NEW YORK, Nov. 16, 2015 /PRNewswire/ -- YOU On Demand
Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or "YOD" or "the
Company"), a Video On Demand ("VOD") and entertainment service
provider in China delivering
Hollywood movies to mobile and TV
screens, announced today its Q3 2015 operating results for the
period ended September 30, 2015 (a
full copy of the Company's quarterly report on Form 10-Q is also
being posted at www.sec.gov). In addition, the Company
announced both receipt and approval of a preliminary nonbinding
investment proposal from Bruno Wu's
Sun Seven Stars.
Conference Call: Chairman Shane
McMahon, CEO Weicheng Liu and
VP of Finance Grace He will host a
conference call at 8:00 a.m. ET today.
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.
YOD Q3 2015 Operating Results
Revenue for the three months ended September 30, 2015 was $476,000, as compared to $645,000 for the same period in 2014. Revenue for
the nine months ended September 30,
2015 was $2,984,000, as
compared to $965,000 for the same
period in 2014. The year-to-date increase in revenue of
approximately $2,019,000 was
attributable to the growth of our multi-platform video streaming
services in the first half of 2015.
Our gross loss for the three months ended September 30, 2015 was $424,000, as compared to $228,000 gross loss during the same period in
2014. The increase in gross loss of approximately $196,000 was primarily due to decreased
revenues.
Our selling, general and administrative expenses for the three
months ended September 30, 2015,
decreased approximately $29,000, to
$1,832,000, as compared to
$1,861,000 for the three months ended
September 30, 2014.
Salaries and personnel costs are the primary component of
selling, general and administrative expenses. For the three months
ended September 30, 2015, these costs
totaled $922,000, a decrease of
$79,000, or 8%, as compared to
$1,001,000 for the same period of
2014. While we added resources in the area of product development
and operations, salaries and personnel costs decreased due to
continuous cost control and internal re-alignment of resources,
which was a primary focus of management for the 2015 fiscal year.
This decrease was partially offset by increase in marketing
expenses related to our promotion of our YOU Hollywood services
across big screen platforms, namely cable, IPTV and OTT.
Net loss was $2,336,000 for Q3
2015 compared to $2,116,000 in the
comparable 2014 period. Basic and diluted loss per share for Q3
2015 was $0.09 as compared to
$0.09 loss per share in the same
period in 2014. Net loss for the nine months ended
September 30, 2015 was $6,578,000 compared to $10,654,000 in the comparable 2014 period.
For the nine months ended September 30,
2015, basic and diluted loss per share was $0.26 as compared to $1.45 loss per share for the same nine-month
period in 2014.
As of September 30, 2015, the
Company had cash and cash equivalents of approximately $4.4 million and total current assets of
approximately $8.5 million.
More details of YOU ON Demand's Q3 2015 financials can be found
in form 10-Q of our corporate filings, copies of which can be
obtained from the SEC or via our website.
Strategic Investment from Bruno
Wu's Sun Seven Stars
YOU On Demand also today announced that its Board of Directors
(the "Board") has received and approved a nonbinding proposal
("Investment Proposal") from Bruno
Wu's Beijing Sun Seven Stars Culture Development Limited
("SSS"). For informational purposes, Bruno Wu is now the Founder, Co-Chairman and CEO
of Sun Seven Stars Media Group Limited, one of the biggest private
media and investment conglomerates in China. Its predecessor is Sun Media Group
Holdings Limited, which was established by Bruno Wu and Yang
Lan in 1999 and became one of the leading entertainment,
media and investment companies in Asia after 10 years of growth. Sun Seven Stars
Media Group Limited now has 7 business units including Sun Media
Group, Sun eSports Group, Sun Seven Stars Culture Group, Enternet
Group, Sun TV+ Network Group, Sun Music Group and Sun Art Capital
Group. It has a presence in over ten major cities in the world
including: Beijing, Shanghai, Tianjin, Hong
Kong, New York, LA,
Paris, London, Toronto, Seoul and Scandinavia countries.
The Investment Proposal is outlined as follows:
- SSS would make a strategic cash investment of $10,000,000 at $2.20 per share of common stock, an approximate
12% premium over the volume-weighted average closing price of the
common stock as quoted by NASDAQ during the last 45 days;
- SSS will offer to provide loans to YOU On Demand in the event
that the Company has requirements for additional working capital to
expand operations and market the YOD service;
- SSS will receive approximately 1.8 million 2-year cash warrants
to purchase common shares at an exercise price of $2.75;
- SSS will use reasonable efforts to secure $50 million of financing for YOD produced
original content;
- SSS will grant YOU On Demand the non-exclusive right, to over
3,100 hours of Hollywood, domestic
and children's movies, TV and original content (that YOD currently
has no rights to with its own content agreements and arrangements),
expected to be valued at approximately $29,100,000, in exchange for common shares of YOD
common stock at a value exchange of $3.16 per share or a 60% premium over the
volume-weighted average closing price of the common stock as quoted
by NASDAQ during the last 45 days. The value of the that content
will be determined by an independent accounting and advisory firm
retained by YOU On Demand;
- SSS and partner Tianjin Enternet Network Technology Limited
("Tianjin Enternet") will sell to YOU On Demand 100% of the
outstanding equity interests of Tianjin SevenStarsFlix Network
Technology Limited ("SevenStarsFlix"), a to-be-formed subsidiary of
Tianjin Enternet. SevenStarsFlix will offer a branded pay content
service delivered to consumers ubiquitously through all its
platform partners, will track and share consumer payments and other
behavior data, will operate a customer management and data-based
service and will develop mobile social TV-based customer management
portals;
- Consideration for the sale of the equity interest in Tianjin
Enternet will be on an earn-out basis. Tianjin Enternet will
receive YOD common stock based on reaching the following
targets:
By Year
End
|
Target
|
Shares
|
2016
|
$4 million net
income or 50 million
homes/users passed
|
5,000,000
|
2017
|
$6 million net
income or 100 million
homes/users passed
|
5,000,000
|
2018
|
$8 million net
income or 150 million
homes/users passed
|
5,000,000
|
- SSS will provide right of first negotiation to YOD on all
live-action or animated feature-length movies that SSS develops or
obtains the right to license.
While the Company and SSS are pursuing a closing of the
foregoing transactions, the Board cautions the Company's
shareholders and others considering trading in its securities that
this is a nonbinding investment proposal subject to the
following:
- Satisfactory completion by the Company of due diligence review
of the content and equity to be contributed to the Company;
- Satisfactory completion by SSS and Tianjin Enternet of due
diligence review of the business of the Company;
- The negotiation, execution and delivery of mutually acceptable
definitive documentation for the transactions contemplated
herein;
- Each party obtaining all required approvals for the
transaction; and
- The company obtaining a satisfactory independent valuation of
the content rights transferred to the Company.
There can be no assurance that any definitive agreement will be
executed, or that this, or any other, transaction will be approved
or consummated. The Company does not undertake any obligation to
provide any updates with respect to this or any other transaction,
except as required under applicable law.
About YOU On Demand Holdings, Inc.
(http://corporate.yod.com)
YOU On Demand (NASDAQ: YOD), is a leading multi-platform
entertainment service company delivering premium content, including
leading Hollywood 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 and Twentieth Century Fox Television Distribution,
Miramax, 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 both New York, NY
and Beijing, China.
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
YOU On
Demand
212-206-1216
jason.finkelstein@yod.com
@youondemand
YOU On Demand
Holdings, Inc., Its Subsidiaries and Variable Interest
Entity
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
476,165
|
|
$
|
644,891
|
|
$
|
2,983,741
|
|
$
|
965,268
|
Cost of
revenue
|
|
900,284
|
|
|
873,025
|
|
|
2,772,322
|
|
|
2,606,142
|
Gross
profit/(loss)
|
|
(424,119)
|
|
|
(228,134)
|
|
|
211,419
|
|
|
(1,640,874)
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
1,832,443
|
|
|
1,861,053
|
|
|
5,939,559
|
|
|
5,772,350
|
Professional fees
|
|
141,034
|
|
|
114,271
|
|
|
581,115
|
|
|
375,986
|
Depreciation and amortization
|
|
98,643
|
|
|
124,936
|
|
|
283,468
|
|
|
414,486
|
Total operating
expense
|
|
2,072,120
|
|
|
2,100,260
|
|
|
6,804,142
|
|
|
6,562,822
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,496,239)
|
|
|
(2,328,394)
|
|
|
(6,592,723)
|
|
|
(8,203,696)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income/(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(30,613)
|
|
|
(29,151)
|
|
|
(89,168)
|
|
|
(2,346,210)
|
Change in fair value of warrant liabilities
|
|
91,315
|
|
|
281,537
|
|
|
125,364
|
|
|
(655,849)
|
Change in fair value of contingent consideration
|
|
-
|
|
|
(47,634)
|
|
|
-
|
|
|
(160,766)
|
Loss on investment in unconsolidated entities
|
|
(50,642)
|
|
|
(6,389)
|
|
|
(143,666)
|
|
|
(16,646)
|
Gain on sale of subsidiary
|
|
-
|
|
|
-
|
|
|
-
|
|
|
755,426
|
Loss on dissolution of a variable interest entity
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(27,463)
|
Others
|
|
142,280
|
|
|
(14,783)
|
|
|
95,937
|
|
|
(82,464)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss before
income taxes and non-controlling interest
|
|
(2,343,899)
|
|
|
(2,144,814)
|
|
|
(6,604,256)
|
|
|
(10,737,668)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
8,612
|
|
|
28,812
|
|
|
25,836
|
|
|
84,249
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(2,335,287)
|
|
|
(2,116,002)
|
|
|
(6,578,420)
|
|
|
(10,653,419)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interest
|
|
249,369
|
|
|
169,364
|
|
|
376,893
|
|
|
696,708
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to YOU On Demand shareholders
|
|
(2,085,918)
|
|
|
(1,946,638)
|
|
|
(6,201,527)
|
|
|
(9,956,711)
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and deemed
dividends on preferred stock
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(16,402,161)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to YOU On Demand common shareholders
|
$
|
(2,085,918)
|
|
$
|
(1,946,638)
|
|
$
|
(6,201,527)
|
|
$
|
(26,358,872)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
$
|
(0.09)
|
|
$
|
(0.09)
|
|
$
|
(0.26)
|
|
$
|
(1.45)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
24,003,403
|
|
|
22,012,166
|
|
|
23,890,929
|
|
|
18,203,124
|
YOU On Demand
Holdings, Inc., and Its Subsidiaries and
Variable Interest Entity
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
|
December
31,
|
|
|
|
2015
|
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
4,356,761
|
|
$
|
10,812,371
|
|
Accounts receivable, net
|
|
2,578,745
|
|
|
1,091,076
|
|
Licensed content, current
|
|
969,250
|
|
|
1,041,609
|
|
Prepaid expenses
|
|
522,505
|
|
|
196,474
|
|
Other current assets
|
|
44,790
|
|
|
22,442
|
|
Total current
assets
|
|
8,472,051
|
|
|
13,163,972
|
|
Property and equipment, net
|
|
198,315
|
|
|
320,671
|
|
Licensed content, non-current
|
|
27,118
|
|
|
35,648
|
|
Intangible assets, net
|
|
2,482,398
|
|
|
2,320,103
|
|
Goodwill
|
|
6,648,911
|
|
|
6,648,911
|
|
Long-term equity investments
|
|
688,672
|
|
|
850,054
|
|
Other non-current assets
|
|
279,476
|
|
|
365,006
|
|
Total
assets
|
$
|
18,796,941
|
|
$
|
23,704,365
|
|
|
|
|
|
|
|
|
LIABILITIES,
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable
|
$
|
22,374
|
|
$
|
110,814
|
|
Deferred revenue
|
|
217,991
|
|
|
13,431
|
|
Accrued expenses and other liabilities
|
|
3,019,822
|
|
|
2,046,783
|
|
Accrued license fees
|
|
746,071
|
|
|
348,007
|
|
Convertible promissory note
|
|
3,000,000
|
|
|
3,000,000
|
|
Warrant liabilities
|
|
459,686
|
|
|
585,050
|
|
Total current
liabilities
|
|
7,465,944
|
|
|
6,104,085
|
|
Deferred income tax
liability
|
|
338,736
|
|
|
364,572
|
|
Total
liabilities
|
|
7,804,680
|
|
|
6,468,657
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
redeemable preferred stock:
|
|
|
|
|
|
|
Series A -
7,000,000 shares issued and outstanding, liquidation
preference of $3,500,000 as of September 30, 2015 and December
31, 2014, respectively
|
|
1,261,995
|
|
|
1,261,995
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
Series E Preferred
Stock - $0.001 par value; 16,500,000 shares authorized, 7,254,997
and 7,365,283 shares issued and outstanding, liquidation preference
of $12,696,245 and $12,889,245 as of September 30, 2015 and
December 31, 2014, respectively
|
|
7,255
|
|
|
7,365
|
|
Common stock, $0.001 par value; 1,500,000,000 shares
authorized, 24,027,924 and 23,793,702 shares issued and outstanding
as of September 30, 2015 and December 31, 2014,
respectively
|
|
24,028
|
|
|
23,794
|
|
Additional paid-in capital
|
|
96,865,051
|
|
|
96,347,272
|
|
Accumulated deficit
|
|
(84,558,094)
|
|
|
(78,356,567)
|
|
Accumulated other comprehensive loss
|
|
(266,742)
|
|
|
(66,032)
|
|
Total YOU On
Demand shareholder's equity
|
|
12,071,498
|
|
|
17,955,832
|
|
Non-controlling interest
|
|
(2,341,232)
|
|
|
(1,982,119)
|
|
Total
equity
|
|
9,730,266
|
|
|
15,973,713
|
|
Total liabilities,
convertible redeemable preferred stock and equity
|
$
|
18,796,941
|
|
$
|
23,704,365
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/you-on-demand-announces-q3-2015-earnings-results-and-approval-of-nonbinding-investment-proposal-from-bruno-wus-sun-seven-stars-300178922.html
SOURCE YOU On Demand Holdings, Inc.