NEW YORK, Nov. 14, 2016 /PRNewswire/ -- Wecast
Network, Inc. (NASDAQ: WCST) ("Wecast" or the "Company" or "WCST"),
formerly YOU On Demand Holdings, Inc. or "YOD," announced today its
Q3 2016 operating results for the period ended September 30, 2016 (a full copy of the Company's
quarterly report on Form 10-Q is also being posted at
www.sec.gov).
Conference Call: Chairman Bruno
Wu and CFO Mei Chen will host
a conference call at 8:00 a.m. EST today.
To join the webcast, please visit the 'Webcasts and Events'
section of the WCST corporate website, http://corporate.yod.com.
Otherwise, the toll-free dial-in is: 877-407-3107; international
callers should dial: 201-493-6796.
NEW TRADING SYMBOL
Beginning today and following this morning's earnings call, at
9:30AM Eastern Standard Time, the
Company, formerly known as YOU On Demand Holdings, Inc., will
continue its trading on the Nasdaq Stock Exchange, but will now be
known as Wecast Network, Inc. The new Company trading
symbol will now be, WCST.
WCST Q3 2016 OPERATING RESULTS
Revenue for Q3 2016 was approximately $1,627,000, as compared to $476,000 for the same period in 2015, an increase
of 242%. The revenue increase was primarily attributed to the
revenue increase from our cable platform, which comprised 78% of
the total revenue for the period. Revenue for the nine months
ended September 30, 2016 was
approximately $4,377,000, as compared
to $2,984,000 for the same period in
2015, an increase of 47%.
Cost of revenues was approximately $894,000 in Q3 2016, as compared to $900,000 for the same period in 2015.
Gross profit Q3 2016 was approximately $733,000 as compared to gross loss of
$424,000 during the same period in
2015. Our gross profit margin percentage was 45% and -89% for Q3
2016 and Q3 2015, respectively. The increase in gross profit of
approximately $1,157,000 was
primarily due to the increase of revenue recognized in the third
quarter of this year, which was driven by certain significant
minimum guarantee contracts signed and executed from cable-based
revenue streams, occurring alongside our current business
transformation and expansion.
Our selling, general and administrative (SG&A) expenses for
Q3 2016, increased approximately $488,000, to $2,320,000, as compared to $1,832,000 for the same period in 2015.
Salaries and personnel costs are the primary components of
SG&A, accounting for 51% and 58% of SG&A expenses in Q3
2016 and 2015, respectively. In Q3 2016, salaries and personnel
costs totaled $1,193,000, an increase
of approximately $131,000, or 12%, as
compared to $1,062,000 for the same
period of 2015.
The other major components of our SG&A expenses include
marketing and promotion expenses, outsourced technology costs, rent
and severance. In Q3 2016, these costs totaled $1,127,000, a net increase of approximately
$356,000, or 46%, compared to
$771,000 for the same period in 2015.
The increase was primarily attributed to the increase of bad debt
expense and business travel, by $367,000 and $76,000 respectively. This increase which
was offset by a decrease of marketing promotion expenses and
outsourcing of R&D costs by approximately $115,000 and $45,000, respectively.
Net loss in Q3 2016 was $2,047,000
for Q3 2016 compared to $2,086,000 in
the comparable 2015 period. Basic and diluted loss per share for Q3
2016 was $0.05 as compared to a
$0.09 loss per share in the same
period in 2015.
Chairman Bruno Wu stated, "With
the name change to Wecast Network now officially complete, we begin
a new chapter in the history of this Company. As we reimagine
and build-out our business model into global, vertical, ubiquitous
and transactional revenue streams, revenues from the legacy
business continue to moderately build off of prior comparative
periods. With that being said, we are working towards
completion of the previously announced M.Y. Products deal, which
assuming all boxes are checked, can be completed sometime in
Q4. With that deal and infrastructure in place, along with
several other previously announced strategic partnerships and joint
ventures, the Wecast vision of a smart e-commerce & content
media company can continue to take shape. What Wecast
ultimately seeks to achieve is the creation of a value chain of
Branding, Content, Commerce and Licensing all intertwined and run
in an aggregated, synergetic and interwoven manner on one
platform. This platform will look to capture the massive
opportunity that exists when targeting media and content consumers
who are now accustomed to the benefits of vertical
consumption."
About Wecast Network, Inc. (http://corporate.yod.com)
Wecast Network, Inc. (NASDAQ: WCST) is leveraging and
optimizing its current operations as a premium content Video On
Demand service provider in China
to evolve into a global, vertical, ubiquitous and transactional
B2B2C, mobile-driven, consumer management platform for both
enterprises and consumers. By aiming to establish the world's
premier multimedia, social networking and smart e-commerce-enabled
network with the largest global effective connected user base,
Wecast, through this expanded, cloud-based, ecosystem of connected
screens combined with strong partnerships with leading global
providers, will be capable of delivering a vast array of
WCST/YOD–branded products and services to enterprise customers and
end-use consumers - anytime and anywhere, across
multiple platforms and devices.
Wecast 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. In
addition, the Company has governmental partnerships and licenses as
well as numerous JV partnerships and strategic cooperation
agreements with an array of distribution and content partners in
the global new media space. Wecast 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
Director Strategy &
IR
Wecast Network,
Inc.
212-206-1216
Financial Tables Follow
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
1,626,844
|
|
$
|
476,165
|
|
$
|
4,377,034
|
|
$
|
2,983,741
|
|
Cost of
revenue
|
|
893,796
|
|
|
900,284
|
|
|
2,609,975
|
|
|
2,772,322
|
|
Gross
profit
|
|
733,048
|
|
|
(424,119)
|
|
|
1,767,059
|
|
|
211,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
2,320,247
|
|
|
1,832,443
|
|
|
6,294,206
|
|
|
5,939,559
|
|
Professional fees
|
|
326,353
|
|
|
141,034
|
|
|
964,290
|
|
|
581,115
|
|
Depreciation and amortization
|
|
123,502
|
|
|
98,643
|
|
|
344,308
|
|
|
283,468
|
|
Impairment of long-lived assets (Note 6)
|
|
172,064
|
|
|
-
|
|
|
172,064
|
|
|
-
|
|
Total operating
expense
|
|
2,942,166
|
|
|
2,072,120
|
|
|
7,774,868
|
|
|
6,804,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,209,118)
|
|
|
(2,496,239)
|
|
|
(6,007,809)
|
|
|
(6,592,723)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income/(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(24,971)
|
|
|
(30,613)
|
|
|
(225,154)
|
|
|
(89,168)
|
|
Change in fair value of warrant liabilities
|
|
58,220
|
|
|
91,315
|
|
|
201,826
|
|
|
125,364
|
|
Equity in earning (loss) of equity method
investees
|
|
17,487
|
|
|
(50,642)
|
|
|
(19,862)
|
|
|
(143,666)
|
|
Other
|
|
(3,313)
|
|
|
142,280
|
|
|
(8,409)
|
|
|
95,937
|
|
Loss before income
taxes and non-controlling
interest
|
|
(2,161,695)
|
|
|
(2,343,899)
|
|
|
(6,059,408)
|
|
|
(6,604,256)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
8,612
|
|
|
8,612
|
|
|
25,836
|
|
|
25,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(2,153,083)
|
|
|
(2,335,287)
|
|
|
(6,033,572)
|
|
|
(6,578,420)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interest
|
|
105,879
|
|
|
249,369
|
|
|
261,809
|
|
|
376,893
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to Wecast Network
shareholders
|
$
|
(2,047,204)
|
|
$
|
(2,085,918)
|
|
$
|
(5,771,763)
|
|
$
|
(6,201,527)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
$
|
(0.05)
|
|
$
|
(0.09)
|
|
$
|
(0.18)
|
|
$
|
(0.26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
41,184,037
|
|
|
24,003,403
|
|
|
31,640,230
|
|
|
23,890,929
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
|
September
30,
|
|
|
|
2016
|
|
|
2015
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net loss
|
$
|
(6,033,572)
|
|
$
|
(6,578,420)
|
|
Adjustments to reconcile net
loss to net cash used in operating activities
|
|
|
|
|
|
|
Share-based compensation expense
|
|
286,577
|
|
|
517,903
|
|
Provision for doubtful accounts (Note 4)
|
|
366,887
|
|
|
9,087
|
|
Depreciation and amortization
|
|
344,308
|
|
|
283,468
|
|
Amortization of debt
issuance costs
|
|
122,696
|
|
|
-
|
|
Income tax benefit
|
|
(25,836)
|
|
|
(25,836)
|
|
Equity in losses of equity method
investees
|
|
19,863
|
|
|
143,666
|
|
Loss on disposal of assets
|
|
-
|
|
|
2,421
|
|
Change in fair value of warrant
liabilities
|
|
(201,826)
|
|
|
(125,364)
|
|
Impairment of long-lived assets
|
|
172,064
|
|
|
-
|
|
Foreign currency exchange losses
|
|
3,430
|
|
|
-
|
|
|
|
|
|
|
|
|
Change in assets and
liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
(2,890,663)
|
|
|
(1,496,756)
|
|
Licensed content
|
|
(639,225)
|
|
|
80,889
|
|
Prepaid expenses and other assets
|
|
(799)
|
|
|
(338,814)
|
|
Accounts payable
|
|
177,354
|
|
|
(88,440)
|
|
Accrued expenses, salary and other current
liabilities
|
|
250,856
|
|
|
796,467
|
|
Deferred revenue
|
|
(10,359)
|
|
|
204,560
|
|
Accrued license content fees
|
|
112,896
|
|
|
398,064
|
|
Net cash used in
operating activities
|
|
(7,945,349)
|
|
|
(6,217,105)
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Acquisition of and deposit for
property and equipment
|
|
(3,130,862)
|
|
|
(32,193)
|
|
Acquisition of leasehold improvements
|
|
(455,723)
|
|
|
-
|
|
Deposit for investment (Note 10)
|
|
(650,000)
|
|
|
-
|
|
Investments in
intangibles
|
|
(2,811,346)
|
|
|
(48,938)
|
|
Investment in long term
investments
|
|
(3,584,025)
|
|
|
-
|
|
Net cash used in
investing activities
|
|
(10,631,956)
|
|
|
(81,131)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Proceeds from issuance of shares and
warrant (Note 8 and Note 11)
|
|
18,000,000
|
|
|
-
|
|
Costs associated with financing activities
|
|
(294,890)
|
|
|
-
|
|
Net cash provided
by financing activities
|
|
17,705,110
|
|
|
-
|
|
Effect of exchange rate changes on
cash
|
|
(57,416)
|
|
|
(157,374)
|
|
Net decrease in
cash
|
|
(929,611)
|
|
|
(6,455,610)
|
|
|
|
|
|
|
|
|
Cash at beginning
of period
|
|
3,768,897
|
|
|
10,812,371
|
|
|
|
|
|
|
|
|
Cash at end of
period
|
$
|
2,839,286
|
|
$
|
4,356,761
|
|
|
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
$
|
-
|
|
$
|
-
|
|
Cash paid for
interest
|
$
|
-
|
|
$
|
-
|
|
Exchange of Series E
Preferred Stock for common stock
|
$
|
100
|
|
$
|
110
|
|
Issuance of
convertible note for licensed content (Note 11)
|
$
|
17,717,847
|
|
$
|
-
|
|
Issuance of shares
for the settlement of liability
|
$
|
75,000
|
|
$
|
-
|
|
Issuance of shares
upon conversion of convertible note, including accrued interest and
debt issuance
cost (Note 11)
|
$
|
17,733,297
|
|
$
|
-
|
|
Acquisition of long
term investment through transfer of Game IP rights (Note
7)
|
$
|
2,714,441
|
|
$
|
-
|
|
Payable for workforce
acquired (Note 6)
|
$
|
93,828
|
|
$
|
-
|
|
Workforce intangible
acquired for shares (Note 6)
|
$
|
121,695
|
|
$
|
-
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/wecast-network-formerly-you-on-demand-announces-q3-2016-results-300361923.html
SOURCE Wecast Network, Inc.