YOU On Demand (YOD) Enters non-Binding Term Sheet on MYP Stake; Will Change Name to WeCast Network
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- The Company has signed a non-binding Term Sheet with Sun Video Group HK Limited ("SVG") for 51% purchase of M.Y. Products, LLC ("MYP"), a video commerce and supply chain management operator, in exchange for $50 million worth of YOD common stock and $800k cash.
- SVG guarantees MYP will achieve $200 million cumulative top line revenue and gain profitability, within 12 months of closing.
- If MYP fails to meet the guarantee, then SVG shall forfeit back to the Company the YOD common stock it received, on a pro-rata basis. The shares will be held in escrow until the guarantee is met.
- MYP is 100% owned by SVG, an affiliate of YOD's Chairman, Bruno Wu, and Sun Seven Stars ("SSS").
- ADDITIONALLY, the Company is changing its corporate name to WeCast Network, Inc., which will become effective in Q4 (specific date to be announced).
- The Company will continue to trade on the Nasdaq Stock Exchange but under the new symbol WCST (specific date to be announced) with no change in the Company's share structure.
YOU On Demand Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or "YOD" or the "Company"), a premium content Video On Demand service provider in China, evolving into a global, mobile-driven, consumer management platform for both enterprises and consumers, announced today that it is changing its corporate name to WeCast Network, Inc ("WeCast Network") to reflect its new direction, forward-looking strategy and near-term product and service roadmap.
The name change will be phased in across all aspects of the business in the relatively near future, except for the legacy video-on-demand business, which will continue to be marketed with the original and current YOU On Demand name and logo and continue to represent the best in video entertainment for the Chinese market.
The YOU On Demand, Inc. corporate name will continue to be used in press releases and corporate filings until the name, WeCast Network, Inc., is officially deemed effective by the SEC.
Chairman Bruno Wu stated, "The impetus surrounding the change of our corporate name to WeCast Network, was to find a designation that could better encompass and further establish our unique identity in the industry and to more accurately represent our planned full portfolio of solutions and services that are in development and aimed at both a Chinese and global audience. This name change marks a new and expanded focus, and it underscores our firm commitment to offering innovative products and solutions that go well beyond our current offering. We are investing heavily in the future of our Company, as our industry requires an innovative approach and a fundamentally different way of operating. Our transformation strategy is focused on understanding and capturing data on our consumer's desires and habits and leveraging our business partner's technology and marketing to better monetize our world-class content in order to deliver personalized experiences to our contracted and addressable users and drive value for all of our stakeholders. Our rebranding to WeCast Network represents the ecosystem we are trying to build, coupled with our intention to leverage the infrastructure and reach of some of our partners in order to execute on our strategy."
Founder & Vice Chairman Shane McMahon, commenting on the rebranding, said "Changing our name to WeCast Network formalizes a shift in corporate strategy that has been underway since the beginning of 2016. This new name will be a jumping off point for a more comprehensive and wider-reaching vision, one which has been developing and has come very far in a short amount of time."
Earlier this year, the Company announced a plan to transform its business into 4 distinct verticals: Pay Content, Multi-Channel Network (MCN), Video Commerce and Marketing & Data Management. Since then, the Company has made important progress with each, including but not limited to:
- Pay Content Division
- Forming the GoLive TV Strategic Partnership expanding the Company's distribution footprint globally via Smart TVs: Press Release Link;
- Expanding strategic partnership with Huawei, increasing distribution reach to 10 Million Addressable Users: Press Release Link;
- Multi-Channel Network (MCN) Division
- Making a strategic investment in Frequency Networks for a 9% stake and forming a partnership for Asian region expansion: Press Release Link;
- Forming joint venture with Megtron Hong Kong Investment Group (a leading Asian mobile terminal ODM or original design manufacturer) for Indian and South Eastern Asian market expansion: Press Release Link
- Video Commerce Division
- Partnering with B.P.O. Global to launch an E- and Video Commerce vertical: Press Release Link;
- Marketing & Data Management Division
- Additional information/press releases coming at a future date
Alongside the corporate name change, the Company is launching the WeCast Supply Chain Management Platform ("WSCM") that will reside under the Video Commerce Division. WSCM will be an innovative platform that will directly connect Chinese product manufacturers to a global market of big box retailers (via various technology platforms), thereby disrupting the existing hierarchical and multilayered model of distribution. M.Y. Products, LLC, or MYP, will be a cornerstone of WSCM.
MYP is 100% owned by Sun Video Group HK Limited or SVG, an affiliate of YOD's Chairman, Bruno Wu, and Sun Seven Stars ("SSS"). Through a signed Term Sheet with SVG, the Company is purchasing 100% of M.Y. Products Global Limited, which owns 51% of M.Y. Products LLC, for $50 million worth of YOD common stock and $800K cash.
Through this transaction, YOU On Demand is gaining both a M2B or Manufacturer to Business, supply chain management operator as well as a M2C or Manufacturer to Consumer, video commerce operator, both of which will offer a full suite of pre-and post-sale services including administration, product management, logistics, financing, branding, licensing support and marketing for Chinese manufacturers exporting to the U.S. MYP assists Chinese manufacturer's revenue and profitability by reducing exorbitant middlemen costs that exist today in the distribution chain and allowing some of those savings to be reapportioned to brand development and design.
SVG guarantees that MYP will achieve $200 million in cumulative revenues and gain profitability, within 12 months of closing the transaction. If MYP fails to meet the guarantee, then SVG shall forfeit back to the Company the YOD common stock it received, on a pro-rata basis. The shares will be held in escrow until the guarantee is met.
This deal with MYP is contingent upon, among other things, both a fairness opinion and third-party valuation.
In addition, each party's obligations to consummate the transaction will be conditioned upon, amongst other things: 1. The completion of due diligence satisfactory to each party; 2. Each party receiving all required approvals (board, shareholder, regulatory, etc.); 3. Executions of a formal agreement containing such provisions as are customary for transactions of this nature.
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