UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of: June 2012
Commission File Number: 000-51116
Ku6 Media Co., Ltd.
(Exact name of registrant as specified in its charter)
Building 6, Zhengtongchuangyi Centre
No. 18, XibaheXili, Chaoyang District,
Beijing 100020, People’s Republic of China
Fax number: +86 10 57586898
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-N.A.
Ku6 Media Reports Unaudited Financial Results for the First Quarter of
Fiscal Year 2012
BEIJING, China, June 5, 2012 — Ku6 Media Co., Ltd. (“Ku6 Media” or the “Company”, NASDAQ: KUTV) , a leading internet video company in China, focusing on User Generated Content (“UGC”), today announced unaudited financial results for the first quarter of fiscal year 2012, ended March 31, 2012.
2012 Q1 Highlights(1)
| • | Total revenues were US$4.68 million (RMB29.47 million), a 5.9% increase from the fourth quarter of 2011; performance advertising revenue increased continuously and accounted for 80.9% of total revenues in the quarter. |
| • | Gross profit increased continuously and was US$1.15 million (RMB7.24 million) and the gross profit margin was 24.6%, as compared to the gross profit of US$0.19 million and the gross profit margin of 4.3% in the fourth quarter of 2011. The increase was due to the further optimization of cost structure under UGC business model. |
| • | Net loss narrowed and was US$1.79 million (RMB11.27 million), the lowest since Ku6 Media became public in 2010, as compared to a net loss of US$3.94 million in the fourth quarter of 2011. Non-GAAP net loss, which herein defined as net loss excluding share-based compensation expenses, was US$1.28 million (RMB8.06 million) in the first quarter of 2012, as compared to the non-GAAP net loss of US$4.46 million in the fourth quarter of 2011. The decrease was primarily attributable to the decrease in cost and operating expenses, which the Company optimizes the cost structure and improves the operating efficiency and the collection of accounts receivable previously written down. |
| • | Basic and diluted loss per ADS was US$0.04 (RMB0.22) in the first quarter of 2012, as compared to US$0.08 in the fourth quarter of 2011. |
| • | Cash and cash equivalents were US$21.79 million (RMB137.20 million) as of March 31, 2012. |
| • | Net cash used in operating activities was US$1.07 million (RMB6.73 million) in the first quarter of 2012, as compared to US$8.30 million in the fourth quarter of 2011. |
| • | Partnership with YouTube announced in January 2012, to allow Ku6 Media’s international users to view original videos from China. |
| • | Partnership with Channel [V] announced in March 2012, to host its official online channel on Ku6 Media’s platform for Channel [V]’s current and upcoming music entertainment programs in mainland China. |
| • | Partnership with SNS website Kaixin001 announced in May 2012, to supply technology support to all video uploading activities on Kaixin001 as the video hosting provider. |
2
| • | Launched my.ku6.com, a new product that focuses on promoting value creating users on May 15, 2012. |
| (1) | The reporting currency of the Company is the United States dollar (“U.S. dollar”), but solely for the convenience of the reader, the amounts of Renminbi (“RMB”) presented throughout the release were calculated at the rate of US$1.00=RMB6.2975, representing the noon buying rate as of March 30, 2012 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. This convenient translation is not intended to imply that the U.S. dollar amounts could have been, or could be, converted, realized or settled into RMB at that rate on March 30, 2012, or at any other rate. |
Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, “I am pleased to announce another steady growing quarter after our strategy switch since the second quarter of 2011. In first quarter of 2012, we grew our revenue by 5.9% quarter over quarter, enlarged our gross profit from US$0.19 million in the fourth quarter of 2011 to US$1.15 million, and narrowed our net loss to US$1.79 million, which was the lowest since Ku6 Media became public in 2010, as compared to a net loss of US$3.94 million in the fourth quarter of 2011.”
“Since the beginning of 2012, Ku6 Media has brought in reputable partners including YouTube, Channel [V] and Kaixin001. We have seen great results from the partnerships in enlarging our user base and promoting our company brand. On May 15, 2012, we officially launched my.ku6.com, a new product that focuses on promoting value creating users as an enhancement to our original website. Different from traditional online video websites that focus on promoting contents, my.ku6.com is offering a new platform to our value creating users to communicate and common users to follow their favorite value creating users. As we’ve always believed that UGC business model is healthy and promising, we are devoted to be the most popular UGC video website by continuously providing our users the best services.”
First Quarter 2012 Financial Results
Total revenues, representing advertising revenue from online video portal operation, were US$4.68 million (RMB29.47 million) in the first quarter of 2012, representing an increase of 5.9% from US$4.42 million in the fourth quarter of 2011 and a decrease of 28.7% from US$6.56 million in the first quarter of 2011.
In the second quarter of 2011, the Company started to generate revenues from performance advertising using a system called Application Advertisement (“AA”). The performance advertising revenue was realized through an affiliated advertising agent. 80.9% of total revenues in the first quarter of 2012 were from this source, as compared to 79.2% of total revenues in the fourth quarter of 2011.
3
Cost of revenues was US$3.53 million (RMB22.24 million) in the first quarter of 2012, representing a decrease of 16.5% from US$4.23 million in the fourth quarter of 2011 and a decrease of 60.5% from US$8.93 million in the first quarter of 2011. The change of content strategy since the second quarter of 2011 from long-form professional content to UGC is the main reason for the decrease in cost of revenues. As a result,gross profit was US$1.15 million (RMB7.24 million) in the first quarter of 2012, as compared to a gross profit of US$0.19 million in the fourth quarter of 2011 and a gross loss of US$2.37 million in the first quarter of 2011.Non-GAAP gross profit, which is herein defined as a gross profit excluding share-based compensation expenses, was US$1.24 million (RMB7.83 million) in the first quarter 2012, as compared to a non-GAAP gross loss of US$23 thousand in the fourth quarter of 2011 and a non-GAAP gross loss of US$2.00 million in the first quarter of 2011. This increase in gross profit was resulted from the cost saving in content procurement and in the meantime, maintaining a steady growth in revenue.
Operating expenses were US$2.82 million (RMB17.78 million) in the first quarter of 2012, representing a decrease of 35.6% from US$4.38 million in the fourth quarter of 2011 and a decrease of 68.9% from US$9.07 million in the first quarter of 2011.Non-GAAP operating expenses, which is herein defined as operating expenses excluding share-based compensation expenses, were US$2.41 million (RMB15.17 million) in the first quarter of 2012, as compared to the non-GAAP operating expenses of US$4.69 million in the fourth quarter of 2011 and US$8.59 million in the first quarter of 2011. The decrease as compared to the fourth quarter of 2011 was attributable to a US$1.36 million (RMB8.56 million) collection of accounts receivable previously written down and a net decrease in other miscellaneous expenses due to improvement in operating efficiency.
Operating losswas US$1.68 million (RMB10.55 million) in the first quarter of 2012, representing a decrease of 59.9% from US$4.19 million in the fourth quarter of 2011 and a decrease of 85.3% from US$11.44 million in the first quarter of 2011.Non-GAAP operating loss was US$1.17 million (RMB7.34 million) in the first quarter of 2012, as compared to the non-GAAP operating loss of US$4.71 million in the fourth quarter of 2011 and US$10.59 million in the first quarter of 2011.
Net losswas US$1.79 million (RMB11.27 million) in the first quarter of 2012, representing a decrease of 54.6% from the loss of US$3.94 million in the fourth quarter of 2011 and a decrease of 83.5% from the loss of US$10.88 million in the first quarter of 2011.Non-GAAP net loss was US$1.28 million (RMB8.06 million) in the first quarter of 2012, as compared to the non-GAAP net loss of US$4.46 million in the fourth quarter of 2011 and US$10.02 million in the first quarter of 2011. The decrease was primarily attributable to the decrease in cost and operating expenses, which the Company optimizes the cost structure and improves the operating efficiency and the collection of accounts receivable previously written down.
Net loss attributable to Ku6 Media was US$1.79 million (RMB11.27 million) in the first quarter of 2012, as compared to US$3.94 million in the fourth quarter of 2011 and US$10.85 million in the first quarter of 2011.Non-GAAP net loss attributable to Ku6 Media was US$1.28 million (RMB8.06 million) in the first quarter of 2012, as compared to the non-GAAP net loss attributable to Ku6 Media of US$4.46 million in the fourth quarter of 2011 and US$10.00 million in the first quarter of 2011.
Net loss attributable to Ku6 Media per basic and diluted ADS was US$0.04 (RMB0.22) in the first quarter of 2012, as compared to US$0.08 in the fourth quarter of 2011 and US$0.31 in the first quarter of 2011. Weighted average ADSs used to calculate basic and diluted net loss per ADS were 50.2 million in the first quarter of 2012, 50.2 million in the fourth quarter of 2011 and 34.8 million in the first quarter of 2011.
4
Adjusted EBITDA loss, which is herein defined as net loss attributable to Ku6 Media before interest income, interest expenses, income taxes, depreciation and amortization (excluding amortization and write-down of licensed video copyrights), further adjusted for share-based compensation expenses, equity in loss of affiliates and other non-operating items, was US$0.34 million (RMB2.14 million) in the first quarter of 2012, as compared to the adjusted EBITDA loss of US$3.86 million in the fourth quarter of 2011 and US$9.12 million in the first quarter of 2011. The decrease was primarily due to a non-GAAP gross profit and a decrease in non-GAAP operating expenses.
As of March 31, 2012, the Company had US$21.79 million (RMB137.20 million) in cash and cash equivalents, compared to US$26.75 million as of December 31, 2011. The decrease was primarily because of repayment of an entrusted loan of US$3.14 million to a related party in the first quarter of 2012.
Recent Business Developments
Partnership with YouTube
On January 17, 2012, the Company announced that it has entered into an agreement with YouTube, a renowned international video-sharing website owned by Google, which would allow Ku6 Media’s international users to view original videos from China through a new channel operated by YouTube.
Partnership with Channel [V]
On March 30, 2012, the Company announced it has entered into an agreement with Star China to cooperate with its well-known international music television channel Channel [V]. Pursuant to the agreement, Channel [V] will launch its official online channel on Ku6 Media’s platform for its current and upcoming music entertainment programs in mainland China.
Partnership with Kaixin001
On May 24, 2012, the Company announced it has entered into an agreement with famous Chinese SNS website Kaixin001. Pursuant to the agreement, Ku6 Media, as the video hosting provider, is assisting Kaixin001 to add a brand new video sharing function by supplying technology support to all video uploading activities on Kaixin001.
Launch of New Product my.ku6.com
On May 15, 2012, the Company officially launched new product my.ku6.com, which is a brand new video platform that focuses on promoting value creating users instead of content. Users can search and follow their favorite value creating users to get the fastest update on the content.
5
Change of Chief Financial Officer
On May 16, 2012, the Company announced the resignation of Chief Financial Officer (“CFO”) Tony Shen and appointment of Acting CFO Frank Feng, both effective on May 16, 2012. Mr. Shen will continue to serve as a consultant of the Company in the next six months.
Conference Call Information
Ku6 Media’s management team will host a corresponding conference call on Tuesday, June 5, 2012 at 9:00pm EDT (9:00am Beijing time on Wednesday, June 6, 2012), to present an overview of the company’s financial performance and business operations.
Dial-in numbers:
International Dial-in Number: | +65 67239381 | |
United States Toll Free Number: | 18665194004 | |
Mainland China Toll Free Number: | 4006208038 / 8008190121 | |
Hong Kong Toll Free Number: | 800930346 | |
Conference ID: | 85891256 | |
A replay will be available from 00:00 June 6, 2012 EDT for 7 days.
International Dial-in Number: | +61 2 8235 5000 | |
United States Toll Free Number: | 18662145335 | |
Mainland China Toll Free Number: | 4006920026 | |
Hong Kong Toll Free Number: | 800901596 | |
Conference ID: | 85891256 |
A live and archived webcast of the conference call will also be available athttp://www.media-server.com/m/p/a67p67a4
About Ku6 Media Co., Ltd.
Ku6 Media Co., Ltd. (NASDAQ: KUTV) is a leading internet video company in China, focusing on User Generated Content (“UGC”). Through its premier online brand and online video website, www.ku6.com, Ku6 Media provides online video upload and sharing service, video reports, information and entertainment in China. For more information about Ku6 Media, please visit http://ir.ku6.com.
6
Forward-looking Statements
This news release contains statements of a forward-looking nature. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “believes,” “could,” “expects,” “may,” “might,” “should,” “will,” or “would,” and by similar statements. Forward-looking statements are not historical facts, but instead represent only the Company’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of its control. It is possible that the Company’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Some of the risks and important factors that could affect the Company’s future results and financial condition include: continued competitive pressures in China’s internet video portal market; changes in technology and consumer demand in this market; the risk that Ku6 Media may not be able to control its expenses in the future; regulatory changes in China with respect to the operations of internet video portal websites; the success of Ku6 Media’s ability to sell advertising and other services on its websites; and other risks outlined in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 20-F. Ku6 Media does not undertake any obligation to update this forward-looking information, except as required under law.
About Non-GAAP Financial Measures
To supplement Ku6 Media’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Ku6 Media uses the following measures defined as non-GAAP financial measures by the SEC in evaluating its business: non-GAAP gross profit or loss, non-GAAP operating expenses, non-GAAP product development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss attributable to Ku6 Media and adjusted EBITDA loss. We define non-GAAP gross profit or loss, non-GAAP operating expenses, non-GAAP product development expenses, non-GAAP sales and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss attributable to Ku6 Media as the respective nearest comparable GAAP financial measure to exclude share-based compensation expenses. We define adjusted EBITDA loss as net loss attributable to Ku6 Media before interest income, interest expenses, income taxes, depreciation and amortization (excluding amortization and write-down of licensed video copyrights), further adjusted for share-based compensation expenses, equity in loss of affiliates and other non-operating items. We present non-GAAP financial measures because they are used by our management to evaluate our operating performance. We also believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in Ku6 Media’s business for the foreseeable future.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP financial measures” at the end of this release.
7
For further information, please contact:
Ms. Helen Zou
Investor Relations Director
Telephone +86 10 5758 6835
ir@ku6.com
8
Ku6 Media Co., Ltd.
Consolidated Balance Sheets
(Amounts in thousands, except for number of shares) | December 31, 2011 US$ | March 31, 2012 US$ (Unaudited) | March 31, 2012 RMB (Unaudited) | |||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 26,751 | 21,786 | 137,197 | |||||||||
Restricted cash | 3,600 | 3,600 | 22,671 | |||||||||
Accounts receivable, net | 777 | 88 | 557 | |||||||||
Accounts receivable due from related parties | 2,740 | 4,199 | 26,440 | |||||||||
Prepaid expenses and other current assets | 884 | 618 | 3,890 | |||||||||
Other receivables due from related parties | 19,539 | 20,384 | 128,371 | |||||||||
Total current assets | 54,291 | 50,675 | 319,126 | |||||||||
Non-current assets: | ||||||||||||
Deposits | 307 | 307 | 1,930 | |||||||||
Property and equipment, net | 3,593 | 3,308 | 20,833 | |||||||||
Acquired intangible assets, net | 24,111 | 23,721 | 149,385 | |||||||||
Investment in equity affiliate | 255 | 207 | 1,305 | |||||||||
Goodwill | 6,233 | 6,233 | 39,251 | |||||||||
Total non-current assets | 34,499 | 33,776 | 212,704 | |||||||||
TOTAL ASSETS | 88,790 | 84,451 | 531,830 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Short-term borrowings | 3,178 | 3,176 | 20,000 | |||||||||
Accounts payable | 6,365 | 4,704 | 29,623 | |||||||||
Accrued expenses and other current liabilities | 10,016 | 11,758 | 74,044 | |||||||||
Other payables due to related parties | 13,552 | 10,408 | 65,546 | |||||||||
Total current liabilities | 33,111 | 30,046 | 189,213 | |||||||||
Non-current deferred tax liabilities | 4,826 | 4,826 | 30,392 | |||||||||
Total liabilities | 37,937 | 34,872 | 219,605 | |||||||||
Shareholders’ equity: | ||||||||||||
Ordinary shares (US$0.00005 par value; 12,000,000,000 shares authorized; 5,019,786,036 shares issued and outstanding as of December 31, 2011 and March 31, 2012) | 251 | 251 | 1,580 | |||||||||
Additional paid-in capital | 184,874 | 185,383 | 1,167,450 | |||||||||
Accumulated deficit | (132,449 | ) | (134,238 | ) | (845,367 | ) | ||||||
Accumulated other comprehensive loss | (1,823 | ) | (1,817 | ) | (11,438 | ) | ||||||
Total Ku6 Media Co., Ltd. shareholders’ equity | 50,853 | 49,579 | 312,225 | |||||||||
Non-controlling interests | — | — | — | |||||||||
Total shareholders’ equity | 50,853 | 49,579 | 312,225 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 88,790 | 84,451 | 531,830 | |||||||||
9
Ku6 Media Co., Ltd.
Consolidated Statements of Operations
| For the Three Months Ended | ||||||||||||||||
(Amounts in thousands, except for number of shares and ADS and per share and per ADS data) | March 31, 2011 US$ (Unaudited) | December 31, 2011 US$ (Unaudited) | March 31, 2012 US$ (Unaudited) | March 31, 2012 RMB | ||||||||||||
Revenues: | ||||||||||||||||
Advertising | ||||||||||||||||
Third parties | 6,163 | 977 | 895 | 5,639 | ||||||||||||
Related parties | 398 | 3,444 | 3,785 | 23,834 | ||||||||||||
Total revenues | 6,561 | 4,421 | 4,680 | 29,473 | ||||||||||||
Cost of revenues: | ||||||||||||||||
Advertising | ||||||||||||||||
Third parties | 8,636 | 4,233 | 3,531 | 22,237 | ||||||||||||
Related parties | 294 | — | — | — | ||||||||||||
Total cost of revenues | 8,930 | 4,233 | 3,531 | 22,237 | ||||||||||||
Gross profit (loss) | (2,369 | ) | 188 | 1,149 | 7,236 | |||||||||||
Operating expenses: | ||||||||||||||||
Product development | 477 | 592 | 579 | 3,646 | ||||||||||||
Selling and marketing | 5,308 | 16 | 369 | 2,322 | ||||||||||||
General and administrative | 3,287 | 3,767 | 1,876 | 11,814 | ||||||||||||
Total operating expenses | 9,072 | 4,375 | 2,824 | 17,782 | ||||||||||||
Operating loss | (11,441 | ) | (4,187 | ) | (1,675 | ) | (10,546 | ) | ||||||||
Interest income | 20 | 82 | 171 | 1,080 | ||||||||||||
Other income (expenses) | 608 | 563 | — | (3 | ) | |||||||||||
Interest expenses | (72 | ) | (333 | ) | (237 | ) | (1,495 | ) | ||||||||
Equity in loss of affiliates | — | (63 | ) | (48 | ) | (303 | ) | |||||||||
Loss before income tax expense | (10,885 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Income tax benefit | 10 | — | — | — | ||||||||||||
Net loss | (10,875 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Less: Net loss attributable to the non-controlling interests | 25 | — | — | — | ||||||||||||
Net loss attributable to Ku6 Media Co., Ltd. | (10,850 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Loss per share—basic and diluted | ||||||||||||||||
Net loss attributable to Ku6 Media Co., Ltd. ordinary shareholders | (US$0.00 | ) | (US$0.00 | ) | (US$0.00 | ) | (RMB0.00 | ) | ||||||||
Loss per ADS—basic and diluted | ||||||||||||||||
Net loss attributable to Ku6 Media Co., Ltd. ordinary shareholders | (US$0.31 | ) | (US$$0.08 | ) | (US$0.04 | ) | (RMB0.22 | ) | ||||||||
Weighted average shares used in per share calculation—basic and diluted | 3,481,202,831 | 5,019,786,036 | 5,019,786,036 | 5,019,786,036 | ||||||||||||
Weighted average ADSs used in per ADS calculation—basic and diluted | 34,812,028 | 50,197,860 | 50,197,860 | 50,197,860 | ||||||||||||
10
Ku6 Media Co., Ltd.
Consolidated Statements of Cash Flows
| For the Three Months Ended | ||||||||||||||||
| (Amounts in thousands) | March 31, 2011 US$ (Unaudited) | December 31, 2011 US$ (Unaudited) | March 31, 2012 US$ (Unaudited) | March 31, 2012 RMB (Unaudited) | ||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | (10,875 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Share-based compensation | 852 | (522 | ) | 509 | 3,204 | |||||||||||
Depreciation and amortization | 1,443 | 851 | 825 | 5,199 | ||||||||||||
Amortization and write-down of licensed video copyrights | 2,387 | 294 | 1 | 8 | ||||||||||||
Bad debt provision | 93 | (63 | ) | (1,359 | ) | (8,560 | ) | |||||||||
Exchange loss (gain) | 83 | (25 | ) | (5 | ) | (29 | ) | |||||||||
Equity in loss of affiliates | — | 63 | 48 | 303 | ||||||||||||
Loss on disposal of property and equipments | 36 | — | 1 | 3 | ||||||||||||
Changes in assets and liabilities, net of acquisitions and dispositions: | ||||||||||||||||
Accounts receivable | (665 | ) | 1,600 | 2,048 | 12,898 | |||||||||||
Prepaid expenses and other current assets | 1,332 | (319 | ) | 266 | 1,680 | |||||||||||
Amount due from related parties | (67 | ) | (174 | ) | (1,834 | ) | (11,546 | ) | ||||||||
Deposits and other non-current assets | (318 | ) | (23 | ) | — | — | ||||||||||
Inventories | 31 | — | — | — | ||||||||||||
Accounts payable | (1,434 | ) | (3,501 | ) | (1,522 | ) | (9,585 | ) | ||||||||
Accrued expenses and other current liabilities | (356 | ) | (2,617 | ) | 1,742 | 10,964 | ||||||||||
Amount due to related parties | 33 | 76 | — | — | ||||||||||||
Income tax payable | (10 | ) | — | — | — | |||||||||||
Net cash used in operating activities | (7,435 | ) | (8,298 | ) | (1,069 | ) | (6,728 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of property and equipments | (402 | ) | (1,144 | ) | (152 | ) | (955 | ) | ||||||||
Payments for licensed video copyrights | (1,565 | ) | (5,420 | ) | (140 | ) | (882 | ) | ||||||||
Restricted cash for pledge of bank loans | — | 2,066 | — | — | ||||||||||||
Loan to related parties under common control by Shanda | (6,700 | ) | — | (470 | ) | (2,960 | ) | |||||||||
Net cash used in investing activities | (8,667 | ) | (4,498 | ) | (762 | ) | (4,797 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from exercise of stock options | 4 | — | — | — | ||||||||||||
Borrowings from bank | — | 1,084 | — | — | ||||||||||||
Borrowings from related parties under common control by Shanda | 6,108 | — | — | — | ||||||||||||
Repayment for loans from related parties under common control of Shanda | — | (3,178 | ) | (3,136 | ) | (19,750 | ) | |||||||||
Net cash provided by (used in) financing activities | 6,112 | (2,094 | ) | (3,136 | ) | (19,750 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (90 | ) | 12 | 2 | 12 | |||||||||||
Net decrease in cash and cash equivalents | (10,080 | ) | (14,878 | ) | (4,965 | ) | (31,263 | ) | ||||||||
Cash and cash equivalents, beginning of period | 27,295 | 41,629 | 26,751 | 168,460 | ||||||||||||
Cash and cash equivalents, end of period | 17,215 | 26,751 | 21,786 | 137,197 | ||||||||||||
11
Reconciliations of Non-GAAP results of operations measures to the nearest comparable GAAP financial measures (*)
(Amounts in thousands of Renminbi (“RMB”) and United States dollar (“U.S. dollar”), unaudited)
| 1. | Non-GAAP Gross Profit (Loss) |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Gross profit (loss) | (2,369 | ) | 188 | 1,149 | 7,236 | |||||||||||
Add back: share-based compensation | 374 | (211 | ) | 95 | 596 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP gross profit (loss) | (1,995 | ) | (23 | ) | 1,244 | 7,832 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
| 2. | Non-GAAP Operating Expenses |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Operating expenses | 9,072 | 4,375 | 2,824 | 17,782 | ||||||||||||
Deduct: share-based compensation | 478 | (311 | ) | 414 | 2,608 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP operating expenses | 8,594 | 4,686 | 2,410 | 15,174 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| 3. | Non-GAAP Product Development Expenses |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Product development expenses | 477 | 592 | 579 | 3,646 | ||||||||||||
Deduct: share-based compensation | 102 | (85 | ) | 59 | 371 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP product development expenses | 375 | 677 | 520 | 3,275 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
12
| 4. | Non-GAAP Sales and Marketing Expenses |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Sales and marketing expenses | 5,308 | 16 | 369 | 2,322 | ||||||||||||
Deduct: share-based compensation | 403 | (452 | ) | 29 | 181 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP sales and marketing expenses | 4,905 | 468 | 340 | 2,141 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| 5. | Non-GAAP General and Administrative Expenses |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
General and administrative expenses | 3,287 | 3,767 | 1,876 | 11,814 | ||||||||||||
Deduct: share-based compensation | (27 | ) | 226 | 326 | 2,056 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP general and administrative expenses | 3,314 | 3,541 | 1,550 | 9,758 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| 6. | Non-GAAP Operating Loss |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Operating loss | (11,441 | ) | (4,187 | ) | (1,675 | ) | (10,546 | ) | ||||||||
Add back: share-based compensation | 852 | (522 | ) | 509 | 3,204 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP operating loss | (10,589 | ) | (4,709 | ) | (1,166 | ) | (7,342 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
13
| 7. | Non-GAAP Net Loss |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Net loss | (10,875 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Add back: share-based compensation | 852 | (522 | ) | 509 | 3,204 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP net loss | (10,023 | ) | (4,460 | ) | (1,280 | ) | (8,063 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
| 8. | Non-GAAP Net Loss Attributable to Ku6 Media Co., Ltd. |
| For the Three Months Ended, | ||||||||||||||||
| March 31, | December 31, | March 31, | March 31, | |||||||||||||
| 2011 | 2011 | 2012 | 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Net loss attributable to Ku6 Media Co., Ltd. | (10,850 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Add back: share-based compensation | 852 | (522 | ) | 509 | 3,204 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Non-GAAP net loss attributable to Ku6 Media Co., Ltd. | (9,998 | ) | (4,460 | ) | (1,280 | ) | (8,063 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
| 9. | Adjusted EBITDA Loss |
| For the Three Months Ended, | ||||||||||||||||
| March 31, 2011 | December 31, 2011 | March 31, 2012 | March 31, 2012 | |||||||||||||
| US$ | US$ | US$ | RMB | |||||||||||||
Net loss attributable to Ku6 Media Co., Ltd. | (10,850 | ) | (3,938 | ) | (1,789 | ) | (11,267 | ) | ||||||||
Add back (deduct): | ||||||||||||||||
Interest income | (20 | ) | (82 | ) | (171 | ) | (1,080 | ) | ||||||||
Interest expenses | 72 | 333 | 237 | 1,495 | ||||||||||||
Income tax expenses (benefit) | (10 | ) | — | — | — | |||||||||||
Depreciation and amortization (excluding amortization and write-down of licensed video copyrights) | 1,443 | 851 | 825 | 5,199 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
EBITDA loss | (9,365 | ) | (2,836 | ) | (898 | ) | (5,653 | ) | ||||||||
Adjustments: | ||||||||||||||||
Share-based compensation | 852 | (522 | ) | 509 | 3,204 | |||||||||||
Equity in loss of affiliates | — | 63 | 48 | 303 | ||||||||||||
Other expenses (income) | (608 | ) | (563 | ) | — | 3 | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Adjusted EBITDA loss | (9,121 | ) | (3,858 | ) | (341 | ) | (2,143 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
| * | For more information on the Non-GAAP financial measures, please see the section captioned “About Non-GAAP Financial Measures” in the earnings release. |
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Ku6 Media Co., Ltd. | ||
By: | /s/ Frank Feng | |
| Name: | Frank Feng | |
| Title: | Acting CFO | |
Date: June 5, 2012
15
