YOU On Demand Reports 2014 Q2 Results

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

NEW YORK, Aug. 14, 2014 /PRNewswire/ -- YOU On Demand Holdings, Inc. 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 operating results for the three- and six-month periods ended June 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. 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, "During the first half of 2014 we successfully pivoted the Company's strategy and its resources to prioritize our IPTV, OTT and Mobile platforms. Given the exciting potential of these fast-growing distribution modes, which are increasingly popular amongst China's tech-savvy and most active consumers of entertainment, YOU On Demand expects to continue generating positive momentum from this strategic shift. As a result, we expect to generate both improved operating efficiencies and enhanced financial results during the second half of this year."

YOU On Demand CEO Weicheng Liu, stated, "Building on the growing popularity of our YOU Hollywood App with Huawei device users, Xiaomi OTT Box owners and other early adopters, we recently softly launched our Hollywood App independently via popular app stores and online channels. We believe select advertising, marketing and social media outreach, combined with word-of-mouth recommendations and endorsements from satisfied App users, will help promote our unique, differentiated service to an appreciative audience of China's most ardent movie fans."

YOU On Demand President & CFO Marc Urbach commented, "During this critical phase in our organization's corporate development, the senior financial and operations teams will continue striving to combine our strong, unlevered balance sheet, with conservative expense management and moderate levels of fixed overhead costs. 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 Q2 Operating Results

Revenue for the quarter ended June 30, 2014 increased to $183,000, up from $51,000 in the year-ago Q2 and up 33% over Q1 2014. Gross loss for the quarter declined to $674,000, down from $739,000 in the comparable 2013 period. Total operating expenses for the quarter fell 10.6% to $2.5 million, reflecting a combination of content revenue-sharing agreements and disciplined corporate overhead levels. The loss from operations of $3.2 million for the quarter was down from a $3.5 million loss from operations in the comparable 2013 period. The net loss from continuing operations for the quarter was $1.1 million – which included a $1.5 million change in the fair value of warrant liabilities – versus $3.5 million net loss from continuing operations in the comparable 2013 period. The net loss attributable to YOU on Demand shareholders amounted to $793,000, down from approximately $3.3 million net loss in Q2 2013. The basic and diluted per share loss was $0.05, compared to a $0.22 basic and diluted per share loss in the year-ago Q2.

Cash and cash equivalents increased from $3.8 million at December 31, 2013, to $15.6 million at June 30, 2014.

YOU On Demand is maintaining full-year 2014 revenue guidance of $3 million.

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 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., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended		Six Months Ended
		June 30,	June 30,	June 30,	June 30,
		2014	2013	2014	2013

Revenue		$ 182,696	$ 50,619	$ 320,377	$ 51,557
Cost of revenue		857,179	790,019	1,733,117	1,638,604
Gross loss		(674,483)	(739,400)	(1,412,740)	(1,587,047)

Operating expense:
	Selling, general and administrative expenses	2,270,657	2,073,537	3,911,297	4,050,767
	Professional fees	76,231	223,051	261,715	474,485
	Depreciation and amortization	139,590	173,394	289,550	466,227
	Impairments of long-lived assets	-	311,249	-	311,249
Total operating expense		2,486,478	2,781,231	4,462,562	5,302,728

Loss from operations		(3,160,961)	(3,520,631)	(5,875,302)	(6,889,775)

Interest & other income (expense):
	Interest expense, net	(28,321)	(29,704)	(2,317,059)	(59,064)
	Change in fair value of warrant liabilities	1,501,632	(4,885)	(937,386)	(30,290)
	Change in fair value of contingent consideration	589,994	(42,046)	(113,132)	(83,694)
	Gain (loss) on investment in unconsolidated entities	(5,349)	2,275	(10,257)	(719)
	Gain (loss) on sale of subsidiary	-	-	755,426	-
	Loss on dissolution of variable interest entity	-	-	(27,463)	-
	Other	(15,015)	71,777	(67,681)	70,596

Net loss from continuing operations
	before income taxes and noncontrolling interest	(1,118,020)	(3,523,214)	(8,592,854)	(6,992,946)

Income tax benefit		32,495	29,821	55,437	60,961

Net loss from continuing operations		(1,085,525)	(3,493,393)	(8,537,417)	(6,931,985)

Net loss from discontinued operations		-	(97,823)	-	(334,398)

Net loss		(1,085,525)	(3,591,216)	(8,537,417)	(7,266,383)

Plus: Net loss attributable to noncontrolling interests		292,560	310,771	527,344	641,173

Net loss attributable to YOU On Demand shareholders		(792,965)	(3,280,445)	(8,010,073)	(6,625,210)
Dividends on preferred stock		-	-	(16,402,161)	-

Net loss attributable to YOU on Demand common shareholders		$ (792,965)	$ (3,280,445)	$ (24,412,234)	$ (6,625,210)

Basic and diluted loss per share:
	Loss from continuing operations	$ (0.05)	$ (0.22)	$ (1.50)	$ (0.44)
	Loss from discontinued operations	-	nil	-	(0.01)
	Basic and diluted loss per share	$ (0.05)	$ (0.22)	$ (1.50)	$ (0.45)

Weighted average shares outstanding:
	Basic and diluted	16,598,990	14,938,780	16,267,036	14,771,261

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED BALANCE SHEETS

		June 30,	December 31,
		2014	2013
ASSETS
Current assets:
	Cash and cash equivalents	$ 15,671,408	$ 3,822,889
	Accounts receivable, net	182,601	175,211
	Licensed content, current	725,450	428,322
	Prepaid expenses	316,249	330,013
	Debt issuance costs, net	-	128,879
	Other current assets	58,994	48,928
Total current assets		16,954,702	4,934,242

Property and equipment, net		428,812	499,858
Licensed content, noncurrent		79,868	162,646
Intangible assets, net		2,456,201	2,621,527
Goodwill		6,105,478	6,105,478
Investment in unconsolidated entities		658,436	673,567
Other noncurrent assets		224,876	-
Total assets		$ 26,908,373	$ 14,997,318

LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY
Current liabilities:
	Accounts payable	$ 354,532	$ 656,545
	Deferred revenue	26,941	68,969
	Accrued expenses and liabilities	1,301,692	1,075,944
	Deferred license fees	1,364,716	1,200,764
	Contingent purchase price consideration liability	691,876	578,744
	Convertible promissory note	3,000,000	3,000,000
	Warrant liabilities	901,197	1,344,440
Total current liabilities		7,640,954	7,925,406

Deferred income tax liability		70,372	125,809
Convertible promissory note		-	2,000,000
Total liabilities		7,711,326	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 June 30, 2014 and December 31, 2013, respectively	1,261,995	1,261,995
	Series C - 0 and 87,500 shares issued and outstanding, liquidation preference
	of $0 and $350,000 at June 30, 2014 and December 31, 2013, respectively	-	219,754
	Series D 4% - 0 and 2,285,714 shares issued and outstanding, liquidation preference
	of $0 and $4,000,000 at June 30, 2014 and December 31, 2013, respectively	-	4,000,000

Equity:
	Preferred Series E stock, $.001 par value; 16,500,000 shares authorized, 13,428,571 and 0 shares issued and outstanding, liquidation preference of $23,500,000 and $0 at June 30, 2014 and December 31, 2013, respectively	13,429	-
	Common stock, $.001 par value; 1,500,000,000 shares authorized, 17,410,220 and 15,794,762 shares issued at June 30, 2014 and December 31, 2013, respectively	17,410	15,794
	Additional paid-in capital	111,566,478	67,417,025
	Accumulated deficit	(90,346,752)	(65,856,053)
	Accumulated other comprehensive loss	(1,402,245)	(715,090)
Total YOU On Demand equity		19,848,320	861,676
Noncontrolling interests		(1,913,268)	(1,397,322)

Total equity		17,935,052	(535,646)

Total liabilities, convertible redeemable preferred stock and equity		$ 26,908,373	$ 14,997,318

SOURCE YOU On Demand Holdings, Inc.

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