UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended:December 31, 2012
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File No. 001-35561
YOU ON DEMAND HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada | 20-1778374 |
(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) |
organization) |
27 Union Square, West Suite 502 | ||
New York, New York 10003 | ||
(Address of principal executive offices) | ||
(212) 206-1216 | ||
(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered |
Common Stock, par value $0.001 per share | Nasdaq Capital Market |
Securities registered pursuant to Section 12(g) of the Exchange Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer [ ] | Accelerated Filer [ ] |
Non-Accelerated Filer [ ] (Do not check if a smaller reporting company) | Smaller reporting company [X] |
Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes [ ] No [X]
As of June 30, 2012 (the last business day of the registrant’s most recently completed second fiscal quarter), the aggregate market value of the shares of the registrant’s common stock held by non-affiliates (based upon the closing price of such shares as reported by Nasdaq) was approximately $ 33,970,755. Shares of the registrant’s common stock held by each executive officer and director and each by each person who owns 10% or more of the outstanding common stock have been excluded from the calculation in that such persons may be deemed to be affiliates of the registrant. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
There were a total of 14,819,691 shares of the registrant’s common stock outstanding as of March 31, 2013.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
YOU On Demand Holdings, Inc. (the “Company”) is filing this Amendment No.1 (the “Amendment”) to the Annual Report on Form 10-K/A for the fiscal year ended December 31, 2012 which was originally filed with the Securities and Exchange Commission on April 8, 2013 (the “Original 10-K”) to include the signature corresponding with the Report of Independent Registered Public Accounting Firm which appeared on page F-1 of the Original 10-K. The signature of the auditor was inadvertently omitted from the Original 10-K.
Except for Item 8 - Financial Statements And Supplementary Data, no other Parts or disclosures from the Original 10-K are included in this Amendment, and except as required to reflect the matters set forth in such included disclosure, this Amendment does not reflect events or developments that have occurred after the date of the Original 10-K and does not modify or update disclosures presented in the Original 10-K in any way.
Among other things, forward-looking statements made in the Original 10-K have not been revised to reflect events, results, or developments that have occurred or facts that have become known to us after the date of the Original 10-K (other than as discussed above), and such forward-looking statements should be read in their historical context. Accordingly, this Amendment should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the Original 10-K.
New certifications of our principal executive and financial officers are included as exhibits to this Amendment.
On February 5, 2014, the Company also filed a Current Report on Form 8-K to update operating results for all periods covered in the Original 10-K and in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, in order to reflect the application of the requirements of Accounting Standards Codification ("ASC") 205-20, Presentation of Financial Statements - Discontinued Operations. The Form 8-K filed on February 5, 2014 is not due to any error in prior filings. Instead, as part of the Company's most recent private placement transaction completed on January 31, 2014, it was obligated to file a registration statement to register the shares issued in this situation, which required the Company to make such update in the Form 8-K. As a result, the Company was required to reflect the retrospective reclassification of its discontinued operations in its previously issued financial statements as those financial statements were incorporated by reference in the registration statement, even though those financial statements relate to periods prior to the issuance of such shares.
1
PART II | |
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
The full text of our audited consolidated financial statements as of December 31, 2012 and 2011 begins on page F-1 of this annual report. | |
PART IV | |
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES. |
Exhibit List | |
The list of exhibits in the Exhibit Index to this Report is incorporated herein by reference. |
2
SIGNATURES
In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this Report on Form 10-K/A to be signed on its behalf by the undersigned, thereto duly authorized individual.
Date: February 26, 2014
YOU ON DEMAND HOLDINGS, INC. | ||
By: | /s/ Shane McMahon | |
Shane McMahon | ||
Chairman | ||
By: | /s/ Marc Urbach | |
Marc Urbach | ||
President and Chief Financial Officer |
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Shane McMahon and Marc Urbach, jointly and severally, as his attorney-in-fact, each with the power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature | Title | |
/s/ Shane McMahon | ||
Shane McMahon | Chairman of the Board | |
(Principle Executive Officer) | ||
/s/ Weicheng Liu | ||
Weicheng Liu | Chief Executive Officer and Director | |
/s/ Marc Urbach | ||
Marc Urbach | President and Chief Financial Officer | |
(Principle Financial and Accounting Officer) | ||
/s/ Xuesong Song | ||
Xuesong Song | Director and Executive Chairman | |
/s/ James Cassano | ||
James Cassano | Director | |
/s/ Jin Shi | ||
Jin Shi | Director | |
/s/ Arthur Wong | ||
Arthur Wong | Director | |
/s/ Clifford Higgerson | ||
Clifford Higgerson | Director |
Page | |
Report of Independent Registered Public Accounting Firm | F-1 |
Consolidated Financial Statements: | |
Balance Sheets as of December 31, 2012 and 2011 | F-2 |
Statements of Operations for the years ended December 31, 2012 and 2011 | F-3 |
Statements of Comprehensive Loss for the years ended December 31, 2012 and 2011 | F-4 |
Statements of Equity for the years ended December 31, 2012 and 2011 | F-5 |
Statements of Cash Flows for the years ended December 31, 2012 and 2011 | F-6 |
Notes to Consolidated Financial Statements | F-7 |
New York, New York
2012 | 2011 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,381,043 | $ | 7,519,574 | ||||
Marketable equity securities, available for sale | 2,229 | 2,229 | ||||||
Accounts receivable, net | 382 | 399,791 | ||||||
Inventories, net | 384,088 | 413,562 | ||||||
Licensed content, current | 681,457 | 150,325 | ||||||
Prepaid expenses | 423,779 | 438,712 | ||||||
Loan receivable from related party | - | 316,660 | ||||||
Amounts due from shareholders | - | 414,743 | ||||||
Amount due from non-controlling interest | - | 1,572,699 | ||||||
Other current assets | 135,606 | 340,175 | ||||||
Total current assets | 6,008,584 | 11,568,470 | ||||||
Property and equipment, net | 4,098,594 | 5,099,050 | ||||||
Licensed content, noncurrent | 530,367 | 450,975 | ||||||
Intangible assets, net | 5,059,188 | 7,149,748 | ||||||
Goodwill | 6,105,478 | 6,105,478 | ||||||
Investment in unconsolidated entities | 655,834 | 582,652 | ||||||
Other assets | - | 101,031 | ||||||
Total assets | $ | 22,458,045 | $ | 31,057,404 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,130,507 | $ | 3,298,041 | ||||
Accrued expenses and liabilities | 2,456,542 | 862,473 | ||||||
Deferred revenue | 2,091,788 | 1,856,674 | ||||||
Payable to Jinan Parent | 144,592 | 143,286 | ||||||
Other current liabilities | 920,888 | 543,163 | ||||||
Contingent purchase price consideration liability, current | 368,628 | 1,091,571 | ||||||
Convertible promissory note | 3,000,000 | - | ||||||
Warrant liabilities | 878,380 | - | ||||||
Total current liabilities | 11,991,325 | 7,795,208 | ||||||
Other long-term payable | - | 76,670 | ||||||
Deferred license fees, noncurrent | 460,547 | - | ||||||
Contingent purchase price consideration liability | 368,628 | 2,267,518 | ||||||
Deferred tax and uncertain tax position liabilities | 305,849 | 810,616 | ||||||
Total liabilities | 13,126,349 | 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 December 31, 2012 and 2011, respectively | 1,261,995 | 1,261,995 | ||||||
Series B - 7,866,800 and 10,266,825 shares issued and outstanding, liquidation preference of $3,933,400 and $5,133,400 at December 31, 2012 and 2011, respectively | 3,223,575 | 3,950,358 | ||||||
Series C - 250,000 and 0 shares issued and outstanding, liquidation preference of $1,000,000 and $0 at December 31, 2012 and 2011, respectively | 627,868 | - | ||||||
Equity: | ||||||||
Common stock, $.001 par value; 1,500,000,000 shares authorized, 13,742,394 and 10,467,400 issued at December 31, 2012 and 2011, respectively | 13,742 | 10,467 | ||||||
Additional paid-in capital | 62,388,502 | 54,505,825 | ||||||
Accumulated deficit | (58,841,664 | ) | (43,704,225 | ) | ||||
Accumulated other comprehensive income | 604,632 | 468,471 | ||||||
Total YOU On Demand equity | 4,165,212 | 11,280,538 | ||||||
Noncontrolling interests | 53,046 | 3,614,501 | ||||||
Total equity | 4,218,258 | 14,895,039 | ||||||
Total liabilities and equity | $ | 22,458,045 | $ | 31,057,404 |
2012 | 2011 | |||||||
Revenue | $ | 6,873,230 | $ | 7,868,175 | ||||
Cost of revenue | 7,083,517 | 5,525,625 | ||||||
Gross (loss) profit | (210,287 | ) | 2,342,550 | |||||
Operating expense: | ||||||||
Selling, general and administrative expenses | 10,811,548 | 8,801,085 | ||||||
Professional fees | 1,344,653 | 2,114,942 | ||||||
Depreciation and amortization | 4,082,936 | 4,423,760 | ||||||
Impairment of long-lived assets | 840,000 | 244,861 | ||||||
Total operating expense | 17,079,137 | 15,584,648 | ||||||
Loss from operations | (17,289,424 | ) | (13,242,098 | ) | ||||
Interest & other income / (expense) | ||||||||
Interest income | 8,636 | 10,574 | ||||||
Interest expense | (78,953 | ) | (1,764 | ) | ||||
Stock purchase right | (43,748 | ) | (194,321 | ) | ||||
Cost of reset provision | (658,719 | ) | - | |||||
Change in fair value of warrant liabilities and modification to certain warrants | 647,302 | - | ||||||
Change in fair value of contingent consideration | 1,313,443 | 3,016 | ||||||
Gain (loss) on investment in unconsolidated entities | 67,675 | (14,371 | ) | |||||
Loss on investment write-off | (95,350 | ) | - | |||||
Loss on write-off of uncollectible loans | (513,427 | ) | - | |||||
Gain on deconsolidation of Shandong Media | 141,814 | - | ||||||
Gain on disposal of AdNet | - | 470,041 | ||||||
Other | (139,739 | ) | (42,849 | ) | ||||
Net loss before income taxes and noncontrolling interest | (16,640,490 | ) | (13,011,772 | ) | ||||
Income tax benefit | 353,085 | 369,707 | ||||||
Net loss | (16,287,405 | ) | (12,642,065 | ) | ||||
Plus: Net loss attributable to noncontrolling interests | 2,074,098 | 1,372,164 | ||||||
Net loss attributable to YOU On Demand shareholders | $ | (14,213,307 | ) | $ | (11,269,901 | ) | ||
Deemed dividends on preferred stock | (924,132 | ) | - | |||||
Net loss attributable to YOU on Demand common shareholders | $ | (15,137,439 | ) | $ | (11,269,901 | ) | ||
Net loss per share | ||||||||
Basic | $ | (1.36 | ) | $ | (1.15 | ) | ||
Diluted | $ | (1.36 | ) | $ | (1.15 | ) | ||
Weighted average shares outstanding | ||||||||
Basic | 11,099,746 | 9,759,430 | ||||||
Diluted | 11,099,746 | 9,759,430 |
2012 | 2011 | |||||||
Net loss | $ | (16,287,405 | ) | $ | (12,642,065 | ) | ||
Other comprehensive (loss) income: | ||||||||
Foreign currency translation adjustments | 136,161 | 379,472 | ||||||
Unrealized losses on available for sale securities | - | (7,204 | ) | |||||
Less: Comprehensive loss attributable to non-controlling interest | 1,969,294 | 1,221,384 | ||||||
Comprehensive loss attributable to YOU On Demand shareholders | $ | (14,181,950 | ) | $ | (11,048,413 | ) |
Accumulated | YOU On | |||||||||||||||||||||||||||||||
Additional | Other | Demand | ||||||||||||||||||||||||||||||
Common | Par | Paid-in | Accumulated | Comprehensive | Shareholders' | Noncontrolling | Total | |||||||||||||||||||||||||
Shares | Value | Capital | Deficit | Income | Equity | Interest | Equity | |||||||||||||||||||||||||
Balance January 1, 2011 | 8,810,250 | $ | 8,810 | $ | 42,907,048 | $ | (32,434,324 | ) | $ | 246,983 | $ | 10,728,517 | $ | 4,684,126 | $ | 15,412,643 | ||||||||||||||||
Common shares issued for services | 2,667 | 3 | 9,997 | - | - | 10,000 | - | 10,000 | ||||||||||||||||||||||||
Warrants issued for service | - | - | 24,816 | - | - | 24,816 | - | 24,816 | ||||||||||||||||||||||||
Stock option compensation expense | - | - | 599,196 | - | - | 599,196 | - | 599,196 | ||||||||||||||||||||||||
Stock purchase right | - | - | 194,321 | - | - | 194,321 | - | 194,321 | ||||||||||||||||||||||||
Stock warrants issued pursuant to licensed content | - | - | 676,462 | - | - | 676,462 | - | 676,462 | ||||||||||||||||||||||||
Common shares issued for cash | 1,654,213 | 1,654 | 10,916,152 | - | - | 10,917,806 | - | 10,917,806 | ||||||||||||||||||||||||
Issuance costs related to the issuance of common shares | - | - | (822,167 | ) | - | - | (822,167 | ) | - | (822,167 | ) | |||||||||||||||||||||
Contribution from noncontrolling interest | - | - | - | - | - | - | 151,759 | 151,759 | ||||||||||||||||||||||||
Share adjustment for round lot holders in connection with 75-for-1 reverse split | 270 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Net loss attributable to YOU On Demand shareholders | - | - | - | (11,269,901 | ) | - | (11,269,901 | ) | (1,372,164 | ) | (12,642,065 | ) | ||||||||||||||||||||
Foreign currency translation adjustments | �� | - | - | - | - | 228,692 | 228,692 | 150,780 | 379,472 | |||||||||||||||||||||||
Unrealized losses on marketable securities | - | - | - | - | (7,204 | ) | (7,204 | ) | - | (7,204 | ) | |||||||||||||||||||||
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 services | - | - | 38,604 | - | - | 38,604 | - | 38,604 | ||||||||||||||||||||||||
Common shares issued for services | 181,617 | 182 | 571,682 | - | - | 571,864 | - | 571,864 | ||||||||||||||||||||||||
Stock option compensation expense | - | - | 766,149 | - | - | 766,149 | - | 766,149 | ||||||||||||||||||||||||
Stock purchase right | - | - | 43,748 | - | - | 43,748 | - | 43,748 | ||||||||||||||||||||||||
Conversion of Series B preferred shares into common | 320,000 | 320 | 726,463 | - | - | 726,783 | - | 726,783 | ||||||||||||||||||||||||
Common shares and options issued for Sinotop acquisition earnout | 245,274 | 245 | 1,308,145 | - | - | 1,308,390 | - | 1,308,390 | ||||||||||||||||||||||||
Common shares and warrants issued for cash in connection with August 2012 private placement | 646,250 | 646 | 2,287,895 | - | - | 2,288,541 | - | 2,288,541 | ||||||||||||||||||||||||
Issuance costs in connection with August 2012 private placement | 80,813 | 81 | (633,746 | ) | - | - | (633,665 | ) | - | (633,665 | ) | |||||||||||||||||||||
Common shares issued for cash in connection with December 2012 retail financing | 1,800,000 | 1,800 | 2,698,200 | - | - | 2,700,000 | - | 2,700,000 | ||||||||||||||||||||||||
Issuance costs in connection with December 2012 retail financing | - | - | (506,262 | ) | - | - | (506,262 | ) | - | (506,262 | ) | |||||||||||||||||||||
Beneficial conversion feature due to modification of Series C preferred stock | - | - | 581,800 | - | - | 581,800 | - | 581,800 | ||||||||||||||||||||||||
Deconsolidation of Shandong Media | - | - | - | - | - | - | (497,383 | ) | (497,383 | ) | ||||||||||||||||||||||
Reduction of registered capital for Zhong Hai Video | - | - | - | - | - | - | (1,094,778 | ) | (1,094,778 | ) | ||||||||||||||||||||||
Issuance of shares in connection with exercise of options | 324 | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Share adjustment for round lot holders in connection with 75-for-1 reverse split | 716 | 1 | (1 | ) | - | - | - | - | - | |||||||||||||||||||||||
Net loss | - | - | - | $ | (15,137,439 | ) | - | (15,137,439 | ) | (2,074,098 | ) | (17,211,537 | ) | |||||||||||||||||||
Foreign currency translation adjustments | - | - | - | - | 136,161 | 136,161 | 104,804 | 240,965 | ||||||||||||||||||||||||
Balance, December 31, 2012 | 13,742,394 | $ | 13,742 | $ | 62,388,502 | $ | (58,841,664 | ) | $ | 604,632 | $ | 4,165,212 | $ | 53,046 | $ | 4,218,258 |
2012 | 2011 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (16,287,405 | ) | $ | (12,642,065 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Stock compensation expense | 1,376,617 | 634,012 | ||||||
Depreciation and amortization | 4,082,936 | 4,423,760 | ||||||
Amortization of licensed content | 150,324 | 75,162 | ||||||
Deferred income tax | (353,085 | ) | (369,707 | ) | ||||
(Gain) loss on investment in unconsolidated entities | (67,675 | ) | 14,371 | |||||
Loss on investment write-off | 47,675 | - | ||||||
Provision for bad debt expense | 163,076 | 52,429 | ||||||
Change in fair value of warrant liabilities | (647,302 | ) | - | |||||
Change in fair value of contingent purchase price consideration liability | (1,313,443 | ) | (3,016 | ) | ||||
Value of right to purchase shares | 43,748 | 194,321 | ||||||
Cost of reset provision | 658,719 | - | ||||||
Gain on deconsolidation of Shandong Media, net of cash | (334,589 | ) | - | |||||
Impairment charge for Jinan Broadband equipment | 840,000 | - | ||||||
Impairment charge for Sinotop equipment | - | 32,681 | ||||||
Impairment charge to AdNet assets, net of cash | - | 209,497 | ||||||
Gain on deconsolidation of AdNet | - | (470,041 | ) | |||||
Loss on uncollectible shareholder loan and related party loan | 473,698 | - | ||||||
Loss on uncollectible loan to Shanghai Tianduo | 39,729 | - | ||||||
Other | 7,996 | - | ||||||
Change in assets and liabilities, | ||||||||
Accounts receivable | (182,094 | ) | (207,358 | ) | ||||
Inventory | 34,093 | 33,990 | ||||||
Licensed content | (797,987 | ) | - | |||||
Prepaid expenses and other assets | (164,046 | ) | 628,805 | |||||
Accounts payable | (29,787 | ) | 1,556,689 | |||||
Accrued expenses and liabilities | 693,360 | 41,206 | ||||||
Deferred revenue | 317,414 | 212,220 | ||||||
Deferred license fee | 462,966 | 76,670 | ||||||
Other current liabilities | 26,550 | (221,462 | ) | |||||
Other | 157,687 | (7,203 | ) | |||||
Net cash used in operating activities | (10,600,825 | ) | (5,735,039 | ) | ||||
Cash flows from investing activities: | ||||||||
Acquisition of property and equipment | (953,636 | ) | (2,547,120 | ) | ||||
Investments in intangibles | (272,643 | ) | (442,702 | ) | ||||
Leasehold improvements | (10,754 | ) | - | |||||
Advances to Shandong Media shareholders | (32,771 | ) | (219,755 | ) | ||||
Repayments from Shandong Media shareholders | 29,663 | - | ||||||
Investment in unconsolidated entity | - | (46,411 | ) | |||||
Loan to Shanghai Tianduo | - | (38,677 | ) | |||||
Net cash used in investing activities | (1,240,141 | ) | (3,294,665 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from sale of equity securities | 6,285,000 | 10,917,806 | ||||||
Proceeds from issuance of convertible note | 3,000,000 | - | ||||||
Costs associated with August 2012 financing and share issuances | (118,906 | ) | (822,167 | ) | ||||
Costs associated with December 2012 financing and share issuances | (506,262 | ) | - | |||||
Capital contribution from Jinan Parent | - | 151,759 | ||||||
Net cash provided by financing activities | 8,659,832 | 10,247,398 | ||||||
Effect of exchange rate changes on cash | 42,603 | (282,516 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (3,138,531 | ) | 935,178 | |||||
Cash and cash equivalents at beginning of period | 7,519,574 | 6,584,396 | ||||||
Cash and cash equivalents at end of period | $ | 4,381,043 | $ | 7,519,574 | ||||
Supplemental Cash Flow Information: | ||||||||
Cash paid for taxes | $ | - | $ | - | ||||
Cash paid for interest | $ | 78,953 | $ | 1,764 | ||||
Software contributed in lieu of issued capital included in intangibles | $ | 398,183 | $ | - | ||||
Value of shares and warrants issued in connection with August 2012 private financing | $ | 2,639,640 | $ | - | ||||
Value of shares and options issued for Sinotop contingent consideration earnout | $ | 1,308,391 | $ | - | ||||
Value of common stock issued from conversion of Preferred Series B shares | $ | 726,783 | $ | - | ||||
Value of warrants issued for licensed content | $ | - | $ | 676,462 | ||||
Property and equipment included in accrued expenses | $ | - | $ | 192,791 | ||||
Intangible assets inlcuded in accounts payable | $ | - | $ | 210,000 |
1. | Basis of Presentation |
2. | Summary of Significant Accounting Policies |
2012 | 2011 | |||||||
Period end RMB:USD exchange rate | 6.3011 | 6.3588 | ||||||
Average RMB:USD exchange rate | 6.3116 | 6.4688 |
3. | Going Concern and Management’s Plans |
4. | VIE Structure and Arrangements |
● | a Cooperation Agreement, dated as of December 26, 2006, between CB Cayman and Jinan Parent (the “December 2006 Cooperation Agreement”); |
● | a Cooperation Agreement dated as of January 2007, between Jinan Broadband and Networks Center (the “January 2007 Cooperation Agreement”); and |
● | two Exclusive Service Agreements, dated December 2006 and March 2007, between Jinan Broadband, Jinan Parent and Networks Center (collectively, the “Exclusive Service Agreements”). |
● | CB Cayman appointed 3 directors and Jinan Parent appointed 2 directors; |
● | The general manager and financial manager are appointed by CB Cayman; and |
● | CB Cayman is entitled to receive 51% of net profit/loss of Jinan Broadband. |
5. | Content Accounting |
6. | Warner Bros. License Agreement |
7. | Property and Equipment |
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
Furniture and office equipment | $ | 3,202,000 | $ | 2,088,000 | ||||
Facilities and machinery | 15,779,000 | 16,724,000 | ||||||
Leasehold improvements | 178,000 | 310,000 | ||||||
Vehicles | 54,000 | 30,000 | ||||||
Total property and equipment | 19,213,000 | 19,152,000 | ||||||
Less: accumulated depreciation | (15,114,000 | ) | (14,053,000 | ) | ||||
Net carrying value | $ | 4,099,000 | $ | 5,099,000 |
8. | Goodwill and Intangible Assets |
Balance at | Deconsolidation | Foreign | Balance at | |||||||||||||||||||||
December 31, | Amortization | of Shandong | Currency | December 31, | ||||||||||||||||||||
2011 | Additions | Expense | Media | Transl Adj | 2012 | |||||||||||||||||||
Amortized intangible assets: | ||||||||||||||||||||||||
Service agreement | $ | 1,310,892 | $ | - | $ | (85,960 | ) | $ | - | $ | 291,231 | (1) | $ | 1,516,163 | ||||||||||
Publication rights | 400,953 | - | (12,150 | ) | (388,803 | ) | - | - | ||||||||||||||||
Customer relationships | 76,579 | - | (5,890 | ) | (70,689 | ) | - | - | ||||||||||||||||
Operating permits | 600,147 | - | (18,186 | ) | (581,961 | ) | - | - | ||||||||||||||||
Charter / Cooperation agreements | 2,560,616 | - | (137,792 | ) | - | - | 2,422,824 | |||||||||||||||||
Noncompete agreement | 1,576,256 | - | (1,455,004 | ) | - | - | 121,252 | |||||||||||||||||
Software and licenses | 240,015 | 586,733 | (191,212 | ) | (4,066 | ) | (789 | ) | 630,681 | |||||||||||||||
Website development | 250,000 | 100,000 | (116,989 | ) | - | 967 | 233,978 | |||||||||||||||||
Total amortized intangible assets | $ | 7,015,458 | $ | 686,733 | $ | (2,023,183 | ) | $ | (1,045,519 | ) | $ | 291,499 | $ | 4,924,898 | ||||||||||
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 |
(1) | Cumulative foreign currency translation adjustment related to our Jinan Service Agreement |
Jinan | Sinotop | |||||||||||||||
Years ending December 31, | Broadband | Hong Kong | Sinotop | Total | ||||||||||||
2013 | $ | 155,284 | $ | 259,041 | $ | 277,062 | $ | 691,387 | ||||||||
2014 | 148,779 | 137,791 | 241,604 | 528,174 | ||||||||||||
2015 | 133,745 | 137,791 | 97,700 | 369,236 | ||||||||||||
2016 | 113,952 | 137,791 | 95,298 | 347,041 | ||||||||||||
2017 | 106,398 | 137,791 | 26,830 | 271,019 | ||||||||||||
Thereafter | 984,170 | 1,733,871 | - | 2,718,041 | ||||||||||||
Total amortization to be recognized | $ | 1,642,328 | $ | 2,544,076 | $ | 738,494 | $ | 4,924,898 |
9. | Equity Method Investments |
2012 | 2011 | |||||||
Condensed income statement information: | ||||||||
Net sales | $ | 1,862,223 | $ | - | ||||
Gross margin | $ | 419,696 | $ | - | ||||
Net loss | $ | (258,450 | ) | $ | (36,849 | ) | ||
Company's equity in net income (loss) | $ | 67,675 | $ | (14,371 | ) | |||
Condensed balance sheet information: | ||||||||
Current assets | $ | 3,018,413 | $ | 1,364,720 | ||||
Noncurrent assets | $ | 577,291 | $ | 177,960 | ||||
Total assets | $ | 3,595,704 | $ | 1,542,680 | ||||
Current liabilities | $ | 1,578,030 | $ | 10 | ||||
Noncurrent liabilities | $ | 182,151 | $ | - | ||||
Equity | $ | 1,835,523 | $ | 1,542,670 | ||||
Total liabilities and equity | $ | 3,595,704 | $ | 1,542,680 |
10. | Deconsolidation of AdNet |
11. | Deconsolidation of Shandong Media Joint Venture |
12. | 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. |
December 31, | December 31, | |||||||
2012 | 2011 | |||||||
(Black-Scholes) | (Monte Carlo) | |||||||
Risk-free interest rate | 0.45 | % | 0.41 | % | ||||
Expected volatility | 75 | % | 75 | % | ||||
Expected life | 3.5 years | 4 years | ||||||
Expected dividend yield | 0 | % | 0 | % |
December 31, 2012 | ||||||||||||||||
Fair Value Measurements | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||
Assets | ||||||||||||||||
Available-for-sale securities | $ | 2,229 | $ | - | $ | - | $ | 2,229 | ||||||||
Investment in unconsolidated entities (Shandong Media) | - | - | - | - | ||||||||||||
Liabilities | ||||||||||||||||
Warrant liabilities | $ | - | $ | - | $ | 878,380 | $ | 878,380 | ||||||||
Contingent purchase price consideration, current (see Note 13) | - | - | 368,628 | 368,628 | ||||||||||||
Contingent purchase price consideration, noncurrent (see Note 13) | - | - | 368,628 | 368,628 |
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 price consideration, current (see Note 13) | $ | - | $ | - | $ | 1,091,571 | $ | 1,091,571 | ||||||||
Contingent purchase price consideration, noncurrent (see Note 13) | - | - | 2,267,518 | 2,267,518 |
Level 3 Assets and Liabilities | ||||||||||||||||||||||||
For the Years Ended December 31, 2011 and 2012 | ||||||||||||||||||||||||
1/1/2011 | Unrealized (gain) / loss | 12/31/2011 | Purchases, sales and issuances and settlements | Unrealized (gain) / loss | 12/31/2012 | |||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||
Warrant Liability | $ | - | - | $ | - | 1,525,682 | (647,302 | ) | $ | 878,380 | ||||||||||||||
Contingent purchase price consideration | $ | 3,362,105 | (3,016 | ) | $ | 3,359,089 | (1,308,390 | ) | (1,313,443 | ) | $ | 737,256 |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
Fair Value at | Valuation | Unobservable | ||||||||
12/31/2012 | Techniques | Inputs | Input | |||||||
Warrant Liability | $ | 878,380 | Monte Carlo Simulation Method | Risk Free rate of interest | 0.777 | % | ||||
Expected volatility | 75 | % | ||||||||
Expected life (years) | 4.67 | |||||||||
Expected dividend yield | 0 | % | ||||||||
Contingent consideration | $ | 737,256 | Black-Scholes Merton Model | Risk Free rate of interest | 0.540 | % | ||||
Expected volatility | 75 | % | ||||||||
Expected life (years) | 3.5 | |||||||||
Expected dividend yield | 0 | % |
13. | Sinotop Contingent Consideration |
January 1, | December 31, | |||||||||||||||
2012 | Earned | Change in | 2012 | |||||||||||||
Class of consideration | Fair Value | Fair Value | Fair Value | Fair Value | ||||||||||||
Common shares | $ | 3,147,109 | $ | (1,226,369 | ) | $ | (1,209,446 | ) | $ | 711,294 | ||||||
Stock options | 211,980 | (82,021 | ) | (103,997 | ) | 25,962 | ||||||||||
Total earned and contingent consideration | $ | 3,359,089 | $ | (1,308,390 | ) | $ | (1,313,443 | ) | $ | 737,256 |
January 1, | December 31, | |||||||||||||||
2011 | Earned | Change in | 2011 | |||||||||||||
Class of consideration | Fair Value | Fair Value | Fair Value | Fair Value | ||||||||||||
Common shares | $ | 3,175,902 | $ | - | $ | (28,793 | ) | $ | 3,147,109 | |||||||
Stock options | 186,203 | - | 25,777 | 211,980 | ||||||||||||
Total earned and contingent consideration | $ | 3,362,105 | $ | - | $ | (3,016 | ) | $ | 3,359,089 |
As of December 31, 2012 | ||||||||||||||||
Number of | Current | Noncurrent | Total | |||||||||||||
Instruments | Liability | Liability | Liability | |||||||||||||
Shares July 2013 | 245,274 | $ | 355,647 | $ | - | $ | 355,647 | |||||||||
Shares July 2014 | 245,274 | - | 355,647 | 355,647 | ||||||||||||
Total Common Shares | 490,548 | $ | 355,647 | $ | 355,647 | $ | 711,294 | |||||||||
Options July 2013 | 26,667 | $ | 12,981 | $ | - | $ | 12,981 | |||||||||
Options July 2014 | 26,666 | - | 12,981 | 12,981 | ||||||||||||
Total Options | 53,333 | $ | 12,981 | $ | 12,981 | $ | 25,962 | |||||||||
Total Shares and Options | 543,881 | $ | 368,628 | $ | 368,628 | $ | 737,256 |
As of December 31, 2011 | ||||||||||||||||
Number of | Current | Noncurrent | Total | |||||||||||||
Instruments | Liability | Liability | Liability | |||||||||||||
Shares July 2012 | 245,274 | $ | 1,027,391 | $ | - | $ | 1,027,391 | |||||||||
Shares July 2013 | 245,274 | - | 1,066,573 | 1,066,573 | ||||||||||||
Shares July 2014 | 245,274 | - | 1,053,145 | 1,053,145 | ||||||||||||
Total Common Shares | 735,822 | $ | 1,027,391 | $ | 2,119,718 | $ | 3,147,109 | |||||||||
Options July 2012 | 26,667 | $ | 64,180 | $ | - | $ | 64,180 | |||||||||
Options July 2013 | 26,667 | - | 71,620 | 71,620 | ||||||||||||
Options July 2014 | 26,666 | - | 76,180 | 76,180 | ||||||||||||
Total Options | 80,000 | $ | 64,180 | $ | 147,800 | $ | 211,980 | |||||||||
Total Shares and Options | 815,822 | $ | 1,091,571 | $ | 2,267,518 | $ | 3,359,089 |
14. | Related Party Transactions |
15. | Retail Financing, December 2012 |
16. | Private Financing, August 2012 |
17. | Private Financings, June 2011 |
18. | Net Loss Per Common Share |
2012 | 2011 | |||||||
Warrants | 1,348,975 | 358,579 | ||||||
Stock purchase right | - | 75,000 | ||||||
Options | 1,585,401 | 1,383,567 | ||||||
Series A Preferred Stock | 933,333 | 933,333 | ||||||
Series B Preferred Stock | 1,048,907 | 1,368,907 | ||||||
Series C Preferred Stock | 250,000 | - | ||||||
Total | 5,166,616 | 4,119,386 |
2012 | 2011 | |||||||
Exercise of stock warrants | 1,348,975 | 358,579 | ||||||
Exercise of stock purchase right | - | 75,000 | ||||||
Exercise and future grants of stock options | 4,051,986 | 4,080,000 | ||||||
Exercise of preferred stock | 2,382,240 | 2,302,240 | ||||||
Issuance of restricted stock grants | 56,780 | - | ||||||
Contingent issuable shares in connection with Sinotop acquisition | 490,548 | 735,822 | ||||||
Total | 8,330,529 | 7,551,641 |
19. | Share-Based Payments |
2012 | 2011 | ||||||||
Stock option amortization | $ | 766,000 | $ | 599,000 | (a) | ||||
Stock issued for services | 572,000 | 10,000 | (b) | ||||||
Stock warrants issued for services | 39,000 | 25,000 | |||||||
Right to purchase shares | 44,000 | 194,000 | (see note 17) | ||||||
$ | 1,421,000 | $ | 828,000 |
(a) | The Company accounts for its stock option awards pursuant to the provisions of ASC 718, Stock Compensation. The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period. The Black-Scholes Merton model incorporated the following assumptions for the options granted in 2012 and 2011: risk-free interest rate of 1.73% to 3.43%, expected volatility of 60% and 75%, expected life of 10.0 years and expected dividend yield of 0%. |
(b) | In the second quarter of 2012, the Company appointed two new “independent” (as defined under the NASDAQ listing requirements) members to the Board of Directors. In connection with the appointment we granted each of our three “independent” directors 10,000 restricted shares to be vested quarterly over one year. |
Options | Weighted Average | |||||||
Outstanding | Exercise Price | |||||||
Approved plan | 4,000,000 | |||||||
Outstanding at December 31, 2010 | 1,285,567 | $ | 3.00 | |||||
Granted | 111,333 | 4.91 | ||||||
Exercised | - | - | ||||||
Canceled | (13,333 | ) | 3.00 | |||||
Outstanding at December 31, 2011 | 1,383,567 | |||||||
Granted | 227,567 | 4.48 | ||||||
Exercised | (1,347 | ) | 3.80 | |||||
Canceled | (24,386 | ) | 5.38 | |||||
Outstanding at December 31, 2012 | 1,585,401 | $ | 3.54 | |||||
Options exercisable as of December 31, 2012 (vested) | 1,067,404 | $ | 3.32 | |||||
Options available for issuance at December 31, 2012 | 2,414,599 |
Weighted Average | |||||||||||||||||||||
Remaining | |||||||||||||||||||||
Number | Contractual Life | Weighted Average | Number | Weighted Average | |||||||||||||||||
Range of Exercise Prices | Outstanding | (Years) | Exercise Price | Exerciseable | Exercise Price | ||||||||||||||||
$3 - $4 | 1,338,000 | 8.17 | $ | 3.04 | 1,000,570 | $ | 3.03 | ||||||||||||||
$4 - $8 | 243,168 | 8.95 | 6.43 | 62,601 | 6.63 | ||||||||||||||||
$8 - $33 | 0 | 0 | 0.00 | 0 | 0 | ||||||||||||||||
$33 - $34 | 2,000 | 0.46 | 33.75 | 2,000 | 33.75 | ||||||||||||||||
$34 - $45 | 900 | 0.20 | 45.00 | 900 | 45.00 | ||||||||||||||||
$45 - $75 | 1,333 | 5.20 | 75.00 | 1,333 | 75.00 | ||||||||||||||||
1,585,401 | 8.09 | $ | 3.43 | 1,067,404 | $ | 3.32 |
Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Options | Fair Value | |||||||
Non-vested at January 1, 2012 | 675,209 | $ | 3.33 | |||||
Granted | 200,900 | 4.58 | ||||||
Vested | (336,837 | ) | 3.46 | |||||
Canceled | (20,219 | ) | 5.30 | |||||
Non-vested at December 31, 2012 | 519,053 | $ | 3.66 |
2012 | 2011 | |||||||||||||
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 | $ | 6.60 | 12/3/2012 | |||||||||
2011 Service Agreement Warrants ($7.20 exercise price) | 20,000 | 6,667 | $ | 7.20 | 6/15/2016 | |||||||||
2012 August Financing Warrants ($4.25 exercise price) | 977,063 | - | $ | 4.25 | 8/30/2017 | (1) | ||||||||
1,348,975 | 433,579 |
(1) | As a result of the negative clawback provisions included in our warrant agreements associated with our August 2012 private financings, the exercise price of $4.25 per share is expected to be reset to $1.50 per share after shareholder approval. |
20. | Income Taxes |
(A) | Corporate Income Tax (“CIT”) |
2012 | 2011 | |||||||
Income (loss) before tax | $ | (16,640,490 | ) | $ | (13,011,772 | ) | ||
Current tax expense (benefit) | ||||||||
United States | $ | (21,875 | ) | $ | 1,620 | |||
PRC/Hong Kong | - | |||||||
(21,875 | ) | 1,620 | ||||||
Deferred tax (benefit) expense other than the benefit of net operating losses | ||||||||
United States | - | - | ||||||
PRC/Hong Kong | (270,830 | ) | (193,781 | ) | ||||
(270,830 | ) | (193,781 | ) | |||||
Deferred tax (benefit) of net operating losses | ||||||||
United States | - | |||||||
PRC/Hong Kong | (60,380 | ) | (177,546 | ) | ||||
(60,380 | ) | (177,546 | ) | |||||
Total income tax (benefit) expense | $ | (353,085 | ) | $ | (369,707 | ) |
2012 | 2011 | |||||||
Net loss before income taxes | $ | (16,640,490 | ) | $ | (13,011,772 | ) | ||
Expected income tax benefit at 34% | (5,657,767 | ) | (4,424,002 | ) | ||||
Nondeductible expenses | 480,620 | 379,915 | ||||||
Non-taxable gain on deconsolidation of Shandong Media | (25,536 | ) | - | |||||
Non-taxable gain on AdNet | - | (563,319 | ) | |||||
Non-taxable change in warrant liabilities | (220,083 | ) | - | |||||
Non-taxable (gain) loss on contingent consideration | (446,571 | ) | - | |||||
Rate-differential on foreign income invested indefinitely | 1,228,607 | 1,180,646 | ||||||
Increase in valuation allowance | 4,286,768 | 2,960,535 | ||||||
Change in estimates - offset by changes in valuation allowance above | 22,752 | - | ||||||
Removal of deferred tax assets relating to pre-merger NOLs | 2,280,194 | - | ||||||
Change in valuation allowance related to pre-merger NOLs | (2,280,194 | ) | - | |||||
Other changes in estimates | - | 94,898 | ||||||
Unrecognized tax benefits | (21,875 | ) | 1,620 | |||||
Income tax expense (benefit) | $ | (353,085 | ) | $ | (369,707 | ) |
2012 | 2011 | |||||||
Deferred tax assets | ||||||||
U.S. NOL - pre-stock exchange transaction | $ | - | $ | 2,280,194 | ||||
U.S. NOL - subsequent to stock exchange transaction | 5,134,195 | 3,365,208 | ||||||
Foreign NOL | 2,105,960 | 1,064,145 | ||||||
Deferred revenue | 429,346 | 439,521 | ||||||
Reserve for returns | - | 21,502 | ||||||
Fixed assets cost basis | 1,604,393 | 1,468,092 | ||||||
Costs capitalized for tax | 10,452 | - | ||||||
Accrued payroll | 21,675 | 8,500 | ||||||
Accrued expenses | 905,265 | - | ||||||
Deferred rent | 390 | - | ||||||
Expenses prepaid for tax | 6,902 | - | ||||||
Inventory reserves | 160,000 | 150,927 | ||||||
Allowance for doubtful accounts | 1,587 | 34,090 | ||||||
Equity method investee | - | 4,927 | ||||||
Investment in and advance to cost method investee | 33,724 | - | ||||||
Nonqualified options | 207,443 | 109,214 | ||||||
Marketable securities | 100,795 | 100,795 | ||||||
AMT credits | - | 17,952 | ||||||
Charitable contribution carryover | 757 | 680 | ||||||
Capital loss carryover | 482,898 | 482,898 | ||||||
Total deferred tax assets | 11,205,782 | 9,548,645 | ||||||
Less: valuation allowance | (10,699,560 | ) | (9,057,657 | ) | ||||
Deferred tax liabilities | ||||||||
Basis in equity method investee | (13,256 | ) | - | |||||
Intangible assets | (798,815 | ) | (1,279,729 | ) | ||||
Total deferred tax liabilities | (812,071 | ) | (1,279,729 | ) | ||||
Net deferred tax liability | $ | (305,849 | ) | $ | (788,741 | ) |
(B) | Uncertain Tax Positions |
2012 | 2011 | |||||||
Balance, beginning of year | $ | 21,875 | $ | 20,255 | ||||
Increase from prior year's tax positions | 884 | 1,620 | ||||||
Reduction resulting from the lapse of the statute of limitations | (22,759 | ) | - | |||||
Balance, end of year | $ | - | $ | 21,875 |
21. | Commitments and Contingencies |
Leased | ||||
Property | ||||
Years ending December 31, | Costs | |||
2013 | $ | 317,000 | ||
2014 | 17,000 | |||
Total | $ | 334,000 |
Content | ||||
Years ending December 31, | Costs | |||
2013 | $ | 1,860,000 | ||
2014 | 2,161,000 | |||
2015 | 2,292,000 | |||
2016 | 1,031,000 | |||
Total | $ | 7,344,000 |
22. | Defined Contribution Plan |
23. | Subsequent Events |
EXHIBIT INDEX | |
Exhibit No. | Description |
3.1 | Articles of Incorporation of the Company, as amended to date [incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 30, 2012]. |
3.2 | Amended and Restated Bylaws of the Company. [incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
3.3 | Certificate of Designation of Series A Preferred Stock [incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
3.4 | Certificate of Designation of Series B Preferred Stock [incorporated by reference to Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
4.1 | Form of Warrant issued pursuant to the Securities Purchase Agreement dated May 20, 2010 [incorporated by reference to Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
4.2 | Form of Warrant issued on July 30, 2010 to Shane McMahon. [incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
4.3 | Form of Warrant issued on July 30, 2010 to Steven Oliveira. [incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
4.4 | Form of Warrant issued pursuant to the Securities Purchase Agreement dated August 30, 2012 [incorporated by reference to exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 31, 2012]. |
10.1 | Cooperation Agreement dated as of December 26, 2006 between China Broadband, Ltd. and Jianan Guangdian Jiahe Digital Television Co., Ltd. [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 20, 2007] |
10.2 | Exclusive Service Agreement, dated December, 2006, by and among Beijing China Broadband Network Technology Co., Ltd., Jinan Guangdian Jiahe Digital Television Co., Ltd. and Jinan Broadcast &Televison Information Network Center. [incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed June 11, 2007] |
10.3 | Cooperation Agreement, dated March 7, 2008, by and among Ji’Nan Zhongkuan Dian Guang Information Technology Co., Shandong Broadcast & TV Weekly Press and Modern Movie & TV Biweekly Press. [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8- K filed March 13, 2008] |
10.4 | Share Issuance Agreement, dated April 7, 2009 between the Company, China Broadband, Ltd., Waanshi Wangjing Media Technologies (Beijing) Co., Ltd. and its shareholders. [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 14, 2009] |
10.5 | Loan Agreement, dated as of April 7, 2009, between China Broadband, Ltd. and Wangjing Media Technologies (Beijing) Co., Ltd. [incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K filed April 15, 2010] |
10.6 | Equity Option Agreement, dated as of April 7, 2009, between China Broadband, Ltd. and Wangjing Media Technologies (Beijing) Co., Ltd. [incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K filed April 15, 2010] |
10.7 | Pledge Agreement, dated as of April 7, 2009, between China Broadband, Ltd. and Wangjing Media Technologies (Beijing) Co., Ltd. [incorporated by reference to Exhibit 10.15 to the Company’s Annual Report on Form 10-K filed April 15, 2010] |
10.8 | Trustee Appointment Letter, dated as of April 7, 2009, by China Broadband, Ltd., appointing Mr. Wang Yingqi as trustee on its behalf [incorporated by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K filed April 15, 2010] |
10.9 | Employment Agreement, dated July 30, 2010 between the Company and Shane McMahon. [incorporated by reference to Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
10.10 | Employment Agreement, dated July 30, 2010 between the Company and Marc Urbach. [incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
10.11 | Employment Agreement, dated July 30, 2010 between the Company and Weicheng Liu. [incorporated by reference to Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed August 23, 2010] |
10.12 | Consulting Agreement, dated January 24, 2007, between the Company and Maxim Financial Corporation. [incorporated by reference to Exhibit 10.9 to the Company’s Amended Current Report on Form 8-K/A filed June 4, 2007] |
10.13 | Form of Securities Purchase Agreement, dated August 30, 2012, by and among the Company, the Investors and Chardan Capital Management [incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 31, 2012]. |
10.14 | Form of Registration Rights Agreement, dated August 30, 2012, by and between the Company and the Investors [incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on August 31, 2012]. |
10.15 | Convertible Promissory Note in $3,000,000 principal amount issued to Shane McMahon [incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 15, 2012]. |
10.16 | Amendment No. 1 to Convertible Promissory Note in $3,000,000 principal amount issued to Shane McMahon [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 21, 2012]. |
10.17 | Amendment No. 2 to Convertible Promissory Note in $3,000,000 principal amount issued to Shane McMahon [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 23, 2012]. |
* Filed herewith |