GUANGZHOU CITY, China, Sept. 7 /PRNewswire-Asia-FirstCall/ -- Subaye, Inc. (Nasdaq: SBAY) ("Subaye" or the "Company"), a leading outsourced marketing services provider in China engaged in online video advertising and cloud computing business solutions, announced today it has sold its remaining entertainment media assets for total proceeds of $7.5 million. Sales of these assets occurred during July and August of 2010. Year-to-date, the Company has generated $16.3 million of net proceeds from non-core asset divestitures and received cash proceeds through today of $9.3 million. The remaining $7.0 million is due from the sale of copyrights in August to Sparkful Investments. Sparkful Investments has agreed to make payment on the full outstanding balance by the end of October, 2010.
The Company sold four copyrights to motion picture productions developed for the entertainment market in China. Internet Copyrights to "Big Movie" and "Big Movie 2" were sold for total net proceeds of $500,000 to Top Rider Group while the rights to "Big Future" and "Valleys and Peaks" were sold to Sparkful Investment for $7.0 million. The Company will record a loss of $4.1 million on these transactions. As a result of the sale of the remaining assets of the entertainment business, no further losses are anticipated in future reporting periods. The effect of the divestiture of the two business segments should only impact Subaye's fiscal year ending September 30, 2010 financial statements and should not impact any future reporting periods. Subaye intends to reinvest the proceeds from these sales into its core online video and cloud computing businesses.
"We completed the sale of our remaining non-core assets ahead of schedule," stated Mr. Zhiguang Cai, Chief Executive Officer of Subaye, Inc. "We are more focused than ever on growing our core video showcase and cloud computing businesses. With strong momentum from the first half of this year and new services such as Group Buy coming online last month and 3D Mall launching later this year, we remain optimistic about our future growth opportunities."
As of June 30, 2010, the Company had cash and cash equivalents of $2.1 million with $38.9 million of working capital and a current ratio of 8.6. The Company generated $15.1 million of cash flows from operation in the nine months ended June 30, 2010.
About Subaye, Inc.
Subaye, Inc. is a leading outsourced marketing services provider in China engaged in online video advertising and cloud computing business solutions. Subaye's online video advertising network provides production, upload, storage, and publishing onto video sharing websites. Subaye also offers cloud computing business solutions and is in the process of developing an online mall with 3D imaging throughout the online customer interface. Visitors of Subaye's websites, namely, http://www.subaye.com , view video showcases of Subaye members, primarily small to mid-size enterprises ("SMEs"), and select products or services they wish to purchase. Paying members utilizing Subaye's video advertising platform pay a membership fee of approximately $117.0 per month. The Company previously conducted a trade services and an entertainment media business. For further information on Subaye, Inc., please visit http://www.subaye.net .
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Subaye, Inc.'s industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Subaye, Inc.'s operations are conducted in the People's Republic of China ("PRC") and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.
For more information, please contact:
Company:
James Crane
Chief Financial Officer
P.R.C. Cell: +86-186-2136-3580
U.S. Office: +1-617-209-4199
Investor Relations:
Ted Haberfield
HC International, Inc.
Tel: +1-760-755-2716 (US)
Email: thaberfield@hcinternational.net
Web: http://www.hcinternational.net
