UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): November
16, 2015
YOU ON DEMAND HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada |
001-35561 |
20-1778374 |
|
|
|
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
ID Number) |
375 Greenwich Street, Suite 516
New York, New York
10013
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code: 212-206-1216
Not Applicable
(Former name or former
address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a -12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d -2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e -4(c))
Item 2.02 |
Results of Operations and Financial
Condition. |
On November 16, 2015, YOU On Demand
Holdings, Inc., issued a press release announcing its financial results for the
third quarter 2015. A copy of the press release is furnished as Exhibit
99.1 to this Form 8-K.
The information contained in
this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or incorporated by reference in any filing under the Exchange Act or the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such filing.
Item 7.01 |
Regulation FD Disclosure.
|
The information set forth in
Item 2.02. Results of Operations and Financial Condition, including the
exhibit referred to therein, is incorporated herein by reference.
The information contained in
this Item 7.01 and in the accompanying Exhibit 99.1 shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or incorporated by reference in any filing under the Exchange Act or the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such filing.
Item 9.01 |
Financial Statements and Exhibits.
|
The information contained in
this Item 9.01 and in the accompanying Exhibit 99.1 shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or incorporated by reference in any filing under the Exchange Act or the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such filing.
SIGNATURES
Pursuant to the requirements of
the Securities Exchange Act of 1934, as amended, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
YOU ON DEMAND
HOLDINGS, INC. |
|
|
|
|
By: |
|
|
|
Name: Weicheng Liu |
|
|
Title: Chief Executive Officer
|
Date: November 16, 2015
YOU On Demand Announces Q3 2015 Earnings Results and Approval
of Nonbinding
Investment Proposal from Bruno Wu's Sun Seven Stars
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 non-binding 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 |
|
|
September |
|
|
September |
|
|
September |
|
|
|
30, |
|
|
30, |
|
|
30, |
|
|
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 |
|
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