(Updated - June 4, 2014 4:56 PM EDT)

VisionChina Media, Inc. (Nasdaq: VISN) reported Q1 EPS of ($1.41), versus ($2.87) reported last year. Revenue for the quarter came in at $22 million, versus $17.1 million reported last year.

Recent Developments

Settlement of Litigation

On April 30, 2014, the Company entered into a settlement arrangement with the selling shareholders of Digital Media Group to settle the litigation with them. Under the arrangement, the Company agrees to (a) release the entire amount of the indemnity escrow fund currently deposited in the designated escrow account (consisting of $4 million and 847,601 common shares of the Company, to be converted to ADSs, plus interest accrued), (b) pay $12 million in cash, including the funds of $4.5 million held by the Sheriff to the selling shareholders of Digital Media Group, and (c) issue the convertible promissory notes with principal amount of $58 million to the selling shareholders of Digital Media Group. The notes will be redeemed by the Company in installments on each anniversary of the issue date from the first to the sixth anniversaries of the issue date, at the amount of $4 million, $5 million, $13.5 million, $16.5 million, $16 million and US$3 million, respectively. Interest on the notes is accrued at a rate of the actual weighted average borrowing rate of the Company per annum. The notes are convertible at the elections of the holders of the notes in certain scenarios. The Company is currently evaluating the impact of the settlement arrangement, including the issuance of the notes, on the consolidated financial statements and therefore the fair value of the settlement amount is not determinable as of the date of this report. The consideration payable of approximately $75,800,000 recorded as of March 31, 2014 is the management's best estimate of the consideration required to settle the litigation with the former DMG shareholders. The Company expects the settlement transaction will closed in the second quarter of 2014.

New Chief Strategic Officer

VisionChina Media appointed Mr. Dennis Tianlin Deng as the Company's chief strategy officer, effective June 3, 2014. Mr. Deng will be a key player of the management team and oversee the operation of the Company's mobile internet business sector. Mr. Deng has over 20 years of experience in the telecommunications industry and served as executive in various multinational telecommunication companies. Prior to joining the Company, Mr. Deng was general manager of Asia Pacific for Novatel Communications Ltd., general manager of Greater China for Alcatel Internetworking Inc. and chief executive officer of Maxwell Technology in China. Mr. Deng also holds several patents in the United States and Canada. Mr. Deng received his bachelor`s degree in microwave communications networks from Beijing University of Posts and Telecommunications in 1984 and his master's degree in electrical engineering from the University of Calgary in 1990.

Guidance

The Company estimates its advertising service revenue for the second quarter of 2014 will be between $30.0 million and $31.6 million, representing year-over-year growth of 12.4% to 18.3%.

For earnings history and earnings-related data on VisionChina Media, Inc. (VISN) click here.

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