x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
|
20-1778374
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
x
|
PART I
|
-
|
FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1.
|
|
3 | |
Item 2.
|
|
23 | |
Item 3
|
|
28 | |
Item 4.
|
|
28 | |
|
|
|
|
PART II
|
-
|
OTHER INFORMATION
|
|
|
|
|
|
Item 1.
|
|
30 | |
Item 1A.
|
|
30 | |
Item 2.
|
|
30 | |
Item 3.
|
|
30 | |
Item 4.
|
|
30 | |
Item 5.
|
|
30 | |
Item 6.
|
|
30 | |
31 |
|
Page
|
Consolidated Balance Sheets
|
4
|
Unaudited Consolidated Statements of Operations
|
5
|
Unaudited Consolidated Statements of Comprehensive Loss
|
6
|
Unaudited Consolidated Statement of Equity
|
7
|
Unaudited Consolidated Statements of Cash Flows
|
8
|
Notes to Unaudited Consolidated Financial Statements
|
9
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(Unaudited)
|
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 4,861,502 | $ | 7,519,574 | ||||
Marketable equity securities, available for sale
|
2,229 | 2,229 | ||||||
Accounts receivable, net
|
393,126 | 399,791 | ||||||
Inventories
|
408,731 | 413,562 | ||||||
Licensed content, current
|
787,335 | 150,325 | ||||||
Prepaid expenses
|
256,075 | 438,712 | ||||||
Loan receivable from related party
|
318,665 | 316,660 | ||||||
Amounts due from shareholders
|
450,135 | 414,743 | ||||||
Amount due from non-controlling interest
|
1,582,655 | 1,572,699 | ||||||
Other current assets
|
392,932 | 340,175 | ||||||
Total current assets
|
9,453,385 | 11,568,470 | ||||||
Property and equipment, net
|
4,555,567 | 5,099,050 | ||||||
Licensed content, noncurrent
|
413,394 | 450,975 | ||||||
Intangible assets, net
|
6,766,384 | 7,149,748 | ||||||
Goodwill
|
6,105,478 | 6,105,478 | ||||||
Investment in unconsolidated entities
|
582,156 | 582,652 | ||||||
Other assets
|
101,633 | 101,031 | ||||||
Total assets
|
$ | 27,977,997 | $ | 31,057,404 | ||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 3,728,420 | $ | 3,298,041 | ||||
Accrued expenses and liabilities
|
1,041,336 | 862,473 | ||||||
Deferred revenue
|
1,944,487 | 1,856,674 | ||||||
Deferred license fees, current
|
173,599 | - | ||||||
Payable to Jinan Parent
|
144,194 | 143,286 | ||||||
Other current liabilities
|
569,560 | 543,163 | ||||||
Contingent purchase consideration liability, current
|
1,324,138 | 1,091,571 | ||||||
Total current liabilities
|
8,925,734 | 7,795,208 | ||||||
Deferred license fees
|
- | 76,670 | ||||||
Contingent purchase consideration liability
|
2,747,016 | 2,267,518 | ||||||
Deferred tax and uncertain tax position liabilities
|
735,178 | 810,616 | ||||||
Total liabilities
|
12,407,928 | 10,950,012 | ||||||
Commitments and Contingencies
|
||||||||
Convertible reedeemable 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, 2012 and December 31, 2011
|
1,261,995 | 1,261,995 | ||||||
Series B - 10,266,825 shares issued and outstanding, liquidation preference of $5,133,400 at March 31, 2012 and December 31, 2011
|
3,950,358 | 3,950,358 | ||||||
Equity:
|
||||||||
Common stock, $.001 par value; 1,500,000,000 shares authorized, 10,468,116 and 10,467,100 issued and outstanding at March 31, 2012 and December 31, 2011, respectively
|
10,468 | 10,467 | ||||||
Additional paid-in capital
|
54,680,928 | 54,505,825 | ||||||
Accumulated deficit
|
(47,924,297 | ) | (43,704,225 | ) | ||||
Accumulated other comprehensive income
|
519,539 | 468,471 | ||||||
Total YOU On Demand equity
|
7,286,638 | 11,280,538 | ||||||
Noncontrolling interests
|
3,071,078 | 3,614,501 | ||||||
Total equity
|
10,357,716 | 14,895,039 | ||||||
Total liabilities and equity
|
$ | 27,977,997 | $ | 31,057,404 |
Three Months Ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Revenue
|
$ | 2,037,579 | $ | 1,697,924 | ||||
Cost of revenue
|
1,792,021 | 1,250,070 | ||||||
Gross profit
|
245,558 | 447,854 | ||||||
Operating expense: | ||||||||
Selling, general and administrative expenses
|
2,746,438 | 1,812,688 | ||||||
Professional fees
|
412,377 | 317,680 | ||||||
Depreciation and amortization
|
1,231,314 | 1,074,327 | ||||||
Total Operating expense | 4,390,129 | 3,204,695 | ||||||
Loss from operations
|
(4,144,571 | ) | (2,756,841 | ) | ||||
Interest & other income / (expense)
|
||||||||
Interest income
|
2,713 | 2,938 | ||||||
Interest expense
|
(1,673 | ) | (555 | ) | ||||
Change in fair value of contingent consideration
|
(712,065 | ) | 38,609 | |||||
Loss on investment in unconsolidated entities
|
(4,192 | ) | (6,798 | ) | ||||
Other
|
(179 | ) | (4 | ) | ||||
Loss before income taxes and noncontrolling interest
|
(4,859,967 | ) | (2,722,651 | ) | ||||
Income tax benefit
|
75,438 | 75,420 | ||||||
Net loss
|
(4,784,529 | ) | (2,647,231 | ) | ||||
Plus: Net loss attributable to noncontrolling interests
|
564,457 | 420,625 | ||||||
Net loss attributable to YOU On Demand shareholders
|
$ | (4,220,072 | ) | $ | (2,226,606 | ) | ||
Net loss per share attributable to YOU On Demand shareholders
|
||||||||
Basic
|
$ | (0.40 | ) | $ | (0.25 | ) | ||
Diluted
|
$ | (0.40 | ) | $ | (0.25 | ) | ||
Weighted average shares outstanding
|
||||||||
Basic
|
10,467,526 | 8,810,843 | ||||||
Diluted
|
10,467,526 | 8,810,843 |
Three Months Ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Net loss
|
$ | (4,784,529 | ) | $ | (2,647,231 | ) | ||
Other comprehensive income (loss):
|
||||||||
Foreign currency translation adjustments
|
51,068 | 7,270 | ||||||
Unrealized losses on available for sale securities
|
- | (2,230 | ) | |||||
Less: Comprehensive loss attributable to non-controlling interest
|
543,423 | 447,674 | ||||||
Comprehensive loss attributable to YOU On Demand shareholders
|
$ | (4,190,038 | ) | $ | (2,194,517 | ) |
Accumulated
|
YOU On
|
|||||||||||||||||||||||||||||||
Additional
|
Other
|
Demand
|
||||||||||||||||||||||||||||||
Common
|
Par
|
Paid-in
|
Accumulated
|
Comprehensive
|
Shareholders'
|
Noncontrolling
|
Total
|
|||||||||||||||||||||||||
Shares
|
Value
|
Capital
|
Deficit
|
Income(loss)
|
(Deficit)/Equity
|
Interest
|
Equity
|
|||||||||||||||||||||||||
Balance December 31, 2011
|
10,467,400 | $ | 10,467 | $ | 54,505,825 | $ | (43,704,225 | ) | $ | 468,471 | $ | 11,280,538 | $ | 3,614,501 | $ | 14,895,039 | ||||||||||||||||
Warrants issued for service
|
- | - | 12,408 | - | - | 12,408 | - | 12,408 | ||||||||||||||||||||||||
Stock option compensation expense
|
- | - | 162,696 | - | - | 162,696 | - | 162,696 | ||||||||||||||||||||||||
Share adjustment for round lot holders in connection with 75-for-1 reverse split
|
716 | 1 | (1 | ) | - | - | - | - | - | |||||||||||||||||||||||
Net loss
|
- | - | - | $ | (4,220,072 | ) | - | (4,220,072 | ) | (564,457 | ) | (4,784,529 | ) | |||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | 51,068 | 51,068 | 21,034 | 72,102 | ||||||||||||||||||||||||
Balance, March 31, 2012
|
10,468,116 | $ | 10,468 | $ | 54,680,928 | $ | (47,924,297 | ) | $ | 519,539 | $ | 7,286,638 | $ | 3,071,078 | $ | 10,357,716 |
Three Months Ended
|
||||||||
March 31,
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Cash flows from operating
|
||||||||
Net loss
|
$ | (4,784,529 | ) | $ | (2,647,231 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||
Stock compensation expense
|
175,104 | 156,042 | ||||||
Depreciation and amortization
|
1,231,314 | 1,065,073 | ||||||
Amortization of licensed content
|
37,581 | - | ||||||
Deferred income tax
|
(75,438 | ) | (75,420 | ) | ||||
Loss on investment in unconsolidated entities
|
4,191 | - | ||||||
Provision for bad debt expense
|
144,877 | - | ||||||
Change in fair value of contingent consideration liability
|
712,065 | (38,609 | ) | |||||
Change in assets and liabilities,
|
||||||||
Accounts receivable
|
(135,666 | ) | (101,524 | ) | ||||
Inventory
|
8,028 | 45,949 | ||||||
Prepaid expenses and other assets
|
129,068 | (6,613 | ) | |||||
Licensed content
|
(637,989 | ) | - | |||||
Accounts payable
|
416,948 | 289,899 | ||||||
Accrued expenses and liabilities
|
208,857 | 246,384 | ||||||
Deferred revenue
|
50,555 | 6,736 | ||||||
Deferred license fee
|
96,592 | - | ||||||
Other current liabilities
|
16,670 | (57,763 | ) | |||||
Net cash used in operating activities
|
(2,401,772 | ) | (1,117,077 | ) | ||||
Cash flows from investing activities:
|
||||||||
Acquisition of property and equipment
|
(162,127 | ) | (553,535 | ) | ||||
Investments in intangibles
|
(103,550 | ) | - | |||||
Loan advances to Shandong Media shareholders
|
(26,479 | ) | (210,230 | ) | ||||
Other
|
- | (156,464 | ) | |||||
Net cash used in investing activities
|
(292,156 | ) | (920,229 | ) | ||||
Cash flows from financing activities
|
||||||||
Capital contribution from Jinan Parent
|
- | 151,759 | ||||||
Net cash provided by financing activities
|
- | 151,759 | ||||||
Effect of exchange rate changes on cash
|
35,856 | (52,951 | ) | |||||
Net decrease in cash and cash equivalents
|
(2,658,072 | ) | (1,938,498 | ) | ||||
Cash and cash equivalents at beginning of period
|
7,519,574 | 6,584,396 | ||||||
Cash and cash equivalents at end of period
|
$ | 4,861,502 | $ | 4,645,898 | ||||
Supplemental Cash Flow Information:
|
||||||||
Cash paid for taxes
|
$ | 325 | $ | - | ||||
Cash paid for interest
|
$ | 1,673 | $ | 555 |
1.
|
Basis of Presentation
|
2.
|
Going Concern and Management’s Plans
|
3.
|
Sinotop Contingent Consideration
|
December 31,
|
March 31,
|
|||||||||||||||
Number of
|
2011
|
Change in
|
2012
|
|||||||||||||
Class of consideration
|
Instruments
|
Fair Value
|
Fair Value
|
Fair Value
|
||||||||||||
Common shares
|
735,822 | $ | 3,147,109 | $ | 658,342 | $ | 3,805,451 | |||||||||
Stock options
|
80,000 | 211,980 | 53,723 | 265,703 | ||||||||||||
Total contingent consideration
|
$ | 3,359,089 | $ | 712,065 | $ | 4,071,154 |
As of March 31,2012
|
||||||||||||||||
Number of
|
Current
|
Noncurrent
|
Total
|
|||||||||||||
Instruments
|
Liability
|
Liability
|
Liability
|
|||||||||||||
Shares July 2012
|
245,274 | $ | 1,243,083 | $ | - | $ | 1,243,083 | |||||||||
Shares July 2013
|
245,274 | - | 1,290,805 | 1,290,805 | ||||||||||||
Shares July 2014
|
245,274 | - | 1,271,563 | 1,271,563 | ||||||||||||
Total Common Shares
|
735,822 | $ | 1,243,083 | $ | 2,562,368 | $ | 3,805,451 | |||||||||
Options July 2012
|
26,667 | $ | 81,055 | $ | - | $ | 81,055 | |||||||||
Options July 2013
|
26,667 | - | 89,772 | 89,772 | ||||||||||||
Options July 2014
|
26,667 | - | 94,876 | 94,876 | ||||||||||||
Total Options
|
80,000 | $ | 81,055 | $ | 184,648 | $ | 265,703 | |||||||||
Total Shares and Options
|
815,822 | $ | 1,324,138 | $ | 2,747,016 | $ | 4,071,154 |
4.
|
Deconsolidation of AdNet
|
5.
|
Shandong Media Joint Venture
|
6.
|
Fair Value Measurements
|
●
|
Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access.
|
●
|
Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.
|
●
|
Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Risk-free interest rate
|
0.538 | % | 0.410 | % | ||||
Expected volatility based on the (High - Low) / (High + Low) method
|
75 | % | 75 | % | ||||
Expected life
|
4 years
|
4 years
|
||||||
Expected dividend yield
|
0 | % | 0 | % |
|
March 31, 2012
|
|
|
|
|
|||||||||||
|
Fair Value Measurements
(Unaudited)
|
|
|
|
|
|||||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total Fair
Value
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale securities
|
|
$
|
2,229
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,229
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent purchase consideration (see Note 3)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,071,154
|
|
|
$
|
4,071,154
|
|
|
December 31, 2011
|
|
|
|
|
|
||||||||||
|
Fair Value Measurements
|
|
|
|
|
|
||||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total Fair
Value
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale securities
|
|
$
|
2,229
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,229
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent purchase consideration (see Note 3)
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3,359,089
|
|
|
$
|
3,359,089
|
|
7.
|
Related Party Transactions
|
8.
|
Property and Equipment
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Furniture and office equipment
|
$ | 3,342,000 | $ | 2,088,000 | ||||
Headend facilities and machinery
|
15,863,000 | 16,724,000 | ||||||
Leasehold improvements
|
167,000 | 310,000 | ||||||
Vehicles
|
67,000 | 30,000 | ||||||
Total property and equipment
|
19,439,000 | 19,152,000 | ||||||
Less: accumulated depreciation
|
(14,884,000 | ) | (14,053,000 | ) | ||||
Net carrying value
|
$ | 4,555,000 | $ | 5,099,000 |
9.
|
Goodwill and Intangible Assets
|
Balance at
|
Foreign
|
Balance at
|
||||||||||||||||||||||
December 31,
|
Amortization
|
Impairment
|
Currency
|
March 31,
|
||||||||||||||||||||
2011
|
Additions
|
Expense
|
Charge
|
Transl Adj
|
2012
|
|||||||||||||||||||
|
|
|
|
|
(unaudited)
|
|||||||||||||||||||
Amortized intangible assets:
|
||||||||||||||||||||||||
Service agreement
|
$ | 1,310,892 | $ | - | $ | (21,490 | ) | $ | - | $ | - | $ | 1,289,402 | |||||||||||
Publication rights
|
400,953 | - | (6,075 | ) | - | - | 394,878 | |||||||||||||||||
Customer relationships
|
76,579 | - | (2,945 | ) | - | - | 73,634 | |||||||||||||||||
Operating permits
|
600,147 | - | (9,093 | ) | - | - | 591,054 | |||||||||||||||||
Charter / Cooperation agreements
|
2,560,616 | - | (34,448 | ) | - | - | 2,526,168 | |||||||||||||||||
Noncompete agreement
|
1,576,256 | - | (363,751 | ) | - | - | 1,212,505 | |||||||||||||||||
Software and licenses
|
240,015 | 3,456 | (19,676 | ) | - | 331 | 224,126 | |||||||||||||||||
Website development
|
250,000 | 100,000 | (29,212 | ) | - | 45 | 320,833 | |||||||||||||||||
Total amortized intangible assets
|
$ | 7,015,458 | $ | 103,456 | $ | (486,690 | ) | $ | - | $ | 376 | $ | 6,632,600 | |||||||||||
Unamortized intangible assets:
|
||||||||||||||||||||||||
Website name
|
134,290 | 134,290 | ||||||||||||||||||||||
Goodwill
|
6,105,478 | - | - | - | - | 6,105,478 | ||||||||||||||||||
Total unamortized intangible assets
|
$ | 6,239,768 | $ | - | $ | - | $ | - | $ | - | $ | 6,239,768 |
Jinan
|
Shandong
|
Sinotop
|
||||||||||||||||||
Years ending December 31,
|
Broadband
|
Media
|
Hong Kong
|
Sinotop
|
Total
|
|||||||||||||||
2012 (nine months)
|
$ | 64,470 | $ | 56,841 | $ | 1,194,597 | $ | 160,708 | $ | 1,476,616 | ||||||||||
2013
|
85,961 | 74,955 | 259,041 | 178,630 | 598,587 | |||||||||||||||
2014
|
85,961 | 72,454 | 137,791 | 155,764 | 451,970 | |||||||||||||||
2015
|
85,961 | 72,454 | 137,791 | 28,326 | 324,532 | |||||||||||||||
2016
|
85,961 | 72,454 | 137,791 | 16,524 | 312,730 | |||||||||||||||
Thereafter
|
881,095 | 715,408 | 1,871,662 | - | 3,468,165 | |||||||||||||||
Total amortization to be recognized
|
$ | 1,289,409 | $ | 1,064,566 | $ | 3,738,673 | $ | 539,952 | $ | 6,632,600 |
10.
|
Accrued Expenses and Liabilities
|
March 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
|
|||||||
Accrued expenses and liabilities
|
$ | 996,000 | $ | 613,000 | ||||
Accrued payroll
|
45,000 | 249,000 | ||||||
$ | 1,041,000 | $ | 862,000 |
11.
|
Private Financings, June 2011
|
12.
|
Net Loss Per Common Share
|
March 31,
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Warrants
|
361,912 | 151,912 | ||||||
Stock purchase right
|
75,000 | - | ||||||
Options
|
1,579,634 | 1,280,233 | ||||||
Series A Preferred Stock
|
933,333 | 933,333 | ||||||
Series B Preferred Stock
|
1,368,907 | 1,368,907 | ||||||
Total
|
4,318,786 | 3,734,386 |
13.
|
Content Accounting
|
14.
|
Warner Bros. License Agreement
|
15.
|
Share-Based Payments
|
March 31,
|
March 31,
|
|||||||
2012
|
2011
|
|||||||
(unaudited)
|
(unaudited)
|
|||||||
Stock option amortization
|
$ | 163,000 | $ | 146,000 | ||||
Stock issued for services
|
- | 10,000 | ||||||
Stock warrants issued for service
|
12,000 | - | ||||||
$ | 175,000 | $ | 156,000 |
March 31, 2012
|
||||||||||||
Weighted
|
Aggregate
|
|||||||||||
Average
|
Intrinsic
|
|||||||||||
Shares
|
Exercise Price
|
Value
|
||||||||||
Options outstanding at beginning of year
|
1,386,234 | $ | 3.32 | $ | 3,203,967 | |||||||
Granted
|
193,400 | 4.91 | 175,813 | |||||||||
Exercised
|
- | - | - | |||||||||
Cancelled/expired
|
- | 3.00 | (32,667 | ) | ||||||||
Options outstanding at end of period
|
1,579,634 | $ | 3.48 | $ | 3,347,113 | |||||||
Options exercisable at end of period
|
805,386 | $ | 3.27 | $ | 1,946,492 | |||||||
Options available for issuance
|
2,420,366 |
March 31,
|
December 31,
|
||||||||||||
2012
|
2011
|
||||||||||||
(unaudited)
|
|
||||||||||||
Number of
|
Number of
|
||||||||||||
Warrants
|
Warrants
|
Exercise
|
Expiration
|
||||||||||
Warants Outstanding
|
Outstanding
|
Outstanding
|
Price
|
Date
|
|||||||||
Share Exchange Consulting Warrants ($45.00 exercise price)
|
59,664 | 59,664 | $ | 45.00 |
1/11/2013
|
||||||||
2007 Private Placement Broker Warrants ($45.00 exercise price)
|
8,533 | 8,533 | $ | 45.00 |
1/11/2013
|
||||||||
2007 Private Placement Investor Warrants ($150.00 exercise price)
|
53,333 | 53,333 | $ | 150.00 |
1/11/2013
|
||||||||
July 2010 Sinotop Acquisition Warrants ($45.00 exercise price)
|
17,049 | 17,049 | $ | 45.00 |
1/11/2013
|
||||||||
July 2010 Sinotop Acquisition Warrants ($150.00 exercise price)
|
13,333 | 13,333 | $ | 150.00 |
1/11/2013
|
||||||||
May 2011 Warner Brothers Warrants ($6.60 excercise price)
|
200,000 | 200,000 | $ | 6.60 |
5/11/2016
|
||||||||
June 2011 Fidelity Right to Purchase ($6.60 exercise price)
|
75,000 | 75,000 | $ | 6.60 |
6/3/2012
|
||||||||
2011 Service Agreement Warrants ($7.20 exercise price)
|
10,000 | 6,667 | $ | 7.20 |
6/15/2016
|
||||||||
436,912 | 433,579 |
16.
|
Income Taxes
|
Jinan
|
Shandong
|
Sinotop
|
Zhong Hai
|
YOD
|
Total
|
|||||||||||||||||||||||
Expiring
|
Broadband
|
Media
|
Hong Kong
|
Video
|
WFOE
|
Other
|
Foreign
|
|||||||||||||||||||||
2012
|
$ | - | $ | - | $ | - | $ | - | $ | 55,726 | $ | - | $ | 55,726 | ||||||||||||||
2013
|
- | 14,659 | - | - | 41,560 | - | 56,219 | |||||||||||||||||||||
2014
|
- | 92,581 | - | - | 35,013 | - | 127,594 | |||||||||||||||||||||
2015
|
- | 465,215 | 322,921 | 385,417 | 18,460 | - | 1,192,013 | |||||||||||||||||||||
2016
|
76,654 | 339,218 | 417,358 | 1,799,062 | 994 | 395,314 | 3,028,600 | |||||||||||||||||||||
2017
|
78,312 | 226,191 | 85,048 | 185,025 | 965 | 711,739 | 1,287,280 | |||||||||||||||||||||
Total
|
$ | 154,966 | $ | 1,137,864 | $ | 825,327 | $ | 2,369,504 | $ | 152,718 | $ | 1,107,053 | $ | 5,747,432 |
17.
|
Commitments and Contingencies
|
Years ending December 31,
|
Leased
Property
Costs
|
|||
2012 (nine months)
|
$ | 281,974 | ||
2013
|
$ | 337,777 | ||
2014
|
$ | 56,976 | ||
2015
|
$ | 18,992 |
Years ending December 31,
|
Product
Related
Costs
|
|||
2012 (nine months)
|
$ | 349,819 | ||
2013
|
$ | 978,389 | ||
2014
|
$ | 1,514,778 | ||
2015
|
$ | 926,778 |
18.
|
Defined Contribution Plan
|
19.
|
Subsequent Events
|
●
|
Growth in the Chinese Economy
. We operate in China and derive almost all of our revenues from sales to customers in China. Economic conditions in China, therefore, affect virtually all aspects of our operations, including the demand for our products, the availability and prices of our raw materials and our other expenses. China has experienced significant economic growth, achieving an average annual growth rate of approximately 10% in gross domestic product from 1996 through 2011. China is expected to experience continued growth in all areas of investment and consumption, even in the face of a global economic recession. However, China has not been entirely immune to the global economic slowdown and is experiencing a slowing of its growth rate.
|
●
|
PRC Economic Stimulus Plans
.
The PRC government has issued a policy entitled “C
entral Government Policy
On Stimulating Domestic Consumption To Counter The Damage Result From Export Business Of The Country
,” pursuant to which the PRC Central Government is dedicating approximately $580 billion to stimulate domestic consumption. Companies that are either directly or indirectly related to construction, and to the manufacture and sale of building materials, electrical household appliances and telecommunication equipment, are expected to benefit. We could potentially benefit if the stimulus plan injects funds into cable infrastructure allowing access to our PPV network.
|
●
|
Deployment of Value-added Services
. To augment our product offerings and create other revenue sources, we work with strategic partners to deploy value-added services to our cable customers. Value-added services, including but not limited to the synergies created by the additions of our new assets, will become a focus of revenue generation for our company. No assurance can be made that we will add other value-added services, or if added, that they will succeed.
|
Three Months Ended
|
|
|
||||||||||||||
March 31,
|
March 31,
|
Amount
|
%
|
|||||||||||||
2012
|
2011
|
Change
|
Change
|
|||||||||||||
Revenue
|
$ | 2,038,000 | $ | 1,698,000 | $ | 340,000 | 20 | % | ||||||||
Cost of revenue
|
1,792,000 | 1,250,000 | 542,000 | 43 | % | |||||||||||
Gross profit
|
246,000 | 448,000 | (202,000 | ) | -45 | % | ||||||||||
Operating expense: | ||||||||||||||||
Selling, general and administrative expenses
|
2,747,000 | 1,813,000 | 934,000 | 52 | % | |||||||||||
Professional fees
|
412,000 | 318,000 | 94,000 | 30 | % | |||||||||||
Depreciation and amortization
|
1,231,000 | 1,074,000 | 157,000 | 15 | % | |||||||||||
Total operating expense | 4,390,000 | 3,205,000 | 1,185,000 | 37 | % | |||||||||||
Loss from operations
|
(4,144,000 | ) | (2,757,000 | ) | (1,387,000 | ) | 50 | % | ||||||||
Interest & other income / (expense)
|
||||||||||||||||
Interest income
|
3,000 | 3,000 | - | 0 | % | |||||||||||
Interest expense
|
(2,000 | ) | (1,000 | ) | (1,000 | ) | 100 | % | ||||||||
Change in fair value of contingent consideration
|
(712,000 | ) | 39,000 | (751,000 | ) | -1926 | % | |||||||||
Loss on investment in unconsolidated entities
|
(4,000 | ) | (7,000 | ) | 3,000 | - | ||||||||||
Loss before income taxes and noncontrolling interests
|
(4,859,000 | ) | (2,723,000 | ) | (2,136,000 | ) | 78 | % | ||||||||
Income tax benefit
|
75,000 | 75,000 | - | 0 | % | |||||||||||
Net loss
|
(4,784,000 | ) | (2,648,000 | ) | (2,136,000 | ) | 81 | % | ||||||||
Net loss attributable to noncontrolling interests
|
564,000 | 421,000 | 143,000 | 34 | % | |||||||||||
Net loss attributable to YOU On Demand shareholders
|
(4,220,000 | ) | (2,227,000 | ) | (1,993,000 | ) | 89 | % |
Three Months Ended
|
||||||||
March 31,
|
March, 31,
|
|||||||
2012
|
2011
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Net cash used in operating activities
|
$ | (2,402,000 | ) | $ | (1,117,000 | ) | ||
Net cash used in investing activities
|
(292,000 | ) | (920,000 | ) | ||||
Net cash provided by financing activities
|
- | 152,000 | ||||||
Effect of exchange rate changes on cash
|
36,000 | (53,000 | ) | |||||
Net decrease in cash and cash equivalents
|
(2,658,000 | ) | (1,938,000 | ) | ||||
Cash and cash equivalents at beginning of period
|
7,520,000 | 6,584,000 | ||||||
Cash and cash equivalents at end of period
|
4,862,000 | 4,646,000 |
10.1 |
Convertible Promissory Note in $3,000,000 principal amount issued to Shane McMahon.
|
31.1 |
Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302.
|
31.2 |
Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302.
|
32.1 |
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
32.2 |
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
101.INS
|
Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
YOU ON DEMAND HOLDINGS, INC
|
||
By:
|
/s/ Marc Urbach
|
|
Name: Marc Urbach
|
||
Title: President and Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer)
|
Exhibit No.
|
Description
|
10.1 |
Convertible Promissory Note in $3,000,000 principal amount issued to Shane McMahon.
|
31.1 |
Certification by Chief Executive Officer pursuant to Sarbanes Oxley Section 302.
|
31.2 |
Certification by Chief Financial Officer pursuant to Sarbanes Oxley Section 302.
|
32.1 |
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
32.2 |
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
101.INS
|
Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
May 10, 2012 | Original Principal Amount: $3,000,000.00 |
If to the Company:
|
||
YOU On Demand Holdings, Inc.
|
||
27 Union Square West, Suite 502
|
||
New York, New York 10003
|
||
Tel: 212-206-1216
|
||
Attention: Marc Urbach
|
||
E-Mail: marc@yod.com
|
||
with a copy to:
|
||
Pillsbury Winthrop Shaw Pittman, LLP
|
||
2300 N Street, N.W.
|
||
Washington, DC 20037
|
||
Attention: Louis A. Bevilacqua
|
||
E-Mail: louis.bevilacqua@pillsburylaw.com
|
||
If to the Payee:
|
||
Shane McMahon
|
||
295 Greenwich St.
|
||
Apt. 301
|
||
New York, New York 10007
|
||
with a copy to:
|
||
K&L Gates LLP
|
||
599 Lexington Avenue
|
||
New York, NY 10022
|
||
Attention: John D. Vaughan
|
||
E-Mail: jack.vaughan@klgates.com
|
YOU ON DEMAND HOLDINGS, INC.
|
||||
|
By: |
|
||
Name: Marc Urbach | ||||
Title: President and Chief Financial Officer | ||||
May 15, 2012
|
/s/ Shane McMahon
|
|
Shane McMahon
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
May 15, 2012
|
/s/ Marc Urbach
|
|
Marc Urbach
|
||
President and Chief Financial Officer
|
||
(Principal Accounting Officer and Principal Financial Officer)
|
May 15, 2012
|
/s/ Shane McMahon
|
|
Shane McMahon
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
May 15, 2012
|
/s/ Marc Urbach
|
|
Marc Urbach
|
||
President and Chief Financial Officer
|
||
(Principal Accounting Officer and Principal Financial Officer)
|