Ku6 Media Co., Ltd

CIK:0001294435|SEC Filings

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Net revenues:
Third parties	$ 10,793,324	$ 4,266,544	$ 737,874
Related parties	115,715	4,317,098	12,404,031
Total net revenues	10,909,039	8,583,642	13,141,905
Cost of revenues:
Third parties	(7,533,657)	(11,231,164)	(15,649,173)
Related parties	(510,854)	(909,775)	(335,504)
Total cost of revenues	(8,044,511)	(12,140,939)	(15,984,677)
Gross profit (loss)	2,864,528	(3,557,297)	(2,842,772)
Operating expenses:
Product development		(1,385,138)	(3,496,393)
Selling and marketing	(1,804,611)	(941,760)	(1,796,980)
General and administrative	(3,223,731)	(7,087,924)	(8,089,086)
Impairment of goodwill and intangible assets			(27,225,907)
Total operating expenses	(5,028,342)	(9,414,822)	(40,608,366)
Operating loss	(2,163,814)	(12,972,119)	(43,451,138)
Interest income:
Third parties	187,759	43,152	83,815
Related parties		3,388	28,856
Total interest income	187,759	46,540	112,671
Interest expense:
Related parties	(260,830)		(16,365)
Total interest expense	(260,830)		(16,365)
Other income, net	202,582	745,958	4,101,039
Gain from disposal of equity interest in affiliate		1,451,979
Loss before income tax benefits	(2,034,303)	(10,727,642)	(39,253,793)
Income tax benefits			4,826,059
Equity in losses of affiliate, net of tax	(16,879)
Net loss	(2,051,182)	(10,727,642)	(34,427,734)
Net loss	(2,051,182)	(10,727,642)	(34,427,734)
Other comprehensive income (loss), net of tax:
Currency translation adjustments of subsidiaries	336,144	193,864	(97,774)
Comprehensive loss	$ (1,715,038)	$ (10,533,778)	$ (34,525,508)
Ordinary shares
Loss per share - basic and diluted:
Net loss per share	$ 0.00	$ 0.00	$ (0.01)
Weighted average shares used in per share calculation - basic and diluted	4,767,742,804	4,746,324,022	4,728,185,434
ADS
Loss per share - basic and diluted:
Net loss per share	$ (0.04)	$ (0.23)	$ (0.73)
Weighted average shares used in per share calculation - basic and diluted	47,677,428	47,463,240	47,281,854

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
CONSOLIDATED STATEMENTS OF CASH FLOWS
Net loss	$ (2,051,182)	$ (10,727,642)	$ (34,427,734)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	281,944	600,995	1,023,871
Depreciation and amortization	543,861	1,048,398	3,388,950
Impairment of intangible assets	0	0	20,993,137
Impairment of goodwill			6,232,770
Deferred taxes			(4,826,059)
Provision for Seed Music receivable			980,000
Bad debt provision (reversal credited to income)		988,135	(310,699)
Gain on derecognition of aged operating liabilities	(13,891)	(206,533)	(2,938,250)
Exchange losses (gains)	344,667	226,641	(133,064)
Equity in losses of affiliated companies	16,879
Gain from disposal of equity interest in affiliate		(1,451,979)
Gains on disposal of property and equipment	(114,379)	(403)	(237,874)
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Accounts receivable	22,490	(1,037,273)	260,100
Prepaid expenses and other current assets	(37,345)	(104,388)	137,414
Amount due from related parties	(8,221)	6,563,757	(2,093,669)
Deposits and other non-current assets	347,963	(9,281)
Accounts payable	(236,377)	(676,200)	1,295,525
Accrued expenses and other current liabilities	(290,556)	(1,207,465)	(1,123,760)
Amount due to related parties	(328,516)	783,970	255,094
Net cash used in operating activities	(1,522,663)	(5,209,268)	(11,524,248)
Investing activities:
Purchases of property and equipment	(22,601)	(209,539)	(29,566)
Proceeds from disposal of property and equipment	114,379	1,510	238,087
Payment for licensed video copyright			(67,999)
Proceeds from disposal of equity interest in affiliate		1,451,979
Loan repayments from related parties under common control of Shanda		498,583	3,300,000
Cash paid for investment in affiliate	(46,312)
Net cash provided by investing activities	45,466	1,742,533	3,440,522
Financing activities:
Proceeds from exercise of stock options	84,975	338,563	46,400
Repurchase of ordinary shares			(58,147)
Cash received from third party to fund investment in affiliate	46,312
Borrowings from related party	4,631,190
Equity contribution from Shanda		5,847,070
Repayment of borrowings from related parties under common control of Shanda			(3,303,760)
Net cash provided by (used in) financing activities	4,762,477	6,185,633	(3,315,507)
Effect of exchange rate changes on cash and cash equivalents	32,318	(9,800)	(524)
Net increase (decrease) in cash and cash equivalents	3,317,598	2,709,098	(11,399,757)
Cash and cash equivalents, beginning of year	4,380,328	1,671,230	13,070,987
Cash and cash equivalents, end of year	7,697,926	4,380,328	1,671,230
Supplemental disclosure of cash flow information:
Loan interest paid to related parties			210,909
Supplemental disclosure of non-cash investing and financing activities:
Accounts payable related to purchase of property and equipment	1,001	2,157	19,779
Amount due to related parties related to purchase of property and equipment	784,504		$ 190,837
Financing of equity interest in affiliate with long-term service obligation	138,936
Net effect of borrowings from and receivables due from Shanda affiliates waived as to repayment and recharacterized as equity contribution		$ 5,405,317
Refinancing of related party loan - assumption of loan by Shanda affiliate from former related party	$ 4,888,674

CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 7,697,926	$ 4,380,328
Accounts receivable, net of allowance for doubtful accounts	91,326	113,816
Accounts receivable due from related parties	12,117	972
Prepaid expenses and other current assets	527,700	490,355
Other receivables due from related parties		2,924
Total current assets	8,329,069	4,988,395
Property and equipment, net	514,573	293,567
Investments in affiliates	168,610
Deposits and other non-current assets		347,963
Total assets	9,012,252	5,629,925
Current liabilities:
Accounts payable	2,824,167	3,075,591
Accounts payable due to related parties	912,534	709,911
Accrued expenses and other current liabilities	5,689,608	5,980,164
Accrued expenses due to related parties	253,365
Related party loan	4,631,190
Current portion of service obligation to related party affiliate	24,700
Total current liabilities	14,335,564	9,765,666
Long-term service obligation to related party affiliate	160,548
Total liabilities	$ 14,496,112	$ 9,765,666
Commitments and contingencies
Shareholders' deficit:
Ordinary shares ($0.00005 par value; 12,000,000,000 shares authorized; 4,763,360,860 and 4,771,610,860 shares issued and outstanding as of December 31, 2014 and 2015, respectively)	$ 238,533	$ 238,120
Additional paid-in capital	184,904,855	184,538,349
Accumulated deficit	(189,147,067)	(187,095,885)
Accumulated other comprehensive loss	(1,480,181)	(1,816,325)
Total shareholders' deficit	(5,483,860)	(4,135,741)
Total liabilities and deficit	$ 9,012,252	$ 5,629,925