4,594,034.07 |
$533.83 |
Common Stock, $0.001 par value, issuable
upon exercise of warrants to purchase shares of Common Stock |
162,500 |
$2.37 |
$385,125 |
$44.75 |
Common Stock, $0.001 par value, issuable upon
exercise of options to purchase shares of Common Stock |
1,090,555 |
$2.37 |
$2,584,615.35 |
$300.33 |
Total: |
15,902,993 |
$2.37 |
$37,690,093.41 |
$4,379.59 |
(1) |
All shares are being registered on this registration
statement for resale by the selling stockholders named in this prospectus.
Pursuant to Rule 416(a) of the Securities Act of 1933, this registration
statement also registers such additional shares of the registrants Common
Stock as may become issuable to prevent dilution as a result of stock
splits, stock dividends or similar transactions with respect to the shares
of Common Stock being registered hereunder. |
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(2) |
Estimated solely for the purpose of calculating the
amount of the registration fee pursuant to Rule 457(c) under the
Securities Act of 1933, as amended, based on the average of the high and
low price for the Companys Common Stock on The NASDAQ Capital Market on
June 12, 2015. |
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until this registration statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
The information in this prospectus is not
complete and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
PROSPECTUS
Subject to completion, dated June 17, 2015
15,902,993 Shares of Common Stock
YOU ON DEMAND HOLDINGS, INC.
This prospectus relates to 15,902,993 shares of Common Stock of
YOU On Demand Holdings, Inc. that may be sold from time to time by the selling
stockholders named in this prospectus, which include:
4,921,054 shares of Common Stock;
933,333 shares of Common Stock issuable
to the selling stockholders upon the conversion of shares of Series A Preferred
Stock, $0.001 par value per share (the Series A Preferred Stock);
6,857,140 shares of Common Stock
issuable to the selling stockholders upon the conversion of shares of Series E
Preferred Stock, $0.001 par value per share (the Series E Preferred Stock);
1,938,411 shares of Common Stock,
issuable to the selling stockholders upon the conversion of shares of Series E
Preferred Stock, $0.001 par value per share, issuable upon conversion of
promissory notes;
162,500 shares of Common Stock issuable
to the selling stockholders upon the exercise of the warrants to purchase Common
Stock, the exercise price of which is $1.50 (the Warrants); and
1,090,555 shares of Common Stock
issuable to the selling stockholders upon the exercise of options to purchase
Common Stock,
We will not receive any of the proceeds from the sale of shares
of our Common Stock by the selling stockholders.
The shares of our Common Stock may be offered through public or
private transactions at market prices prevailing at the time of sale, at a fixed
price or fixed prices, at negotiated prices, at various prices determined at the
time of sale or at prices related to prevailing market prices. In addition,
shares of our Common Stock may be offered from time to time through ordinary
brokerage transactions on the Nasdaq Capital Market. The timing and amount of
any sale are within the sole discretion of the selling stockholders, subject to
certain restrictions. See Plan of Distribution.
Our Common Stock is listed on the Nasdaq Capital Market under
the symbol YOD. On June 12, 2015, the closing sale price of our Common Stock
as reported on the Nasdaq Capital Market was $2.34.
Investing in our Common Stock involves a high degree of risk.
See Risk Factors beginning on page 2 of this prospectus and in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2014 to read about
risk factors you should consider before buying shares of our Common Stock.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The date of this prospectus is June 16, 2015
TABLE OF CONTENTS
i
ABOUT THIS PROSPECTUS
You should rely only on the information contained in this
prospectus. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. For further information, please see the
section of this prospectus entitled Where You Can Obtain Additional
Information. The selling stockholders are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.
You should not assume that the information appearing in this
prospectus is accurate as of any date other than the date on the front cover of
this prospectus, regardless of the time of delivery of this prospectus or any
sale of a security. Our business, financial condition, results of operations,
and prospects may have changed since those dates.
We obtained statistical data, market data, and other industry
data and forecasts used throughout this prospectus from market research,
publicly available information, and industry publications. Industry publications
generally state that they obtain their information from sources that they
believe to be reliable, but they do not guarantee the accuracy and completeness
of the information. Similarly, while we believe that the statistical data,
industry data, and forecasts and market research are reliable, we have not
independently verified the data, and we do not make any representation as to the
accuracy of the information. We have not sought the consent of the sources to
refer to their reports appearing in this prospectus.
USE OF TERMS
Except as otherwise indicated by the context, all references in
this prospectus to (i) YOU On Demand,we,us,our,our Company, or the
Company are to YOU On Demand Holdings, Inc., a Nevada corporation, and its
consolidated subsidiaries and variable interest entities, or VIEs; (ii)
Securities Act are to the Securities Act of 1933, as amended; and (iii)
Exchange Act means the Securities Exchange Act of 1934, as amended.
YOU ON DEMAND HOLDINGS, INC.
Our Business
We operate in the Chinese media segment through our
subsidiaries and VIEs, and provide integrated value-added service solutions for
the delivery of video on demand (VOD) and enhanced premium content for digital
cable providers, Internet Protocol Television (IPTV) providers, Over-the-Top
(OTT) streaming providers, mobile manufacturers and operators, as well as
direct customers.
Through our VIE, Beijing Sino Top Scope Technology Co., Ltd.
(Sinotop Beijing) and its 80% owned operating entity, Zhong Hai Shi Xun
Information Technology Co., Ltd. (Zhong Hai Video), we provide: 1) integrated
value-added business-to-business (B2B) service solutions for the delivery of
VOD and enhanced premium content for digital cable; 2) integrated value-added
business-to-business-to-customer (B2B2C) service solution for the delivery of
VOD and enhanced premium content for IPTV and OTT providers and; 3) a direct to
user, or B2C, mobile video service app.
The following chart illustrates our current corporate
structure:
1
Note: Zhang Yan, the sole shareholder of Sinotop Beijing, and a
party to certain VIE arrangements between YOU On Demand (Asia) Limited (YOD
Hong Kong), formerly Sinotop Group Limited, and Sinotop Beijing, is the wife of
Weicheng Liu, our Chief Executive Officer.
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1. |
Sinotop Beijing VIE Agreements, including with Zhang Yan,
the sole shareholder of Sinotop Beijing. |
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(1) |
Management Services Agreement between Sinotop Beijing and
YOD Hong Kong, dated as of March 9, 2010. |
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(2) |
Option Agreement among YOD Hong Kong, Sinotop Beijing and
the sole shareholder of Sinotop Beijing (Zhang Yan), dated March 9,
2010. |
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(3) |
Termination, Assignment and Assumption Agreement, dated
June 4, 2012, by and among YOD Hong Kong, YOU On Demand (Beijing)
Technology Co., Ltd. (YOD WFOE), Sinotop Beijing and Zhang Yan, as the
sole shareholder of Sinotop Beijing. |
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(4) |
Equity Pledge Agreement, dated June 4, 2012, by and among
Sinotop Beijing, YOD WFOE and Zhang Yan, as the sole shareholder of
Sinotop Beijing. Pursuant to the Pledge Agreement, the Pledge Agreement
was registered with the competent office of the PRCSAIC in Beijing shortly
after the Pledge Agreement was executed. |
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(5) |
Voting Rights Proxy Agreement, dated June 4, 2012, by and
among Sinotop Beijing, YOD WFOE and Zhang Yan, as the sole shareholder of
Sinotop Beijing. |
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(6) |
Power of Attorney, dated June 4, 2012 executed by Zhang
Yan as the sole shareholder of Sinotop Beijing. |
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2. |
Cooperation Agreement, by and among, Sinotop Beijing, Hua
Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd. (Hua
Cheng) and Zhong Hai Video, dated September 30, 2010. The controlling
party of Hua Cheng is Hua Cheng Film and Television Digital Programs Co.
Ltd. (Hua Cheng Digital). Hua Cheng Digital is not related to us or our
principles. |
2
VIE Structure and Arrangements
On July 30, 2010, we acquired YOD Hong Kong through CB Cayman.
Through a series of contractual arrangements, we control Sinotop Beijing.
Sinotop Beijing, a corporation established in the PRC, is the 80% owner of Zhong
Hai Video, which was established to provide integrated value-added service
solutions for the delivery of VOD, PPV and enhanced premium content for digital
cable, IPTV and OTT providers, mobile manufacturers and operators, as well as
direct customers.
In March 2010, YOD Hong Kong entered into a management services
agreement with Sinotop Beijing pursuant to which Sinotop Beijing pays consulting
and service fees, equal to 100% of net profits of Sinotop Beijing, to YOD Hong
Kong for various management, technical, consulting and other services in
connection with its business. Payment of the fees under the management services
agreement is secured through an equity pledge agreement, dated June 4, 2012, by
and among Sinotop Beijing, YOD WFOE and the sole shareholder of Sinotop Beijing,
pursuant to which the sole shareholder of Sinotop Beijing pledged all equity
interests in Sinotop Beijing to YOD WFOE. In addition, on June 4, 2012, YOD WFOE
entered into a voting rights agreement with Sinotop Beijing and the sole
shareholder of Sinotop Beijing, whereby YOD WFOE was entrusted with all of the
voting rights of the sole shareholder of Sinotop Beijing. Through these
contractual arrangements, we acquired control over and rights to 100% of the
economic benefit of Sinotop Beijing. Accordingly, Sinotop Beijing is considered
a VIE and, therefore, is consolidated in our financial statements.
Our Corporate History
YOU On Demand Holdings, Inc., our parent holding company, was
formed in the State of Nevada on October 19, 2004, pursuant to a reorganization
of a California entity formed in 1988. Prior to January 2007, we were a blank
check shell company.
On January 23, 2007, we acquired China Broadband, Ltd., a
Cayman Islands company, which at the time was a party to the cooperation
agreement with our PRC-based wholly-foreign-owned-entity, in a reverse
acquisition transaction.
On July 30, 2010, we acquired YOD Hong Kong, formerly Sinotop
Group Limited, through our subsidiary CB Cayman. Through a series of contractual
arrangements, YOD Hong Kong and its subsidiary, YOD WFOE, controls
SinotopBeijing. Sinotop Beijing is the 80% owner of Zhong Hai Video. As a result
of the contractual arrangements with Sinotop Beijing, we have the right to
control management decisions and direct the economic activities that most
significantly impact Sinotop Beijing and Zhong Hai Video, and, accordingly,
under generally accepted accounting principles in the United States, we
consolidate these operating entities in our consolidated financial statements.
Our Unconsolidated Equity Investment
We hold 30% ownership interest in Shandong Lushi Media Co.,
Ltd., a PRC company (Shandong Media), our print-based media business, and
account for our investment in Shandong Media under the equity method The
business of Shandong Media includes a television programming guide publication,
the distribution of periodicals, the publication of advertising, the
organization of public relations events, the provision of information related
services, copyright transactions, the production of audio and video products,
and the provision of audio value added communication services. In addition to
being the exclusive provincial television programming guide publishing group in
the Shandong province, Shandong Media has a combined subscription basis of
approximately 225,000 subscribers.
Office Location
The address of our principal executive office is 375 Greenwich
Street, Suite 516, New York, New York 10013 and our telephone number is (212)
206-1216. We maintain a website at www.yod.com that contains information about
our Company, though no information contained on our website is part of this
prospectus.
3
THE OFFERING
Common stock offered by the selling
stockholder |
15,902,993 shares, consisting of (i) 4,921,054 shares of
Common Stock, (ii) 933,333 shares of Common Stock issuable upon the
conversion of shares of Series A Preferred Stock; (iii) 6,857,140 shares
of Common Stock issuable upon conversion of shares of Series E Preferred
Stock; (iv) 1,938,411 shares of Common Stock issuable upon conversion of
Series E Preferred Stock issuable upon conversion of a promissory note;
(v) 162,500 shares Common Stock issuable upon exercise of the Warrants
held by the selling stockholders and (vi) 1,090,555 shares of Common Stock
issuable to the selling stockholder upon the exercise of options to
purchase Common Stock. |
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Offering Price |
The selling stockholders will determine at what price
they may sell the offered shares, and such sales may be made at prevailing
market prices or at privately negotiated prices. |
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Use of proceeds |
All of the shares of Common Stock being offered under
this prospectus are being offered and sold by the selling stockholders. We
will not receive any proceeds from the resale of the shares by the selling
security holders. |
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The Nasdaq Capital Market |
Our Common Stock is quoted on the Nasdaq Capital Market
under the symbol YOD. |
RISK FACTORS
An investment in our securities involves a high degree of risk.
Prior to making a decision about investing in our securities, you should
carefully consider the important risk factor below and the specific risk factors
discussed in the sections entitled Risk Factors contained in our most recent
Annual Report on Form 10-K filed on March 30, 2015, and in any applicable
prospectus supplement and our other filings with the Securities and Exchange
Commission (the SEC) and incorporated by reference in this prospectus,
together with all of the other information contained in this prospectus, or any
applicable prospectus supplement. Additional risks and uncertainties not
presently known to us, or that we currently view as immaterial, may also impair
our business. If any of the risks or uncertainties described in our SEC filings
or any prospectus supplement or any additional risks and uncertainties actually
occur, our business, financial condition and results of operations could be
materially and adversely affected. In that case, the trading price of our
securities could decline and you might lose all or part of your investment.
The number of shares being registered for sale is significant
in relation to our trading volume.
All of the shares registered for sale on behalf of the selling
stockholders are restricted securities as that term is defined in Rule 144
under the Securities Act. We have filed this registration statement to register
these restricted shares for sale into the public market by the selling
stockholders. These restricted securities, if sold in the market all at once or
at about the same time, could depress the market price during the period the
registration statement remains effective and also could affect our ability to
raise equity capital. Any outstanding shares not sold by the selling
stockholders pursuant to this prospectus will remain as restricted shares in
the hands of the holders, except for those held by non-affiliates for a period
of six months, calculated pursuant to Rule 144.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference
forward-looking statements within the meaning of section 27A of the Securities
Act and section 21E of the Exchange Act. These forward-looking statements are
managements beliefs and assumptions. In addition, other written or oral
statements that constitute forward-looking statements are based on current
expectations, estimates and projections about the industry and markets in which
we operate and statements may be made by or on our behalf. Words such as should,could,may,expect,anticipate,intend,plan,believe,seek,estimate,
variations of such words and similar expressions are intended to identify such
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are
difficult to predict. There are a number of important factors that could cause
our actual results to differ materially from those indicated by such
forward-looking statements.
4
We describe material risks, uncertainties and assumptions that
could affect our business, including our financial condition and results of
operations, under Risk Factors and may update our descriptions of such risks,
uncertainties and assumptions in any prospectus supplement. We base our
forward-looking statements on our managements beliefs and assumptions based on
information available to our management at the time the statements are made. We
caution you that actual outcomes and results may differ materially from what is
expressed, implied or forecast by our forward-looking statements. Accordingly,
you should be careful about relying on any forward-looking statements. Reference
is made in particular to forward-looking statements regarding growth strategies,
financial results, product and service development, competitive strengths,
intellectual property rights, litigation, mergers and acquisitions, market
acceptance or continued acceptance of our products and services, accounting
estimates, financing activities, ongoing contractual obligations and sales
efforts. Except as required under the federal securities laws and the rules and
regulations of the SEC, we do not have any intention or obligation to update
publicly any forward-looking statements after the distribution of this
prospectus, whether as a result of new information, future events, changes in
assumptions, or otherwise.
5
SELLING STOCKHOLDERS
This prospectus relates to the resale by the selling
stockholders named below from time to time of up to a total of 15,902,993 shares
of Common Stock, which also includes Common Stock issuable upon (a) the
conversion of shares of Series A Preferred Stock and Series E Preferred Stock
and (b) the exercise of the Warrants issued and issuable to the selling
stockholder pursuant to transactions exempt from registration under the
Securities Act. Each share of Series A Preferred Stock shall be convertible, at
the option of the holder thereof, at any time, into 0.1333333 shares of Common
Stock. The conversion price for the Series E Preferred Stock is $1.75 and each
share of Series E Preferred Stock is convertible at any time at the option of
the holder into one share of Common Stock (subject to certain adjustments set
forth in its Certificate of Designation). The exercise price for the Warrants is
$1.50. All of the Common Stock offered by this prospectus is being offered by
the selling stockholders for their own accounts.
The table below, which was prepared based on information filed
publicly or supplied to us by the selling stockholders, sets forth information
regarding the beneficial ownership of outstanding shares of our Common Stock
owned by the selling stockholders and the shares that it may sell or otherwise
dispose of from time to time under this prospectus. The selling stockholders, or
their transferees, donees or successors, may resell, from time to time, all,
some or none of the shares of our Common Stock covered by this prospectus, as
provided in this prospectus under the section entitled Plan of Distribution
and in any applicable prospectus supplement. However, we do not know when or in
what amount the selling stockholders may offer their shares for sale under this
prospectus, if any.
The number of shares disclosed in the table below as
beneficially owned are those beneficially owned as determined under the rules
of the SEC. Such information is not necessarily indicative of ownership for any
other purpose. Under the rules of the SEC, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or to direct the voting of such security, or
investment power, which includes the power to dispose of or to direct the
disposition of such security. In computing the number of shares beneficially
owned by a selling stockholder and the percentage of ownership of that selling
stockholder, shares of Common Stock underlying shares of convertible preferred
stock, options or warrants held by that selling stockholder that are convertible
or exercisable, as the case may be, within 60 days are included. The selling
stockholders percentage of ownership in the following table is based upon
23,793,702 shares of Common Stock outstanding as of June 1, 2015. Prior to this
offering, the aggregate number of Common Stock held by non-affiliates was
18,144,252.
Unless otherwise indicated and subject to community property
laws where applicable, the selling stockholders named in the following table
have, to our knowledge, sole voting and investment power with respect to the
shares beneficially owned by them. In addition, except for as specifically set
forth in the footnote to the table below, the selling stockholders do not have
any family relationships with our officers, directors or controlling
stockholders. Except for as specifically set forth in the footnote to the table
below, no selling stockholders have held a position as an officer or director of
the Company within the past three years. Other than Chardan Capital Markets LLC,
which is a registered broker-dealer, none of the selling stockholders is a
broker-dealer. Furthermore, except as specifically set forth in the footnote to
the table below, none of the selling stockholders is an affiliate of a
registered broker-dealer.
Information concerning the selling stockholders may change from
time to time, and any changed information will be presented in a prospectus
supplement as necessary. Please carefully read the footnotes located below the
table in conjunction with the information presented in the table.
6
Name |
Beneficial
Ownership Before the Offering |
Percentage of
Ownership Before the Offering |
Shares of Common
Stock Included in Prospectus |
Beneficial Ownership of Common Stock After the
Offering (1) |
Percentage of
Common Stock Owned After Offering (2) |
Shane McMahon |
5,930,232 (3) |
21.6% |
5,930,232 (3) |
0 |
0 |
C Media Limited |
6,857,140 (4) |
22.3% |
6,857,140 (4) |
0 |
0 |
Steven Oliveira |
138,716 |
* |
138,716 (5) |
* |
* |
Kerry Propper |
12,819 |
* |
12,819 (6) |
* |
* |
Ronald Glickman |
10,495 |
* |
10,495 (7) |
* |
* |
Steven Urbach |
470 |
* |
470 (8) |
* |
* |
Weicheng Liu |
2,953,121 |
12.2% |
2,953,121 (9) |
0 |
0 |
Total |
15,902,993 |
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15,902,993 |
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* Less than 1%
(1) Assume that all securities offered are sold.
(2) As of June 1, 2015, a total of 23,835,370 shares of Common
Stock of the Company are considered to be outstanding pursuant to SEC Rule
13d-3(d). Shares of Series A Preferred Stock and shares of Series E Preferred
Stock are deemed to be outstanding for computing the percentage of ownership of
the person holding the shares and the percentage ownership of any group of which
the holder is member but are not deemed outstanding for computing the percentage
of other persons.
(3) Shane McMahon holds 3,052,996 shares of Common Stock,
including (i) 2,324,600 shares of Common Stock, 24,600 shares of which are held
by the Shane B. McMahon Trust u/a/Vincent K. McMahon Irrev. Trust dated.
12/23/2008, (ii) 533,333 shares of Common Stock underlying options exercisable
within 60 days at $3.00 per share, (iii) 36,667 shares of Common Stock
underlying options exercisable within 60 days at $4.50 per share; and (iv)
163,888 shares of Common Stock underlying options exercisable within 60 days at
$2.00 per share. In addition, Mr. McMahon holds 2,871,744 shares of Series E
Preferred Shares, including 933,333 shares of Series E Preferred Stock and
1,938,411 shares of Series E Preferred Stock, issuable within 60 days, upon
conversion of a promissory note which is convertible at any time between January
31, 2014 and December 31, 2016, at a price of $1.75 per share at the option of
Mr. McMahon.
(4) C Media Limited holds 7,000,000 shares of Series A
Preferred Stock, being entitled to cast ten (10) votes for every share of Common
Stock that is issuable upon conversion of a share of Series A Preferred Stock
(each share of Series A Preferred Stock is convertible into 0.1333333 shares of
Common Stock), or a total of 9,333,330 votes and 5,923,807 shares of Series E Preferred Stock. 7,000,000
shares of Series A Preferred Stock are convertible to 933,333 shares of Common
Stock (each share of Series A Preferred Stock shall be convertible, at the
option of the holder thereof, at any time, into 0.1333333 shares of Common
Stock.).
(5) Included in this prospectus are 138,716 shares of Common
Stock underlying the Warrants.
(6) Included in this prospectus are 12,819 shares of Common
Stock underlying the Warrants. Kerry Propper is an affiliate of a broker-dealer
and made the representations that he purchased our securities in the ordinary
course of business and at the time of purchase of the securities to be resold,
it had no agreements or understandings, directly or indirectly, with any person
to distribute the securities.
(7) Included in this prospectus are 10,495 shares of Common
Stock underlying the Warrants. Ronald Glickman is an affiliate of a broker-dealer and
made the representations that he purchased our securities in the ordinary course
of business and at the time of purchase of the securities to be resold, it had
no agreements or understandings, directly or indirectly, with any person to
distribute the securities.
(8) Included in this prospectus are 470 shares of Common Stock
underlying the Warrants. Steven Urbach is an affiliate of a broker-dealer and
made the representations that he purchased our securities in the ordinary course
of business and at the time of purchase of the securities to be resold, it had
no agreements or understandings, directly or indirectly, with any person to
distribute the securities.
(9) Includes 320,000 shares underlying options exercisable
within 60 days at $3.75 per share and 36,667 shares underlying options
exercisable within 60 days at $4.50 per share.
PLAN OF DISTRIBUTION
The selling stockholders, may, from time to time, sell,
transfer or otherwise dispose of any or all of their shares of our Common Stock
or interests in shares of our Common Stock on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These dispositions may be at fixed prices, at prevailing market prices at the
time of sale, at prices related to the prevailing market price, at varying
prices determined at the time of sale, or at negotiated prices.
7
The selling stockholders may use any one or more of the
following methods when disposing of shares or interests therein:
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ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers; |
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block trades in which the broker-dealer will
attempt to sell the shares as agent, but may position and resell a portion
of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and
resale by the broker-dealer for their accounts; |
8
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an exchange distribution in accordance with the
rules of the applicable exchange; |
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privately negotiated transactions; |
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short sales effected after the date the
registration statement of which this prospectus is a part is declared
effective by the SEC; |
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through the writing or settlement of options or
other hedging transactions, whether through an options exchange or
otherwise; |
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broker-dealers may agree with the selling
stockholders to sell a specified number of such shares at a stipulated
price per share; and |
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a combination of any such methods of sale.
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The selling stockholders may, from time to time, pledge or
grant a security interest in some or all of the shares of our Common Stock owned
by them and, if they default in the performance of their secured obligations,
the pledgees or secured parties may offer and sell the shares of our Common
Stock, from time to time, under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of our Common Stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus.
In connection with the sale of our Common Stock or interests
therein, the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of our Common Stock in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our Common Stock short
and deliver these securities to close out its short position, or loan or pledge
the shares of our Common Stock to broker-dealers that in turn may sell these
securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The aggregate proceeds to the selling stockholders from the
sale of shares of our Common Stock offered by them will be the purchase price of
the Common Stock less discounts or commissions, if any. The selling stockholders
reserve the right to accept and, together with their agents from time to time,
to reject, in whole or in part, any proposed purchase of our Common Stock to be
made directly or through agents. We will not receive any of the proceeds from
this offering.
Broker-dealers engaged by the selling stockholders may arrange
for other broker-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchase of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling stockholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet the criteria and conform to the
requirements of that rule.
The selling stockholders and any underwriters, broker-dealers
or agents that participate in the sale of our Common Stock or interests therein
may be deemed to be underwriters within the meaning of Section 2(11) of the
Securities Act. Any discounts, commissions, concessions or profit they earn on
any resale of the shares may be underwriting discounts and commissions under the
Securities Act. Selling stockholders who are underwriters within the meaning
of Section 2(11) of the Securities Act will be subject to the prospectus
delivery requirements of the Securities Act. We know of no existing arrangements
between the selling stockholders and any other stockholder, broker, dealer,
underwriter, or agent relating to the sale or distribution of the shares, nor
can we presently estimate the amount, if any, of such compensation. See Selling
Stockholders for description of any material relationship that a stockholder
has with us and the description of such relationship.
To the extent required, the shares of our Common Stock to be
sold, the names of the selling stockholders, the respective purchase prices and
public offering prices, the names of any agents, dealers or underwriters, any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this
prospectus.
9
In order to comply with the securities laws of some states, if
applicable, the shares of our Common Stock may be sold in these jurisdictions
only through registered or licensed brokers or dealers. In addition, in some
states the Common Stock may not be sold unless it has been registered or
qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.
We have advised the selling stockholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to
sales of shares in the market and to the activities of the selling stockholders
and their affiliates. In addition, we will make copies of this prospectus (as it
may be supplemented or amended from time to time) available to the selling
stockholders for the purpose of satisfying the prospectus delivery requirements
of the Securities Act. The selling stockholders may indemnify any broker-dealer
that participates in transactions involving the sale of the shares against
certain liabilities, including liabilities arising under the Securities Act.
The Company is required to pay all fees and expenses incident
to the registration of the shares.
LEGAL MATTERS
The validity of the Common Stock offered by this prospectus
will be passed upon for us by Sherman & Howard LLC, Las Vegas, Nevada.
EXPERTS
The consolidated financial statements of YOU On Demand
Holdings, Inc. as of December 31, 2014 and for the year ended December 31, 2014,
have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG Huazhen
(SGP), independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in auditing and
accounting.
The audit report covering the December 31, 2014 consolidated
financial statements contains an explanatory paragraph that states that the
Company incurred net losses from continuing operations and had a significant
accumulated deficit that raise substantial doubt about its ability to continue
as a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of that uncertainty.
The consolidated financial statements of the Company as of
December 31, 2013 and for the year ended December 31, 2013 incorporated in this
prospectus by reference have been audited by UHY LLP, an independent registered
public accounting firm, and are incorporated in reliance upon their report dated
March 31, 2014, given upon such firms authority as experts in auditing and
accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-3
under the Securities Act with respect to the securities offered in this
offering. This prospectus does not contain all of the information set forth in
the registration statement. For further information with respect to us and the
securities offered in this offering, we refer you to the registration statement
and to the attached exhibits. With respect to each such document filed as an
exhibit to the registration statement, we refer you to the exhibit for a more
complete description of the matters involved.
You may inspect our registration statement and the attached
exhibits and schedules without charge at the public reference facilities
maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain copies of all or any part of our registration statement from the SEC upon
payment of prescribed fees. You may obtain information on the operation of the
public reference room by calling the SEC at 1-800-SEC-0330.
Our SEC filings, including the registration statement and the
exhibits filed with the registration statement, are also available from the
SECs website at www.sec.gov, which contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the SEC.
10
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference in this
prospectus certain of the information we file with the SEC. This means we can
disclose important information to you by referring you to another document that
has been filed separately with the SEC. The information incorporated by
reference is considered to be part of this prospectus, and will modify and
supersede the information included in this prospectus to the extent that the
information included as incorporated by reference modifies or supersedes the
existing information. Any statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
prospectus. We incorporate by reference the documents listed below and all
additional documents that we file with the SEC under the terms of Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, that are made after the initial
filing date of the registration statement of which this prospectus is a part and
before the termination of any offering of securities offered by this prospectus.
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Our Annual Report on Form 10-K for the fiscal
year ended December 31, 2014, filed March 30, 2015; |
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Our Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2015, filed on May 14, 2015; |
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The description of our Common Stock, $0.001 par
value per share, contained in our Registration Statement on Form 8-A,
filed on May 29, 2012, pursuant to Section 12(b) of the Exchange Act, as
amended. |
Any statement made in this prospectus concerning the contents
of any contract, agreement or other document is only a summary of the actual
document. You may obtain a copy of any document summarized in this prospectus
and any or all of the information that has been incorporated by reference in
this prospectus at no cost by writing or calling us at our mailing address and
telephone number: YOU On Demand Holdings, Inc., 375 Greenwich Street, Suite 516,
New York, New York 10013; telephone number: (212) 206-1216. Each statement
regarding a contract, agreement or other document is qualified in its entirety
by reference to the actual document.
11
15,902,993 Shares of Common Stock
YOU ON DEMAND HOLDINGS, INC.
PROSPECTUS
June 17, 2015
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses, to be paid
solely by us, in connection with the issuance and distribution of the securities
being registered hereby:
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Amount to be |
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Paid* |
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SEC Registration Fee |
$ |
4,380 |
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Printing Fees and Expenses |
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1,000 |
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Legal Fees and Expenses |
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15,000 |
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Accounting Fees and Expenses |
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15,000 |
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Miscellaneous |
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1,000 |
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Total |
$ |
36,380 |
|
____________________
* All amount
shown herein, except the SEC registration fee, are estimated and may vary based
upon, among other things, the number of issuances and amount of securities
offered. We will pay all of these expenses.
Item 15. Indemnification of Directors and Officers.
We are a Nevada corporation and generally governed by the
Nevada Private Corporations Law, Title 78 of the Nevada Revised Statutes, or
NRS.
Section 78.138 of the NRS provides that, unless the
corporations articles of incorporation provide otherwise, a director or officer
will not be individually liable unless it is proven that (i) the directors or
officers acts or omissions constituted a breach of his or her fiduciary duties,
and (ii) such breach involved intentional misconduct, fraud or a knowing
violation of the law.
Section 78.7502 of the NRS permits a company to indemnify its
directors and officers against expenses, judgments, fines, and amounts paid in
settlement actually and reasonably incurred in connection with a threatened,
pending, or completed action, suit, or proceeding, except an action by or on
behalf of the corporation, if the officer or director (i) is not liable pursuant
to NRS 78.138, or (ii) acted in good faith and in a manner the officer or
director reasonably believed to be in or not opposed to the best interests of
the corporation and, if a criminal action or proceeding, had no reasonable cause
to believe the conduct of the officer or director was unlawful. Section 78.7502
of the NRS also requires a corporation to indemnify its officers and directors
if they have been successful on the merits or otherwise in defense of any claim,
issue, or matter resulting from their service as a director or officer.
Section 78.751 of the NRS permits a Nevada company to indemnify
its officers and directors against expenses incurred by them in defending a
civil or criminal action, suit, or proceeding as they are incurred and in
advance of final disposition thereof, upon determination by the stockholders,
the disinterested board members, or by independent legal counsel. Section 78.751
of NRS requires a corporation to advance expenses as incurred upon receipt of an
undertaking by or on behalf of the officer or director to repay the amount if it
is ultimately determined by a court of competent jurisdiction that such officer
or director is not entitled to be indemnified by the company if so provided in
the corporations articles of incorporation, bylaws, or other agreement. Section
78.751 of the NRS further permits the company to grant its directors and
officers additional rights of indemnification under its articles of
incorporation, bylaws or other agreement.
Section 78.752 of the NRS provides that a Nevada company may
purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the
company, or is or was serving at the request of the company as a director,
officer, employee or agent of another company, partnership, joint venture, trust
or other enterprise, for any liability asserted against him and liability and
expenses incurred by him in his capacity as a director, officer, employee or
agent, or arising out of his status as such, whether or not the company has the
authority to indemnify him against such liability and expenses.
II-1
Our Articles of Incorporation and Bylaws implement the
indemnification and insurance provisions permitted by Chapter 78 of the NRS by
providing that:
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We shall indemnify our directors and officers
to the fullest extent permitted by the NRS against expense, liability and
loss reasonably incurred or suffered by them in connection with their
service as an officer or director; and |
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We may purchase and maintain insurance, or make
other financial arrangements, on behalf of any person who holds or who has
held a position as a director, officer, or representative against
liability, cost, payment, or expense incurred by such person.
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At the present time, there is no pending litigation or
proceeding involving a director, officer, employee or other agent of ours in
which indemnification would be required or permitted. We are not aware of any
threatened litigation or proceeding which may result in a claim for such
indemnification.
Item 16. Exhibits.
The list of exhibits in the Exhibit Index to this prospectus is
incorporated herein by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the Calculation of Registration Fee
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii)
of this section do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed with
or furnished to the SEC by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement, or is contained in a form of prospectus filed
pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for the purpose of determining liability under the
Securities Act to any purchaser:
II-2
(i) Each prospectus filed by the registrant pursuant to Rule
424(b)(3) shall be deemed to be part of the registration statement as of the
date the filed prospectus was deemed part of and included in the registration
statement; and
(ii) Each prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other than registration
statements relying on Rule 430B or other than prospectuses filed in reliance on
Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided,
however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or
deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time
of contract of sale prior to such first use, supersede or modify any statement
that was made in the registration statement or prospectus that was part of the
registration statement or made in any such document immediately prior to such
date of first use.
(5) That, for purposes of determining any liability under the
Securities Act, each filing of the registrants annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plans annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(6) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Beijing, China, on June 17, 2015.
YOU On Demand Holdings, Inc. |
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By: |
/s/
Weicheng Liu |
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Weicheng Liu |
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Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Weicheng Liu and Grace He, and
each of them, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and re-substitution, for him or her and in his or her
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this registration statement (and any
registration statement filed pursuant to Rule 462(b) under the Securities Act,
as amended, for the offering which this Registration Statement relates), and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the SEC, granting unto said attorneys-in-fact agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents or any of them, or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
*****
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities indicated on June 17, 2015.
Signature |
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Title |
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/s/ Xuesong Song
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Xuesong Song |
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Director and Executive Chairman |
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/s/ Shane McMahon
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Shane McMahon |
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Chairman of the Board |
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/s/ Weicheng Liu
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Weicheng Liu |
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Chief Executive Officer and Director |
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(Principle Executive Officer) |
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/s/ Grace He |
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Grace He |
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Vice President of Finance |
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(Principle Financial and Accounting Officer)
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/s/ James Cassano
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James Cassano |
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Director |
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/s/ Clifford
Higgerson |
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Clifford Higgerson |
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Director |
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/s/ Jin Shi |
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Jin Shi |
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Director |
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/s/ Arthur Wong
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Arthur Wong |
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Director |
EXHIBIT INDEX
Exhibit |
Description |
Number |
|
|
|
3.1 |
Articles of Incorporation of
the Company as filed with the Secretary of State of Nevada (Incorporated
by reference to Exhibits 3.1 to the Companys Annual Report on Form 10-K
filed on March 30, 2012). |
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3.2 |
Second Amended and Restated
Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the
Companys Current Report on Form 8-K filed on February 6, 2014). |
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3.3 |
Amendment No. 1 to
the Second Amendment and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K filed
on March 30, 2015). |
|
|
5.1 |
Opinion of Sherman & Howard
LLC* |
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23.1
|
Consent of KPMG Huazhen (SGP)*
|
|
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23.2
|
Consent of UHY LLP.* |
|
|
23.3
|
Consent of Sherman & Howard
LLC (included in Exhibit 5.1).* |
|
|
24 |
Power of Attorney (included on
signature page hereof). |
*Filed herewith.
50 West Liberty Street, Suite 1000, Reno, Nevada
89501-1950 |
3960 Howard Hughes Parkway, Suite 500, Las
Vegas, Nevada 89169 |
Telephone: 775-323-1980 Fax: 775-323-2339 |
Telephone: 702-387-6073 Fax: 702-990-3564
|
www.shermanhoward.com
|
Exhibit 5.1
June 17, 2015
YOU On Demand Holdings, Inc.
375 Greenwich Street
Suite
516
New York, New York 10013
|
Re: |
YOU On Demand Holdings, Inc./Registration
Statement on Form S-3 |
Ladies and Gentlemen:
We have acted as special Nevada counsel to YOU On Demand
Holdings, Inc., a Nevada corporation (the Company), in connection with the
registration by the Company of 15,902,993 shares (the Shares) of its common
stock, $0.001 par value per share (the Common Stock), to be sold by certain
selling stockholders of the Company under a Registration Statement on Form S-3
(the Registration Statement) under the Securities Act of 1933, as amended (the
Securities Act), as filed with the Securities and Exchange Commission (the
Commission).
Of the 15,902,993 Shares subject to this opinion:
(a) 4,921,054 Shares are issued and outstanding (the Issued
Shares);
(b) 933,333 Shares are issuable upon conversion of 7,000,000
outstanding shares of Series A Convertible Preferred Stock (the Series A
Preferred Stock);
(c) 6,857,140 Shares are issuable upon conversion of
6,857,140 outstanding shares of Series E Convertible Preferred Stock (the
Series E Preferred Stock);
(d) 1,938,411 Shares are issuable upon conversion
of 1,938,411 shares of Series E Preferred Stock that are issuable upon
conversion of outstanding promissory notes (the Notes);
June 17, 2015
Page 2
(e) 162,500 Shares are issuable upon exercise of an equal number of outstanding warrants (“Warrants”); and
(f) 1,090,555 Shares are issuable upon exercise of an equal number of outstanding options (the
“Options”).
The Shares issuable upon conversion of the Series A Preferred Stock are referred to as the “Series A Conversion Shares,” the Shares issuable upon conversion of the Series E Preferred Stock are referred to as
the “Series E Conversion Shares,” the Series A Conversion Shares and the Series E Conversion Shares are referred to collectively as the “Conversion Shares,” the Shares issuable upon exercise of the Warrants are referred to as
the “Warrant Shares,” and the Shares issuable upon exercise of the Options re referred to as the “Option Shares.” For purposes of these opinions, we have examined originals or copies, certified or otherwise identified to our
satisfaction, of:
(a) the Registration Statement;
(b) Articles of Incorporation of the Company filed with the Nevada Secretary of State on October 19, 2004 (“Original Articles”), as amended by (i) Articles of Merger Pursuant to NRS 92A.200 filed with the
Nevada Secretary of State on December 15, 2004 (“Articles of Merger”), (ii) Certificate of Amendment to Articles of Incorporation For Nevada Profit Corporations filed with the Nevada Secretary of State on January 27, 2005 (“First
Amendment”), (iii) Certificate of Amendment to Articles of Incorporation For Nevada Profit Corporations filed with the Nevada Secretary of State on May 7, 2007 (“Second Amendment”), (iv) Certificate of Amendment to Articles of
Incorporation For Nevada Profit Corporations filed with the Nevada Secretary of State on July 8, 2010 (“Third Amendment”), (v) Certificate of Designation For Nevada Profit Corporations filed with the Nevada Secretary of State on July 30,
2010 (“Series A Designation”), (vi) Certificate of Designation For Nevada Profit Corporations filed with the Nevada Secretary of State on July 30, 2010 (“Series B Designation”), (vii) Certificate of Correction filed with the
Nevada Secretary of State on November 22, 2010 (“First Certificate of Correction”), (viii) Certificate of Amendment to Articles of Incorporation For Nevada Profit Corporations filed with the Nevada Secretary of State on February 23, 2011
(“Fourth Amendment”), (ix) Certificate of Amendment to Articles of Incorporation For Nevada Profit Corporations filed with the Nevada Secretary of State on February 9, 2012 (“Fifth Amendment”), (x) Certificate of Designation
For Nevada Profit Corporations filed with the Nevada Secretary of State on August 30, 2012 (“Series C Designation”), (xi) Certificate of Correction filed with the Nevada Secretary of State on July 5, 2013 (“Second Certificate of
Correction”); (xii) Certificate of Designation for Nevada Profit Corporations as filed with the Nevada Secretary of State on July 5, 2013 (“Series D Designation”); and (xiii) Certificate of Designation for Nevada Profit
Corporations as filed with the Nevada Secretary of State on January 31, 2014 (“Series E Designation” and collectively with the Original Articles, the Articles of Merger, the First Amendment, the Second Amendment, the Third Amendment, the
Series A Designation, the Series B Designation, the First Certificate of Correction, the Fourth Amendment, the Fifth Amendment, the Series C Designation, the Second Certificate of Correction, and the Series D Designation, the “Articles of
Incorporation”);
June 17, 2015
Page 3
(c) Second Amended and Restated Bylaws of the Company, adopted on January 31, 2014,
as amended on March 26, 2015;
(d) forms of agreements, resolutions of the Board of Directors, and such other matters as relevant related to the issuance of the Issued Shares, the Series A Preferred Shares, the Series E Preferred Shares, the Notes,
the Warrants, and the Options;
(e) a specimen certificate representing the Common Stock; and
(f) certain resolutions of the Board of Directors of the Company relating to the issuance of the Shares, the registration of the Shares under the Securities Act, and such other matters as relevant.
We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates of public officials, certificates of officers or other
representatives of the Company and others, and such other documents, certificates, and records as we have deemed necessary or appropriate as a basis for the opinions set forth herein.
In our examination we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity to original documents
of all documents submitted to us as facsimile, electronic, certified, or photostatic copies. We have relied upon the accuracy and completeness of the information, factual matters, representations, and warranties contained in such documents. In our
examination of documents, we have assumed that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all obligations thereunder and, other than with respect to the Company, the due authorization by
all requisite action, corporate or other, the execution and delivery by all parties of the documents, and the validity and binding effect thereof on such parties.
In rendering the opinions set forth below, we have also assumed that:
(a) at or prior to the time of issuance and delivery, the Issued Shares have been and the Conversion Shares, the Warrant Shares, and the Option Shares will be registered by the transfer agent and registrar of such
Shares;
June 17, 2015
Page 4
(b) the Issued Shares, the Series A Preferred Stock, the Series E Preferred Stock, the Warrants, and the Options were issued in accordance with the terms of the applicable agreements governing the issuance of such
securities;
(c) the agreements governing the issuance of the Issued Shares, the Series A Preferred Stock, the Series E Preferred Stock, the Warrants, and the Options are enforceable in accordance with their respective terms;
(d) the Conversion Shares will be issued in accordance with the Series A Designation and the Series E Designation, as applicable;
(e) the Warrant Shares will be issued upon exercise of the applicable Warrants in accordance with the terms of such Warrants;
(f) the Option Shares will be issued upon exercise of the applicable Options in accordance with the terms of such Options;
(g) the Company will keep reserved a sufficient number of shares of its Common Stock to satisfy its obligations for issuances of the Conversion Shares and the Warrant Shares; and
(h) upon issuance of any of the Conversion Shares, the Warrant Shares, and the Option Shares, the total number of shares of the Company’s Common Stock issued and outstanding will not exceed the total number of
shares of Common Stock that the Company is then authorized to issue under the Articles of Incorporation.
The opinions set forth below are also subject to the further qualification that the enforcement of any agreements or instruments referenced herein and to which the Company is a party may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).
Based upon and subject to the foregoing, we are of the opinion that:
(a) the Issued Shares have been duly authorized, were validly issued, and are fully paid and nonassessable;
(b) the Conversion Shares have been duly authorized and when issued in accordance with the terms of the Series A Designation and the Series E Designation, as applicable, will be validly issued, fully paid, and nonassessable;
(c) the Warrant Shares have been duly authorized and upon issuance in accordance with the terms of the applicable Warrants will be validly issued, fully paid, and nonassessable; and
June 17, 2015
Page 5
(d) the Option Shares have been duly authorized and upon issuance in accordance with the terms of the applicable Options will be validly issued, fully paid, and nonassessable;
The opinions expressed herein are limited to the matters specifically set forth herein and no other opinion shall be inferred beyond the matters expressly stated. We disclaim any undertaking to advise you of any
subsequent changes in the facts stated or assumed herein or any changes in applicable law that may come to our attention subsequent to the date the Registration Statement is declared effective.
While certain members of this firm are admitted to practice in certain jurisdictions other than Nevada, in rendering the foregoing opinions we have not examined the laws of any jurisdiction other than Nevada.
Accordingly, the opinions we express herein are limited to matters involving the laws of the State of Nevada (excluding securities laws). We express no opinion regarding the effect of the laws of any other jurisdiction or state, including any
federal securities laws related to the issuance and sale of the Shares.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and we consent to the reference of our name under the caption “Legal Matters” in the Prospectus forming a part of the Registration Statement. In
giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Sherman & Howard L.L.C.
SHERMAN & HOWARD L.L.C.
Consent of Independent Registered Public Accounting Firm
The Board of Directors
YOU On Demand Holdings, Inc.
We consent to the use of our report with respect to the
consolidated balance sheet of YOU On Demand Holdings, Inc. as of December 31,
2014, and the related consolidated statements of operations, comprehensive loss,
equity and cash flows for the year ended December 31, 2014, incorporated herein
by reference and to the reference to our firm under the heading Experts in the
prospectus.
Our report dated March 30, 2015 contains an explanatory
paragraph that states that the Company incurred net losses from continuing
operations and had a significant accumulated deficit that raise substantial
doubt about its ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ KPMG Huazhen (SGP)
Beijing, China
June 17, 2015
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of our report dated March 31, 2014 relating to the consolidated financial statements of YOU On Demand Holdings, Inc. and its Subsidiaries (the “Company”) as of December 31, 2013 and for the year then ended. We also consent to the reference to our firm under the caption “EXPERTS” in this Registration Statement.
/s/ UHY LLP
New York, New York
June 17, 2015
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