YOU On Demand Reports Third-Quarter 2014 Results

YOU On Demand Reports Third-Quarter 2014 Results

- For Q3, revenues increased 253% quarter-over-quarter and 577% year-over-year

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

NEW YORK, Nov. 13, 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 financial results for the three- and nine-month periods ended September 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/webcasts. 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, "As evidenced from our strong Q3 revenues which grew 253% quarter-over-quarter, YOU On Demand is beginning to show the fruit of a tremendous amount of planning and hard work. In China, as the appetite for premium content and the breadth of distribution channels continues to grow, YOU On Demand is now firmly entrenched and well-positioned to capitalize."

YOU On Demand CEO Weicheng Liu, stated, "We are very pleased with the traction we are now witnessing when it comes to revenue growth and consumer uptake. It is directly attributed to both the tremendous effort of the YOU On Demand team as well as the growing Chinese middle-class consumers who are now showing a very convincing desire to pay for premium content that is delivered to their mobile and TV screens with the highest quality. Our service strategy remains the same: to offer a unique and differentiated service to an audience of China's most passionate movie fans. Through organic growth and continued expansion of distribution partnerships, we believe YOU On Demand is decisively executing on its plan to be the number one destination for movie fans across mobile and TV screens.(")

YOU On Demand President & CFO Marc Urbach commented, "YOU On Demand had a strong start to the second half of 2014 as we intensified our commitment to delivering high quality entertainment across a spectrum of consumer devices and screens. 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 Q3 Operating Results

Revenues for Q3 were approximately $645,000, an increase of 253% over Q2 2014 and an increase of 577% over Q3 in the prior year.

Our gross loss for the quarter amounted to $228,000, down from $617,000 in the same period in the prior year.

The loss from operations of $2.3 million for the quarter was down from a $2.6 million loss from operations in the comparable 2013 period. The net loss attributable to YOU On Demand shareholders for the Q3 2014 quarter amounted to $1.9 million, compared to $3.2 million income in the prior year quarter, which included $5.6 million income from discontinued operations.

The loss per share on a fully diluted basis for Q3 2014 was $0.09 compared to $0.14 income per share in the year-ago Q3 which included $0.36 income per share from discontinued operations.

Cash and cash equivalents increased from $3.8 million at December 31, 2013, to $13.0 million at September 30, 2014.

Guidance

For full-year fiscal 2014, YOU On Demand now expects total revenue to be in the range of $1.7 million - $2.0 million. The change in guidance is directly attributable to longer-than-anticipated finalization of distribution agreements and therefore certain revenues being delayed to 2015.

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 risk factors set forth from time to time the Company's periodic reports, including but not limited to its Annual Report on Form 10-K for the fiscal year ended December 31, 2013, 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
YOU On Demand
212-206-1216
jason.finkelstein@yod.com
@youondemand



Financial Tables Follow












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


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


Three months ended Nine months Ended

Sep 30, 2014 Sep 30, 2013 Sep 30, 2014 Sep 30, 2013
------------ ------------ ------------ ------------

Revenue 644,891 95,295 965,268 146,852

Cost of revenue 873,025 712,327 2,606,142 2,350,931

Gross loss (228,134) (617,032) (1,640,874) (2,204,079)


Operating expenses:

Selling, general and administrative expense 1,861,053 1,726,967 5,772,350 5,856,484

Professional fees 114,271 78,379 375,986 474,114

Depreciation and amortization 124,936 154,719 414,486 620,946

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

Total operating expenses 2,100,260 1,960,065 6,562,822 7,262,793
--------- --------- --------- ---------

Loss from operations (2,328,394) (2,577,097) (8,203,696) (9,466,872)


Interest & other income/(expenses)

Interest expense, net (29,151) (29,818) (2,346,210) (88,882)

Change in fair value of warrant liabilities 281,537 (6,840) (655,849) (37,130)

Change in fair value of contingent consideration (47,634) (15,649) (160,766) (99,343)

Gain/(loss) on investment in unconsolidated entities (6,389) 8,592 (16,646) 7,873

Gain on sale of a subsidiary - - 755,426 -

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

Others (14,783) (11,827) (82,464) 58,769

Net loss before income tax and non- (2,144,814) (2,632,639) (10,737,668) (9,625,585)

controlling interest

Income tax benefit 28,812 21,168 84,249 82,129

Loss from continuing operations (2,116,002) (2,611,471) (10,653,419) (9,543,456)

Net income from discontinued operations - 5,589,872 - 5,255,474

Net income/(loss) (2,116,002) 2,978,401 (10,653,419) (4,287,982)


Net loss attributable to non-controlling interests 169,364 193,512 696,708 834,685

Net income/(loss) attributable to YOU On (1,946,638) 3,171,913 (9,956,711) (3,453,297)

Demand shareholders

Dividend on preferred stock - (1,029,829) (16,402,161) (1,029,829)
--- ---------- ----------- ----------

Net income/(loss) attributable to YOU On (1,946,638) 2,142,084 (26,358,872) (4,483,126)

Demand common shareholders



Basic and diluted loss per share:

Loss from continuing operations $(0.09) (0.22) $(1.45) $(0.65)

Income from discontinued operations - 0.36 - 0.35

Basic and diluted income/(loss) per share $(0.09) $0.14 $(1.45) $(0.30)
====== ===== ====== ======


Weighted average shares outstanding:

Basic and diluted 22,012,166 15,553,097 18,203,124 15,034,841
========== ========== ========== ==========



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

UNAUDITED CONSOLIDATED BALANCE SHEETS


September 30, December 31,

ASSETS 2014 2013
------ ---- ----

Current assets:

$13,045,215 $3,822,889

Cash and cash equivalents

636,684 175,211

Accounts receivable, net

1,000,928 428,322

Licensed content, current

292,708 330,013

Prepaid expenses

- 128,879

Debt issuance costs, net

9,066 48,928

Other current assets


Total current assets 14,984,601 4,934,242
---------- ---------


Property and equipment, net 376,330 499,858

Licensed content, non-current 145,801 162,646

Intangible assets, net 2,386,419 2,621,527

Goodwill 6,105,478 6,105,478

Investment in unconsolidated entities 861,194 673,567

Other non-current assets 367,409 -

Total assets $25,227,232 $14,997,318
=========== ===========


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

Current liabilities:

173,613 656,545

Accounts payable

142,144 68,969

Deferred revenue

1,745,126 1,075,944

Accrued expenses and other liabilities

1,205,427 1,200,764

Deferred license fees

- 578,744

Contingent purchase price consideration liability

3,000,000 3,000,000

Convertible promissory note

619,660 1,344,440

Warrant liabilities


Total current liabilities 6,885,970 7,925,406
--------- ---------

41,560 125,809

Deferred income tax liability

- 2,000,000

Convertible promissory note

Total liabilities 6,927,530 10,051,215
--------- ----------




Commitments and contingencies


Convertible redeemable preferred stock:

Series A -7,000,000 shares issued and outstanding, liquidation preference
of 1,261,995 1,261,995
$3,500,000 at September 30, 2014 and December 31, 2013, respectively

Series C - 0 and 87,500 shares issued and outstanding, liquidation
preference of $0 - 219,754
and $350,000 at September 30, 2014 and December 31, 2013, respectively

Series D 4% - 0 and 2,285,714 shares issued and outstanding, liquidation - 4,000,000
preference of $0 and $4,000,000 at September 30, 2014 and December 31, 2013,
respectively

Equity:

7,560 -

Series E Preferred Stock, $0.001 par value; 16,500,000 shares authorized,
7,559,998 and 0 shares issued and outstanding, liquidation preference of
$13,300,000 and $0 at September 30, 2014 and December 31, 2013, respectively

23,598 15,794

Common stock, $0.001 par value; 1,500,000,000 shares authorized, 23,598,430
and
15,794,762 shares issued at September 30, 2014 and December 31, 2013,
respectively

112,764,950 67,417,025

Additional paid-in capital

(92,293,390) (65,856,053)

Accumulated deficit

(1,381,701) (715,090)

Accumulated other comprehensive loss


Total YOU On Demand equity 19,121,017 861,676

Non-controlling interest (2,083,310) (1,397,322)
---------- ----------

Total equity 17,037,707 (535,646)
---------- --------

Total liabilities, convertible redeemable preferred stock and equity $25,227,232 $14,997,318
=========== ===========



SOURCE YOU On Demand Holdings, Inc.

YOU On Demand Holdings, Inc.


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