NEW YORK, Aug. 15, 2016 /PRNewswire/ -- YOU On Demand
Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company" or
"YOD"), "), a premium content Video On Demand service provider in
China evolving into a global,
mobile-driven, consumer data management platform for both
enterprises and consumers, announced today its Q2 2016 operating
results for the period ended June 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: CEO Mingcheng
Tao and CFO Mei Chen 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 Q2 2016 Operating Results
Revenue for Q2 2016, which was mostly comprised of pre- Sun
Seven Stars, legacy model revenue, was approximately $1.480 million as compared to $1.269 million in Q1 2016, an increase of 16.6%
quarter over quarter. The change was attributable to increased
revenue from OTT and Mobile platforms.
Cost of revenue was approximately $800,000 for Q2 2016, as compared to $829,000 for the Q2 2015. The decrease of
approximately $29,000, or 3%, was
primarily due to delays in expected revenue from specific content
titles, which impacted our content license cost amortization
pattern. Cost of revenues is primarily comprised of content
licensing fees. Our content licensing agreements with production
companies incorporate minimum guarantee payment levels. As of
June 30, 2016 and 2015, revenues did
not exceed the level of minimum guarantees to cause additional
costs to be incurred.
Gross profit for Q2 2016 was approximately $680,000 as compared to gross profit of
$651,000 during the same period in
2015. The increase in gross profit was primarily due to the
decrease of cost recognized per expected revenue, which is expected
to increase -from specific IP contents.
SG&A expenses for Q2 2016, increased approximately
$150,000, to $1.809 million, as compared to $1.659 million in Q2 2015.
Salaries and personnel costs are the primary components of
SG&A expenses, accounting for 56% and 50% of our SG&A
expenses for the Q2 2016 and 2015, respectively. For the
second quarter of 2016, salaries and personnel costs totaled
$1.015 million, an increase of
$178,000, or 21%, as compared to
$837,000 for the same period of 2015.
The increase was primarily attributed to the business
transformation and re-alignment strategy to expand the Company's
business, which will be our primary focus for the 2016 fiscal
year.
The other major components of our SG&A expenses include
marketing and promotion expenses, outsourced technology costs, rent
and severance. For Q2 2016, these costs totaled $794,000, a net decrease of $28,000, or 3%, as compared to $822,000 for the same period in 2015.
The decrease was primarily attributed to decrease in
technology outsourcing costs, stock-based compensation expenses,
and other staff-related costs, which was to some extent offset by
minor increases in regulatory and entertainment expenses.
Net loss was $1.588 million for Q2
2016 compared to $1.317 million in
the comparable 2015 period. Basic and diluted loss per share for Q2
2016 was $0.05 as compared to a
$0.06 cents loss per share in the
same period in 2015.
As of June 30, 2016 the Company
had cash of approximately $2.4
million and total current assets of approximately
$6.9 million. The cash standing
as of June 30, 2016 does not include
the two recently announced stock purchase agreements with: 1. Seven
Stars Works Co., Ltd. which closed post Q2, or July 20, and
netted proceeds of $4 million to YOU
On Demand and; 2. Harvest Alternative Investment Opportunities SPC
that closed post Q2, or August 11,
and also netted proceeds of $4
million to YOU On Demand.
CEO Mingcheng Tao stated, "YOU On
Demand is in the midst of both a very intriguing and burgeoning
period in this Company's long and arduous journey towards success
and profitability. In the next coming days, weeks and months,
YOU On Demand will be announcing several strategic partnerships,
asset injections, acquisitions and corporate restructurings.
All of these maneuvers will be driven by the vision that
Mr. Bruno
Wu laid out on prior earnings calls and public
announcements. In the meantime, YOU On Demand's original and
legacy business, on its own, is starting to take form and show some
positive revenue results. As evidenced from our Q2
revenues, which are still for the most part legacy, pre-Sun Seven
Stars revenues, it is clear YOU On Demand is still in the process
of evolving towards its future as a B2B2C ecosystem. However,
speaking to the legacy VOD business solely, we are forecasting both
quarter-over-quarter and year-over-year revenue growth in both Q3
and Q4, as we complete the second half of 2016."
About YOU On Demand Holdings, Inc.
(http://corporate.yod.com)
YOU On Demand (NASDAQ: YOD) is leveraging and optimizing its
current operations as a premium content Video On Demand service
provider in China to evolve into a
global, B2B2C, mobile-driven, consumer management platform for both
enterprises and consumers. By aiming to establish the world's
premier multimedia, social networking and e-commerce-enabled
network with the largest global effective connected user base, YOU
On Demand, 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
YOD–branded products and services to enterprise customers and
end-use consumers - anytime and anywhere, across
multiple platforms and devices.
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. 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. 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
Financial Tables Follow
YOU On Demand
Holdings, Inc. and Its Subsidiaries and Variable Interest
Entity
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
|
|
June
30,
|
|
|
June
30,
|
|
|
June
30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
1,480,464
|
|
$
|
1,479,648
|
|
$
|
2,750,190
|
|
$
|
2,507,576
|
|
Cost of
revenue
|
|
800,399
|
|
|
829,039
|
|
|
1,716,179
|
|
|
1,872,038
|
|
Gross
profit
|
|
680,065
|
|
|
650,609
|
|
|
1,034,011
|
|
|
635,538
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense
|
|
1,808,906
|
|
|
1,658,814
|
|
|
3,973,959
|
|
|
4,107,116
|
|
Professional fees
|
|
270,491
|
|
|
151,363
|
|
|
637,937
|
|
|
440,081
|
|
Depreciation and amortization
|
|
123,343
|
|
|
95,082
|
|
|
220,806
|
|
|
184,825
|
|
Total operating
expense
|
|
2,202,740
|
|
|
1,905,259
|
|
|
4,832,702
|
|
|
4,732,022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(1,522,675)
|
|
|
(1,254,650)
|
|
|
(3,798,691)
|
|
|
(4,096,484)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other
income/(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
(166,710)
|
|
|
(30,232)
|
|
|
(200,183)
|
|
|
(58,555)
|
|
Change in fair value of warrant liabilities
|
|
106,583
|
|
|
49,344
|
|
|
143,606
|
|
|
34,049
|
|
Equity in losses of equity method investees
|
|
(27,001)
|
|
|
(60,621)
|
|
|
(37,349)
|
|
|
(93,024)
|
|
Other
|
|
(5,258)
|
|
|
(36,576)
|
|
|
(5,096)
|
|
|
(46,343)
|
|
Loss before income
taxes and non-controlling interest
|
|
(1,615,061)
|
|
|
(1,332,735)
|
|
|
(3,897,713)
|
|
|
(4,260,357)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
8,612
|
|
|
8,612
|
|
|
17,224
|
|
|
17,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(1,606,449)
|
|
|
(1,324,123)
|
|
|
(3,880,489)
|
|
|
(4,243,133)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interest
|
|
18,360
|
|
|
7,303
|
|
|
155,929
|
|
|
127,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to YOU On Demand shareholders
|
$
|
(1,588,089)
|
|
$
|
(1,316,820)
|
|
$
|
(3,724,560)
|
|
$
|
(4,115,609)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share
|
$
|
(0.05)
|
|
$
|
(0.06)
|
|
$
|
(0.14)
|
|
$
|
(0.17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
29,197,899
|
|
|
23,851,602
|
|
|
26,815,888
|
|
|
23,833,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(1,606,449)
|
|
$
|
(1,324,123)
|
|
|
$
|
(3,880,489)
|
|
$
|
(4,243,133)
|
|
Other comprehensive
loss, net of nil tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
(214,641)
|
|
|
(1,683)
|
|
|
|
(201,509)
|
|
|
(722)
|
|
Comprehensive
loss
|
|
(1,821,090)
|
|
|
(1,325,806)
|
|
|
|
(4,081,998)
|
|
|
(4,243,855)
|
|
Comprehensive loss(gain) attributable to
non-controlling
interest
|
|
(3,588)
|
|
|
7,196
|
|
|
|
139,368
|
|
|
128,641
|
|
Comprehensive loss
attributable to YOU On Demand shareholders
|
$
|
(1,824,678)
|
|
$
|
(1,318,610)
|
|
|
$
|
(3,942,630)
|
|
$
|
(4,115,214)
|
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash
|
$
|
2,403,761
|
|
$
|
3,768,897
|
|
Restricted
cash
|
|
-
|
|
|
2,994,364
|
|
Accounts receivable, net
|
|
3,094,770
|
|
|
1,689,415
|
|
Licensed
content, current
|
|
711,683
|
|
|
556,591
|
|
Prepaid expenses
|
|
512,445
|
|
|
362,421
|
|
Deferred
issuance cost
|
|
-
|
|
|
551,218
|
|
Other current assets
|
|
159,482
|
|
|
157,594
|
|
Total current
assets
|
|
6,882,141
|
|
|
10,080,500
|
|
Property and equipment, net
|
|
93,589
|
|
|
154,434
|
|
Licensed content, non-current
|
|
17,726,840
|
|
|
21,085
|
|
Intangible assets, net
|
|
2,591,122
|
|
|
2,412,591
|
|
Goodwill
|
|
6,648,911
|
|
|
6,648,911
|
|
Long term
investments
|
|
6,118,445
|
|
|
450,115
|
|
Other non-current assets
|
|
2,124,417
|
|
|
58,089
|
|
Total
assets
|
$
|
42,185,465
|
|
$
|
19,825,725
|
|
|
|
|
|
|
|
|
LIABILITIES,
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable (including accounts payable of consolidated
variable interest entities ("VIEs") without recourse to the Company
of $651,254 and $44,867 as of June 30, 2016 and December 31, 2015,
respectively)
|
$
|
651,254
|
|
$
|
45,788
|
|
Deferred revenue (including deferred revenue of VIEs without
recourse to the Company of $1,232 and $15,080 as of June 30, 2016
and December 31, 2015, respectively)
|
|
1,232
|
|
|
15,080
|
|
Accrued expenses (including accrued expenses of VIEs without
recourse to the Company of $390,176 and $280,038 as of June 30,
2016 and December 31, 2015, respectively)
|
|
1,440,228
|
|
|
1,196,066
|
|
Accrued
salaries (including accrued salaries of VIEs without recourse to
the Company of nil and $10,861 as of June 30, 2016 and December 31,
2015, respectively)
|
|
1,344,883
|
|
|
1,058,124
|
|
Other
current liabilities (including other current liabilities of VIEs
without recourse to the Company of $361,908 and $298,422,
respectively as of June 30, 2016 and December 31, 2015)
|
|
521,374
|
|
|
312,170
|
|
Accrued license content fees (including accrued license
content fees of VIEs without recourse to the Company of $1,518,112
and $933,532 as of June 30, 2016 and December 31, 2015,
respectively)
|
|
1,518,112
|
|
|
933,532
|
|
Convertible promissory notes
|
|
3,000,000
|
|
|
3,000,000
|
|
Warrant liabilities
|
|
251,611
|
|
|
395,217
|
|
Deposit
payable
|
|
-
|
|
|
2,994,364
|
|
Total current
liabilities
|
|
8,728,694
|
|
|
9,950,341
|
|
Deferred income
taxes
|
|
312,900
|
|
|
330,124
|
|
Total
liabilities
|
$
|
9,041,594
|
|
$
|
10,280,465
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
redeemable preferred stock:
|
|
|
|
|
|
|
Series A - 7,000,000 shares issued and outstanding, liquidation and
deemed liquidation preference of $3,500,000 as of June 30,
2016 and December 31, 2015, respectively
|
|
1,261,995
|
|
|
1,261,995
|
|
Equity:
|
|
|
|
|
|
|
Series E Preferred Stock - $0.001 par value; 16,500,000 shares
authorized, 7,154,997 and 7,254,997 shares issued and outstanding,
liquidation preference of $12,521,245 and $12,696,245 as of June
30, 2016 and December 31, 2015, respectively
|
|
7,155
|
|
|
7,255
|
|
Common stock, $0.001 par value; 1,500,000,000 shares authorized,
38,170,204 and 24,249,109 shares issued and outstanding as of June
30, 2016 and December 31, 2015, respectively
|
|
38,170
|
|
|
24,249
|
|
Additional paid-in capital
|
|
125,179,330
|
|
|
97,512,542
|
|
Accumulated deficit
|
|
(90,182,400)
|
|
|
(86,457,840)
|
|
Accumulated other comprehensive loss
|
|
(632,980)
|
|
|
(414,910)
|
|
Total YOU On
Demand shareholder's equity
|
|
34,409,275
|
|
|
10,671,296
|
|
Non-controlling interest
|
|
(2,527,399)
|
|
|
(2,388,031)
|
|
Total
equity
|
|
31,881,876
|
|
|
8,283,265
|
|
Total liabilities,
convertible redeemable preferred stock and equity
|
$
|
42,185,465
|
|
$
|
19,825,725
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/you-on-demand-reports-q2-2016-results-300313171.html
SOURCE YOU On Demand Holdings, Inc.