10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-19644

YOU ON DEMAND HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Nevada	20-1778374
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

375 Greenwich Street, Suite 516
New York, New York 10013
(Address of principal executive offices)

212-206-1216
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes [X]     No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [X]     No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “larger accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer                     [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
24,027,924 shares as of November 16, 2015.

QUARTERLY REPORT ON FORM 10-Q
OF YOU ON DEMAND HOLDINGS, INC.
FOR THE PERIOD ENDED SEPTEMBER 30, 2015

TABLE OF CONTENTS

PART I	-FINANCIAL INFORMATION
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II	-OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	35
Signatures		37

References

Except as otherwise indicated by the context, references in this report to (i) the “Company,” “YOU On Demand,” “we,” “us,” and “our” are to YOU On Demand Holdings, Inc., a Nevada corporation, and its consolidated subsidiaries and variable interest entities; (ii) “CB Cayman” are to our wholly-owned subsidiary China Broadband, Ltd., a Cayman Islands company; (iii) “YOD Hong Kong” are to YOU On Demand (Asia) Limited (formerly known as Sinotop Group Limited), a Hong Kong company wholly-owned by CB Cayman; (iv) “YOD WFOE” are to YOU On Demand (Beijing) Technology Co., Ltd., a PRC company wholly-owned by YOD Hong Kong; (v) “Sinotop Beijing” or “Sinotop” are to Beijing Sino Top Scope Technology Co., Ltd, a PRC company controlled by YOD Hong Kong through contractual arrangements; (vi) “Zhong Hai Video” are to Zhong Hai Shi Xun Information Technology Co., Ltd., a PRC company 80% owned by Sinotop Beijing; (vii) “Hua Cheng” are to Hua Cheng Hu Dong (Beijing) Film and Television Communication Co., Ltd., a PRC company 39% owned by Sinotop Beijing and 20% owner of Zhong Hai Video; (viii) “WFOE” are to our wholly-owned subsidiary Beijing China Broadband Network Technology Co., Ltd., a PRC company, which was sold effective March 25, 2014; (ix) “Jinan Zhong Kuan” are to Jinan Zhong Kuan Dian Guang Information Technology Co. Ltd., a PRC company controlled through contractual arrangements, which was dissolved effective March 25, 2014; (x) “SEC” are to the United States Securities and Exchange Commission; (xi) “Securities Act” are to Securities Act of 1933, as amended; (xii) “Exchange Act” are to the Securities Exchange Act of 1934, as amended; (xiii) “PRC” and “China” are to People’s Republic of China; (xiv) “Renminbi” and “RMB” are to the legal currency of China; (xv) “U.S. dollar,” “$” and “US$” are to United States dollars; and (xvi) “VIE” refers to our current variable interest entity, Sinotop Beijing.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

YOU ON DEMAND HOLDINGS, INC., ITS SUBSIDIARIES AND VARIABLE INTEREST ENTITY
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2015

	Page
Unaudited Consolidated Balance Sheets	5
Unaudited Consolidated Statements of Operations	6
Unaudited Consolidated Statements of Comprehensive Loss	7
Unaudited Consolidated Statements of Cash Flows	8
Unaudited Consolidated Statements of Equity	9
Notes to Unaudited Consolidated Financial Statements	11

4

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED BALANCE SHEETS

		September 30,			December 31,
		2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	4,356,761		$	10,812,371
Accounts receivable, net		2,578,745			1,091,076
Licensed content, current		969,250			1,041,609
Prepaid expenses		522,505			196,474
Other current assets		44,790			22,442
Total current assets		8,472,051			13,163,972
Property and equipment, net		198,315			320,671
Licensed content, non-current		27,118			35,648
Intangible assets, net		2,482,398			2,320,103
Goodwill		6,648,911			6,648,911
Long-term equity investments		688,672			850,054
Other non-current assets		279,476			365,006
Total assets	$	18,796,941		$	23,704,365
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY
Current liabilities:
Accounts payable (including accounts payable of consolidated variable interest entity (“VIE”)                        without recourse to the Company of $9,229 and $8,598 as of September 30, 2015 and                        December 31, 2014, respectively)	$	22,374		$	110,814
Deferred revenue (including deferred revenue of VIE without recourse to the Company of                        $217,991 and $13,431 as of September 30, 2015 and December 31, 2014, respectively)		217,991			13,431
Accrued expenses and other liabilities (including accrued expenses and other liabilities of VIE                        without recourse to the Company of $998,930 and $573,620 as of September 30, 2015                        and December 31, 2014, respectively)		3,019,822			2,046,783
Accrued license fees (including accrued license fees of VIE without recourse to the Company of                        $746,071 and $348,007 as of September 30, 2015 and December 31, 2014, respectively)		746,071			348,007
Convertible promissory note		3,000,000			3,000,000
Warrant liabilities		459,686			585,050
Total current liabilities		7,465,944			6,104,085
Deferred income tax liability		338,736			364,572
Total liabilities		7,804,680			6,468,657
Commitments and contingencies
Convertible redeemable preferred stock:
Series A - 7,000,000 shares issued and outstanding, liquidation preference of $3,500,000 as of                        September 30, 2015 and December 31, 2014, respectively		1,261,995			1,261,995
Equity:
Series E Preferred Stock - $0.001 par value; 16,500,000 shares authorized, 7,254,997 and                        7,365,283 shares issued and outstanding, liquidation preference of $12,696,245 and                        $12,889,245 as of September 30, 2015 and December 31, 2014, respectively		7,255			7,365
Common stock, $0.001 par value; 1,500,000,000 shares authorized, 24,027,924 and 23,793,702                        shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively		24,028			23,794
Additional paid-in capital		96,865,051			96,347,272
Accumulated deficit		(84,558,094	)		(78,356,567	)
Accumulated other comprehensive loss		(266,742	)		(66,032	)
Total YOU On Demand shareholder’s equity		12,071,498			17,955,832
Non-controlling interest		(2,341,232	)		(1,982,119	)
Total equity		9,730,266			15,973,713
Total liabilities, convertible redeemable preferred stock and equity	$	18,796,941		$	23,704,365

The accompanying notes are an integral part of these consolidated financial statements.

5

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended						Nine Months Ended
		September 30,			September 30,			September 30,			September 30,
		2015			2014			2015			2014
Revenue	$	476,165		$	644,891		$	2,983,741		$	965,268
Cost of revenue		900,284			873,025			2,772,322			2,606,142
Gross profit/(loss)		(424,119	)		(228,134	)		211,419			(1,640,874	)
Operating expenses:
Selling, general and administrative expense		1,832,443			1,861,053			5,939,559			5,772,350
Professional fees		141,034			114,271			581,115			375,986
Depreciation and amortization		98,643			124,936			283,468			414,486
Total operating expense		2,072,120			2,100,260			6,804,142			6,562,822
Loss from operations		(2,496,239	)		(2,328,394	)		(6,592,723	)		(8,203,696	)
Interest and other income/(expense)
Interest expense, net		(30,613	)		(29,151	)		(89,168	)		(2,346,210	)
Change in fair value of warrant liabilities		91,315			281,537			125,364			(655,849	)
Change in fair value of contingent consideration		-			(47,634	)		-			(160,766	)
Loss on investment in unconsolidated entities		(50,642	)		(6,389	)		(143,666	)		(16,646	)
Gain on sale of subsidiary		-			-			-			755,426
Loss on dissolution of a variable interest entity		-			-			-			(27,463	)
Others		142,280			(14,783	)		95,937			(82,464	)
Net loss before income taxes and non-controlling interest		(2,343,899	)		(2,144,814	)		(6,604,256	)		(10,737,668	)
Income tax benefit		8,612			28,812			25,836			84,249
Net loss		(2,335,287	)		(2,116,002	)		(6,578,420	)		(10,653,419	)
Net loss attributable to non-controlling interest		249,369			169,364			376,893			696,708
Net loss attributable to YOU On Demand shareholders		(2,085,918	)		(1,946,638	)		(6,201,527	)		(9,956,711	)
Dividends and deemed dividends on preferred stock		-			-			-			(16,402,161	)
Net loss attributable to YOU On Demand common shareholders	$	(2,085,918	)	$	(1,946,638	)	$	(6,201,527	)	$	(26,358,872	)
Basic and diluted loss per share	$	(0.09	)	$	(0.09	)	$	(0.26	)	$	(1.45	)
Weighted average shares outstanding:
Basic and diluted		24,003,403			22,012,166			23,890,929			18,203,124

The accompanying notes are an integral part of these consolidated financial statements.

6

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

		Three Months Ended						Nine Months Ended
		September 30,			September 30,			September 30,			September 30,
		2015			2014			2015			2014
Net loss	$	(2,335,287	)	$	(2,116,002	)	$	(6,578,420	)	$	(10,653,419	)
Other comprehensive loss, net of tax
Sale of subsidiary and dissolution of variable interest entity		-			-			-			(633,984	)
Foreign currency translation adjustments		(182,208	)		31,264			(182,930	)		(21,907	)
Comprehensive loss		(2,517,495	)		(2,084,738	)		(6,761,350	)		(11,309,310	)
Comprehensive loss attributable to non-controlling interest		230,472			170,042			359,113			685,988
Comprehensive loss attributable to YOU On Demand shareholders	$	(2,287,023	)	$	(1,914,696	)	$	(6,402,237	)	$	(10,623,322	)

The accompanying notes are an integral part of these consolidated financial statements.

7

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Cash flows from operating activities:
Net loss	$	(6,578,420	)	$	(10,653,419	)
Adjustments to reconcile net loss to net cash used in operating activities
Share-based compensation expense		967,902			1,133,335
Provision for doubtful accounts		9,087			-
Depreciation and amortization		283,468			414,486
Amortization of interest expense related to debt issuance costs		-			128,879
Amortization of interest expense related to beneficial conversion feature		-			2,126,301
Income tax benefit		(25,836	)		(84,249	)
Loss on long-term equity investments		143,666			16,646
Loss on disposal of assets		2,421			8,334
Change in fair value of warrant liabilities		(125,364	)		655,849
Change in fair value of contingent consideration		-			160,766
Gain from disposal of consolidated entities		-			(727,963	)
Change in assets and liabilities,
Accounts receivable		(1,496,756	)		(461,473	)
Licensed content		80,889			(555,762	)
Prepaid expenses and other assets		(338,814	)		(97,399	)
Accounts payable		(88,440	)		(482,932	)
Accrued expenses and other liabilities		346,468			350,541
Deferred revenue		204,560			73,175
Deferred license fee		398,064			4,663
Net cash used in operating activities		(6,217,105	)		(7,990,222	)
Cash flows from investing activities:
Acquisition of property and equipment		(32,193	)		(58,869	)
Acquisition of leasehold improvements		-			(9,492	)
Investments in intangibles and research and development		(48,938	)		(292	)
Investments in unconsolidated entities		-			(208,760	)
Sale of subsidiary		-			(7,549	)
Net cash used in investing activities		(81,131	)		(284,962	)
Cash flows from financing activities
Proceeds from sale of Series E Preferred Stock		-			19,000,000
Proceeds from the exercise of warrants and options		-			995,607
Series D Preferred Stock dividend payment		-			(92,054	)
Interest paid on convertible note		-			(2,386,051	)
Net cash provided by financing activities		-			17,517,502
Effect of exchange rate changes on cash		(157,374	)		(19,992	)
Net increase/(decrease) in cash and cash equivalents		(6,455,610	)		9,222,326
Cash and cash equivalents at beginning of period		10,812,371			3,822,889
Cash and cash equivalents at end of period	$	4,356,761		$	13,045,215
Supplemental Cash Flow Information:
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	-		$	-
Value of warrants issued for issuance costs in connection with Preferred Series E Preferred Stock	$	-		$	2,166,296
Conversion of convertible promissory note for Series E Preferred Stock	$	-		$	2,000,000
Exchange of Series D Preferred Stock for Series E Preferred Stock	$	-		$	4,000,000
Value of common stock issued from conversion of Preferred Series C shares	$	-		$	219,754
Values of shares and options issued for Sinotop contingent consideration earn-out	$	-		$	739,265
Exchange of Series E Preferred Stock for common stock	$	110		$	-

The accompanying notes are an integral part of these consolidated financial statements.

8

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY
For the Nine Months Ended September 30, 2014

																Accumulated			YOU on
										Additional						Other			Demand
	Preferred			Par		Common		Par		Paid-in			Accumulated			Comprehensive			Shareholders'			Non-controlling			Total
	Stock			Value		Stock		Value		Capital			Deficit			Loss			Equity			Interest			Equity
Balance, January 1, 2014	-		$	-		15,794,762	$	15,794	$	67,417,025		$	(65,856,053	)	$	(715,090	)	$	861,676		$	(1,397,322	)	$	(535,646	)
Share-based compensation	-			-		-		-		718,969			-			-			718,969			-			718,969
Common stock issued for services	-			-		73,600		74		179,926			-			-			180,000			-			180,000
Common stock and options issued for Sinotop acquisition earn-out	-			-		245,274		245		739,265			-			-			739,510			-			739,510
Conversion of Series C Preferred Stock into common stock	-			-		140,000		140		219,614			-			-			219,754			-			219,754
Series D Preferred Stock cash dividends	-			-		-		-		-			(92,054	)		-			(92,054	)		-			(92,054	)
Series E Preferred Stock issued	14,285,714			14,286		-		-		24,985,714			-			-			25,000,000			-			25,000,000
Conversion of Series E Preferred Stock into common stock	(6,725,716	)		(6,726	)	6,725,716		6,726		-			-						-			-			-
Issuance costs in connection with the issuance of Series E Preferred Stock	-			-		-		-		(4,552,347	)		-			-			(4,552,347	)		-			(4,552,347	)
Valuation of warrants issued to placement agent in connection with the issuance of Series E Preferred Stock	-			-		-		-		2,166,296			-			-			2,166,296			-			2,166,296
Beneficial conversion feature of Series E Preferred Stock	-			-		-		-		16,388,572			(16,388,572	)		-			-			-			-
Beneficial conversion feature related to convertible note modification	-			-		-		-		2,126,301			-			-			2,126,301			-			2,126,301
Sale of subsidiary and dissolution of variable interest entity	-			-		-		-		-			-			(633,984	)		(633,984	)		-			(633,984	)
Exercise of warrants	-			-		607,480		607		2,374,575			-			-			2,375,182			-			2,375,182
Exercise of options	-			-		11,598		12		1,040			-			-			1,052			-			1,052
Net loss attributable to YOU On Demand shareholders	-			-		-		-		-			(9,956,711	)		-			(9,956,711	)		(696,708	)		(10,653,419	)
Foreign currency translation adjustments	-			-		-		-		-			-			(32,627	)		(32,627	)		10,720			(21,907	)
Balance, September 30, 2014	7,559,998		$	7,560		23,598,430	$	23,598	$	112,764,950		$	(92,293,390	)	$	(1,381,701	)	$	19,121,017		$	(2,083,310	)	$	17,037,707

The accompanying notes are an integral part of these consolidated financial statements.

9

YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity
UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY
For the Nine Months Ended September 30, 2015

																Accumulated			YOU On
	Series E			Series E						Additional						Other			Demand			Non-
	Preferred			Par		Common		Par		Paid-in			Accumulated			Comprehensive			Shareholders'			controlling			Total
	Stock			Value		Stock		Value		Capital			Deficit			Loss			Equity			Interest			Equity
Balance, January 1, 2015	7,365,283		$	7,365		23,793,702	$	23,794	$	96,347,272		$	(78,356,567	)	$	(66,032	)	$	17,955,832		$	(1,982,119	)	$	15,973,713
Share-based compensation	-			-		-		-		300,797			-			-			300,797			-			300,797
Common stock issued for services	-			-		120,755		121		216,985			-			-			217,106			-			217,106
Conversion of Series E Preferred Stock into common stock	(110,286	)		(110	)	110,286		110		-			-			-			-			-			-
Exercise of options	-			-		3,181		3		(3	)		-			-			-			-			-
Net loss attributable to YOU On Demand shareholders	-			-		-		-		-			(6,201,527	)		-			(6,201,527	)		(376,893	)		(6,578,420	)
Foreign currency translation adjustments	-			-		-		-		-			-			(200,710	)		(200,710	)		17,780			(182,930	)
Balance, September 30, 2015	7,254,997		$	7,255		24,027,924	$	24,028	$	96,865,051		$	(84,558,094	)	$	(266,742	)	$	12,071,498		$	(2,341,232	)	$	9,730,266

The accompanying notes are an integral part of these consolidated financial statements.

10

1. Organization and Principal Activities

YOU On Demand Holdings, Inc., is a Nevada corporation that primarily operates in China through our subsidiaries and variable interest entities (“VIEs”). The Company, its subsidiaries and its VIEs are collectively referred to as YOU on Demand (“YOU On Demand”, “we”, “us”, or “the Company”).

YOU on Demand is principally engaged in providing and delivery of video on demand (“VOD”) content and video streaming service through a comprehensive end-to-end secure delivery system. Our services are offered across multiple platforms, including digital cable television, IPTV (“Internet Protocol Television”), mobile and over-the-top (“OTT”) devices.

In the opinion of management, these financial statements reflect all adjustments, which are of a normal and recurring nature that is necessary for a fair statement of the results for the periods presented in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and with the instructions to Form 10-Q in Article 10 of SEC Regulation S-X. The results of operations for the interim periods presented are not necessarily indicative of results for the full year.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 30, 2015 (our “2014 Annual Report”).

2. Going Concern and Management’s Plans

For the nine months ended September 30, 2015, we incurred a net loss of approximately $6.6 million and we used cash for operations of approximately $6.2 million. Further, we had an accumulated deficit of approximately $84.6 million as of September 30, 2015.

The Company must continue to rely on debt and equity to pay for ongoing operating expenses in order to execute its business plan. On January 31, 2014, we completed a Series E Preferred Stock financing (as discussed below in Note 9) in which we raised an additional $19.0 million. We also may have the ability to raise funds by various methods, including utilization of our $50 million shelf registration, of which $47.3 million is remaining, as well as other means of financing such as debt or private investment. However, financing may not be available to the Company on terms acceptable to us or at all or such resources may not be received in a timely manner. Further we may need approval to seek additional financing from the shareholders from the August 2012 private financing in the event we do a public financing.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

3. VIE Structure and Arrangements

To comply with PRC laws and regulation that prohibit or restrict foreign ownership of companies that provide value-added telecommunication services, the Company provides its services through Sinotop Beijing and its subsidiary, Zhonghai Video, which holds the licenses and approvals to provide digital distribution and Internet content services in the PRC. The Company has obtained substantial ability to control Sinotop Beijing and Zhonghai Video through a series of contractual agreements entered into among YOD WFOE, YOD Hong Kong, Sinotop Beijing and the legal shareholder of Sinotop Beijing.

Management Services Agreement

Pursuant to a Management Services Agreement, as of March 9, 2010, between Sinotop Beijing and YOD Hong Kong (the “Management Services Agreement”), YOD Hong Kong has the exclusive right to provide to Sinotop Beijing management, financial and other services related to the operation of Sinotop Beijing’s business, and Sinotop Beijing is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from Sinotop Beijing, upon demand, equal to 100% of the annual net profits of Sinotop Beijing during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee, which payments will be credited against Sinotop Hong Kong’s future payment obligations.

11

The Management Services Agreement also provides YOD Hong Kong, or its designee, with a right of first refusal to acquire all or any portion of the equity of Sinotop Beijing upon any proposal by the sole shareholder of Sinotop Beijing to transfer such equity. In addition, at the sole discretion of YOD Hong Kong, Sinotop Beijing is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of Sinotop Beijing which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including:

(a) business opportunities presented to, or available to Sinotop Beijing may be pursued and contracted for in the name of YOD Hong Kong rather than Sinotop Beijing, and at its discretion, YOD Hong Kong may employ the resources of Sinotop Beijing to secure such opportunities;

(b) any tangible or intangible property of Sinotop Bejing, any contractual rights, any personnel, and any other items or things of value held by Sinotop Beijing may be transferred to YOD Hong Kong at book value;

(c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to Sinotop Beijing on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing;

(d) contracts entered into in the name of Sinotop Beijing may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing; and

(e) any changes to, or any expansion or contraction of, the business may be carried out in the exercise of the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of Sinotop Beijing.

The term of the Management Services Agreement is 20 years, and may not be terminated by Sinotop Beijing, except with the consent of, or a material breach by, YOD Hong Kong.

Equity Pledge Agreement

Pursuant to an Equity Pledge Agreement among YOD Hong Kong, Sinotop Beijing and the sole shareholder of Sinotop Beijing (the “Shareholder”), dated March 9, 2010, the Shareholder pledged all of its equity interests in Sinotop Beijing (the “Collateral”) to YOD Hong Kong as security for the performance of the obligations of Sinotop Beijing to make all of the required management fee payments pursuant to the Management Services Agreement. The term of the Equity Pledge Agreement expires two years from Sinotop Beijing’s satisfaction of all obligations under the Management Services Agreement.

Option Agreement

Pursuant to an Option Agreement among YOD Hong Kong, Sinotop Beijing and the Shareholder, dated March 9, 2010, and entered into in connection with the Management Services Agreement, the Shareholder granted an exclusive option to YOD Hong Kong, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the Shareholder’s equity in Sinotop Beijing. The aggregate purchase price of the option is equal to the registered paid-in capital of the Shareholder. The term of the agreement is until all of the equity interest in Sinotop Beijing held by the Shareholder is transferred to YOD Hong Kong, or its designee, or until the maximum period allowed by law has run, and may not be terminated by any party to the agreement without the consent of the other parties.

Voting Rights Proxy Agreement

Pursuant to a Voting Rights Proxy Agreement among YOD Hong Kong, Sinotop Beijing and the Shareholder, dated March 9, 2010, the Shareholder granted to YOD Hong Kong an irrevocable proxy, for the maximum period of time permitted by law, all of its voting rights as a shareholder of Sinotop Beijing. The Shareholder may not transfer any of its equity interest in Sinotop Beijing to any party other than YOD Hong Kong. The Voting Rights Proxy Agreement may not be terminated except upon the written consent of all parties, or unilaterally by YOD Hong Kong upon 30 days’ notice.

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On June 4, 2012, YOD Hong Kong assigned all rights under the above agreement to YOD WFOE, its wholly-owned subsidiary. Accordingly, YOD WFOE may exercise the above agreements in place of YOD Hong Kong.

Under the above contractual agreements, YOD WFOE has the power to direct the activities of the Sinotop Beijing, and can have the assets transferred freely out of Sinotop Beijing without any restrictions. Therefore, YOD WFOE considers that there is no asset of Sinotop Beijing or Zhonghai Video that can be used only to settle obligations of Sinotop Beijing or Zhonghai Video, except for the registered capital of these two entities amounting to RMB17.0 million (approximately $2.7 million) as of September 30, 2015. As Sinotop Beijing and Zhonghai Video are incorporated as limited liability companies under PRC Company Law, creditors of these two entities do not have recourse to the general credit of other entities of the Company.

Financial Information

The following financial information of our VIEs as applicable for the periods presented, affected the Company’s consolidated financial statements.

		September 30,		December 31,
		2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	74,541	$	506,525
Accounts receivable, net		2,578,745		1,091,076
Licensed content, current		969,250		1,041,609
Prepaid expenses		76,498		105,918
Other current assets		29,299		12,811
Intercompany receivables due from the Company's subsidiaries(i)		125,178		572,192
Total current assets		3,853,511		3,330,131
Property and equipment, net		191,134		297,898
Licensed content, non-current		27,118		35,648
Intangible assets, net		284,535		5,291
Long-term equity investments		688,672		850,054
Other non-current assets		187,508		272,657
Total assets	$	5,232,478	$	4,791,679
LIABILITIES
Current liabilities:
Accounts payable	$	9,229	$	8,598
Deferred revenue		217,991		13,431
Accrued expenses and other liabilities		998,930		573,620
Accrued license fees		746,071		348,007
Intercompany payables due to the Company's subsidiaries(i)		12,443,690		11,200,536
Total current liabilities		14,415,911		12,144,192
Total liabilities	$	14,415,911	$	12,144,192

(i) Intercompany receivables and payables are eliminated upon consolidation

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Revenue	$	2,983,741		$	965,268
Net loss	$	(2,030,575	)	$	(3,548,767	)

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Net cash used in operating activities	$	(352,169	)	$	(2,074,850	)
Net cash used in investing activities	$	(79,815	)	$	(276,460	)
Net cash provided by financing activities	$	-		$	-

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4. Sales of WFOE and Dissolution of Jinan Zhong Kuan

On March 25, 2014, we sold Beijing China Broadband Network Technology Co., Ltd. (“WFOE”), our wholly-owned subsidiary, to Linkstar Global Investment Limited. On the same date, we dissolved Jinan Zhong Kuan Dian Guang Information Technology Co., Ltd. (“Jinan Zhong Kuan”), the VIE of WFOE. Both WFOE and Jinan Zhong Kuan were investment holding companies and were sold or dissolved when we determined that they were no longer required for our organizational structure. Total consideration for the sale of WFOE was US$50,000, which we received in the third quarter of 2014. In accordance with ASC 810-10-40, Deconsolidation of a Subsidiary, we derecognized the net assets associated with WFOE and Jinan Zhong Kuan on March 25, 2014 when we ceased to have controlling financial interest in these entities.

5. Property and Equipment

The following is a breakdown of our property and equipment:

		September 30,			December 31,
		2015			2014
Furniture and office equipment	$	931,242		$	959,080
Leasehold improvements		190,722			190,722
Total property and equipment		1,121,964			1,149,802
Less: accumulated depreciation		(923,649	)		(829,131	)
Net carrying value	$	198,315		$	320,671

We recorded depreciation expense of approximately $47,000 and $147,000 for the three and nine months ended September 30, 2015. We recorded depreciation expense of approximately $55,000 and $181,000 for the three and nine months ended September 30, 2014.

6. Intangible Assets

The Company intangible assets primarily arose from the acquisition of YOD Hong Kong.

As of September 30, 2015, the Company’s amortized intangible assets consisted of the following:

		September 30, 2015							December 31, 2014
		Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net
		Amount		Amortization			Balance		Amount		Amortization			Balance
Charter/ Cooperation agreements	$	2,755,821	$	(711,924	)	$	2,043,897	$	2,755,821	$	(608,580	)	$	2,147,241
Software and licenses		253,930		(227,860	)		26,070		253,930		(215,358	)		38,572
Website and mobile app development		653,830		(375,689	)		278,141		356,425		(356,425	)		-
Total definite lived intangible assets	$	3,663,581	$	(1,315,473	)	$	2,348,108	$	3,366,176	$	(1,180,363	)	$	2,185,813
Website name		134,290		-			134,290		134,290		-			134,290
Total intangible assets	$	3,797,871	$	(1,315,473	)	$	2,482,398	$	3,500,466	$	(1,180,363	)	$	2,320,103

We recorded amortization expense related to our finite lived intangible assets of approximately $52,000 and $137,000 for the three and nine months ended September 30, 2015. We recorded amortization expense related to our finite lived intangible assets of approximately $70,000 and $234,000 for the three and nine months ended September 30, 2014.

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The following table outlines the amortization expense for the next five years and thereafter:

		Amortization to be
Years ending December 31,		Recognized
2015 (3 months)	$	62,003
2016		255,274
2017		239,487
2018		194,788
2019		138,275
2020		137,792
Thereafter		1,320,489
Total amortization to be recognized	$	2,348,108

7. Fair Value Measurements

Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows:

• Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access.

• Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.

• Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Accounting standards require the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

We review the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis, and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information.

The fair value of the warrant liabilities at September 30, 2015 were valued using the Black-Scholes Merton method as an estimate for the Monte Carlos Simulation method which was the method used at the year ended December 31, 2014. The following assumptions were incorporated:

	Black Scholes	Monte Carlo
	September 30,	December 31,
	2015	2014
Risk-free interest rate	0.64%	1.040%
Expected volatility	70%	70%
Expected term (years)	1.92	2.67
Expected dividend yield	0%	0%

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014, respectively:

		September 30, 2015
		Fair Value Measurements
		Level 1		Level 2		Level 3		Total Fair Value
Liabilities
Warrant liabilities (see Note 10)	$	-	$	-	$	459,686	$	459,686

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		December 31, 2014
		Fair Value Measurements
		Level 1		Level 2		Level 3		Total Fair Value
Liabilities
Warrant liabilities (see Note 10)	$	-	$	-	$	585,050	$	585,050

The table below reflects the components effecting the change in fair value for the nine months ended September 30, 2015:

		Level 3 Assets and Liabilities
		For the Nine Months Ended September 30, 2015
						Change in
		January 1,				Fair Value			September 30,
		2015		Settlements		gain			2015
Liabilities:
Warrant liabilities (see Note 10)	$	585,050	$	-	$	(125,364	)	$	459,686

The significant unobservable inputs used in the fair value measurement of the Company’s warrant liability includes the risk free interest rate, expected volatility, expected term and expected dividend yield. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value measurement.

The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other payables and convertible promissory note as of September 30, 2015 and December 31, 2014, approximate fair value because of the short maturity of these instruments.

8. Related Party Transactions

(a) $3.0 Million Convertible Note

On May 10, 2012, our Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the “Note”). Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Thereafter, on May 21, 2012, at the Company’s request, the Company and Mr. McMahon entered into Amendment No.1 to the Note, pursuant to which the price per share at which the Note, or any convertible Securities into which the Note is converted, may be converted into shares of the Company’s common stock, shall not be less than $4.75, which amount represents the closing bid price of the Company’s common stock on the trading day immediately prior to the date of the Note in accordance with the rules and regulations of The Nasdaq Stock Market, Inc.

On April 12, 2013, our majority shareholders approved an amendment to the Note, as amended on May 21, 2012, to remove the $4.75 floor to the conversion price of the Note and such approval and such amendment was effective following the expiration of the 20-day period mandated by Rule 14c-2.

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Effective May 10, 2013, the Company and Mr. McMahon entered into Amendment No. 3 to the note pursuant to which (i) the Note will mature on November 10, 2013, and (ii) the net proceeds of any financing of equity or equity-linked securities of the Company occurring on or before such date will be used to repay the Note until the full amount of the Note, and all accrued interest on the Note is repaid.

In connection with the Series D Amendment (as discussed below in Note 9), on November 4, 2013, the Company and Mr. McMahon entered into a waiver, pursuant to which (i) Mr. McMahon waived the Company’s obligation to repay the Note on November 10, 2013, (ii) the Company and Mr. McMahon agreed that the principal and all interest on the Note shall become due and payable on the earlier of (a) the closing of the Series E Financing, or (b) if there is no Series E Financing, the date when the Bridge Note (as discussed below in Note 9) is repaid in full or converted into shares of Series D Preferred Stock, and (iii) Mr. McMahon waived the Company’s obligation to repay the Note with the proceeds received from the issuance of the Bridge Note.

Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note will be, at Mr. McMahon’s option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the “Series E Preferred Stock”) at a conversion price of $1.75, until December 31, 2014. As a result, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand.

Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 to the Note pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon’s option.

For the three and nine months ended September 30, 2015, the Company recorded interest expense of $30,000 and $90,000, respectively, related to the Note. For the three and nine months ended September 30, 2014, the Company recorded interest expense of $30,000 and $2,216,000, respectively, related to the Note.

(b) Revenue and Accounts Receivable

In March 2015, Zhong Hai Video entered into an agreement with C Media Limited (“C Media”) to provide video content services via C Media’s proprietary railway Wi-Fi service platform. As of September 30, 2015, C Media is our largest shareholder. For the three and nine months ended September 30, 2015, total revenue recognized amounted to nil and $182,000, respectively. As of September 30, 2015, total accounts receivable due from C Media amounted to $94,000.

(c) Cost of Revenue

Zhong Hai Video paid licensed content fees of approximately nil and $41,000 for the three months ended September 30, 2015 and 2014, and $80,000 and $122,000 for the nine months ended September 30, 2015 and 2014, respectively, to Hua Cheng, the minority shareholder of Zhong Hai Video. As of September 30, 2015 and 2014, total accounts payable due to Hua Cheng amounted to $39,000 and nil.

(d) Sale of WFOE

Effective March 25, 2014, WFOE, our wholly-owned subsidiary, was sold to Linkstar Global Investment Limited, whose sole shareholder is a family member of one of our management personnel. Total consideration for the sale of WFOE was $50,000, which was received in the third quarter of 2014.

9. Series D and Series E Preferred Stock Financing and Convertible Note

(a) Series D Preferred Stock

On July 5, 2013, we entered into a Series D Preferred Stock Purchase Agreement with C Media, pursuant to which we sold to C Media 2,285,714 shares of Series D 4% Convertible Redeemable Preferred Stock of the Company (the “Series D Preferred Stock”) for $1.75 per share, or a total purchase price of $4,000,000.

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On January 31, 2014, the Company exchanged the Series D Preferred Stock to Series E Preferred Stock, effective as of January 31, 2014. Previously recognized beneficial conversion feature of $183,000 related to the Series D Preferred Stock original issuance was reversed and the Company recognized approximately $2,651,000 of beneficial conversion feature as a deemed dividend related to the exchange of Series D Preferred Stock to Series E Preferred Stock. Further, in accordance with the terms of the Series D Preferred Stock Purchase Agreement, the Company paid the full cumulative dividends of $92,000 upon the exchange of the Series D Preferred Stock to Series E Preferred Stock.

(b) $2.0 Million Convertible Note

On November 4, 2013, the Company issued a convertible note to C Media in $2,000,000 principal amount (the “Bridge Note”). The Bridge Note had an annual interest rate of 4% and a maturity date of January 5, 2015. Upon the closing of a financing pursuant to the terms of the Series D Preferred Stock Purchase Agreement by and between the Company and C Media, dated as of July 5, 2013, as amended as of November 4, 2013 (as discussed below) in which C Media would invest funds in the Company in exchange for shares of the Series E Preferred Stock, the principal amount and all unpaid interest of the Bridge Note would be automatically converted into shares of Series E Preferred Stock at a conversion price equal to the per share purchase price paid for the Series E Preferred Stock by C Media. Upon the issuance of the Series E Preferred Stock on January 31, 2014, the Bridge Note was automatically converted into 1,142,857 shares of Series E Preferred Stock, with no gain or loss recognized for the conversion of the Bridge Note for Series E Preferred Stock.

In connection with the issuance of the Bridge Note, the Company recorded debt issuance costs of approximately $370,000 that was to be amortized over the period of the earliest possible conversion date of January 31, 2014, of which $129,000 was recognized during the three months ended March 31, 2014. The issuance costs included cash paid of $241,936 and the issuance of warrants to the placement agent to purchase 114,285 shares of common stock at $1.75 per share. The fair value of the warrants was calculated using the Black-Scholes model with the following assumptions: expected term of 5 years, expected dividend rate of 0%, volatility of 70% and an interest rate of 1.36% . The exercise price of the warrants was $1.75. The warrants were valued at $128,072 at the date of issuance.

(c) Amendment to Series D Stock Purchase Agreement

On November 4, 2013, in connection with the issuance of the Bridge Note, the Company and C Media entered into Amendment No. 1 to the Series D Purchase Agreement (the “Series D Amendment”). Pursuant to the original Series D Purchase Agreement, dated July 5, 2013, the Company and C Media agreed, among other things, that each party would act in good faith and with fair dealing to finalize an agreement for the purchase and sale of shares of Series E Preferred Stock pursuant to the terms of a Series E Purchase Agreement on or before October 31, 2013. Pursuant to the Series D Amendment, the parties agreed that each party would act in good faith and with fair dealing to finalize the Series E Purchase Agreement on or before the 30th day following the issuance of the Bridge Note.

Also in connection with the Series D Amendment, C Media executed a waiver and consent with the Company as of October 31, 2013 agreeing, among other things, to waive its right to redeem its Series D Preferred Stock as of October 31, 2013 until the 30th day following the issuance of the Bridge Note. On December 4, 2013, C Media exercised its extension option which extended such date to January 31, 2014.

(d) Series E Preferred Stock

On January 31, 2014, the Company entered into a Series E Preferred Stock Purchase Agreement (the “Series E Purchase Agreement”) with C Media and certain other purchasers (collectively, the “Investors”), pursuant to which the Company issued to the Investors an aggregate of 14,285,714 shares of Series E Preferred Stock of the Company for $1.75 per share, or a total purchase price of $25.0 million. Among the 14,285,714 shares of Series E Preferred Stock issued to the Investors, (i) 1,142,857 shares were issued upon the conversion of the Bridge Note issued to C Media in principal amount of $2,000,000, (ii) 10,857,143 shares were issued for an aggregate purchase price of $19 million, and (iii) 2,285,714 shares were issued upon the conversion of 2,285,714 shares of Series D Preferred Stock held by C Media, which constitute all of the issued and outstanding shares of Series D Preferred Stock, into the Series E Preferred Stock pursuant to the Series E

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Purchase Agreement. In connection with the issuance of the Series E Preferred Stock, we recorded issuance costs of $4,552,347 to additional paid in capital. The issuance costs included cash paid of approximately $2,386,000 and the issuance of warrants to the placement agent to purchase 1,085,714 shares of common stock at $1.75 per share. The fair value of the warrants was calculated using the Black-Scholes model with the following assumptions: expected term of 5 years, expected dividend rate of 0%, volatility of 70% and an interest rate of 1.49% . The exercise price of the warrants was $1.75. The warrants were valued at $2,166,296 at the date of issuance.

In connection with the issuance of Series E Preferred Stock, we recorded dividends of approximately $16,402,000. This amount is comprised of (1) recognition of a deemed dividend for a beneficial conversion feature discount of $16,571,000, (2) reversal of a deemed dividend for the beneficial conversion feature discount of $183,000 related to the extinguishment of the Series D Preferred Stock and (3) cash dividends paid of $14,000 for January 2014, which is part of the total cash dividend paid, amounting to $92,054, in the six months ended June 30, 2014.

10. Warrant Liabilities

In connection with our August 30, 2012 private financing, we issued 977,063 warrants to investors and the broker. In accordance with FASB ASC 815-40-15-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock, the warrants have been accounted as derivative liabilities to be re- measured at the end of every reporting period with the change in value reported in the consolidated statement of operations. On August 30, 2012, such warrants were valued at $1,525,000 utilizing a valuation model and were initially recorded as a liability. The warrants are revalued at each year end based on the Monte Carlo valuation.

As of September 30, 2015 and December 31, 2014, the warrant liability was re-valued as disclosed in Note 7, and was adjusted to its current fair value of approximately $460,000 and $585,000, respectively, as determined by the Company, resulting in a gain of approximately $125,000 for the nine months ended September 30, 2015. There were no warrants exercised during nine months ended September 30, 2015.

11. Share-Based Payments

As of September 30, 2015, the Company had 1,721,096 options and 2,191,487 warrants outstanding to purchase shares of our common stock.

The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation. The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period.

Total share-based payments expense recorded by the Company during the three and nine months ended September 30, 2015 and 2014 is as follows:

		Three Months Ended				Nine Months Ended
		September 30		September 30		September 30		September 30
		2015		2014		2015		2014
Employees and directors share-based payments	$	287,000	$	912,000	$	968,000	$	1,133,000

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(a) Stock Options

Effective as of December 3, 2010, our Board of Directors approved the YOU On Demand Holdings, Inc. 2010 Stock Incentive Plan (“the Plan”) pursuant to which options or other similar securities may be granted. The maximum aggregate number of shares of our common stock that may be issued under the Plan is 4,000,000 shares. As of September 30, 2015, options available for issuance are 2,011,297 shares.

Stock option activity for the nine months ended September 30, 2015 is summarized as follows:

					Weighted Average
					Remaining		Aggregated
	Options			Weighted Average	Contractual Life		Intrinsic
	Outstanding			Exercise Price	(Years)		Value
Outstanding at January 1, 2015	1,800,226		$	2.73
Granted	16,565			2.12
Exercised	(19,042	)		1.79
Expired	(30,689	)		1.89
Forfeited	(45,964	)		1.68
Outstanding at September 30, 2015	1,721,096		$	2.77	5.89	$	60,625
Vested and expected to vest as of September 30, 2015	1,721,096			2.77	5.89		60,625
Options exercisable at September 30, 2015 (vested)	1,674,156		$	2.80	5.83	$	52,188

The weighted average grant-date fair value of options granted during the nine months ended September 30, 2015 and 2014 was $1.28 and $1.70. The total intrinsic value of options exercised during the nine months ended September 30, 2015 and 2014 was $6,192 and $8,553.

As of September 30, 2015, approximately $78,000 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.44 years. The total fair value of shares vested during the nine months ended September 30, 2015 and 2014 was approximately $301,000 and $719,000 respectively.

(b) Warrants

In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to investors and service providers to purchase common stock of the Company.

As of September 30, 2015, the weighted average exercise price of the warrants was $2.20 and the weighted average remaining life was 2.64 years. The following table outlines the warrants outstanding and exercisable as of September 30, 2015 and December 31, 2014:

	September 30,	December 31,
	2015	2014
	Number of	Number of
	Warrants	Warrants		Exercise	Expiration
Warrants Outstanding	Outstanding	Outstanding		Price	Date
	and Exercisable	and Exercisable
May 2011 Warner Brothers Warrants	200,000	200,000	$	6.60	05/11/16
2011 Service Agreement Warrants	26,667	26,667	$	7.20	06/15/16
2012 August Financing Warrants(i)	536,250	536,250	$	1.50	08/30/17
2013 Broker Warrants (Series D Financing)	228,571	228,571	$	1.75	07/05/18
2013 Broker Warrants (Convertible Note)	114,285	114,285	$	1.75	11/04/18
2014 Broker Warrants (Series E Financing)	1,085,714	1,085,714	$	1.75	01/31/19
	2,191,487	2,191,487

(i) The warrants are classified as derivate liabilities in Note 10

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12. Net Loss Per Common Share

Basic net loss per common share attributable to YOU On Demand shareholders is calculated by dividing the net loss attributable to YOU On Demand shareholders by the weighted average number of outstanding common shares during the applicable period. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive.

For the nine months ended September 30, 2015 and 2014, the number of securities convertible into common shares not included in diluted loss per common share because the effect would have been anti-dilutive consists of the following:

	September 30,	September 30,
	2015	2014
Warrants	2,191,487	2,191,487
Options	1,721,096	1,821,142
Series A Preferred Stock	933,333	933,333
Series E Preferred Stock	7,254,997	7,559,998
Convertible promissory notes	1,947,053	1,878,481
Total	14,047,966	14,384,441

The Company has reserved its authorized but unissued common stock for possible future issuance in connection with the following:

	September 30,	September 30,
	2015	2014
Exercise of stock warrants	2,191,487	2,191,487
Exercise and future grants of stock options	3,928,870	3,985,605
Conversion of preferred stock	8,188,330	8,493,331
Issuable shares from conversion of promissory notes payable	1,947,053	1,878,481
Total	16,255,740	16,548,904

13. Income Taxes

As of September 30, 2015, the Company had approximately $23.6 million of the U.S domestic cumulative tax loss carryforwards (which excludes the NOL carryforwards of approximately $1.7 million because of the uncertainty of the position being sustained) and approximately $14.7 million of the foreign cumulative tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions. These U.S. and foreign tax loss carryforwards will expire beginning year 2028 through 2035 and year 2015 to year 2020, respectively. We have established a 100% valuation allowance against our net deferred tax assets due to our history of pre-tax losses and the likelihood that the deferred tax assets will not be realizable. The valuation allowance increased approximately $0.5 million and $2.3 million during the three and nine months ended September 30, 2015, respectively.

We are not aware of any unrecorded tax liabilities which would impact our financial position or our results of operations.

14. Contingencies and Commitments

(a) Severance Commitment

The Company has employment agreements with certain employees that provide severance payments upon termination of employment under certain circumstances, as defined in the applicable agreements. As of September 30, 2015, the Company's potential minimum cash obligation to these employees was approximately $1,348,000.

21

(b) Operating Lease Commitment

The Company is committed to paying leased property costs related to our offices in New York and China through 2017 as follows:

		Leased Property
Years ending December 31,		Costs
2015 (3 months)	$	203,850
2016		691,653
2017		57,725
Total	$	953,228

(c) Licensed Content Commitment

The Company is committed to paying content costs through 2016 as follows:

Years ending December 31,		Content Costs
2015 (3 months)	$	2,237,711
2016		1,306,500
2017		1,074,650
Total	$	4,618,861

(d) Lawsuits and Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

15. Concentration, Credit and Other Risks

(a) PRC Regulations

The PRC market in which the Company operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Company to conduct wireless telecommunication services through contractual arrangements in the PRC since the industry remains highly regulated. The Company conducts all of its operations in China through its Zhonghai Video, which is consolidated in the Company’s financial statements as a result of a series of contractual arrangements enacted among YOD WFOE, Sinotop Beijing as the parent company of Zhonghai Video and the legal shareholder of Sinotop Beijing. The Company believes that these contractual arrangements are in compliance with PRC laws and are legally enforceable. If Sinotop Beijing or its legal shareholder fails to perform the obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, YOD WFOE or YOD HK can enforce its rights under the VIE contracts through the operations of PRC laws and courts. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If YOD WFOE had direct ownership of Sinotop Beijing, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of Sinotop Beijing, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Company relies on Sinotop Beijing and its legal shareholder to perform their contractual obligations to exercise effective control.

In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like YOD WFOE, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Company’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company’s ability to conduct business in the PRC.

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(b) Major Customers

The Company relies on agreements with distribution partners, including digital cable operators, IPTV operators, OTT streaming operators and mobile smartphone manufacturers and operators, during the course of its business. A distribution partner that individually generates more than 10% of the Company’s revenue is considered a major customer.

For the nine months ended September 30, 2015, three customers individually accounted for more than 10% of the Company’s revenue. Four customers individually accounted for 10% of the Company’s net accounts receivables as of September 30, 2015.

For the nine months ended September 30, 2014, four customers individually accounted for more than 10% of the Company’s revenue. Two customers individually accounted for 10% of the Company’s net accounts receivables as of September 30, 2014.

(c) Major Suppliers

The Company relies on agreements with studio content partners to acquire video contents. A content partner that accounts for more than 10% of the Company’s cost of revenues is considered a major supplier.

For the nine months ended September 30, 2015, four suppliers individually accounted for more than 10% of the Company’s cost of revenues. One supplier individually accounted for 10% of the Company’s accounts payable as of September 30, 2015.

For the nine months ended September 30, 2014, four suppliers individually accounted for more than 10% of the Company’s cost of revenues. One supplier individually accounted for 10% of the Company’s accounts payable as of September 30, 2014.

(d) Concentration of Credit Risks

Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents and accounts receivable. As of September 30, 2015 and 2014, the Company’s cash and cash equivalents were held by financial institutions located in the PRC, Hong Kong and the United States that management believes are of high-credit ratings and quality. Accounts receivable are typically unsecured and are mainly derived from revenues from the Company’s VOD content distribution partners. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances.

(e) Foreign Currency Risks

A majority of the Company’s operating transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance.

16. Defined Contribution Plan

During 2011, the Company began sponsoring a 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee’s pay. Employees become fully vested in employer matching contributions after six months of employment. Company 401(k) matching contributions were approximately $7,000 and $25,000 for the nine months ended September 30, 2015 and 2014, respectively.

17. Subsequent Event

Management evaluated subsequent events after September 30, 2015 through the latest practicable date, and concluded that no subsequent event has occurred that would require recognition or disclosure in the unaudited consolidated financial statements.

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Cautionary Note Regarding Forward Looking Statements

This Form 10-Q contains “forward-looking” statements that involve risks and uncertainties. You can identify these statements by the use of forward-looking words such as "may", "will", "expect", "anticipate", "estimate", "believe", "continue", or other similar words. You should read statements that contain these words carefully because they discuss our future expectations, contain projections of our future results of operations or financial condition or state other "forward-looking" information. We believe that it is important to communicate our future expectations to our investors. However, these forward-looking statements are not guarantees of future performance and actual results may differ materially from the expectations that are expressed, implied or forecasted in any such forward-looking statements. There may be events in the future that we are unable to accurately predict or control, including weather conditions and other natural disasters which may affect demand for our products, and the product–development and marketing efforts of our competitors. Examples of these events are more fully described in the Company’s 2014 Annual Report under Part I. Item 1A. Risk Factors.

Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. However, readers should carefully review the reports and documents the Company files from time to time with the SEC, particularly its Quarterly Reports on Form 10-Q, Annual Report on Form 10-K , Current Reports on Form 8-K and all amendments to those reports.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following management’s discussion and analysis should be read in conjunction with our financial statements and the notes thereto and the other financial information appearing elsewhere in this report. In addition to historical information, the following discussion contains certain forward-looking information. See “Special Note Regarding Forward Looking Statements” above for certain information concerning those forward-looking statements.

Overview

YOU On Demand Holdings, Inc. is a corporation formed in the State of Nevada on October 19, 2004.

We operate in the Chinese media industry and provide enhanced premium content through our video streaming service and integrated value-added video-on-demand (“VOD”) solutions business to digital cable providers, Internet Protocol Television (“IPTV”) providers, Over-the-Top (“OTT”) streaming providers, mobile manufacturers and operators, as well as direct customers.

On July 30, 2010, we acquired YOD Hong Kong, formerly Sinotop Group Limited, through our subsidiary China CB Cayman. Through a series of contractual arrangements, YOD Hong Kong and its subsidiary, YOD WFOE, controls Beijing Sino Top Scope Technology Co., Ltd. (“Sinotop Beijing”), a corporation established in the People’s Republic of China (“PRC”). Sinotop Beijing is the 80% owner of Zhong Hai Shi Xun Information Technology Co., Ltd. (“Zhong Hai Video”), though which we provide: 1) integrated value-added business-to-business (“B2B”) service solutions for the delivery of VOD and enhanced premium content for digital cable; 2) integrated value-added business-to-business-to-customer (“B2B2C”) service solutions for the delivery of enhanced premium content for IPTV and OTT providers and; 3) a direct to user, or B2C, mobile video service app. As a result of the contractual arrangements with Sinotop Beijing, we have the right to control management decisions and direct the economic activities that most significantly impact Sinotop Beijing and Zhong Hai Video, and accordingly, under generally accepted accounting principles in the United States (“U.S. GAAP”), we consolidate these operating entities in our consolidated financial statements.

Our Unconsolidated Equity Investment

Shandong Media operates a publishing business, which includes the distribution of periodicals, the publication of advertising, the organization of public relations events, the provision of information related services, copyright transactions, the production of audio and video products, and the provision of audio value added communication services. We hold 30% ownership interest in Shandong Media and account for our investment using the equity method.

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Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

• Our ability to adapt our product and service offerings to meet consumer demands. Our expansion prospect is dependent on continued development of our product and services. The content distribution industry in China is highly competitive and dominated by large Internet companies that have more resources than us. The growth of our business will depend on whether we can develop new services and products that can offer higher quality contents, technological innovation and unique user experience.

• Our ability to expand our subscriber base. Our business is affected by the overall size of our user base, which in turn is determined by, among other factors, (i) user experience of our service and products, (ii) our relationship with distribution platforms, such as digital cable and IPTV providers and mobile product manufacturers, (iii) expansion of our business to include increased service offerings and (iv) the expansion of our subscribers beyond smartphones to mobile tablets and other Internet-enabled mobile devices.

• Our ability to achieve revenue growth and meet internal or external expectations of future performance. In the latter half of 2013, we shifted our focus to our core multi-platform video streaming services and our business model is still evolving. Our financial performance is affected by, among other things, our ability to come to favorable business terms with our distribution partners, manage and procure contents in a cost-effective manner and manage our operating expenses. Overall, our normalized operating expenses have been decreasing but we have also incurred certain additional costs related to our financing activities, maintaining our public company status and making staff reductions.

• Changes in China’s economic, political or social policies or conditions. We operate in China and derive all of our revenues from sales to customers in China. Accordingly, our business, financial condition and results of operation is significantly influenced by the political, social and economic policies and conditions in China. While the Chinese economy has experienced significant growth over the past decade, growth has been uneven, both geographically and among various sectors of the economy. In addition, the Chinese government continues to play a significant role in regulating telecommunication and Internet industry development by imposing certain laws and regulations concerning Internet access and distribution of video content and other information over traditional and new media platforms. Some of the laws and regulations are also relatively new and involving and their interpretation and enforcement involve significant uncertainty.

Taxation

United States

YOU On Demand Holdings, Inc. is subject to United States tax. No provision for income taxes in the United States has been made as YOU On Demand Holdings, Inc. had no income taxable in the United States since inception.

Cayman Islands

CB Cayman was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, it is not subject to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands.

Hong Kong

Our subsidiary, YOD Hong Kong, was incorporated in Hong Kong and under the current laws of Hong Kong, is subject to Profits Tax of 16.5% . No provision for Hong Kong Profits Tax has been made as YOD Hong Kong has no taxable income.

The People’s Republic of China

Under the Enterprise Income Tax Law, our Chinese subsidiaries and VIEs are subject to an earned income tax of 25.0% .

Our future effective income tax rate depends on various factors, such as tax legislation, the geographic composition of our pre-tax income and non-tax deductible expenses incurred. Our management carefully monitors these legal developments to determine if there will be any change in the statutory income tax rate.

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Consolidated Results of Operations

Comparison of Three Months Ended September 30, 2015 and 2014

		Three Months Ended
		September 30, 2015			September 30, 2014			Amount Change		% Change
Revenue	$	476,000		$	645,000		$	(169,000	)	-26%
Cost of revenue		900,000			873,000			27,000		3%
Gross loss		(424,000	)		(228,000	)		(196,000	)	86%
Operating expense:
Selling, general and administrative expenses		1,832,000			1,861,000			(29,000	)	-2%
Professional fees		141,000			114,000			27,000		24%
Depreciation and amortization		99,000			125,000			(26,000	)	-21%
Total operating expense		2,072,000			2,100,000			(28,000	)	-1%
Loss from operations		(2,496,000	)		(2,328,000	)		(168,000	)	7%
Interest and other income/(expense)
Interest expense, net		(31,000	)		(29,000	)		(2,000	)	7%
Change in fair value of warrant liabilities		91,000			282,000			(191,000	)	-68%
Change in fair value of contingent consideration		-			(48,000	)		48,000		-100%
Loss on investment in unconsolidated entities		(51,000	)		(6,000	)		(45,000	)	750%
Others		142,000			(16,000	)		158,000		-988%
Loss before income taxes and non-controlling interest		(2,345,000	)		(2,145,000	)		(200,000	)	9%
Income tax benefit		9,000			29,000			(20,000	)	-69%
Net loss		(2,336,000	)		(2,116,000	)		(220,000	)	10%
Net loss attributable to non-controlling interest		249,000			169,000			80,000		47%
Net loss attributable to YOU On Demand shareholders		(2,087,000	)		(1,947,000	)		(140,000	)	7%
Dividend and deemed dividend on preferred stock		-			-			-		-
Net loss attributable to YOU On Demand common shareholders	$	(2,087,000	)	$	(1,947,000	)	$	(140,000	)	7%

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Revenues

Revenue for the three months ended September 30, 2015 was $476,000, as compared to $645,000 for the same period in 2014. The decrease in revenue of approximately $169,000 was primarily attributable to slowdown in our VOD business for the quarter, which was affected by delays in the execution of certain new agreements and decline in monthly subscribers on some distribution platforms after the summer. Our revenue is derived from delivery of our licensed content and performance of related services for customers and channel partners, which spans across multiple platforms and distribution networks thereby causing some variability in the timing of our content and service delivery. Changes in internal resource allocation of our customers and channel partners, economic and market conditions and industry regulatory environment also influence the progress of our distribution arrangements.

Gross loss

Our gross loss for the three months ended September 30, 2015 was $424,000, as compared to $228,000 gross loss during the same period in 2014. The increase in gross loss of approximately $196,000 was primarily due to to slowdown in our VOD business which led to a decrease in revenue for the quarter. Our cost of revenue, primarily comprised of content licensing fees paid to production companies under our content license agreements, remained relatively stable for the quarter as our revenues from operations do not yet meet the threshold that exceed minimum guarantee payments.

Selling, general and administrative expenses

Our selling, general and administrative expenses for the three months ended September 30, 2015, decreased approximately $29,000, to $1,832,000, as compared to $1,861,000 for the three months ended September 30, 2014.

Salaries and personnel costs are the primary components of selling, general and administrative expenses, accounting for 50% of our selling, general and administrative expenses for the three months ended September 30, 2015. For the third quarter of 2015, salaries and personnel costs totaled $922,000, a decrease of $79,000, or 8%, as compared to $1,001,000 for the same period of 2014. While we added resources in the area of product development and operations, salaries and personnel costs decreased due to continuous cost control and internal re-alignment of resources, which was a primary focus for the 2015 fiscal year.

The other major components of our selling, general and administrative expenses include marketing and promotion expenses. For the three months ended September 30, 2015, these costs totaled $910,000, a net increase of $50,000, or 6%, as compared to $860,000 for the same period in 2014, primarily due to increasing marketing expenses related to promotion of our YOU Hollywood services across big screen platforms, namely cable, IPTV and OTT.

Professional fees

Professional fees are generally related to public company reporting and governance expenses as well as legal fees related to expansion of our multi-platform video streaming services. Our costs for professional fees increased $27,000, or 24%, to $141,000 for the three months ended September 30, 2015, from $114,000 for the same period in 2014. The increase in professional fees was related to audit, corporate governance and advisory expenses.

Depreciation and amortization

Our depreciation and amortization expense decreased by $26,000, or 21%, to $99,000 in the three months ended September 30, 2015, from $125,000 during the three months ended September 30, 2014. The decrease was mainly due to full amortization of website development and certain software in 2014.

Change in fair value of warrant liabilities

Certain of our warrants are recognized as derivative liabilities and re-measured at the end of every reporting period and upon settlement, with the change in value reported in the statement of operations. We reported a gain of $91,000 and $282,000 for the three months ended September 30, 2015 and 2014, respectively. The changes are primarily due to fluctuation in our closing stock price.

Change in fair value of contingent consideration

Our contingent consideration related to our acquisition of YOD HK is classified as a liability because the earn-out securities do not meet the fixed-for-fixed criteria under ASC 815-40-15 since the contingency was not solely based on the Company’s operations. Further, ASC 815-40-15 requires us to re-measure at the end of every reporting period with the change in value reported in the statement of operations and, accordingly, we reported a loss of $48,000 for the three months ended September 30, 2014.

Net loss attributable to non-controlling interest

Hua Cheng has a 20% non-controlling interest in Zhong Hai Video and as such we allocate 20% of the operating loss of Zhong Hai Video to Hua Cheng. During the three months ended September 30, 2015, $249,000 of our operating loss from Zhong Hai Video was allocated to Hua Cheng. For the three months ended September 30, 2014, operating loss attributable to non-controlling interest was $169,000.

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Comparison of Nine Months Ended September 30, 2015 and 2014

		Nine Months Ended
		September 30, 2015			September 30, 2014			Amount Change		% Change
Revenue	$	2,984,000		$	965,000		$	2,019,000		209%
Cost of revenue		2,772,000			2,606,000			166,000		6%
Gross profit/(loss)		212,000			(1,641,000	)		1,853,000		-113%
Operating expense:
Selling, general and administrative expenses		5,940,000			5,772,000			168,000		3%
Professional fees		581,000			376,000			205,000		55%
Depreciation and amortization		283,000			415,000			(132,000	)	-32%
Total operating expense		6,804,000			6,563,000			241,000		4%
Loss from operations		(6,592,000	)		(8,204,000	)		1,612,000		-20%
Interest & other income/(expense)
Interest expense, net		(89,000	)		(2,346,000	)		2,257,000		-96%
Change in fair value of warrant liabilities		125,000			(656,000	)		781,000		-119%
Change in fair value of contingent consideration		-			(161,000	)		161,000		-100%
Loss on investment in unconsolidated entities		(144,000	)		(17,000	)		(127,000	)	747%
Gain on sale of subsidiary		-			755,000			(755,000	)	-100%
Loss on dissolution of a variable interest entity		-			(27,000	)		27,000		-100%
Others		96,000			(82,000	)		178,000		-217%
Loss before income taxes and non-controlling interest		(6,604,000	)		(10,738,000	)		4,134,000		-38%
Income tax benefit		26,000			84,000			(58,000	)	-69%
Net loss		(6,578,000	)		(10,654,000	)		4,076,000		-38%
Net loss attributable to non-controlling interest		377,000			697,000			(320,000	)	-46%
Net loss attributable to YOU On Demand shareholders		(6,201,000	)		(9,957,000	)		3,756,000		-38%
Dividend and deemed dividend on preferred stock		-			(16,402,000	)		16,402,000		-100%
Net loss attributable to YOU On Demand common shareholders	$	(6,201,000	)	$	(26,359,000	)	$	20,158,000		-76%

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Revenues

Revenue for the nine months ended September 30, 2015 was $2,984,000, as compared to $965,000 for the same period in 2014. The increase in revenue of approximately $2,019,000 was attributable to the growth of our multi-platform video streaming services.

Gross profit/loss

Our gross profit for the nine months ended September 30, 2015 was $212,000, as compared to $1,641,000 gross loss during the same period in 2014. The increase in gross profit of approximately $1,853,000 was primarily due to growth in revenue while maintaining tight control of costs. YOD’s cost of revenue is largely comprised of content licensing fees and, to a lesser extent, costs associated with direct delivery of our content services such as content preparation fees and government censorship clearance costs.

Selling, general and administrative expenses

Our selling, general and administrative expenses for the nine months ended September 30, 2015, increased approximately $168,000, to $5,940,000, as compared to $5,772,000 for the nine months ended September 30, 2014.

Salaries and personnel costs are the primary components of selling, general and administrative expenses, accounting for 44% of our selling, general and administrative expenses for the nine months ended September 30, 2015. For the three quarters of 2015, salaries and personnel costs totaled $2,614,000, a decrease of $481,000, or 16%, as compared to $3,095,000 for the same period of 2014, due to staff reductions made as part of the above mentioned cost control and internal re-alignment  initiatives.

The other major components of our selling, general and administrative expenses include marketing and promoting, technology and severance expense. For the nine months ended September 30, 2015, these costs totaled $3,326,000, a net increase of $649,000, or 24%, as compared to $2,677,000 for the same period in 2014, primarily due to the increase of severance cost and growth in our business, including development of new products and services, as well as promotion of these services.

Professional fees

Professional fees are generally related to public company reporting and governance expenses as well as legal fees related to expansion of our multi-platform video streaming services. Our costs for professional fees increased $205,000, or 55%, to $581,000 for the nine months ended September 30, 2015, from $376,000 for the same period in 2014. The increase in professional fees was related to our transition to a new audit firm.

Depreciation and amortization

Our depreciation and amortization expense decreased by $132,000, or 32%, to $283,000 in the nine months ended September 30, 2015, from $415,000 during the nine months ended September 30, 2014. The decrease was mainly due to full amortization of website development and certain software in 2014.

Interest expense, net

Our interest expense decreased by $2,257,000 to $89,000 for the nine months ended September 30, 2015, from $2,346,000 during the same period in 2014. Interest expense incurred during 2014 was primarily related to (1) the amortization of debt issuance costs related to the issuance of the $2.0 million convertible note, and (2) the recognition of the beneficial conversion feature of $2,126,000 related to the modification of the $3.0 million convertible note as discussed in Note 8(a) of the consolidated financial statements included in this report.

Change in fair value of warrant liabilities

Certain of our warrants are recognized as derivative liabilities and re-measured at the end of every reporting period and upon settlement, with the change in value reported in the statement of operations. We reported a gain of $125,000 and a loss of $656,000 for the nine months ended September 30, 2015 and 2014, respectively. The changes are primarily due to fluctuation in our closing stock price.

Change in fair value of contingent consideration

Our contingent consideration related to our acquisition of YOD HK is classified as a liability because the earn-out securities do not meet the fixed-for-fixed criteria under ASC 815-40-15 since the contingency was not solely based on the Company’s operations. Further, ASC 815-40-15 requires us to re-measure at the end of every reporting period with the change in value reported in the statement of operations and, accordingly, we reported a loss of $161,000 for the nine months ended September 30, 2014.

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Gain from disposal of consolidated entities

Effective March 25, 2014, we deconsolidated our ownership in WFOE and Jinan Zhong Kuan as these entities were investment holding companies, and we determined that they were no longer required for our organizational structure on a going forward basis. We recorded a gain of $728,000 from disposal of these consolidated entities as discussed in Note 4 of our consolidated financial statements included in this report.

Net loss attributable to non-controlling interest

Hua Cheng has a 20% non-controlling interest in Zhong Hai Video and as such we allocate 20% of the operating loss of Zhong Hai Video to Hua Cheng. During the nine months ended September 30, 2015, $377,000 of our operating loss from Zhong Hai Video was allocated to Hua Cheng. For the nine months ended September 30, 2014, operating loss attributable to non-controlling interest was $697,000.

Dividends on preferred stock

For the nine months ended September 30, 2014, in connection with the issuance of Series E Preferred Stock, we recorded dividends of approximately $16,402,000, which was primarily comprised of the recognition of a deemed dividend for a beneficial conversion feature discount of $16,571,000.

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Liquidity and Capital Resources

As of September 30, 2015, we had cash and cash equivalents of approximately $4,357,000. Approximately $588,000 was held in our Hong Kong entity and $3,765,000 was held in our China entities. The Company has no plans to repatriate these funds. As of September 30, 2015, we had working capital of approximately $1,006,000.

The following table provides a summary of our net cash flows from operating, investing and financing activities.

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Net cash used in operating activities	$	(6,217,000	)	$	(7,990,000	)
Net cash used in investing activities		(81,000	)		(285,000	)
Net cash provided by financing activities		-			17,517,000
Effect of exchange rate changes on cash		(157,000	)		(20,000	)
Net increase/(decrease) in cash and cash equivalents		(6,455,000	)		9,222,000
Cash and cash equivalents at beginning of period		10,812,000			3,823,000
Cash and cash equivalents at end of period	$	4,357,000		$	13,045,000

Operating Activities

Cash used in operating activities decreased for the nine months ended September 30, 2015 compared to 2014 primarily due to the expansion of our multi-platform video streaming services. Although our content license payments and operational costs increased year-over-year, the increase in our costs and expenses was partially offset by our significant revenue growth.

Investing Activities

Cash used in investing activities for the nine months ended September 30, 2015 was primarily due to additions to property and equipment of $32,000 and intangibles and research and development of $49,000. Cash used in investing activities for the nine months ended September 30, 2014 was primarily used for investment in Shandong Lushi Media Co., Ltd (“Shandong Media”), a PRC company 30% owned by Sinotop Beijing, and, to a lesser extent, the acquisition of property and equipment. In August 2014, we invested US$209,000 (approximately RMB1.29 million) in Shandong Media to maintain our 30% equity ownership.

Financing Activities

The Company must continue to rely on debt and equity to pay for ongoing operating expenses in order to execute its business plan.

In January 2014, we received investment net proceeds of approximately $16,614,000 from the sale of the Series E Preferred Stock and we received approximately $996,000 from the exercise of warrants and options from certain investors and employees.

The fact that we have incurred significant continuing losses and continue to rely on debt and equity financings to fund our operations to date, could raise substantial doubt about our ability to continue as a going concern. As of September 30, 2015 and 2014, the Company has accumulated deficits of approximately $85 million and $92 million, respectively. The consolidated financial statements included in this report have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

31

Effects of Inflation

Inflation and changing prices have had an effect on our business and we expect that inflation or changing prices could materially affect our business in the foreseeable future. Our management will closely monitor the price change and make efforts to maintain effective cost control in operations.

Off Balance Sheet Arrangements

We do not have any off balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.

Seasonality
Our operating results and operating cash flows historically have not been subject to seasonal variations. This pattern may change, however, as a result of new market opportunities or new product introductions.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates, and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our financial statements.

Variable Interest Entities

We account for entities qualifying as variable interest entities (VIEs) in accordance with Financial Accounting Standards Boards (“FASB”) Accounting Standards Codification (“ASC”) Topic 810, Consolidation. For our consolidated VIEs, management has made evaluations of the relationships between our VIEs and the economic benefit flow of contractual arrangement with VIEs. In connection with such evaluation, management also took into account the fact that, as a result of such contractual arrangements, we control the legal shareholders’ voting interests and have power of attorney in the VIEs, and therefore we are able to direct all business activities of the VIEs. As a result of such evaluation, management concluded that we are the primary beneficiary of our consolidated VIEs.

We have consulted our PRC legal counsel in assessing our ability to control our PRC VIEs. Any changes in PRC laws and regulations that affect our ability to control our PRC VIEs may preclude us from consolidating these companies in the future.

Revenue Recognition

When persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectability is reasonably assured, we recognize revenue as services are performed. For certain contracts that involve sub-licensing content within the specified license period, revenue is recognized in accordance with ASC Subtopic 926-605, Entertainment – Films – Revenue Recognition, whereby revenue is recognized upon delivery of films when the arrangement includes a nonrefundable minimum guarantee, delivery is complete and we have no substantive future obligations to provide future additional services. Payments received from customers for the performance of future services are recognized as deferred revenue, and subsequently recognized as revenue in the period that the service obligations are completed.

In accordance with ASC 605-25, Revenue Recognition – Multiple Element Arrangements, contracts with multiple element deliverables are separated into individual units for accounting purposes when the unit determined to have standalone value to the customer and performance of service is considered probable. Since the contract price is for all deliverables, we allocated the arrangement consideration to all deliverables at the inception of the arrangement based on their relative selling price. We use (a) vendor-specific objective evidence of selling price, if it exists, or, (b) the management’s best estimate of the selling price for that deliverable to determine the relative selling price of each individual unit.

The recognition of revenue involves certain judgments and changes in our assumptions, judgments or estimations may have a material impact on the amount and timing of our revenue recognition.

32

Licensed Content

We obtain content through content license agreements and revenue sharing agreements with studios and distributors. When the license fee is known or reasonably determinable for a specified title in the content license agreements, we recognize the greater of: (i) revenue sharing costs incurred through the end of the reporting period, or (ii) the proportionate value of total minimum license fees over the term of each license agreement. Prepaid license fees are classified as an asset on our consolidated balance sheets as licensed content and accrued license fees payable to licensors are classified as a liability on our consolidated balance sheets. When the license fee is not known or reasonably determinable for a specific title, the title is not recognized in licensed content asset or liability in accordance with the relevant guidance. Commitments for license agreements that do not meet the criteria for recognition in licensed content are included in Note 14 to the consolidated financial statements.

Intangible Assets and Goodwill

We account for intangible assets and goodwill, in accordance with ASC 350, Intangibles – Goodwill and Other. ASC 350 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be evaluated for impairment at least annually. ASC 350 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives and reviewed for impairment whenever events indicate the carrying amount may not be recoverable. In accordance with ASC 350, goodwill is allocated to reporting units, which are either the operating segment or one reporting level below the operating segment. On an annual basis, we review goodwill for impairment by first assessing qualitative factors to determine whether the existence of events or circumstances makes it more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, goodwill is further tested for impairment by comparing the carrying value to the estimated fair value of its reporting units, determined using externally quoted prices (if available) or a discounted cash flow model and, when deemed necessary, a market approach.

Application of goodwill impairment tests requires significant management judgment, including the identification of reporting units, assigning assets, liabilities and goodwill to reporting units and determination of fair value of each reporting unit. Judgment applied when performing the qualitative analysis includes consideration of macroeconomic, industry and market conditions, overall financial performance of the reporting unit, composition, personnel or strategy changes affecting the reporting unit and recoverability of asset groups within a reporting unit. Judgments applied when performing the quantitative analysis includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these judgments, estimates and assumptions could materially affect the determination of fair value for each reporting unit.

Foreign Currency Translation

An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of YOU On Demand Holdings, Inc., CB Cayman and YOD Hong Kong is the U.S. dollar. The functional currency of YOD WFOE, Sinotop Beijing and Zhong Hai Video is the RMB.

Assets and liabilities of our subsidiaries and VIEs whose functional currencies are not the U.S. dollar are translated into U.S. dollars, our reporting currency, at the exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average exchange rates in effect during the reporting period. Foreign currency translation adjustments are not included in determining net income for the period but are accumulated in a separate component of equity in our consolidated balance sheets.

Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are re-measured at the applicable rates of exchange in effect at that date. Gains and losses resulting from foreign currency re-measurement are included in the consolidated statements of comprehensive loss.

Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-05, Customer Accounting for Fees Paid in Cloud Computing Arrangement, under ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. This amendment provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. This amendment is effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted. Management is currently evaluating the impact of this amendment on our financial position, statement of operations or cash flow.

33

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Vice President of Finance, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Vice president of finance, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2015. Based on that evaluation, our Chief Executive Officer and Vice President of Finance concluded that as of September 30, 2015, and as of the date that the evaluation of the effectiveness of our disclosure controls and procedures was completed, our disclosure controls and procedures were not effective to satisfy the objectives for which they are intended based on the following reason:

• Management identified one material weakness in our internal control over financial reporting as of December 31, 2014. The material weakness was related to insufficiently complete and comprehensive controls to ensure that accounting for complex and non-routine transactions were complete.

The Company is in the process of taking additional measures to address the material weakness, including:

•   continuous formalization and implementation of internal control over financial reporting, including formalization of policies and procedures on entity-level controls, enhanced effectiveness of finance department involvement during business transactions;

•   performing formal assessments and documentation on complex and non-routine transactions, including evaluation of transactions and contractual terms under the appropriate accounting guidance, selection of new accounting policies, updating assessments on critical accounting judgments and estimates for new transactions; and

•   investing in additional resources in the finance department to evaluate the appropriate accounting for complex and non-routine
transactions

We consider that the actions we are taking, as listed above, will help remedy the material weakness referred to above, and help strengthen our general internal controls and procedures over financial reporting. However, the process of designing and implementing an effective financial reporting system represents a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. While we have developed a remediation plan to address the material weakness identified in 2014, this remediation plan or any additional plan we plan to implement may be insufficient to address our material weakness and additional material weaknesses may be discovered in the future. We plan to continue to address and remediate additional control deficiencies we may identify during our evaluation process in 2015.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal control for the quarter ended September 30, 2015, which have materially affected or would likely materially affect our internal control over financial reporting. The Company continues to invest resources in order to upgrade internal controls.

34

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no material pending legal proceedings to which we are a party or to which any of our property is subject. To the best of our knowledge, no such actions against us are contemplated or threatened.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our 2014 Annual Report which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K is not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Item 2. Unregistered Sales of Sales of Equity Securities and Use of Proceeds

There were no unregistered sales of equity securities during the fiscal quarter ended September 30, 2015.

Item 3. Defaults Upon Senior Securities

There were no defaults upon senior securities during the fiscal quarter ended September 30, 2015.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

See Exhibit Index.

35

 EXHIBIT INDEX

Exhibit
No.	Description
31.1	Certifications of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certifications of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document
101.SCH	Taxonomy Extension Schema Document
101.CAL	Taxonomy Extension Calculation Linkbase Document
101.DEF	Taxonomy Extension Definition Linkbase Document
101.LAB	Taxonomy Extension Label Linkbase Document
101.PRE	Taxonomy Extension Presentation Linkbase Document

36

SIGNATURES

In accordance with 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 on November 16, 2015.

YOU ON DEMAND HOLDINGS, INC.

By: /s/ Weicheng Liu                                                                            
Name: Weicheng Liu
Title: Chief Executive Officer
(Principal Executive Officer and an Authorized Officer)

37

EX-31.1

CERTIFICATIONS

I, Weicheng Liu, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of YOU On Demand Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2015

/s/ Weicheng Liu                          
Weicheng Liu
Chief Executive Officer
(Principal Executive Officer)

EX-31.2

CERTIFICATIONS

I, Grace He, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of YOU On Demand Holdings, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 16, 2015

/s/ Grace He                                                                        
Grace He
Vice President of Finance
(Principal Financial and Accounting Officer)

EX-32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Weicheng Liu, Chief Executive Officer of YOU ON DEMAND HOLDINGS, INC. (the “Company”), DOES HEREBY CERTIFY that:

1.	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2.	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement this 16^th day of November, 2015.

/s/ Weicheng Liu                                   
Weicheng Liu
Chief Executive Officer
(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to YOU On Demand Holdings, Inc. and will be retained by YOU On Demand Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Grace He, Vice President of Finance of YOU ON DEMAND HOLDINGS, INC. (the “Company”), DOES HEREBY CERTIFY that:

1.	The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2015 (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2.	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement this 16^th day of November, 2015.

/s/ Grace He                                                          
Grace He
Vice President of Finance
(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to YOU On Demand Holdings, Inc. and will be retained by YOU On Demand Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Warrant Liabilities (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) shares
Warrant Liabilities 1 | shares	977,063
Warrant Liabilities 2	$ 1,525,000
Warrant Liabilities 3	460,000
Warrant Liabilities 4	585,000
Warrant Liabilities 5	$ 125,000

XML

Share Based Payments Expense (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Share-based Payments Share Based Payments Expense 1	$ 287,000
Share-based Payments Share Based Payments Expense 2	912,000
Share-based Payments Share Based Payments Expense 3	968,000
Share-based Payments Share Based Payments Expense 4	$ 1,133,000

XML

Property and Equipment (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Property And Equipment Property And Equipment 1	$ 931,242
Property And Equipment Property And Equipment 2	959,080
Property And Equipment Property And Equipment 3	190,722
Property And Equipment Property And Equipment 4	190,722
Property And Equipment Property And Equipment 5	1,121,964
Property And Equipment Property And Equipment 6	1,149,802
Property And Equipment Property And Equipment 7	(923,649)
Property And Equipment Property And Equipment 8	(829,131)
Property And Equipment Property And Equipment 9	198,315
Property And Equipment Property And Equipment 10	$ 320,671

XML

Stock Option Activity (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Share-based Payments Stock Option Activity 1	$ 1,800,226
Share-based Payments Stock Option Activity 2	2.73
Share-based Payments Stock Option Activity 3	$ 16,565
Share-based Payments Stock Option Activity 4	2.12
Share-based Payments Stock Option Activity 5	$ (19,042)
Share-based Payments Stock Option Activity 6	1.79
Share-based Payments Stock Option Activity 7	$ (30,689)
Share-based Payments Stock Option Activity 8	1.89
Share-based Payments Stock Option Activity 9	$ (45,964)
Share-based Payments Stock Option Activity 10	1.68
Share-based Payments Stock Option Activity 11	$ 1,721,096
Share-based Payments Stock Option Activity 12	2.77
Share-based Payments Stock Option Activity 13	5.89
Share-based Payments Stock Option Activity 14	$ 60,625
Share-based Payments Stock Option Activity 15	$ 1,721,096
Share-based Payments Stock Option Activity 16	2.77
Share-based Payments Stock Option Activity 17	5.89
Share-based Payments Stock Option Activity 18	$ 60,625
Share-based Payments Stock Option Activity 19	$ 1,674,156
Share-based Payments Stock Option Activity 20	2.80
Share-based Payments Stock Option Activity 21	5.83
Share-based Payments Stock Option Activity 22	$ 52,188

XML

Statement of Operation (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Vie Structure And Arrangements Statement Of Operation 1	$ 2,983,741
Vie Structure And Arrangements Statement Of Operation 2	965,268
Vie Structure And Arrangements Statement Of Operation 3	(2,030,575)
Vie Structure And Arrangements Statement Of Operation 4	$ (3,548,767)

XML

VIE Structure and Arrangements (Narrative) (Details) - 9 months ended Sep. 30, 2015 ¥ in Thousands, $ in Millions	USD ($) yr d	CNY (¥) yr d
Vie Structure And Arrangements 1	100.00%	100.00%
Vie Structure And Arrangements 2 | yr	20	20
Vie Structure And Arrangements 3	30	30
Vie Structure And Arrangements 4 | ¥		¥ 17,000
Vie Structure And Arrangements 5 | $	$ 2.7

XML

Antidilutive Securities Excluded from Computation of Earnings Per Share (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 1	$ 2,191,487
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 2	2,191,487
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 3	1,721,096
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 4	1,821,142
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 5	933,333
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 6	933,333
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 7	7,254,997
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 8	7,559,998
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 9	1,947,053
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 10	1,878,481
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 11	14,047,966
Net Loss Per Common Share Antidilutive Securities Excluded From Computation Of Earnings Per Share 12	$ 14,384,441

XML

VIE Structure and Arrangements (Tables)

9 Months Ended

Sep. 30, 2015

Statement of Financial Position [Table Text Block]

		September 30,		December 31,
		2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	74,541	$	506,525
Accounts receivable, net		2,578,745		1,091,076
Licensed content, current		969,250		1,041,609
Prepaid expenses		76,498		105,918
Other current assets		29,299		12,811
Intercompany receivables due from the Company's subsidiaries (i)		125,178		572,192
Total current assets		3,853,511		3,330,131
Property and equipment, net		191,134		297,898
Licensed content, non-current		27,118		35,648
Intangible assets, net		284,535		5,291
Long-term equity investments		688,672		850,054
Other non-current assets		187,508		272,657
Total assets	$	5,232,478	$	4,791,679
LIABILITIES
Current liabilities:
Accounts payable	$	9,229	$	8,598
Deferred revenue		217,991		13,431
Accrued expenses and other liabilities		998,930		573,620
Accrued license fees		746,071		348,007
Intercompany payables due to the Company's subsidiaries (i)		12,443,690		11,200,536
Total current liabilities		14,415,911		12,144,192
Total liabilities	$	14,415,911	$	12,144,192

Statement of Operation [Table Text Block]

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Revenue	$	2,983,741		$	965,268
Net loss	$	(2,030,575	)	$	(3,548,767	)

Statement of Cash Flow [Table Text Block]

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Net cash used in operating activities	$	(352,169	)	$	(2,074,850	)
Net cash used in investing activities	$	(79,815	)	$	(276,460	)
Net cash provided by financing activities	$	-		$	-

XML

Amortization Expense (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Intangible Assets Amortization Expense 1	$ 62,003
Intangible Assets Amortization Expense 2	255,274
Intangible Assets Amortization Expense 3	239,487
Intangible Assets Amortization Expense 4	194,788
Intangible Assets Amortization Expense 5	138,275
Intangible Assets Amortization Expense 6	137,792
Intangible Assets Amortization Expense 6	1,320,489
Intangible Assets Amortization Expense 7	$ 2,348,108

XML

Contingencies and Commitments (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Contingencies And Commitments 1	$ 1,348,000

XML

Related Party Transactions (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Related Party Transactions 1	$ 3
Related Party Transactions 2	3,000,000
Related Party Transactions 3	3,000,000
Related Party Transactions 4	4.75
Related Party Transactions 5	$ 4.75
Related Party Transactions 6	20
Related Party Transactions 7	$ 1.75
Related Party Transactions 8	2,126,000
Related Party Transactions 9	1.75
Related Party Transactions 10	30,000
Related Party Transactions 11	90,000
Related Party Transactions 12	30,000
Related Party Transactions 13	$ 2,216,000
Related Party Transactions 14	0
Related Party Transactions 15	$ 182,000
Related Party Transactions 16	$ 94,000
Related Party Transactions 17	0
Related Party Transactions 18	$ 41,000
Related Party Transactions 19	80,000
Related Party Transactions 20	122,000
Related Party Transactions 21	$ 39,000
Related Party Transactions 22	0
Related Party Transactions 23	$ 50,000

XML

Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 1	$ 0
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 2	0
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 3	459,686
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 4	$ 459,686
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 1		$ 0
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 2		0
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 3		585,050
Fair Value Measurements Assets And Liabilities Measured At Fair Value On A Recurring Basis 4		$ 585,050

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Statement of Cash Flow (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Vie Structure And Arrangements Statement Of Cash Flow 1	$ (352,169)
Vie Structure And Arrangements Statement Of Cash Flow 2	(2,074,850)
Vie Structure And Arrangements Statement Of Cash Flow 3	(79,815)
Vie Structure And Arrangements Statement Of Cash Flow 4	(276,460)
Vie Structure And Arrangements Statement Of Cash Flow 5	0
Vie Structure And Arrangements Statement Of Cash Flow 6	$ 0

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Going Concern and Management's Plans

9 Months Ended

Sep. 30, 2015

Going Concern and Management's Plans [Text Block]

2. Going Concern and Management’s Plans

For the nine months ended September 30, 2015, we incurred a net loss of approximately $6.6 million and we used cash for operations of approximately $6.2 million. Further, we had an accumulated deficit of approximately $84.6 million as of September 30, 2015.

The Company must continue to rely on debt and equity to pay for ongoing operating expenses in order to execute its business plan. On January 31, 2014, we completed a Series E Preferred Stock financing (as discussed below in Note 9) in which we raised an additional $19.0 million. We also may have the ability to raise funds by various methods, including utilization of our $50 million shelf registration, of which $47.3 million is remaining, as well as other means of financing such as debt or private investment. However, financing may not be available to the Company on terms acceptable to us or at all or such resources may not be received in a timely manner. Further we may need approval to seek additional financing from the shareholders from the August 2012 private financing in the event we do a public financing.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

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Concentration, Credit and Other Risks (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015
Concentration, Credit And Other Risks 1	10.00%
Concentration, Credit And Other Risks 2	10.00%
Concentration, Credit And Other Risks 3	10.00%
Concentration, Credit And Other Risks 4	10.00%
Concentration, Credit And Other Risks 5	10.00%
Concentration, Credit And Other Risks 6	10.00%
Concentration, Credit And Other Risks 7	10.00%
Concentration, Credit And Other Risks 8	10.00%
Concentration, Credit And Other Risks 9	10.00%
Concentration, Credit And Other Risks 10	10.00%

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Share-Based Payments (Tables)

9 Months Ended

Sep. 30, 2015

Share Based Payments Expense [Table Text Block]

		Three Months Ended				Nine Months Ended
		September 30		September 30		September 30		September 30
		2015		2014		2015		2014
Employees and directors share-based payments	$	287,000	$	912,000	$	968,000	$	1,133,000

Stock Option Activity [Table Text Block]

					Weighted Average
					Remaining		Aggregated
	Options			Weighted Average	Contractual Life		Intrinsic
	Outstanding			Exercise Price	(Years)		Value
Outstanding at January 1, 2015	1,800,226		$	2.73
Granted	16,565			2.12
Exercised	(19,042	)		1.79
Expired	(30,689	)		1.89
Forfeited	(45,964	)		1.68
Outstanding at September 30, 2015	1,721,096		$	2.77	5.89	$	60,625
Vested and expected to vest as of September 30, 2015	1,721,096			2.77	5.89		60,625
Options exercisable at September 30, 2015 (vested)	1,674,156		$	2.80	5.83	$	52,188

Warrants Outstanding [Table Text Block]

	September 30,	December 31,
	2015	2014
	Number of	Number of
	Warrants	Warrants		Exercise	Expiration
Warrants Outstanding	Outstanding	Outstanding		Price	Date
	and Exercisable	and Exercisable
May 2011 Warner Brothers Warrants	200,000	200,000	$	6.60	05/11/16
2011 Service Agreement Warrants	26,667	26,667	$	7.20	06/15/16
2012 August Financing Warrants (i)	536,250	536,250	$	1.50	08/30/17
2013 Broker Warrants (Series D Financing)	228,571	228,571	$	1.75	07/05/18
2013 Broker Warrants (Convertible Note)	114,285	114,285	$	1.75	11/04/18
2014 Broker Warrants (Series E Financing)	1,085,714	1,085,714	$	1.75	01/31/19
	2,191,487	2,191,487

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Fair Value Measurements (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2015

Dec. 31, 2014

Fair Value of the Warrant Liabilities [Table Text Block]

	Black Scholes	Monte Carlo
	September 30,	December 31,
	2015	2014
Risk-free interest rate	0.64%	1.040%
Expected volatility	70%	70%
Expected term (years)	1.92	2.67
Expected dividend yield	0%	0%

Assets and Liabilities Measured at Fair Value on a Recurring Basis [Table Text Block]

		September 30, 2015
		Fair Value Measurements
		Level 1		Level 2		Level 3		Total Fair Value
Liabilities
Warrant liabilities (see Note 10)	$	-	$	-	$	459,686	$	459,686

		December 31, 2014
		Fair Value Measurements
		Level 1		Level 2		Level 3		Total Fair Value
Liabilities
Warrant liabilities (see Note 10)	$	-	$	-	$	585,050	$	585,050

Components Effecting Change in Fair Value [Table Text Block]

		Level 3 Assets and Liabilities
		For the Nine Months Ended September 30, 2015
						Change in
		January 1,				Fair Value			September 30,
		2015		Settlements		gain			2015
Liabilities:
Warrant liabilities (see Note 10)	$	585,050	$	-	$	(125,364	)	$	459,686

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Warrants Outstanding (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Share-based Payments Warrants Outstanding 1	$ 200,000
Share-based Payments Warrants Outstanding 2	$ 200,000
Share-based Payments Warrants Outstanding 3	6.60
Share-based Payments Warrants Outstanding 4	$ 26,667
Share-based Payments Warrants Outstanding 5	$ 26,667
Share-based Payments Warrants Outstanding 6	7.20
Share-based Payments Warrants Outstanding 7	$ 536,250
Share-based Payments Warrants Outstanding 8	$ 536,250
Share-based Payments Warrants Outstanding 9	1.50
Share-based Payments Warrants Outstanding 10	$ 228,571
Share-based Payments Warrants Outstanding 11	$ 228,571
Share-based Payments Warrants Outstanding 12	1.75
Share-based Payments Warrants Outstanding 13	$ 114,285
Share-based Payments Warrants Outstanding 14	$ 114,285
Share-based Payments Warrants Outstanding 15	1.75
Share-based Payments Warrants Outstanding 16	$ 1,085,714
Share-based Payments Warrants Outstanding 17	$ 1,085,714
Share-based Payments Warrants Outstanding 18	1.75
Share-based Payments Warrants Outstanding 19	$ 2,191,487
Share-based Payments Warrants Outstanding 20	$ 2,191,487

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Defined Contribution Plan (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Defined Contribution Plan 1	100.00%
Defined Contribution Plan 2	3.00%
Defined Contribution Plan 3	50.00%
Defined Contribution Plan 4	5.00%
Defined Contribution Plan 5	$ 7,000
Defined Contribution Plan 6	$ 25,000

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Net Loss Per Common Share (Tables)

9 Months Ended

Sep. 30, 2015

Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	September 30,	September 30,
	2015	2014
Warrants	2,191,487	2,191,487
Options	1,721,096	1,821,142
Series A Preferred Stock	933,333	933,333
Series E Preferred Stock	7,254,997	7,559,998
Convertible promissory notes	1,947,053	1,878,481
Total	14,047,966	14,384,441

Unissued Common Stock for Possible Future Issuance [Table Text Block]

	September 30,	September 30,
	2015	2014
Exercise of stock warrants	2,191,487	2,191,487
Exercise and future grants of stock options	3,928,870	3,985,605
Conversion of preferred stock	8,188,330	8,493,331
Issuable shares from conversion of promissory notes payable	1,947,053	1,878,481
Total	16,255,740	16,548,904

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Contingencies and Commitments (Tables)

9 Months Ended

Sep. 30, 2015

Leased Property Costs [Table Text Block]

		Leased Property
Years ending December 31,		Costs
2015 (3 months)	$	203,850
2016		691,653
2017		57,725
Total	$	953,228

Leased Content Commitment [Table Text Block]

Years ending December 31,		Content Costs
2015 (3 months)	$	2,237,711
2016		1,306,500
2017		1,074,650
Total	$	4,618,861

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Organization and Principal Activities

9 Months Ended

Sep. 30, 2015

Organization and Principal Activities [Text Block]

1. Organization and Principal Activities

YOU On Demand Holdings, Inc., is a Nevada corporation that primarily operates in China through our subsidiaries and variable interest entities (“VIEs”). The Company, its subsidiaries and its VIEs are collectively referred to as YOU on Demand (“YOU On Demand”, “we”, “us”, or “the Company”).

YOU on Demand is principally engaged in providing and delivery of video on demand (“VOD”) content and video streaming service through a comprehensive end-to-end secure delivery system. Our services are offered across multiple platforms, including digital cable television, IPTV (“Internet Protocol Television”), mobile and over-the-top (“OTT”) devices.

In the opinion of management, these financial statements reflect all adjustments, which are of a normal and recurring nature that is necessary for a fair statement of the results for the periods presented in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and with the instructions to Form 10-Q in Article 10 of SEC Regulation S-X. The results of operations for the interim periods presented are not necessarily indicative of results for the full year.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on March 30, 2015 (our “2014 Annual Report”).

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Going Concern and Management's Plans (Narrative) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Going Concern And Management's Plans 1	$ 6,600
Going Concern And Management's Plans 2	6,200
Going Concern And Management's Plans 3	84,600
Going Concern And Management's Plans 4	19,000
Going Concern And Management's Plans 5	50,000
Going Concern And Management's Plans 6	$ 47,300

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Share-Based Payments (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) yr shares
Share-based Payments 1 | shares	1,721,096
Share-based Payments 2 | shares	2,191,487
Share-based Payments 3 | shares	4,000,000
Share-based Payments 4 | shares	2,011,297
Share-based Payments 5	$ 1.28
Share-based Payments 6	1.70
Share-based Payments 7	6,192
Share-based Payments 8	8,553
Share-based Payments 9	$ 78,000
Share-based Payments 10 | yr	1.44
Share-based Payments 11	$ 301,000
Share-based Payments 12	719,000
Share-based Payments 13	$ 2.20
Share-based Payments 14 | yr	2.64

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Components Effecting Change in Fair Value (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Fair Value Measurements Components Effecting Change In Fair Value 1	$ 585,050
Fair Value Measurements Components Effecting Change In Fair Value 2	0
Fair Value Measurements Components Effecting Change In Fair Value 3	(125,364)
Fair Value Measurements Components Effecting Change In Fair Value 4	$ 459,686

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UNAUDITED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 4,356,761	$ 10,812,371
Accounts receivable, net	2,578,745	1,091,076
Licensed content, current	969,250	1,041,609
Prepaid expenses	522,505	196,474
Other current assets	44,790	22,442
Total current assets	8,472,051	13,163,972
Property and equipment, net	198,315	320,671
Licensed content, non-current	27,118	35,648
Intangible assets, net	2,482,398	2,320,103
Goodwill	6,648,911	6,648,911
Long-term equity investments	688,672	850,054
Other non-current assets	279,476	365,006
Total assets	18,796,941	23,704,365
Current liabilities:
Accounts payable (including accounts payable of consolidated variable interest entity (VIE) without recourse to the Company of $9,229 and $8,598 as of September 30, 2015 and December 31, 2014, respectively)	22,374	110,814
Deferred revenue (including deferred revenue of VIE without recourse to the Company of $217,991 and $13,431 as of September 30, 2015 and December 31, 2014, respectively)	217,991	13,431
Accrued expenses and other liabilities (including accrued expenses and other liabilities of VIE without recourse to the Company of $998,930 and $573,620 as of September 30, 2015 and December 31, 2014, respectively)	3,019,822	2,046,783
Accrued license fees (including accrued license fees of VIE without recourse to the Company of $746,071 and $348,007 as of September 30, 2015 and December 31, 2014, respectively)	746,071	348,007
Convertible promissory note	3,000,000	3,000,000
Warrant liabilities	459,686	585,050
Total current liabilities	7,465,944	6,104,085
Deferred income tax liability	338,736	364,572
Total liabilities	7,804,680	6,468,657
Equity:
Common stock, $0.001 par value; 1,500,000,000 shares authorized, 24,027,924 and 23,793,702 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively	24,028	23,794
Additional paid-in capital	96,865,051	96,347,272
Accumulated deficit	(84,558,094)	(78,356,567)
Accumulated other comprehensive loss	(266,742)	(66,032)
Total YOU On Demand shareholder's equity	12,071,498	17,955,832
Non-controlling interest	(2,341,232)	(1,982,119)
Total equity	9,730,266	15,973,713
Total liabilities, convertible redeemable preferred stock and equity	18,796,941	23,704,365
Series A Preferred Stock [Member]
Convertible redeemable preferred stock:
Series A - 7,000,000 shares issued and outstanding, liquidation preference of $3,500,000 as of September 30, 2015 and December 31, 2014, respectively	1,261,995	1,261,995
Series E Preferred Stock [Member]
Equity:
Series E Preferred Stock - $0.001 par value; 16,500,000 shares authorized, 7,254,997 and 7,365,283 shares issued and outstanding, liquidation preference of $12,696,245 and $12,889,245 as of September 30, 2015 and December 31, 2014, respectively	$ 7,255	$ 7,365

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Statement of Financial Position (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Vie Structure And Arrangements Statement Of Financial Position 1	$ 74,541
Vie Structure And Arrangements Statement Of Financial Position 2	506,525
Vie Structure And Arrangements Statement Of Financial Position 3	2,578,745
Vie Structure And Arrangements Statement Of Financial Position 4	1,091,076
Vie Structure And Arrangements Statement Of Financial Position 5	969,250
Vie Structure And Arrangements Statement Of Financial Position 6	1,041,609
Vie Structure And Arrangements Statement Of Financial Position 7	76,498
Vie Structure And Arrangements Statement Of Financial Position 8	105,918
Vie Structure And Arrangements Statement Of Financial Position 9	29,299
Vie Structure And Arrangements Statement Of Financial Position 10	12,811
Vie Structure And Arrangements Statement Of Financial Position 11	125,178
Vie Structure And Arrangements Statement Of Financial Position 12	572,192
Vie Structure And Arrangements Statement Of Financial Position 13	3,853,511
Vie Structure And Arrangements Statement Of Financial Position 14	3,330,131
Vie Structure And Arrangements Statement Of Financial Position 15	191,134
Vie Structure And Arrangements Statement Of Financial Position 16	297,898
Vie Structure And Arrangements Statement Of Financial Position 17	27,118
Vie Structure And Arrangements Statement Of Financial Position 18	35,648
Vie Structure And Arrangements Statement Of Financial Position 19	284,535
Vie Structure And Arrangements Statement Of Financial Position 20	5,291
Vie Structure And Arrangements Statement Of Financial Position 21	688,672
Vie Structure And Arrangements Statement Of Financial Position 22	850,054
Vie Structure And Arrangements Statement Of Financial Position 23	187,508
Vie Structure And Arrangements Statement Of Financial Position 24	272,657
Vie Structure And Arrangements Statement Of Financial Position 25	5,232,478
Vie Structure And Arrangements Statement Of Financial Position 26	4,791,679
Vie Structure And Arrangements Statement Of Financial Position 27	9,229
Vie Structure And Arrangements Statement Of Financial Position 28	8,598
Vie Structure And Arrangements Statement Of Financial Position 29	217,991
Vie Structure And Arrangements Statement Of Financial Position 30	13,431
Vie Structure And Arrangements Statement Of Financial Position 31	998,930
Vie Structure And Arrangements Statement Of Financial Position 32	573,620
Vie Structure And Arrangements Statement Of Financial Position 33	746,071
Vie Structure And Arrangements Statement Of Financial Position 34	348,007
Vie Structure And Arrangements Statement Of Financial Position 35	12,443,690
Vie Structure And Arrangements Statement Of Financial Position 36	11,200,536
Vie Structure And Arrangements Statement Of Financial Position 37	14,415,911
Vie Structure And Arrangements Statement Of Financial Position 38	12,144,192
Vie Structure And Arrangements Statement Of Financial Position 39	14,415,911
Vie Structure And Arrangements Statement Of Financial Position 40	$ 12,144,192

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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net loss	$ (6,578,420)	$ (10,653,419)
Adjustments to reconcile net loss to net cash used in operating activities
Share-based compensation expense	967,902	1,133,335
Provision for doubtful accounts	9,087	0
Depreciation and amortization	283,468	414,486
Amortization of interest expense related to debt issuance costs	0	128,879
Amortization of interest expense related to beneficial conversion feature	0	2,126,301
Income tax benefit	(25,836)	(84,249)
Loss on long-term equity investments	143,666	16,646
Loss on disposal of assets	2,421	8,334
Change in fair value of warrant liabilities	(125,364)	655,849
Change in fair value of contingent consideration	0	160,766
Gain from disposal of consolidated entities	0	(727,963)
Change in assets and liabilities,
Accounts receivable	(1,496,756)	(461,473)
Licensed content	80,889	(555,762)
Prepaid expenses and other assets	(338,814)	(97,399)
Accounts payable	(88,440)	(482,932)
Accrued expenses and other liabilities	346,468	350,541
Deferred revenue	204,560	73,175
Deferred license fee	398,064	4,663
Net cash used in operating activities	(6,217,105)	(7,990,222)
Cash flows from investing activities:
Acquisition of property and equipment	(32,193)	(58,869)
Acquisition of leasehold improvements	0	(9,492)
Investments in intangibles and research and development	(48,938)	(292)
Investments in unconsolidated entities	0	(208,760)
Sale of subsidiary	0	(7,549)
Net cash used in investing activities	(81,131)	(284,962)
Cash flows from financing activities
Proceeds from sale of Series E Preferred Stock	0	19,000,000
Proceeds from the exercise of warrants and options	0	995,607
Series D Preferred Stock dividend payment	0	(92,054)
Interest paid on convertible note	0	(2,386,051)
Net cash provided by financing activities	0	17,517,502
Effect of exchange rate changes on cash	(157,374)	(19,992)
Net increase/(decrease) in cash and cash equivalents	(6,455,610)	9,222,326
Cash and cash equivalents at beginning of period	10,812,371	3,822,889
Cash and cash equivalents at end of period	4,356,761	13,045,215
Supplemental Cash Flow Information:
Cash paid for income taxes	0	0
Cash paid for interest	0	0
Value of warrants issued for issuance costs in connection with Preferred Series E Preferred Stock	0	2,166,296
Conversion of convertible promissory note for Series E Preferred Stock	0	2,000,000
Exchange of Series D Preferred Stock for Series E Preferred Stock	0	4,000,000
Value of common stock issued from conversion of Preferred Series C shares	0	219,754
Values of shares and options issued for Sinotop contingent consideration earn-out	0	739,265
Exchange of Series E Preferred Stock for common stock	$ 110	$ 0

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Leased Property Costs (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Contingencies And Commitments Leased Property Costs 1	$ 203,850
Contingencies And Commitments Leased Property Costs 2	691,653
Contingencies And Commitments Leased Property Costs 3	57,725
Contingencies And Commitments Leased Property Costs 4	$ 953,228

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Property and Equipment (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Property And Equipment 1	$ 47,000
Property And Equipment 2	147,000
Property And Equipment 3	55,000
Property And Equipment 4	$ 181,000

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Concentration, Credit and Other Risks

9 Months Ended

Sep. 30, 2015

Concentration, Credit and Other Risks [Text Block]

15. Concentration, Credit and Other Risks

(a) PRC Regulations

The PRC market in which the Company operates poses certain macro-economic and regulatory risks and uncertainties. These uncertainties extend to the ability of the Company to conduct wireless telecommunication services through contractual arrangements in the PRC since the industry remains highly regulated. The Company conducts all of its operations in China through its Zhonghai Video, which is consolidated in the Company’s financial statements as a result of a series of contractual arrangements enacted among YOD WFOE, Sinotop Beijing as the parent company of Zhonghai Video and the legal shareholder of Sinotop Beijing. The Company believes that these contractual arrangements are in compliance with PRC laws and are legally enforceable. If Sinotop Beijing or its legal shareholder fails to perform the obligations under the contractual arrangements or any dispute relating to these contracts remains unresolved, YOD WFOE or YOD HK can enforce its rights under the VIE contracts through the operations of PRC laws and courts. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce these contractual arrangements. In particular, the interpretation and enforcement of these laws, rules and regulations involve uncertainties. If YOD WFOE had direct ownership of Sinotop Beijing, it would be able to exercise its rights as a shareholder to effect changes in the board of directors of Sinotop Beijing, which in turn could effect changes at the management level, subject to any applicable fiduciary obligations. However, under the current contractual arrangements, the Company relies on Sinotop Beijing and its legal shareholder to perform their contractual obligations to exercise effective control.

In addition, the telecommunications, information and media industries remain highly regulated. Restrictions are currently in place and are unclear with respect to which segments of these industries foreign owned entities, like YOD WFOE, may operate. The PRC government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as telecommunications, information and media, some of which are not published on a timely basis or may have retroactive effect. Administrative and court proceedings in China may also be protracted, resulting in substantial costs and diversion of resources and management attention. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws, and the Company’s legal structure and scope of operations in the PRC, which could be subject to further restrictions resulting in limitations on the Company’s ability to conduct business in the PRC.

(b) Major Customers

The Company relies on agreements with distribution partners, including digital cable operators, IPTV operators, OTT streaming operators and mobile smartphone manufacturers and operators, during the course of its business. A distribution partner that individually generates more than 10% of the Company’s revenue is considered a major customer.

For the nine months ended September 30, 2015, three customers individually accounted for more than 10% of the Company’s revenue. Four customers individually accounted for 10% of the Company’s net accounts receivables as of September 30, 2015.

For the nine months ended September 30, 2014, four customers individually accounted for more than 10% of the Company’s revenue. Two customers individually accounted for 10% of the Company’s net accounts receivables as of September 30, 2014.

(c) Major Suppliers

The Company relies on agreements with studio content partners to acquire video contents. A content partner that accounts for more than 10% of the Company’s cost of revenues is considered a major supplier.

For the nine months ended September 30, 2015, four suppliers individually accounted for more than 10% of the Company’s cost of revenues. One supplier individually accounted for 10% of the Company’s accounts payable as of September 30, 2015.

For the nine months ended September 30, 2014, four suppliers individually accounted for more than 10% of the Company’s cost of revenues. One supplier individually accounted for 10% of the Company’s accounts payable as of September 30, 2014.

(d) Concentration of Credit Risks

Financial instruments that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents and accounts receivable. As of September 30, 2015 and 2014, the Company’s cash and cash equivalents were held by financial institutions located in the PRC, Hong Kong and the United States that management believes are of high-credit ratings and quality. Accounts receivable are typically unsecured and are mainly derived from revenues from the Company’s VOD content distribution partners. The risk with respect to accounts receivable is mitigated by regular credit evaluations that the Company performs on its distribution partners and its ongoing monitoring of outstanding balances.

(e) Foreign Currency Risks

A majority of the Company’s operating transactions are denominated in RMB and a significant portion of the Company’s assets and liabilities is denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the RMB is subject to changes in the central government policies and to international economic and political developments. In the PRC, certain foreign exchange transactions are required by laws to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to complete the remittance.

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Intangible Assets (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Intangible Assets 1	$ 52,000
Intangible Assets 2	137,000
Intangible Assets 3	70,000
Intangible Assets 4	$ 234,000

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Subsequent Event

9 Months Ended

Sep. 30, 2015

Subsequent Event [Text Block]

17. Subsequent Event

Management evaluated subsequent events after September 30, 2015 through the latest practicable date, and concluded that no subsequent event has occurred that would require recognition or disclosure in the unaudited consolidated financial statements.

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UNAUDITED CONSOLIDATED STATEMENTS OF EQUITY - USD ($)	Preferred Shares [Member]	Preferred Shares [Member] Series E Preferred Stock [Member]	Common Shares [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	Accumulated Other Comprehensive Loss [Member]	YOU On Demand Shareholders' Equity [Member]	Noncontrolling Interest [Member]	Total
Beginning Balance at Dec. 31, 2013			$ 15,794	$ 67,417,025	$ (65,856,053)	$ (715,090)	$ 861,676	$ (1,397,322)	$ (535,646)
Beginning Balance (Shares) at Dec. 31, 2013			15,794,762
Share-based compensation				718,969			718,969		718,969
Common stock issued for services			$ 74	179,926			180,000		180,000
Common stock issued for services (Shares)			73,600
Common stock and options issued for Sinotop acquisition earn-out			$ 245	739,265			739,510		739,510
Common stock and options issued for Sinotop acquisition earn-out (Shares)			245,274
Conversion of Series C Preferred Stock into common stock			$ 140	219,614			219,754		219,754
Conversion of Series C Preferred Stock into common stock (Shares)			140,000
Series D Preferred Stock cash dividends					(92,054)		(92,054)		(92,054)
Series E Preferred Stock issued	$ 14,286			24,985,714			25,000,000		25,000,000
Series E Preferred Stock issued (Shares)	14,285,714
Conversion of Series E Preferred Stock into common stock	$ (6,726)		$ 6,726
Conversion of Series E Preferred Stock into common stock (Shares)	(6,725,716)		6,725,716
Issuance costs in connection with the issuance of Series E Preferred Stock				(4,552,347)			(4,552,347)		(4,552,347)
Valuation of warrants issued to placement agent in connection with the issuance of Series E Preferred Stock				2,166,296			2,166,296		2,166,296
Beneficial conversion feature of Series E Preferred Stock				16,388,572	(16,388,572)
Beneficial conversion feature related to convertible note modification				2,126,301			2,126,301		2,126,301
Exercise of warrants			$ 607	2,374,575			2,375,182		2,375,182
Exercise of warrants (Shares)			607,480
Exercise of options			$ 12	1,040			1,052		1,052
Exercise of options (Shares)			11,598
Net loss attributable to YOU On Demand shareholders					(9,956,711)		(9,956,711)	(696,708)	(10,653,419)
Foreign currency translation adjustments						(32,627)	(32,627)	10,720	(21,907)
Ending Balance at Sep. 30, 2014	$ 7,560		$ 23,598	112,764,950	(92,293,390)	(1,381,701)	19,121,017	(2,083,310)	17,037,707
Ending Balance (Shares) at Sep. 30, 2014	7,559,998		23,598,430
Beginning Balance at Dec. 31, 2014		$ 7,365	$ 23,794	96,347,272	(78,356,567)	(66,032)	17,955,832	(1,982,119)	15,973,713
Beginning Balance (Shares) at Dec. 31, 2014		7,365,283	23,793,702
Share-based compensation				300,797			300,797		300,797
Common stock issued for services			$ 121	216,985			217,106		217,106
Common stock issued for services (Shares)			120,755
Conversion of Series E Preferred Stock into common stock		$ (110)	$ 110
Conversion of Series E Preferred Stock into common stock (Shares)		(110,286)	110,286
Exercise of options			$ 3	(3)
Exercise of options (Shares)			3,181
Net loss attributable to YOU On Demand shareholders					(6,201,527)		(6,201,527)	(376,893)	(6,578,420)
Foreign currency translation adjustments						(200,710)	(200,710)	17,780	(182,930)
Ending Balance at Sep. 30, 2015		$ 7,255	$ 24,028	$ 96,865,051	$ (84,558,094)	$ (266,742)	$ 12,071,498	$ (2,341,232)	$ 9,730,266
Ending Balance (Shares) at Sep. 30, 2015		7,254,997	24,027,924

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UNAUDITED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Accounts payable of consolidated variable interest entities (VIEs) without recourse to the Company	$ 9,229	$ 8,598
Deferred revenue of VIEs without recourse to the Company	217,991	13,431
Accrued expenses and other liabilities of VIEs without recourse to the Company	998,930	573,620
Accrued license fees of VIEs without recourse to the Company	$ 746,071	$ 348,007
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,500,000,000	1,500,000,000
Common stock, shares issued (in shares)	24,027,924	23,793,702
Common stock, shares outstanding	24,027,924	23,793,702
Series A Preferred Stock [Member]
Convertible redeemable preferred stock, issued (in shares)	7,000,000	7,000,000
Convertible redeemable preferred stock, outstanding (in shares)	7,000,000	7,000,000
Convertible redeemable preferred stock, liquidation preference	$ 3,500,000	$ 3,500,000
Series E Preferred Stock [Member]
Preferred Stock, Par Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	16,500,000	16,500,000
Preferred Stock, Shares Issued	7,254,997	7,365,283
Preferred Stock, Shares Outstanding	7,254,997	7,365,283
Preferred Stock, Liquidation Preference, Value	$ 12,696,245	$ 12,889,245

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Warrant Liabilities

9 Months Ended

Sep. 30, 2015

Warrant Liabilities [Text Block]

10. Warrant Liabilities

In connection with our August 30, 2012 private financing, we issued 977,063 warrants to investors and the broker. In accordance with FASB ASC 815-40-15-5, Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock, the warrants have been accounted as derivative liabilities to be re- measured at the end of every reporting period with the change in value reported in the consolidated statement of operations. On August 30, 2012, such warrants were valued at $1,525,000 utilizing a valuation model and were initially recorded as a liability. The warrants are revalued at each year end based on the Monte Carlo valuation.

As of September 30, 2015 and December 31, 2014, the warrant liability was re-valued as disclosed in Note 7, and was adjusted to its current fair value of approximately $460,000 and $585,000, respectively, as determined by the Company, resulting in a gain of approximately $125,000 for the nine months ended September 30, 2015. There were no warrants exercised during nine months ended September 30, 2015.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 16, 2015
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Trading Symbol	yod
Entity Registrant Name	YOU ON DEMAND HOLDINGS, INC.
Entity Central Index Key	0000837852
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		24,027,924
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well Known Seasoned Issuer	No
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Share-Based Payments

9 Months Ended

Sep. 30, 2015

Share-Based Payments [Text Block]

11. Share-Based Payments

As of September 30, 2015, the Company had 1,721,096 options and 2,191,487 warrants outstanding to purchase shares of our common stock.

The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation . The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period.

Total share-based payments expense recorded by the Company during the three and nine months ended September 30, 2015 and 2014 is as follows:

		Three Months Ended				Nine Months Ended
		September 30		September 30		September 30		September 30
		2015		2014		2015		2014
Employees and directors share-based payments	$	287,000	$	912,000	$	968,000	$	1,133,000

(a) Stock Options

Effective as of December 3, 2010, our Board of Directors approved the YOU On Demand Holdings, Inc. 2010 Stock Incentive Plan (“the Plan”) pursuant to which options or other similar securities may be granted. The maximum aggregate number of shares of our common stock that may be issued under the Plan is 4,000,000 shares. As of September 30, 2015, options available for issuance are 2,011,297 shares.

Stock option activity for the nine months ended September 30, 2015 is summarized as follows:

					Weighted Average
					Remaining		Aggregated
	Options			Weighted Average	Contractual Life		Intrinsic
	Outstanding			Exercise Price	(Years)		Value
Outstanding at January 1, 2015	1,800,226		$	2.73
Granted	16,565			2.12
Exercised	(19,042	)		1.79
Expired	(30,689	)		1.89
Forfeited	(45,964	)		1.68
Outstanding at September 30, 2015	1,721,096		$	2.77	5.89	$	60,625
Vested and expected to vest as of September 30, 2015	1,721,096			2.77	5.89		60,625
Options exercisable at September 30, 2015 (vested)	1,674,156		$	2.80	5.83	$	52,188

The weighted average grant-date fair value of options granted during the nine months ended September 30, 2015 and 2014 was $1.28 and $1.70. The total intrinsic value of options exercised during the nine months ended September 30, 2015 and 2014 was $6,192 and $8,553.

As of September 30, 2015, approximately $78,000 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.44 years. The total fair value of shares vested during the nine months ended September 30, 2015 and 2014 was approximately $301,000 and $719,000 respectively.

(b) Warrants

In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to investors and service providers to purchase common stock of the Company.

As of September 30, 2015, the weighted average exercise price of the warrants was $2.20 and the weighted average remaining life was 2.64 years. The following table outlines the warrants outstanding and exercisable as of September 30, 2015 and December 31, 2014:

	September 30,	December 31,
	2015	2014
	Number of	Number of
	Warrants	Warrants		Exercise	Expiration
Warrants Outstanding	Outstanding	Outstanding		Price	Date
	and Exercisable	and Exercisable
May 2011 Warner Brothers Warrants	200,000	200,000	$	6.60	05/11/16
2011 Service Agreement Warrants	26,667	26,667	$	7.20	06/15/16
2012 August Financing Warrants (i)	536,250	536,250	$	1.50	08/30/17
2013 Broker Warrants (Series D Financing)	228,571	228,571	$	1.75	07/05/18
2013 Broker Warrants (Convertible Note)	114,285	114,285	$	1.75	11/04/18
2014 Broker Warrants (Series E Financing)	1,085,714	1,085,714	$	1.75	01/31/19
	2,191,487	2,191,487

(i) The warrants are classified as derivate liabilities in Note 10

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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue	$ 476,165	$ 644,891	$ 2,983,741	$ 965,268
Cost of revenue	900,284	873,025	2,772,322	2,606,142
Gross profit/(loss)	(424,119)	(228,134)	211,419	(1,640,874)
Operating expenses:
Selling, general and administrative expense	1,832,443	1,861,053	5,939,559	5,772,350
Professional fees	141,034	114,271	581,115	375,986
Depreciation and amortization	98,643	124,936	283,468	414,486
Total operating expense	2,072,120	2,100,260	6,804,142	6,562,822
Loss from operations	(2,496,239)	(2,328,394)	(6,592,723)	(8,203,696)
Interest and other income/(expense)
Interest expense, net	(30,613)	(29,151)	(89,168)	(2,346,210)
Change in fair value of warrant liabilities	91,315	281,537	125,364	(655,849)
Change in fair value of contingent consideration	0	(47,634)	0	(160,766)
Loss on investment in unconsolidated entities	(50,642)	(6,389)	(143,666)	(16,646)
Gain on sale of subsidiary	0	0	0	755,426
Loss on dissolution of a variable interest entity	0	0	0	(27,463)
Others	142,280	(14,783)	95,937	(82,464)
Net loss before income taxes and non-controlling interest	(2,343,899)	(2,144,814)	(6,604,256)	(10,737,668)
Income tax benefit	8,612	28,812	25,836	84,249
Net loss	(2,335,287)	(2,116,002)	(6,578,420)	(10,653,419)
Net loss attributable to non-controlling interest	249,369	169,364	376,893	696,708
Net loss attributable to YOU On Demand shareholders	(2,085,918)	(1,946,638)	(6,201,527)	(9,956,711)
Dividends and deemed dividends on preferred stock	0	0	0	(16,402,161)
Net loss attributable to YOU On Demand common shareholders	$ (2,085,918)	$ (1,946,638)	$ (6,201,527)	$ (26,358,872)
Basic and diluted loss per share	$ (0.09)	$ (0.09)	$ (0.26)	$ (1.45)
Weighted average shares outstanding:
Basic and diluted	24,003,403	22,012,166	23,890,929	18,203,124

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Property and Equipment

9 Months Ended

Sep. 30, 2015

Property and Equipment [Text Block]

5. Property and Equipment

The following is a breakdown of our property and equipment:

		September 30,			December 31,
		2015			2014
Furniture and office equipment	$	931,242		$	959,080
Leasehold improvements		190,722			190,722
Total property and equipment		1,121,964			1,149,802
Less: accumulated depreciation		(923,649	)		(829,131	)
Net carrying value	$	198,315		$	320,671

We recorded depreciation expense of approximately $47,000 and $147,000 for the three and nine months ended September 30, 2015. We recorded depreciation expense of approximately $55,000 and $181,000 for the three and nine months ended September 30, 2014.

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Sales of WFOE and Dissolution of Jinan Zhong Kuan

9 Months Ended

Sep. 30, 2015

Sales of WFOE and Dissolution of Jinan Zhong Kuan [Text Block]

4. Sales of WFOE and Dissolution of Jinan Zhong Kuan

On March 25, 2014, we sold Beijing China Broadband Network Technology Co., Ltd. (“WFOE”), our wholly-owned subsidiary, to Linkstar Global Investment Limited. On the same date, we dissolved Jinan Zhong Kuan Dian Guang Information Technology Co., Ltd. (“Jinan Zhong Kuan”), the VIE of WFOE. Both WFOE and Jinan Zhong Kuan were investment holding companies and were sold or dissolved when we determined that they were no longer required for our organizational structure. Total consideration for the sale of WFOE was US$50,000, which we received in the third quarter of 2014. In accordance with ASC 810-10-40, Deconsolidation of a Subsidiary , we derecognized the net assets associated with WFOE and Jinan Zhong Kuan on March 25, 2014 when we ceased to have controlling financial interest in these entities.

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Defined Contribution Plan

9 Months Ended

Sep. 30, 2015

Defined Contribution Plan [Text Block]

16. Defined Contribution Plan

During 2011, the Company began sponsoring a 401(k) defined contribution plan ("401(k) Plan") that provides for a 100% employer matching contribution of the first 3% and a 50% employer matching contribution of each additional percent contributed by an employee up to 5% of each employee’s pay. Employees become fully vested in employer matching contributions after six months of employment. Company 401(k) matching contributions were approximately $7,000 and $25,000 for the nine months ended September 30, 2015 and 2014, respectively.

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Net Loss Per Common Share

9 Months Ended

Sep. 30, 2015

Net Loss Per Common Share [Text Block]

12. Net Loss Per Common Share

Basic net loss per common share attributable to YOU On Demand shareholders is calculated by dividing the net loss attributable to YOU On Demand shareholders by the weighted average number of outstanding common shares during the applicable period. Diluted net loss per share equals basic net loss per share because the effect of securities convertible into common shares is anti-dilutive.

For the nine months ended September 30, 2015 and 2014, the number of securities convertible into common shares not included in diluted loss per common share because the effect would have been anti-dilutive consists of the following:

	September 30,	September 30,
	2015	2014
Warrants	2,191,487	2,191,487
Options	1,721,096	1,821,142
Series A Preferred Stock	933,333	933,333
Series E Preferred Stock	7,254,997	7,559,998
Convertible promissory notes	1,947,053	1,878,481
Total	14,047,966	14,384,441

The Company has reserved its authorized but unissued common stock for possible future issuance in connection with the following:

	September 30,	September 30,
	2015	2014
Exercise of stock warrants	2,191,487	2,191,487
Exercise and future grants of stock options	3,928,870	3,985,605
Conversion of preferred stock	8,188,330	8,493,331
Issuable shares from conversion of promissory notes payable	1,947,053	1,878,481
Total	16,255,740	16,548,904

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Related Party Transactions

9 Months Ended

Sep. 30, 2015

Related Party Transactions [Text Block]

8. Related Party Transactions

(a) $3.0 Million Convertible Note

On May 10, 2012, our Executive Chairman and Principal Executive Officer, Mr. Shane McMahon, made a loan to the Company in the amount of $3,000,000. In consideration for the loan, the Company issued a convertible note to Mr. McMahon in the aggregate principal amount of $3,000,000 (the “Note”). Upon issuance, the conversion price of the Note was equal to the price per share paid for securities by investors in the most recent financing (as of the date of conversion) of equity or equity-linked securities of the Company. Thereafter, on May 21, 2012, at the Company’s request, the Company and Mr. McMahon entered into Amendment No.1 to the Note, pursuant to which the price per share at which the Note, or any convertible Securities into which the Note is converted, may be converted into shares of the Company’s common stock, shall not be less than $4.75, which amount represents the closing bid price of the Company’s common stock on the trading day immediately prior to the date of the Note in accordance with the rules and regulations of The Nasdaq Stock Market, Inc.

On April 12, 2013, our majority shareholders approved an amendment to the Note, as amended on May 21, 2012, to remove the $4.75 floor to the conversion price of the Note and such approval and such amendment was effective following the expiration of the 20 -day period mandated by Rule 14c-2.

Effective May 10, 2013, the Company and Mr. McMahon entered into Amendment No. 3 to the note pursuant to which (i) the Note will mature on November 10, 2013, and (ii) the net proceeds of any financing of equity or equity-linked securities of the Company occurring on or before such date will be used to repay the Note until the full amount of the Note, and all accrued interest on the Note is repaid.

In connection with the Series D Amendment (as discussed below in Note 9), on November 4, 2013, the Company and Mr. McMahon entered into a waiver, pursuant to which (i) Mr. McMahon waived the Company’s obligation to repay the Note on November 10, 2013, (ii) the Company and Mr. McMahon agreed that the principal and all interest on the Note shall become due and payable on the earlier of (a) the closing of the Series E Financing, or (b) if there is no Series E Financing, the date when the Bridge Note (as discussed below in Note 9) is repaid in full or converted into shares of Series D Preferred Stock, and (iii) Mr. McMahon waived the Company’s obligation to repay the Note with the proceeds received from the issuance of the Bridge Note.

Effective on January 31, 2014, the Company and Mr. McMahon entered into Amendment No. 4 to the Note pursuant to which the Note will be, at Mr. McMahon’s option, payable on demand or convertible on demand into shares of Series E Preferred Stock of the Company (the “Series E Preferred Stock”) at a conversion price of $1.75, until December 31, 2014. As a result, the Company recognized a beneficial conversion feature discount calculated as the difference between the Series E Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for the Series E Preferred Stock investment and the effective conversion price. As such, we recognized a beneficial conversion feature of approximately $2,126,000 which was reflected as interest expense and additional paid-in capital since the note was payable upon demand.

Effective December 30, 2014, the Company and Mr. McMahon entered into Amendment No. 5 to the Note pursuant to which the maturity date of the Note was extended to December 31, 2016. The Note remains payable on demand or convertible on demand into shares of Series E Preferred Stock at a conversion price of $1.75 at Mr. McMahon’s option.

For the three and nine months ended September 30, 2015, the Company recorded interest expense of $30,000 and $90,000, respectively, related to the Note. For the three and nine months ended September 30, 2014, the Company recorded interest expense of $30,000 and $2,216,000, respectively, related to the Note.

(b) Revenue and Accounts Receivable

In March 2015, Zhong Hai Video entered into an agreement with C Media Limited (“C Media”) to provide video content services via C Media’s proprietary railway Wi-Fi service platform. As of September 30, 2015, C Media is our largest shareholder. For the three and nine months ended September 30, 2015, total revenue recognized amounted to nil and $182,000, respectively. As of September 30, 2015, total accounts receivable due from C Media amounted to $94,000.

(c) Cost of Revenue

Zhong Hai Video paid licensed content fees of approximately nil and $41,000 for the three months ended September 30, 2015 and 2014, and $80,000 and $122,000 for the nine months ended September 30, 2015 and 2014, respectively, to Hua Cheng, the minority shareholder of Zhong Hai Video. As of September 30, 2015 and 2014, total accounts payable due to Hua Cheng amounted to $39,000 and nil.

(d) Sale of WFOE

Effective March 25, 2014, WFOE, our wholly-owned subsidiary, was sold to Linkstar Global Investment Limited, whose sole shareholder is a family member of one of our management personnel.Total consideration for the sale of WFOE was $50,000, which was received in the third quarter of 2014.

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Leased Content Commitment (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Contingencies And Commitments Leased Content Commitment 1	$ 2,237,711
Contingencies And Commitments Leased Content Commitment 2	1,306,500
Contingencies And Commitments Leased Content Commitment 3	1,074,650
Contingencies And Commitments Leased Content Commitment 4	$ 4,618,861

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Intangible Assets

9 Months Ended

Sep. 30, 2015

Intangible Assets [Text Block]

6. Intangible Assets

The Company intangible assets primarily arose from the acquisition of YOD Hong Kong.

As of September 30, 2015, the Company’s amortized intangible assets consisted of the following:

		September 30, 2015							December 31, 2014
		Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net
		Amount		Amortization			Balance		Amount		Amortization			Balance
Charter/ Cooperation agreements	$	2,755,821	$	(711,924	)	$	2,043,897	$	2,755,821	$	(608,580	)	$	2,147,241
Software and licenses		253,930		(227,860	)		26,070		253,930		(215,358	)		38,572
Website and mobile app development		653,830		(375,689	)		278,141		356,425		(356,425	)		-
Total definite lived intangible assets	$	3,663,581	$	(1,315,473	)	$	2,348,108	$	3,366,176	$	(1,180,363	)	$	2,185,813
Website name		134,290		-			134,290		134,290		-			134,290
Total intangible assets	$	3,797,871	$	(1,315,473	)	$	2,482,398	$	3,500,466	$	(1,180,363	)	$	2,320,103

We recorded amortization expense related to our finite lived intangible assets of approximately $52,000 and $137,000 for the three and nine months ended September 30, 2015. We recorded amortization expense related to our finite lived intangible assets of approximately $70,000 and $234,000 for the three and nine months ended September 30, 2014.

The following table outlines the amortization expense for the next five years and thereafter:

		Amortization to be
Years ending December 31,		Recognized
2015 (3 months)	$	62,003
2016		255,274
2017		239,487
2018		194,788
2019		138,275
2020		137,792
Thereafter		1,320,489
Total amortization to be recognized	$	2,348,108

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Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Measurements [Text Block]

7. Fair Value Measurements

Accounting standards require the categorization of financial assets and liabilities, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The various levels of the fair value hierarchy are described as follows:

• Level 1 — Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that we have the ability to access.

• Level 2 — Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.

• Level 3 — Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

Accounting standards require the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

We review the valuation techniques used to determine if the fair value measurements are still appropriate on an annual basis, and evaluate and adjust the unobservable inputs used in the fair value measurements based on current market conditions and third party information.

The fair value of the warrant liabilities at September 30, 2015 were valued using the Black-Scholes Merton method as an estimate for the Monte Carlos Simulation method which was the method used at the year ended December 31, 2014. The following assumptions were incorporated:

	Black Scholes	Monte Carlo
	September 30,	December 31,
	2015	2014
Risk-free interest rate	0.64%	1.040%
Expected volatility	70%	70%
Expected term (years)	1.92	2.67
Expected dividend yield	0%	0%

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis at September 30, 2015 and December 31, 2014, respectively:

		September 30, 2015
		Fair Value Measurements
		Level 1		Level 2		Level 3		Total Fair Value
Liabilities
Warrant liabilities (see Note 10)	$	-	$	-	$	459,686	$	459,686

		December 31, 2014
		Fair Value Measurements
		Level 1		Level 2		Level 3		Total Fair Value
Liabilities
Warrant liabilities (see Note 10)	$	-	$	-	$	585,050	$	585,050

The table below reflects the components effecting the change in fair value for the nine months ended September 30, 2015:

		Level 3 Assets and Liabilities
		For the Nine Months Ended September 30, 2015
						Change in
		January 1,				Fair Value			September 30,
		2015		Settlements		gain			2015
Liabilities:
Warrant liabilities (see Note 10)	$	585,050	$	-	$	(125,364	)	$	459,686

The significant unobservable inputs used in the fair value measurement of the Company’s warrant liability includes the risk free interest rate, expected volatility, expected term and expected dividend yield. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value measurement.

The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other payables and convertible promissory note as of September 30, 2015 and December 31, 2014, approximate fair value because of the short maturity of these instruments.

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Series D and Series E Preferred Stock Financing and Convertible Note

9 Months Ended

Sep. 30, 2015

Series D and Series E Preferred Stock Financing and Convertible Note [Text Block]

9. Series D and Series E Preferred Stock Financing and Convertible Note

(a) Series D Preferred Stock

On July 5, 2013, we entered into a Series D Preferred Stock Purchase Agreement with C Media, pursuant to which we sold to C Media 2,285,714 shares of Series D 4% Convertible Redeemable Preferred Stock of the Company (the “Series D Preferred Stock”) for $1.75 per share, or a total purchase price of $4,000,000.

On January 31, 2014, the Company exchanged the Series D Preferred Stock to Series E Preferred Stock, effective as of January 31, 2014. Previously recognized beneficial conversion feature of $183,000 related to the Series D Preferred Stock original issuance was reversed and the Company recognized approximately $2,651,000 of beneficial conversion feature as a deemed dividend related to the exchange of Series D Preferred Stock to Series E Preferred Stock. Further, in accordance with the terms of the Series D Preferred Stock Purchase Agreement, the Company paid the full cumulative dividends of $92,000 upon the exchange of the Series D Preferred Stock to Series E Preferred Stock.

(b) $2.0 Million Convertible Note

On November 4, 2013, the Company issued a convertible note to C Media in $2,000,000 principal amount (the “Bridge Note”). The Bridge Note had an annual interest rate of 4% and a maturity date of January 5, 2015. Upon the closing of a financing pursuant to the terms of the Series D Preferred Stock Purchase Agreement by and between the Company and C Media, dated as of July 5, 2013, as amended as of November 4, 2013 (as discussed below) in which C Media would invest funds in the Company in exchange for shares of the Series E Preferred Stock, the principal amount and all unpaid interest of the Bridge Note would be automatically converted into shares of Series E Preferred Stock at a conversion price equal to the per share purchase price paid for the Series E Preferred Stock by C Media. Upon the issuance of the Series E Preferred Stock on January 31, 2014, the Bridge Note was automatically converted into 1,142,857 shares of Series E Preferred Stock, with no gain or loss recognized for the conversion of the Bridge Note for Series E Preferred Stock.

In connection with the issuance of the Bridge Note, the Company recorded debt issuance costs of approximately $370,000 that was to be amortized over the period of the earliest possible conversion date of January 31, 2014, of which $129,000 was recognized during the three months ended March 31, 2014. The issuance costs included cash paid of $241,936 and the issuance of warrants to the placement agent to purchase 114,285 shares of common stock at $1.75 per share. The fair value of the warrants was calculated using the Black-Scholes model with the following assumptions: expected term of 5 years, expected dividend rate of 0%, volatility of 70% and an interest rate of 1.36% . The exercise price of the warrants was $1.75. The warrants were valued at $128,072 at the date of issuance.

(c) Amendment to Series D Stock Purchase Agreement

On November 4, 2013, in connection with the issuance of the Bridge Note, the Company and C Media entered into Amendment No. 1 to the Series D Purchase Agreement (the “Series D Amendment”). Pursuant to the original Series D Purchase Agreement, dated July 5, 2013, the Company and C Media agreed, among other things, that each party would act in good faith and with fair dealing to finalize an agreement for the purchase and sale of shares of Series E Preferred Stock pursuant to the terms of a Series E Purchase Agreement on or before October 31, 2013. Pursuant to the Series D Amendment, the parties agreed that each party would act in good faith and with fair dealing to finalize the Series E Purchase Agreement on or before the 30th day following the issuance of the Bridge Note.

Also in connection with the Series D Amendment, C Media executed a waiver and consent with the Company as of October 31, 2013 agreeing, among other things, to waive its right to redeem its Series D Preferred Stock as of October 31, 2013 until the 30th day following the issuance of the Bridge Note. On December 4, 2013, C Media exercised its extension option which extended such date to January 31, 2014.

(d) Series E Preferred Stock

On January 31, 2014, the Company entered into a Series E Preferred Stock Purchase Agreement (the “Series E Purchase Agreement”) with C Media and certain other purchasers (collectively, the “Investors”), pursuant to which the Company issued to the Investors an aggregate of 14,285,714 shares of Series E Preferred Stock of the Company for $1.75 per share, or a total purchase price of $25.0 million. Among the 14,285,714 shares of Series E Preferred Stock issued to the Investors, (i) 1,142,857 shares were issued upon the conversion of the Bridge Note issued to C Media in principal amount of $2,000,000, (ii) 10,857,143 shares were issued for an aggregate purchase price of $19 million, and (iii) 2,285,714 shares were issued upon the conversion of 2,285,714 shares of Series D Preferred Stock held by C Media, which constitute all of the issued and outstanding shares of Series D Preferred Stock, into the Series E Preferred Stock pursuant to the Series E

Purchase Agreement. In connection with the issuance of the Series E Preferred Stock, we recorded issuance costs of $4,552,347 to additional paid in capital. The issuance costs included cash paid of approximately $2,386,000 and the issuance of warrants to the placement agent to purchase 1,085,714 shares of common stock at $1.75 per share. The fair value of the warrants was calculated using the Black-Scholes model with the following assumptions: expected term of 5 years, expected dividend rate of 0%, volatility of 70% and an interest rate of 1.49% . The exercise price of the warrants was $1.75. The warrants were valued at $2,166,296 at the date of issuance.

In connection with the issuance of Series E Preferred Stock, we recorded dividends of approximately $16,402,000. This amount is comprised of (1) recognition of a deemed dividend for a beneficial conversion feature discount of $16,571,000, (2) reversal of a deemed dividend for the beneficial conversion feature discount of $183,000 related to the extinguishment of the Series D Preferred Stock and (3) cash dividends paid of $14,000 for January 2014, which is part of the total cash dividend paid, amounting to $92,054, in the six months ended June 30, 2014.

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Sales of WFOE and Dissolution of Jinan Zhong Kuan (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Sales Of Wfoe And Dissolution Of Jinan Zhong Kuan 1	$ 50,000

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Fair Value of the Warrant Liabilities (Details)	9 Months Ended
	Sep. 30, 2015
Fair Value Measurements Fair Value Of The Warrant Liabilities 1	0.64%
Fair Value Measurements Fair Value Of The Warrant Liabilities 2	1.04%
Fair Value Measurements Fair Value Of The Warrant Liabilities 3	70.00%
Fair Value Measurements Fair Value Of The Warrant Liabilities 4	70.00%
Fair Value Measurements Fair Value Of The Warrant Liabilities 5	1.92
Fair Value Measurements Fair Value Of The Warrant Liabilities 6	2.67
Fair Value Measurements Fair Value Of The Warrant Liabilities 7	0.00%
Fair Value Measurements Fair Value Of The Warrant Liabilities 8	0.00%

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Contingencies and Commitments

9 Months Ended

Sep. 30, 2015

Contingencies and Commitments [Text Block]

14. Contingencies and Commitments

(a) Severance Commitment

The Company has employment agreements with certain employees that provide severance payments upon termination of employment under certain circumstances, as defined in the applicable agreements. As of September 30, 2015, the Company's potential minimum cash obligation to these employees was approximately $1,348,000.

(b) Operating Lease Commitment

The Company is committed to paying leased property costs related to our offices in New York and China through 2017 as follows:

		Leased Property
Years ending December 31,		Costs
2015 (3 months)	$	203,850
2016		691,653
2017		57,725
Total	$	953,228

(c) Licensed Content Commitment

The Company is committed to paying content costs through 2016 as follows:

Years ending December 31,		Content Costs
2015 (3 months)	$	2,237,711
2016		1,306,500
2017		1,074,650
Total	$	4,618,861

(d) Lawsuits and Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2015

Property and Equipment [Table Text Block]

		September 30,			December 31,
		2015			2014
Furniture and office equipment	$	931,242		$	959,080
Leasehold improvements		190,722			190,722
Total property and equipment		1,121,964			1,149,802
Less: accumulated depreciation		(923,649	)		(829,131	)
Net carrying value	$	198,315		$	320,671

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Schedule of Intangible Assets and Goodwill (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Intangible Assets Schedule Of Intangible Assets And Goodwill 1	$ 2,755,821
Intangible Assets Schedule Of Intangible Assets And Goodwill 2	(711,924)
Intangible Assets Schedule Of Intangible Assets And Goodwill 3	2,043,897
Intangible Assets Schedule Of Intangible Assets And Goodwill 4	2,755,821
Intangible Assets Schedule Of Intangible Assets And Goodwill 5	(608,580)
Intangible Assets Schedule Of Intangible Assets And Goodwill 6	2,147,241
Intangible Assets Schedule Of Intangible Assets And Goodwill 7	253,930
Intangible Assets Schedule Of Intangible Assets And Goodwill 8	(227,860)
Intangible Assets Schedule Of Intangible Assets And Goodwill 9	26,070
Intangible Assets Schedule Of Intangible Assets And Goodwill 10	253,930
Intangible Assets Schedule Of Intangible Assets And Goodwill 11	(215,358)
Intangible Assets Schedule Of Intangible Assets And Goodwill 12	38,572
Intangible Assets Schedule Of Intangible Assets And Goodwill 13	653,830
Intangible Assets Schedule Of Intangible Assets And Goodwill 14	(375,689)
Intangible Assets Schedule Of Intangible Assets And Goodwill 15	278,141
Intangible Assets Schedule Of Intangible Assets And Goodwill 16	356,425
Intangible Assets Schedule Of Intangible Assets And Goodwill 17	(356,425)
Intangible Assets Schedule Of Intangible Assets And Goodwill 18	0
Intangible Assets Schedule Of Intangible Assets And Goodwill 19	3,663,581
Intangible Assets Schedule Of Intangible Assets And Goodwill 20	(1,315,473)
Intangible Assets Schedule Of Intangible Assets And Goodwill 21	2,348,108
Intangible Assets Schedule Of Intangible Assets And Goodwill 22	3,366,176
Intangible Assets Schedule Of Intangible Assets And Goodwill 23	(1,180,363)
Intangible Assets Schedule Of Intangible Assets And Goodwill 24	2,185,813
Intangible Assets Schedule Of Intangible Assets And Goodwill 25	134,290
Intangible Assets Schedule Of Intangible Assets And Goodwill 26	0
Intangible Assets Schedule Of Intangible Assets And Goodwill 27	134,290
Intangible Assets Schedule Of Intangible Assets And Goodwill 28	134,290
Intangible Assets Schedule Of Intangible Assets And Goodwill 29	0
Intangible Assets Schedule Of Intangible Assets And Goodwill 30	134,290
Intangible Assets Schedule Of Intangible Assets And Goodwill 31	3,797,871
Intangible Assets Schedule Of Intangible Assets And Goodwill 32	(1,315,473)
Intangible Assets Schedule Of Intangible Assets And Goodwill 33	2,482,398
Intangible Assets Schedule Of Intangible Assets And Goodwill 34	3,500,466
Intangible Assets Schedule Of Intangible Assets And Goodwill 35	(1,180,363)
Intangible Assets Schedule Of Intangible Assets And Goodwill 36	$ 2,320,103

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Income Taxes (Narrative) (Details) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Income Taxes 1	$ 23.6
Income Taxes 2	1.7
Income Taxes 3	$ 14.7
Income Taxes 4	100.00%
Income Taxes 5	$ 0.5
Income Taxes 6	$ 2.3

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UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Net loss	$ (2,335,287)	$ (2,116,002)	$ (6,578,420)	$ (10,653,419)
Other comprehensive loss, net of tax
Sale of subsidiary and dissolution of variable interest entity	0	0	0	(633,984)
Foreign currency translation adjustments	(182,208)	31,264	(182,930)	(21,907)
Comprehensive loss	(2,517,495)	(2,084,738)	(6,761,350)	(11,309,310)
Comprehensive loss attributable to non-controlling interest	230,472	170,042	359,113	685,988
Comprehensive loss attributable to YOU On Demand shareholders	$ (2,287,023)	$ (1,914,696)	$ (6,402,237)	$ (10,623,322)

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VIE Structure and Arrangements

9 Months Ended

Sep. 30, 2015

VIE Structure and Arrangements [Text Block]

3. VIE Structure and Arrangements

To comply with PRC laws and regulation that prohibit or restrict foreign ownership of companies that provide value-added telecommunication services, the Company provides its services through Sinotop Beijing and its subsidiary, Zhonghai Video, which holds the licenses and approvals to provide digital distribution and Internet content services in the PRC. The Company has obtained substantial ability to control Sinotop Beijing and Zhonghai Video through a series of contractual agreements entered into among YOD WFOE, YOD Hong Kong, Sinotop Beijing and the legal shareholder of Sinotop Beijing.

Management Services Agreement

Pursuant to a Management Services Agreement, as of March 9, 2010, between Sinotop Beijing and YOD Hong Kong (the “Management Services Agreement”), YOD Hong Kong has the exclusive right to provide to Sinotop Beijing management, financial and other services related to the operation of Sinotop Beijing’s business, and Sinotop Beijing is required to take all commercially reasonable efforts to permit and facilitate the provision of the services by YOD Hong Kong. As compensation for providing the services, YOD Hong Kong is entitled to receive a fee from Sinotop Beijing, upon demand, equal to 100% of the annual net profits of Sinotop Beijing during the term of the Management Services Agreement. YOD Hong Kong may also request ad hoc quarterly payments of the aggregate fee, which payments will be credited against Sinotop Hong Kong’s future payment obligations.

The Management Services Agreement also provides YOD Hong Kong, or its designee, with a right of first refusal to acquire all or any portion of the equity of Sinotop Beijing upon any proposal by the sole shareholder of Sinotop Beijing to transfer such equity. In addition, at the sole discretion of YOD Hong Kong, Sinotop Beijing is obligated to transfer to YOD Hong Kong, or its designee, any part or all of the business, personnel, assets and operations of Sinotop Beijing which may be lawfully conducted, employed, owned or operated by YOD Hong Kong, including:

(a) business opportunities presented to, or available to Sinotop Beijing may be pursued and contracted for in the name of YOD Hong Kong rather than Sinotop Beijing, and at its discretion, YOD Hong Kong may employ the resources of Sinotop Beijing to secure such opportunities;

(b) any tangible or intangible property of Sinotop Bejing, any contractual rights, any personnel, and any other items or things of value held by Sinotop Beijing may be transferred to YOD Hong Kong at book value;

(c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by YOD Hong Kong by acquisition, lease, license or otherwise, and made available to Sinotop Beijing on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing;

(d) contracts entered into in the name of Sinotop Beijing may be transferred to YOD Hong Kong, or the work under such contracts may be subcontracted, in whole or in part, to YOD Hong Kong, on terms to be determined by agreement between YOD Hong Kong and Sinotop Beijing; and

(e) any changes to, or any expansion or contraction of, the business may be carried out in the exercise of the sole discretion of YOD Hong Kong, and in the name of and at the expense of, YOD Hong Kong; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of YOD Hong Kong) or adversely affecting any license, permit or regulatory status of Sinotop Beijing.

The term of the Management Services Agreement is 20 years, and may not be terminated by Sinotop Beijing, except with the consent of, or a material breach by, YOD Hong Kong.

Equity Pledge Agreement

Pursuant to an Equity Pledge Agreement among YOD Hong Kong, Sinotop Beijing and the sole shareholder of Sinotop Beijing (the “Shareholder”), dated March 9, 2010, the Shareholder pledged all of its equity interests in Sinotop Beijing (the “Collateral”) to YOD Hong Kong as security for the performance of the obligations of Sinotop Beijing to make all of the required management fee payments pursuant to the Management Services Agreement. The term of the Equity Pledge Agreement expires two years from Sinotop Beijing’s satisfaction of all obligations under the Management Services Agreement.

Option Agreement

Pursuant to an Option Agreement among YOD Hong Kong, Sinotop Beijing and the Shareholder, dated March 9, 2010, and entered into in connection with the Management Services Agreement, the Shareholder granted an exclusive option to YOD Hong Kong, or its designee, to purchase, at any time and from time to time, to the extent permitted under PRC law, all or any portion of the Shareholder’s equity in Sinotop Beijing. The aggregate purchase price of the option is equal to the registered paid-in capital of the Shareholder. The term of the agreement is until all of the equity interest in Sinotop Beijing held by the Shareholder is transferred to YOD Hong Kong, or its designee, or until the maximum period allowed by law has run, and may not be terminated by any party to the agreement without the consent of the other parties.

Voting Rights Proxy Agreement

Pursuant to a Voting Rights Proxy Agreement among YOD Hong Kong, Sinotop Beijing and the Shareholder, dated March 9, 2010, the Shareholder granted to YOD Hong Kong an irrevocable proxy, for the maximum period of time permitted by law, all of its voting rights as a shareholder of Sinotop Beijing. The Shareholder may not transfer any of its equity interest in Sinotop Beijing to any party other than YOD Hong Kong. The Voting Rights Proxy Agreement may not be terminated except upon the written consent of all parties, or unilaterally by YOD Hong Kong upon 30 days’ notice.

On June 4, 2012, YOD Hong Kong assigned all rights under the above agreement to YOD WFOE, its wholly-owned subsidiary. Accordingly, YOD WFOE may exercise the above agreements in place of YOD Hong Kong.

Under the above contractual agreements, YOD WFOE has the power to direct the activities of the Sinotop Beijing, and can have the assets transferred freely out of Sinotop Beijing without any restrictions. Therefore, YOD WFOE considers that there is no asset of Sinotop Beijing or Zhonghai Video that can be used only to settle obligations of Sinotop Beijing or Zhonghai Video, except for the registered capital of these two entities amounting to RMB17.0 million (approximately $2.7 million) as of September 30, 2015. As Sinotop Beijing and Zhonghai Video are incorporated as limited liability companies under PRC Company Law, creditors of these two entities do not have recourse to the general credit of other entities of the Company.

Financial Information

The following financial information of our VIEs as applicable for the periods presented, affected the Company’s consolidated financial statements.

		September 30,		December 31,
		2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	74,541	$	506,525
Accounts receivable, net		2,578,745		1,091,076
Licensed content, current		969,250		1,041,609
Prepaid expenses		76,498		105,918
Other current assets		29,299		12,811
Intercompany receivables due from the Company's subsidiaries (i)		125,178		572,192
Total current assets		3,853,511		3,330,131
Property and equipment, net		191,134		297,898
Licensed content, non-current		27,118		35,648
Intangible assets, net		284,535		5,291
Long-term equity investments		688,672		850,054
Other non-current assets		187,508		272,657
Total assets	$	5,232,478	$	4,791,679
LIABILITIES
Current liabilities:
Accounts payable	$	9,229	$	8,598
Deferred revenue		217,991		13,431
Accrued expenses and other liabilities		998,930		573,620
Accrued license fees		746,071		348,007
Intercompany payables due to the Company's subsidiaries (i)		12,443,690		11,200,536
Total current liabilities		14,415,911		12,144,192
Total liabilities	$	14,415,911	$	12,144,192

(i) Intercompany receivables and payables are eliminated upon consolidation

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Revenue	$	2,983,741		$	965,268
Net loss	$	(2,030,575	)	$	(3,548,767	)

		Nine Months Ended
		September 30,			September 30,
		2015			2014
Net cash used in operating activities	$	(352,169	)	$	(2,074,850	)
Net cash used in investing activities	$	(79,815	)	$	(276,460	)
Net cash provided by financing activities	$	-		$	-

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Unissued Common Stock for Possible Future Issuance (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 1	$ 2,191,487
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 2	2,191,487
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 3	3,928,870
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 4	3,985,605
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 5	8,188,330
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 6	8,493,331
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 7	1,947,053
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 8	1,878,481
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 9	16,255,740
Net Loss Per Common Share Unissued Common Stock For Possible Future Issuance 10	$ 16,548,904

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2015

Schedule of Intangible Assets and Goodwill [Table Text Block]

		September 30, 2015							December 31, 2014
		Gross Carrying		Accumulated			Net		Gross Carrying		Accumulated			Net
		Amount		Amortization			Balance		Amount		Amortization			Balance
Charter/ Cooperation agreements	$	2,755,821	$	(711,924	)	$	2,043,897	$	2,755,821	$	(608,580	)	$	2,147,241
Software and licenses		253,930		(227,860	)		26,070		253,930		(215,358	)		38,572
Website and mobile app development		653,830		(375,689	)		278,141		356,425		(356,425	)		-
Total definite lived intangible assets	$	3,663,581	$	(1,315,473	)	$	2,348,108	$	3,366,176	$	(1,180,363	)	$	2,185,813
Website name		134,290		-			134,290		134,290		-			134,290
Total intangible assets	$	3,797,871	$	(1,315,473	)	$	2,482,398	$	3,500,466	$	(1,180,363	)	$	2,320,103

Amortization Expense [Table Text Block]

		Amortization to be
Years ending December 31,		Recognized
2015 (3 months)	$	62,003
2016		255,274
2017		239,487
2018		194,788
2019		138,275
2020		137,792
Thereafter		1,320,489
Total amortization to be recognized	$	2,348,108

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Label	Element	Value
Accumulated Other Comprehensive Loss [Member]
Sale Of Subsidiary And Dissolution Of Variable Interest Entity	yod_SaleOfSubsidiaryAndDissolutionOfVariableInterestEntity	$ (633,984)
YOU On Demand Shareholders' Equity [Member]
Sale Of Subsidiary And Dissolution Of Variable Interest Entity	yod_SaleOfSubsidiaryAndDissolutionOfVariableInterestEntity	$ (633,984)

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Series D and Series E Preferred Stock Financing and Convertible Note (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) yr $ / shares shares
Series D And Series E Preferred Stock Financing And Convertible Note 1 | shares	2,285,714
Series D And Series E Preferred Stock Financing And Convertible Note 2	4.00%
Series D And Series E Preferred Stock Financing And Convertible Note 3 | $ / shares	$ 1.75
Series D And Series E Preferred Stock Financing And Convertible Note 4	$ 4,000,000
Series D And Series E Preferred Stock Financing And Convertible Note 9	183,000
Series D And Series E Preferred Stock Financing And Convertible Note 10	2,651,000
Series D And Series E Preferred Stock Financing And Convertible Note 11	92,000
Series D And Series E Preferred Stock Financing And Convertible Note 12	2,000,000
Series D And Series E Preferred Stock Financing And Convertible Note 13	$ 2,000,000
Series D And Series E Preferred Stock Financing And Convertible Note 14	4.00%
Series D And Series E Preferred Stock Financing And Convertible Note 11 | shares	1,142,857
Series D And Series E Preferred Stock Financing And Convertible Note 17	$ 370,000
Series D And Series E Preferred Stock Financing And Convertible Note 18	129,000
Series D And Series E Preferred Stock Financing And Convertible Note 19	$ 241,936
Series D And Series E Preferred Stock Financing And Convertible Note 20 | shares	114,285
Series D And Series E Preferred Stock Financing And Convertible Note 21 | $ / shares	$ 1.75
Series D And Series E Preferred Stock Financing And Convertible Note 22 | yr	5
Series D And Series E Preferred Stock Financing And Convertible Note 23	0.00%
Series D And Series E Preferred Stock Financing And Convertible Note 24	70.00%
Series D And Series E Preferred Stock Financing And Convertible Note 25	1.36%
Series D And Series E Preferred Stock Financing And Convertible Note 26	$ 1.75
Series D And Series E Preferred Stock Financing And Convertible Note 27	$ 128,072
Series D And Series E Preferred Stock Financing And Convertible Note 28 | shares	14,285,714
Series D And Series E Preferred Stock Financing And Convertible Note 29 | $ / shares	$ 1.75
Series D And Series E Preferred Stock Financing And Convertible Note 30	$ 25,000,000
Series D And Series E Preferred Stock Financing And Convertible Note 31 | shares	14,285,714
Series D And Series E Preferred Stock Financing And Convertible Note 32 | shares	1,142,857
Series D And Series E Preferred Stock Financing And Convertible Note 33	$ 2,000,000
Series D And Series E Preferred Stock Financing And Convertible Note 34 | shares	10,857,143
Series D And Series E Preferred Stock Financing And Convertible Note 35	$ 19,000,000
Series D And Series E Preferred Stock Financing And Convertible Note 36 | shares	2,285,714
Series D And Series E Preferred Stock Financing And Convertible Note 37 | shares	2,285,714
Series D And Series E Preferred Stock Financing And Convertible Note 38	$ 4,552,347
Series D And Series E Preferred Stock Financing And Convertible Note 39	$ 2,386,000
Series D And Series E Preferred Stock Financing And Convertible Note 40 | shares	1,085,714
Series D And Series E Preferred Stock Financing And Convertible Note 41 | $ / shares	$ 1.75
Series D And Series E Preferred Stock Financing And Convertible Note 42 | yr	5
Series D And Series E Preferred Stock Financing And Convertible Note 43	0.00%
Series D And Series E Preferred Stock Financing And Convertible Note 44	70.00%
Series D And Series E Preferred Stock Financing And Convertible Note 45	1.49%
Series D And Series E Preferred Stock Financing And Convertible Note 46	$ 1.75
Series D And Series E Preferred Stock Financing And Convertible Note 47	2,166,296
Series D And Series E Preferred Stock Financing And Convertible Note 48	16,402,000
Series D And Series E Preferred Stock Financing And Convertible Note 49	16,571,000
Series D And Series E Preferred Stock Financing And Convertible Note 50	183,000
Series D And Series E Preferred Stock Financing And Convertible Note 51	14,000
Series D And Series E Preferred Stock Financing And Convertible Note 52	$ 92,054

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Taxes [Text Block]

13. Income Taxes

As of September 30, 2015, the Company had approximately $23.6 million of the U.S domestic cumulative tax loss carryforwards (which excludes the NOL carryforwards of approximately $1.7 million because of the uncertainty of the position being sustained) and approximately $14.7 million of the foreign cumulative tax loss carryforwards, which may be available to reduce future income tax liabilities in certain jurisdictions. These U.S. and foreign tax loss carryforwards will expire beginning year 2028 through 2035 and year 2015 to year 2020, respectively. We have established a 100% valuation allowance against our net deferred tax assets due to our history of pre-tax losses and the likelihood that the deferred tax assets will not be realizable. The valuation allowance increased approximately $0.5 million and $2.3 million during the three and nine months ended September 30, 2015, respectively.

We are not aware of any unrecorded tax liabilities which would impact our financial position or our results of operations.