YOU On Demand, a multi-platform entertainment and VoD company in China, has released its unaudited operating results for the three-month period ended September 30th 2013.
On November 5th, the company announced that C Media Limited, a China-based mobile video service provider, raised its aggregate strategic investment in YOU On Demand to $6 million, with an additional $2 million Convertible Bridge Note financing. In addition, C Media and YOU On Demand jointly agreed to extend C Media’s Phase 2 investment deadline – for up to $10 million of additional capital – to December 4th, 2013. As previously disclosed in early July, C Media had made an initial $4 million investment in YOU On Demand.
In addition and also subsequent to quarter-end, the Company forged a mobile distribution agreement with Huawei, a global information and communications technology (ICT) solutions provider and the third largest global smartphone manufacturer. Per the agreement, Huawei is offering its mobile customers feature films through YOU On Demand’s newly launched mobile application (App), YOU Cinema. The YOU Cinema App is now coming pre-loaded on Huawei Mate smartphones featuring various titles from YOU On Demand’s content partners, including Paramount Pictures.
Shane McMahon, Chairman of YOU On Demand, commented, “C Media’s strategic investment, in multiple tranches, as well as our new mobile content distribution agreement with Huawei via the YOU Cinema App, are milestones for our organisation. Partnering with these two respected China-based organizations provides us with the requisite resources to continue YOU On Demand’s rapid expansion, awareness and brand recognition across multiple distribution platforms, especially in the mobile space. We also plan to deploy a portion of C Media’s investment in further diversifying our array of entertainment content and continue building YOU On Demand’s multi-platform brand.”
Revenue for the quarter amounted to $0.1 million, while total operating expenses declined approximately 35 per cent to $2 million. This lower cost base helped lead to a more than 30 per cent reduction in the Company’s operating loss, to $2.6 million in Q3. A one-time $5.6 million gain on the sale of YOD’s non-core Jinan Broadband assets resulted in net income of $3.0 million, or diluted EPS of $0.14 per share – based on 15.6 million weighted average shares outstanding at quarter-end.
The cash and cash equivalents balance was $1.2 million, but this does not reflect the additional $2 million infusion from C Media on November 5th, nor the remaining cash balance payment received from the sale of the legacy Jinan Broadband assets on November 1st.