YOU On Demand Reports 2014 Q1 Results and Provides Update on Ongoing Operational Progress

Management Hosting Investor Webcast and Analyst Call at 4:30 p.m. ET

May 15, 2014, 16:01 ET from YOU On Demand Holdings, Inc.

NEW YORK, May 15, 2014 /PRNewswire/ -- YOU On Demand Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company" or "YOD"), a leading multi-platform entertainment and Video On Demand (VOD) company in China, announced today its operating results for the three-month period ending March 31, 2014 (a full copy of its quarterly report on Form 10-Q will also be posted at www.sec.gov).

Chairman Shane McMahon, CEO Weicheng Liu and President & CFO Marc Urbach are hosting an investor webcast and analyst conference call today at 4:30 p.m. ET to discuss the Company's recent operating results and provide an update on the ongoing progress. The live and archived webcast will be available here, in the 'Webcasts and Events' section of the corporate.yod.com website. For those wishing to dial in, please call +1 212 231 2905. Questions will also be accepted and addressed, time permitting, via emails to ir@yod.com.

Shane McMahon, Chairman of YOU On Demand, commented, "The 2014 first quarter was a productive period and we are very excited about what the future holds as we continue to expand our distribution platform across IPTV, OTT and Mobile. Due to the tremendous potential of these exciting technologies we are refocusing our efforts and prioritizing these platforms. Concurrently, we are also continuing to deploy YOD's China-based sales team in targeting the numerous, but still fragmented digital cable MSO operators, with the goal of further expanding our reach as this platform continues to mature and our brand grows in popularity among consumers."

YOU On Demand CEO Weicheng Liu, stated, "Our strong balance sheet, healthy cash position and a firm commitment to prudent expense management, position the Company to capitalize on the significant opportunities that lay ahead as we continue leveraging the goodwill inherent in the YOD brand. We believe that each of our business initiatives, across multiple platforms, offers a unique shareholder return opportunity and we remain confident that we will be able to unlock future value for the benefit of all stakeholders."

2014 Q1 Operating Results

Revenue for the quarter ended March 31, 2014 increased to $138,000 from $938 in the quarter ended March 31, 2013. Gross loss for the quarter ended March 31, 2014 declined to $738,000, from $848,000 in the quarter ended March 31, 2013. Total operating expenses for the quarter ended March 31, 2014 declined 21.8% from the quarter ended March 31, 2013, which reflects the success of our strategy of forging revenue-sharing agreements with content partners while keeping corporate overhead at manageable levels. We reported a reduced loss from operations of $2.7 million for the quarter ended March 31, 2014, down from $3.4 million in the prior year period. Our net loss from continuing operations for the quarter ended March 31, 2014 increased to $7.5 million from $3.5 million in the prior year period. Our net loss attributable to YOU on Demand common shareholders was $23.6 million (compared to $3.3 million in the prior year period), which was impacted by several one-time, non-cash items. These one-time, non-cash items include a $16.4 million non-cash beneficial conversion feature incurred as part of our Preferred Series E share sale, as well as changes in the fair value of warrant liabilities of $2.4 million and contingent consideration of $0.7 million. The reported per share loss from continuing operations for the quarter ended March 31, 2014 was $1.48 as compared to $0.21 per share loss from continuing operations in the prior year period.

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. and Its Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

March 31,

March 31,

2014

2013

(unaudited)

(unaudited)

Revenue

$

137,681

$

938

Cost of revenue

875,938

848,585

Gross loss

(738,257)

(847,647)

Operating expense:

     Selling, general and administrative expenses

1,640,640

1,983,736

     Professional fees

185,484

251,434

     Depreciation and amortization

149,960

292,833

Total operating expense

1,976,084

2,528,003

Loss from operations

(2,714,341)

(3,375,650)

Interest & other income / (expense)

     Interest expense, net

(2,288,738)

(29,360)

     Change in fair value of warrant liabilities

(2,439,018)

(25,405)

     Change in fair value of contingent consideration

(703,126)

(41,648)

     Loss on investment in unconsolidated entities

(4,908)

(2,994)

     Gain on sale subsidiary

755,426

-

     Loss on dissolution of variable interest entity

(27,463)

-

     Other

(52,666)

(1,181)

Net loss from continuing operations before income taxes and noncontrolling interest

(7,474,834)

(3,476,238)

Income tax benefit

22,942

31,140

Net loss from continuing operations

(7,451,892)

(3,445,098)

Net loss from discontinued operations

-

(230,069)

Net loss

$

(7,451,892)

$

(3,675,167)

Plus: Net loss attributable to noncontrolling interest

234,784

330,402

Net Loss attributable to YOU On Demand shareholders

(7,217,108)

(3,344,765)

Dividends on preferred stock

(16,402,161)

-

Net loss attributable to You On Demand common shareholders

$

(23,619,269)

$

(3,344,765)

Basic loss per share

     Loss from continuing operations

$

(1.48)

$

(0.21)

     Loss from discontinued operations

$

-

$

(0.02)

     Basic loss per share

$

(1.48)

$

(0.23)

Diluted loss per share

     Loss from continuing operations

$

(1.48)

$

(0.21)

     Loss from discontinued operations

$

-

$

(0.02)

     Diluted loss per share

$

(1.48)

$

(0.23)

Weighted average shares outstanding

     Basic

15,931,394

14,602,196

     Diluted

15,931,394

14,602,196

 

YOU On Demand Holdings, Inc. and Its Subsidiaries

CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2014

2013

(Unaudited)

ASSETS

Current assets:

       Cash and cash equivalents

$

17,954,910

$

3,822,889

       Accounts receivable, net

186,715

175,211

       Licensed content, current

1,070,036

428,322

       Prepaid expenses

505,846

330,013

       Debt issuance cost, net

-

128,879

       Other current assets

57,683

48,928

Total current assets

19,775,190

4,934,242

Property and equipment, net

433,400

499,858

Licensed content, noncurrent

117,414

162,646

Intangible assets, net

2,535,825

2,621,527

Goodwill

6,105,478

6,105,478

Investment in unconsolidated entities

663,066

673,567

Total assets

$

29,630,373

$

14,997,318

LIABILITIES AND EQUITY

Current liabilities:

       Accounts payable

$

1,167,185

$

656,545

       Accrued expenses and liabilities

943,453

1,046,920

       Deferred revenue

79,791

68,969

       Deferred license fees

998,225

1,200,764

       Other current liabilities

6,943

29,024

       Contingent purchase price consideration liability

1,281,870

578,744

       Convertible promissory note

3,000,000

3,000,000

       Warrant liabilities

3,189,273

1,344,440

Total current liabilities

10,666,740

7,925,406

Deferred tax liability

102,867

125,809

Convertible promissory note

-

2,000,000

Total liabilities

10,769,607

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 March 31, 2014 and December 31, 2013, respectively

1,261,995

1,261,995

     Series C – 87,500 shares issued and outstanding, liquidation  preference of $350,000 at March 31, 2014 and December 31, 2013, respectively

219,754

219,754

     Series D 4% - 0 and 2,285,714 shares issued and outstanding, liquidation preference of $0 and $4,000,000 at March 31, 2014  and December 31, 2013, respectively

-

4,000,000

Equity:

     Preferred Series E stock, $.001 par value; 16,500,000 shares authorized, 14,285,714 and 0 shares issued at March 31, 2014 and December 31, 2013, respectively

14,286

-

     Common stock, $.001 par value; 1,500,000,000 shares authorized, 16,097,154 and 15,794,762 shares issued at March 31, 2014 and December 31, 2013, respectively

16,097

15,794

     Additional paid-in capital

109,865,767

67,417,025

     Accumulated deficit

(89,553,787)

(65,856,053)

     Accumulated other comprehensive loss

(1,324,359)

(715,090)

Total YOU On Demand equity

19,018,004

861,676

Noncontrolling interests

(1,638,987)

(1,397,322)

Total equity

17,379,017

(535,646)

Total liabilities and equity

$

29,630,373

$

14,997,318

 

SOURCE YOU On Demand Holdings, Inc.



RELATED LINKS

http://corporate.yod.com