YOU On Demand Reports 2014 Q2 Results

YOU On Demand Reports 2014 Q2 Results

Investor Update Call Scheduled Today at 4:30 p.m. ET

NEW YORK, Aug. 14, 2014 /PRNewswire/ -- YOU On Demand Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company"), a leading Video On Demand service provider in China delivering Hollywood movies to mobile and TV screens, today announced its operating results for the three- and six-month periods ended June 30, 2014 (a full copy of its quarterly report on Form 10-Q will be posted at www.sec.gov). Chairman Shane McMahon, CEO Weicheng Liu and President and CFO Marc Urbach are hosting an investor update conference call today at 4:30 p.m. ET to discuss the Company's recent results. To join the webcast, please visit the 'Webcasts and Events' section of the YOD corporate website, http://corporate.yod.com. Otherwise, the toll-free dial-in is: 877/407-3107; international callers should dial: 201/493-6796.

Shane McMahon, Chairman of YOU On Demand, commented, "During the first half of 2014 we successfully pivoted the Company's strategy and its resources to prioritize our IPTV, OTT and Mobile platforms. Given the exciting potential of these fast-growing distribution modes, which are increasingly popular amongst China's tech-savvy and most active consumers of entertainment, YOU On Demand expects to continue generating positive momentum from this strategic shift. As a result, we expect to generate both improved operating efficiencies and enhanced financial results during the second half of this year."

YOU On Demand CEO Weicheng Liu, stated, "Building on the growing popularity of our YOU Hollywood App with Huawei device users, Xiaomi OTT Box owners and other early adopters, we recently softly launched our Hollywood App independently via popular app stores and online channels. We believe select advertising, marketing and social media outreach, combined with word-of-mouth recommendations and endorsements from satisfied App users, will help promote our unique, differentiated service to an appreciative audience of China's most ardent movie fans."

YOU On Demand President & CFO Marc Urbach commented, "During this critical phase in our organization's corporate development, the senior financial and operations teams will continue striving to combine our strong, unlevered balance sheet, with conservative expense management and moderate levels of fixed overhead costs. There are many opportunities that lie ahead and we expect to best leverage these by maintaining our fiscally prudent strategy for the long-term benefit of the Company's shareholders."

2014 Q2 Operating Results

Revenue for the quarter ended June 30, 2014 increased to $183,000, up from $51,000 in the year-ago Q2 and up 33% over Q1 2014. Gross loss for the quarter declined to $674,000, down from $739,000 in the comparable 2013 period. Total operating expenses for the quarter fell 10.6% to $2.5 million, reflecting a combination of content revenue-sharing agreements and disciplined corporate overhead levels. The loss from operations of $3.2 million for the quarter was down from a $3.5 million loss from operations in the comparable 2013 period. The net loss from continuing operations for the quarter was $1.1 million - which included a $1.5 million change in the fair value of warrant liabilities - versus $3.5 million net loss from continuing operations in the comparable 2013 period. The net loss attributable to YOU on Demand shareholders amounted to $793,000, down from approximately $3.3 million net loss in Q2 2013. The basic and diluted per share loss was $0.05, compared to a $0.22 basic and diluted per share loss in the year-ago Q2.

Cash and cash equivalents increased from $3.8 million at December 31, 2013, to $15.6 million at June 30, 2014.

YOU On Demand is maintaining full-year 2014 revenue guidance of $3 million.

Safe Harbor Statement

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

About YOU On Demand Holdings, Inc. (http://corporate.yod.com)

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


CONTACT:

Jason Finkelstein Robert Rinderman or Norberto Aja

YOU On Demand JCIR

212-206-1216 212-835-8500

jason.finkelstein@yod.com YOD@jcir.com

@youondemand


- Financial Tables Follow -




YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


Three Months Ended Six Months Ended
------------------ ----------------

June 30, June 30, June 30, June 30,

2014 2013 2014 2013
---- ---- ---- ----


Revenue $182,696 $50,619 $320,377 $51,557

Cost of revenue 857,179 790,019 1,733,117 1,638,604
------- ------- --------- ---------

Gross loss (674,483) (739,400) (1,412,740) (1,587,047)
-------- -------- ---------- ----------


Operating expense:

Selling, general and administrative expenses 2,270,657 2,073,537 3,911,297 4,050,767

Professional fees 76,231 223,051 261,715 474,485

Depreciation and amortization 139,590 173,394 289,550 466,227

Impairments of long-lived assets - 311,249 - 311,249

Total operating expense 2,486,478 2,781,231 4,462,562 5,302,728
--------- --------- --------- ---------


Loss from operations (3,160,961) (3,520,631) (5,875,302) (6,889,775)


Interest & other income (expense):

Interest expense, net (28,321) (29,704) (2,317,059) (59,064)

Change in fair value of warrant liabilities 1,501,632 (4,885) (937,386) (30,290)

Change in fair value of contingent consideration 589,994 (42,046) (113,132) (83,694)

Gain (loss) on investment in unconsolidated entities (5,349) 2,275 (10,257) (719)

Gain (loss) on sale of subsidiary - - 755,426 -

Loss on dissolution of variable interest entity - - (27,463) -

Other (15,015) 71,777 (67,681) 70,596
-----


Net loss from continuing operations

before income taxes and noncontrolling interest (1,118,020) (3,523,214) (8,592,854) (6,992,946)


Income tax benefit 32,495 29,821 55,437 60,961
------ ------ ------ ------


Net loss from continuing operations (1,085,525) (3,493,393) (8,537,417) (6,931,985)


Net loss from discontinued operations - (97,823) - (334,398)
--- ------- --- --------


Net loss (1,085,525) (3,591,216) (8,537,417) (7,266,383)


Plus: Net loss attributable to noncontrolling interests 292,560 310,771 527,344 641,173
------- ------- ------- -------


Net loss attributable to YOU On Demand shareholders (792,965) (3,280,445) (8,010,073) (6,625,210)

Dividends on preferred stock - - (16,402,161) -
--- --- ----------- ---


Net loss attributable to YOU on Demand common shareholders $(792,965) $(3,280,445) $(24,412,234) $(6,625,210)
========= =========== ============ ===========


Basic and diluted loss per share:

Loss from continuing operations $(0.05) $(0.22) $(1.50) $(0.44)

Loss from discontinued operations - nil - (0.01)

Basic and diluted loss per share $(0.05) $(0.22) $(1.50) $(0.45)
================================


Weighted average shares outstanding:

Basic and diluted 16,598,990 14,938,780 16,267,036 14,771,261
==========






YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity

UNAUDITED CONSOLIDATED BALANCE SHEETS


June 30, December 31,

2014 2013
---- ----

ASSETS
------

Current assets:

Cash and cash equivalents $15,671,408 $3,822,889

Accounts receivable, net 182,601 175,211

Licensed content, current 725,450 428,322

Prepaid expenses 316,249 330,013

Debt issuance costs, net - 128,879

Other current assets 58,994 48,928
------

Total current assets 16,954,702 4,934,242
---------- ---------


Property and equipment, net 428,812 499,858

Licensed content, noncurrent 79,868 162,646

Intangible assets, net 2,456,201 2,621,527

Goodwill 6,105,478 6,105,478

Investment in unconsolidated entities 658,436 673,567

Other noncurrent assets 224,876 -

Total assets $26,908,373 $14,997,318
=========== ===========


LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY
--------------------------------------------------------------

Current liabilities:

Accounts payable $354,532 $656,545

Deferred revenue 26,941 68,969

Accrued expenses and liabilities 1,301,692 1,075,944

Deferred license fees 1,364,716 1,200,764

Contingent purchase price consideration liability 691,876 578,744

Convertible promissory note 3,000,000 3,000,000

Warrant liabilities 901,197 1,344,440
-------

Total current liabilities 7,640,954 7,925,406
--------- ---------


Deferred income tax liability 70,372 125,809

Convertible promissory note - 2,000,000

Total liabilities 7,711,326 10,051,215
--------- ----------


Commitments and Contingencies


Convertible redeemable preferred stock, $.001 par value; 50,000,000

shares authorized

Series A - 7,000,000 shares issued and outstanding, liquidation preference

of $3,500,000 at June 30, 2014 and December 31, 2013, respectively 1,261,995 1,261,995

Series C - 0 and 87,500 shares issued and outstanding, liquidation preference

of $0 and $350,000 at June 30, 2014 and December 31, 2013, respectively - 219,754

Series D 4% - 0 and 2,285,714 shares issued and outstanding, liquidation preference

of $0 and $4,000,000 at June 30, 2014 and December 31, 2013, respectively - 4,000,000


Equity:

Preferred Series E stock, $.001 par value; 16,500,000 shares authorized, 13,428,571 and 0 shares issued 13,429 -
and outstanding, liquidation preference of $23,500,000 and $0 at June 30, 2014 and December 31, 2013,
respectively

Common stock, $.001 par value; 1,500,000,000 shares authorized, 17,410,220 and 15,794,762 shares 17,410 15,794
issued at June 30, 2014 and December 31, 2013, respectively

Additional paid-in capital 111,566,478 67,417,025

Accumulated deficit (90,346,752) (65,856,053)

Accumulated other comprehensive loss (1,402,245) (715,090)
-----------

Total YOU On Demand equity 19,848,320 861,676

Noncontrolling interests (1,913,268) (1,397,322)
---------- ----------


Total equity 17,935,052 (535,646)
---------- --------


Total liabilities, convertible redeemable preferred stock and equity $26,908,373 $14,997,318
=========== ===========

SOURCE YOU On Demand Holdings, Inc.

YOU On Demand Holdings, Inc.

Web Site: http://www.yod.com


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