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

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

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
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- 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
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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 219,754 219,754
preference of $350,000 at March 31, 2014 and December 31, 2013, respectively

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.

YOU On Demand Holdings, Inc.

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


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