Ku6 Extends Loss From Chinese Online Video Biz After Dumping Wireless Services

China’s Ku6 Media Company Ltd., which boasts a new focus on Internet video services after dumping its poor wireless services offerings and its old name of Hurray, today announced its unaudited financial results for its second quarter ended June 30, 2010.

On August 17, 2010, the company announced that it changed its name to Ku6 Media Company Ltd. from Hurray! Holding Company Ltd., and changed its trading symbol on the Nasdaq Global Market from HRAY to KUTV.

Total revenues from continuing operations, representing advertising revenues contributed by online video portal operations, were USD2.4 million in the second quarter of 2010, up 98.8% from USD1.2 million in the first quarter of 2010, which included only the months of February and March 2010, since the acquisition of Ku6 Media was completed in January 2010. Net loss from continuing operations was USD14.7 million in the second quarter of 2010, an increase in loss of 60.4% from USD9.2 million in the first quarter of 2010.

Earnings before interest expense and interest income, income taxes, depreciation, and amortization for continuing operations was negative USD13.7 million in the second quarter of 2010.

On June 1, 2010, Ku6 Media entered into a definitive agreement to sell its wireless value-added services and recorded music businesses to Shanda Interactive Entertainment Limited and acquire Yisheng, an online radio business from Shanda, which was approved by a special committee comprised of three independent directors of Ku6 Media after receiving a fairness opinion on the proposed transaction from its independent financial advisor. Accordingly the assets and liabilities of the two operations were classified as held for sale in the balance sheet as of June 30, 2010, and the corresponding operating results were presented as “Operating Results of Discontinued Operations” in the income statements. The transaction was consummated in August 2010.

For the discontinued WVAS and recorded music businesses, total revenues were USD5.7 million in the second quarter of 2010, up 0.8% from USD5.6 million in the first quarter of 2010 and down 42.4% from USD9.8 million in the second quarter of 2009. Revenues from the WVAS business were USD1.8 million in the second quarter of 2010, up 1.5% from USD1.7 million in the first quarter of 2010 and down 68.3% from USD5.6 million in the second quarter of 2009.

Total revenues from continuing operations, representing the advertising revenue from online video portal operation were USD2.4 million in the second quarter of 2010, up 98.8% from USD1.2 million in the first quarter of 2010, which included only the months of February and March 2010, since the acquisition of Ku6 was completed in January 2010.

Gross loss was USD8.8 million for the second quarter of 2010 compared with a gross loss of USD5.0 million in the first quarter of 2010. The increase in gross loss of online video portal operations was mainly a result of the full-quarter consolidation of the segment’s operating results.

Net loss from continuing operations was USD14.7 million in the second quarter of 2010, an increase in loss of 60.4% from USD9.2 million in the first quarter of 2010 partly due to the full-quarter consolidation of the operating results of online video portal operations since the second quarter of 2010.

As of June 30, 2010, the company had USD38.0 million in cash and cash equivalents which included the cash balance of USD25.2 million transferred to Shanda with the sale of WVAS and recorded music businesses on August 17, 2010, and included in “current assets classified as held for sale”, and excluded the cash consideration of USD37.2 million received from Shanda for the asset sale and purchase transaction which was completed on August 17, 2010.