Ku6 Media Reports Unaudited Financial Results for the Second Quarter of Fiscal Year 2013

Ku6 Media Reports Unaudited Financial Results for the Second Quarter of Fiscal
                                  Year 2013

PR Newswire

BEIJING, Aug. 28, 2013

BEIJING, Aug. 28, 2013 /PRNewswire/-- Ku6 Media Co., Ltd. ("Ku6 Media" or the
"Company," NASDAQ: KUTV), a leading internet video company focused on User
Generated Content ("UGC") in China, today announced unaudited financial
results for the second quarter of fiscal year 2013, ended June 30, 2013.

Second Quarter 2013 Highlights ^(1)

  oTotal revenues were US$3.42 million (RMB20.98 million) in the second
    quarter of 2013, representing an increase of 11.4% from US$3.07 million in
    the first quarter of 2013 and an increase of 12.9% from US$3.03 million in
    the second quarter of 2012.
  oThe Company generates substantially all of its revenues from online
    advertising, primarily through an advertising agency agreement with
    Shengyue, an affiliate wholly owned by Shanda Interactive, pursuant to
    which Shengyue acts as the Company's exclusive advertising agency for
    standard media resources and as its non-exclusive advertising agency for
    highly interactive advertising resources.
  oGAAP net loss was US$2.54 million (RMB15.60 million), as compared to a net
    loss of US$1.67 million in the first quarter of 2013 and US$1.47 million
    in the second quarter of 2012. Non-GAAP net loss, which the Company
    defines as net loss excluding expenses (benefits) associated with
    share-based compensation, was US$2.38 million (RMB14.60 million) in the
    second quarter of 2013, as compared to non-GAAP net loss of US$2.32
    million in the first quarter of 2013 and US$1.53 million in the second
    quarter of 2012.
  oBasic and diluted loss per ADS was US$0.05 (RMB0.31) in the second quarter
    of 2013, as compared to US$0.04 in the first quarter of 2013 and US$0.03
    in the second quarter of 2012.
  oCash and cash equivalents were US$9.96 million (RMB61.12 million) as of
    June 30, 2013.
  oNet cash used in operating activities was US$0.93 million (RMB5.71
    million) in the second quarter of 2013, as compared to US$2.27 million in
    the first quarter of 2013 and US$1.41 million in the second quarter of
    2012.

(1) The reporting currency of the Company is the United States dollar
("U.S. dollar"), but solely for the convenience of the reader, the amounts of
Renminbi ("RMB") presented throughout the release were calculated at the rate
of US$1.00=RMB6.1374, representing the noon buying rate as of June 28, 2013 in
the City of New York for cable transfers of RMB as certified for customs
purposes by the Federal Reserve Bank of New York. This convenience translation
is not intended to imply that the U.S. dollar amounts could have been, or
could be, converted, realized or settled into RMB at that rate on June 28,
2013, or at any other rate.

"I am pleased to announce our second quarter 2013 earnings release." Mr. Fang
Du, Chief Executive Officer of Ku6 Media, commented, "The Company did a great
job in the second quarter in improving the infrastructure and product design,
in hiring top talents to strengthen our R&D team, and in launching marketing
campaigns to bring our premium video content to more users.

At the press conference held on August 13, we announced our new slogan "Short
is Cool", which represented the Company's commitment to offer more quality
short-form videos by leveraging the prosperity of mobile devices and mobile
platform as well as through promotion campaigns and marketing events. I
believe that, with their unique charms, short-form videos will play a more
important role in people's daily life and expect to change their entertainment
habit. "

Second Quarter 2013 Financial Results

Total revenues were US$3.42 million (RMB20.98 million) in the second quarter
of 2013, representing an increase of 11.4% from US$3.07 million in the first
quarter of 2013 and an increase of 12.9% from US$3.03 million in the second
quarter of 2012.

In the second quarter of 2011, the Company started to generate advertising
revenues primarily from performance advertising services using a system called
Application Advertisement ("AA"). The performance advertising revenue was
realized through an affiliated advertising agent which is under common control
of Shanda Interactive Entertainment Limited, the Company's majority
shareholder. The Company generated 89.9% of total revenues in the second
quarter of 2013 through this affiliated advertising agent, as compared to
95.8% of total revenues in the first quarter of 2013.

Cost of revenues was US$3.90 million (RMB23.91 million) in the second quarter
of 2013, representing an increase of 24.3% from US$3.13 million in the first
quarter of 2013 and an increase of 6.4% from US$3.66 million in the second
quarter of 2012.

Gross loss  was US$0.48 million (RMB2.92 million) in the second quarter of
2013, as compared to a gross loss of US$0.07 million in the first quarter of
2013 and a gross loss of US$0.63 million in the second quarter of 2012.
Non-GAAP gross loss,  which is herein defined as a gross loss excluding
expenses (benefits) associated with share-based compensation, was US$0.44
million (RMB2.68 million) in the second quarter of 2013, as compared to a
non-GAAP gross loss of US$0.26 million in the first quarter of 2013 and a
non-GAAP gross loss of US$0.66 million in the second quarter of 2012. The
increase in non-GAAP gross loss as compared to the first quarter of 2013 was
primarily because the Company incurred more costs to improve its platform
operation, partially offset by an increase in total revenues.

Operating expenses were US$3.30 million (RMB20.24 million) in the second
quarter of 2013, representing an increase of 45.3% from US$2.27 million in the
first quarter of 2013 and an increase of 100.5% from US$1.64 million in the
second quarter of 2012. Non-GAAP operating expenses, which is herein defined
as operating expenses excluding expenses (benefits) associated with
share-based compensation, were US$3.17 million (RMB19.48 million) in the
second quarter of 2013, as compared to non-GAAP operating expenses of US$2.72
million in the first quarter of 2013 and US$1.67 million in the second quarter
of 2012. The increase in non-GAAP operating expenses as compared to the first
quarter of 2013 was primarily due to the increase in labor costs as the
Company recruited more talents to strengthen the research and development
team, partially offset by the proceeds from disposal of network equipment
previously written down.

Operating loss was US$3.77 million (RMB23.16 million) in the second quarter of
2013, representing an increase of 61.7% from US$2.33 million in the first
quarter of 2013 and an increase of 65.8% from US$2.28 million in the second
quarter of 2012. Non-GAAP operating loss, which reflects the exclusion of
expenses (benefits) associated with share-based compensation, was US$3.61
million (RMB22.16 million) in the second quarter of 2013, as compared to the
non-GAAP operating loss of US$2.98 million in the first quarter of 2013 and
US$2.34 million in the second quarter of 2012.

Net loss was US$2.54 million (RMB15.60 million) in the second quarter of 2013,
representing an increase of 52.0% from US$1.67 million in the first quarter of
2013 and an increase of 72.7% from US$1.47 million in the second quarter of
2012. Non-GAAP net loss, which reflects the exclusion of expenses (benefits)
associated with share-based compensation, was US$2.38 million (RMB14.60
million) in the second quarter of 2013, as compared to US$2.32 million in the
first quarter of 2013 and US$1.53 million in the second quarter of 2012. The
increase in net loss as compared to the first quarter of 2013 was primarily
attributable to (1) an increase in costs incurred for platform operation
improvement, (2) an increase in labor costs as the Company recruited more
talents to strengthen the research and development team, and (3) a net
increase in share-based compensation expenses resulted from the first quarter
reversal of those expenses previously recorded, due to the changes in the
likelihood of achieving performance targets related to profitability for
performance-based stock option awards, partially offset by (1) an increase in
total revenues from both third parties and related parties, (2) proceeds from
disposal of network equipment previously written down, and (3) receipts of
government subsidy benefits in the second quarter of 2013.

Net loss per basic and diluted ADS was US$0.05 (RMB0.31) in the second quarter
of 2013, as compared to US$0.04 in the first quarter of 2013 and US$0.03 in
the second quarter of 2012. Weighted average ADSs used to calculate basic and
diluted net loss per ADS were 47.3 million in the second quarter of 2013, 47.3
million in the first quarter of 2013 and 50.2 million in the second quarter of
2012.

Adjusted EBITDA loss, which is herein defined as net loss before interest
income, interest expenses, income taxes, depreciation and amortization
(excluding amortization and write-down of licensed video copyrights), further
adjusted for share-based compensation expenses (benefits), equity in loss of
affiliates and other non-operating items, was US$2.69 million (RMB16.53
million) in the second quarter of 2013, as compared to adjusted EBITDA loss of
US$2.04 million in the first quarter of 2013 and US$1.48 million in the second
quarter of 2012.

As of June 30, 2013, the Company had US$9.96 million (RMB61.12 million) in
cash and cash equivalents, compared to US$10.81 million as of March 31, 2013.
The decrease was primarily attributable to US$0.93 million (RMB5.71 million)
net cash used in operating activities. 

Recent Business Developments

Ku6 Media Announces the Love-Theme UGC Video Campaign

The Company held a press conference on August 13, the Chinese Valentine's Day,
to announce its love-theme UGC video campaign. The Company's new slogan "Short
is Cool" was first introduced at the press conference, representing the
Company's commitment to offer more quality short-form videos by leveraging the
prosperity of mobile devices and mobile platform as well as through promotion
campaigns and marketing events.

Ku6 Media Announces Management Change

In June 2013, Mr. Fang Du joined the Company to replace Mr. Jeff Shi as the
Chief Executive Officer of Ku6 Media. Mr. Du's bio can be found in the press
release on Ku6 Media's website.

Ku6 Media Announces Management Change

In April 2013, Mr. Kelvin Wenbo Liu joined the Company as President and Mr.
Jian Lu was appointed as the Company's Chief Technology Officer. Their bios
can be found in the press release on Ku6 Media 's website.

Share Repurchase Program of 2011

Pursuant to a share repurchase program announced on December 30, 2011, the
Company's Board of Directors have authorized the Company to repurchase up to
an aggregate of US$3.2 million of its outstanding ADSs from time to time
following the date thereof, based on market conditions. As of June 30, 2013,
the Company has repurchased 157,567 ADSs from open market under this program.

Conference Call Information

Ku6's management team will be hosting a corresponding conference call at
8:00am EDT on Wednesday, August 28, 2013 (8:00pm Beijing time on the same
day).

Dial-in numbers:   

International Dial-in Number:       +65 67239381
United States Toll Free Number:         18665194004
Mainland China Toll Free Number:        4006208038 / 8008190121
Hong Kong Toll Free Number: 800930346
Conference ID:                          33522461

A replay will be available from 10:00am August 28, 2013 EDT for 7 days.

International Dial-in Number:     +61 2 8199 0299
United States Toll Free Number:       18554525696
Mainland China Toll Free Number:      4001200932 / 8008700205

Hong Kong Toll Free Number:           800963117
Conference ID:                        33522461

A live and archived webcast of the conference call will also be available at

http://www.media-server.com/m/p/fqugr3qc



http://www.media-server.com/m/p/z2v9kooi

About Ku6 Media Co., Ltd.

Ku6 Media Co., Ltd. (NASDAQ: KUTV) is a leading internet video company in
China focused on User -Generated Content ("UGC"). Through its premier online
brand and online video website,www.ku6.com, Ku6 Media provides online video
uploading and sharing service, video reports, information and entertainment in
China. For more information about Ku6 Media, please visithttp://ir.ku6.com.

Forward-looking Statements

This news release contains statements of a forward-looking nature. These
statements are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these
forward-looking statements by terminology such as "believes," "could,"
"expects," "may," "might," "should," "will," or "would," and by similar
statements. Forward-looking statements are not historical facts, but instead
represent only the Company's beliefs regarding future events, many of which,
by their nature, are inherently uncertain and outside of its control. It is
possible that the Company's actual results and financial condition may differ,
possibly materially, from the anticipated results and financial condition
indicated in these forward-looking statements. Some of the risks and important
factors that could affect the Company's future results and financial condition
include: continued competitive pressures in China's internet video portal
market; changes in technology and consumer demand in this market; the risk
that Ku6 Media may not be able to control its expenses in the future;
regulatory changes in China with respect to the operations of internet video
portal websites; the success of Ku6 Media's ability to sell advertising and
other services on its websites; and other risks outlined in the Company's
filings with the Securities and Exchange Commission,including the Company's
annual report on Form 20-F. Ku6 Media does not undertake any obligation to
update this forward-looking information, except as required under law.

About Non-GAAP Financial Measures

To supplement Ku6 Media's consolidated financial results presented in
accordance with United States Generally Accepted Accounting Principles
("GAAP"), Ku6 Media uses the following measures defined as non-GAAP financial
measures by the SEC in evaluating its business: non-GAAP gross profit or loss,
non-GAAP operating expenses, non-GAAP product development expenses, non-GAAP
sales and marketing expenses, non-GAAP general and administrative expenses,
non-GAAP operating loss, non-GAAP net loss and adjusted EBITDA loss. We
define non-GAAP gross profit or loss, non-GAAP operating expenses, non-GAAP
product development expenses, non-GAAP sales and marketing expenses, non-GAAP
general and administrative expenses, non-GAAP operating loss and non-GAAP net
loss as the respective nearest comparable GAAP financial measure excluding
expenses (benefits) associated with share-based compensation. We define
adjusted EBITDA loss as net loss before interest income, interest expenses,
income taxes, depreciation and amortization (excluding amortization and
write-down of licensed video copyrights), further adjusted for share-based
compensation expenses (benefits), equity in loss of affiliates and other
non-operating items. We present non-GAAP financial measures because they are
used by our management to evaluate our operating performance. We also believe
that these non-GAAP financial measures provide useful information to investors
and others in understanding and evaluating our consolidated results of
operations in the same manner as our management and in comparing financial
results across accounting periods and to those of our peer companies.A
limitation of using non-GAAP financial measures is that non-GAAP measures
exclude share-based compensation charges that have been and will continue to
be significant recurring expenses inKu6 Media's business for the foreseeable
future.

The presentation of these non-GAAP financial measures is not intended to be
considered in isolation from, or as a substitute for, the financial
information prepared and presented in accordance with GAAP. For more
information on these non-GAAP financial measures, please see the table
captioned "Reconciliations of non-GAAP results of operations measures to the
nearest comparable GAAP financial measures" at the end of this release.



Ku6 Media Co., Ltd.
Consolidated Balance Sheets
                                                       June 30,    June 30,
                                          December 31,
(Amounts in thousands,                                 2013        2013
                                          2012
except for number of shares)                           US$         RMB
                                          US$
                                                       (Unaudited) (Unaudited)
ASSETS
Current assets:
 Cash and cash equivalents              13,071       9,958       61,116
 Accounts receivable, net               67           43          264
 Accounts receivable due from related   4,399        3,756       23,052
parties
 Prepaid expenses and other current     523          229         1,406
assets
 Other receivables due from related     6,097        2,732       16,767
parties
Total current assets                      24,157       16,718      102,605
Non-current assets:
 Deposits                               310          335         2,056
 Property and equipment, net            2,918        2,061       12,649
 Acquired intangible assets, net        22,552       21,773      133,630
 Goodwill                               6,233        6,233       38,254
Total non-current assets                  32,013       30,402      186,589
TOTAL ASSETS                              56,170       47,120      289,194
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Accounts payable                       4,645        4,676       28,699
 Accounts payable due to related        -            227         1,393
parties
 Accrued expenses and other current     9,353        8,402       51,566
liabilities
 Other payables due to related parties  3,780        375         2,302
Total current liabilities                 17,778       13,680      83,960
 Non-current deferred tax liabilities   4,826        4,826       29,619
Total liabilities                         22,604       18,506      113,579
Shareholders' equity:
 Ordinary shares (US$0.00005 par value;
 12,000,000,000 shares authorized;
4,732,446,560
 shares and 4,726,648,360 shares issued 236          236         1,448
and
 outstanding as of December 31, 2012
and June
 30, 2013, respectively)
 Additional paid-in capital             177,183      176,640     1,084,110
 Accumulated deficit                    (141,940)    (146,153)   (896,999)
 Accumulated other comprehensive loss   (1,913)      (2,109)     (12,944)
Total Ku6 Media Co., Ltd. shareholders'   33,566       28,614      175,615
equity
 Non-controlling interests              -            -           -
Total shareholders' equity                33,566       28,614      175,615
TOTAL LIABILITIES AND                     56,170       47,120      289,194
SHAREHOLDERS' EQUITY





Ku6 Media Co., Ltd.
Consolidated Statements of Operations
               For the Three Months Ended                              For the Six Months Ended
(Amounts in
thousands,     June 30,      March 31,     June 30,      June 30,      June 30,      June 30,      June 30,
except for                                 2013
number of      2012          2013                        2013          2012          2013          2013
shares and ADS
and per
share and per  US$           US$           US$           RMB           US$           US$           RMB
ADS data)
               (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Revenues:
Advertising
Third parties  158           129           344           2,111         1,053         473           2,903
Related        2,871         2,939         3,075         18,873        6,656         6,014         36,910
parties
Total revenues 3,029         3,068         3,419         20,984        7,709         6,487         39,813
Cost of
revenues:
Advertising
Third parties  3,660         3,133         3,702         22,721        7,191         6,835         41,949
Related        -             -             193           1,184         -             193           1,184
parties
Total cost of  3,660         3,133         3,895         23,905        7,191         7,028         43,133
revenues
Gross profit   (631)         (65)          (476)         (2,921)       518           (541)         (3,320)
(loss)
Operating
expenses:
Product        363           351           952           5,843         942           1,303         7,997
development
Sales and      240           300           642           3,940         609           942           5,782
marketing
General and    1,041         1,618         1,703         10,452        2,917         3,321         20,382
administrative
Total
operating      1,644         2,269         3,297         20,235        4,468         5,566         34,161
expenses
Operating loss (2,275)       (2,334)       (3,773)       (23,156)      (3,950)       (6,107)       (37,481)
Interest       162           30            16            98            333           46            282
income
Other income   993           648           1,216         7,463         993           1,864         11,440
Interest       (213)         (16)          -             -             (450)         (16)          (98)
expenses
Equity in loss (138)         -             -             -             (186)         -             -
of affiliates
Loss before
income tax     (1,471)       (1,672)       (2,541)       (15,595)      (3,260)       (4,213)       (25,857)
expense
Income tax     -             -             -             -             -             -             -
benefit
Net loss       (1,471)       (1,672)       (2,541)       (15,595)      (3,260)       (4,213)       (25,857)
Loss per share
- basic and
diluted
Net loss       (US$0.00)     (US$0.00)     (US$0.00)     (RMB0.00)     (US$0.00)     (US$0.00)     (RMB0.01)
Loss per ADS -
basic and
diluted
Net loss       (US$0.03)     (US$0.04)     (US$0.05)     (RMB0.31)     (US$0.06)     (US$0.09)     (RMB0.55)
Weighted
average shares                                                      
used in per
 share                   4,731,798,773                                        4,729,325,332 4,729,325,332
calculation  -
basic and      5,019,786,036               4,726,880,171 4,726,880,171 5,019,786,036
diluted
Weighted
average ADSs                                                        
used in per
 ADS                     47,317,988                                           47,293,253    47,293,253
calculation  -
basic and      50,197,860                  47,268,802    47,268,802    50,197,860
diluted



Ku6 Media Co., Ltd.
Consolidated Statements of Cash Flows
              For the Three Months Ended                      For the Six Months Ended
              June 30,    March 31,   June 30,    June 30,    June 30,    June 30,    June 30,
(Amounts in                           2013
thousands)    2012        2013                    2013        2012        2013        2013
              US$         US$         US$         RMB         US$         US$         RMB
              (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows
from
operating
activities:
Net loss      (1,471)     (1,672)     (2,541)     (15,595)    (3,260)     (4,213)     (25,857)
Adjustments
to reconcile
net loss to
net cash
 used in
operating
activities:
Share-based
compensation  (60)        (647)       162         994         449         (485)       (2,977)
(reversal)
Depreciation
and           851         937         917         5,628       1,676       1,854       11,379
amortization
Amortization
and                                             
write-down of             -                                   1           -           -
licensed      -                       -           -
  video
copyrights
Bad debt      (656)       (97)        (176)       (1,080)     (2,015)     (273)       (1,675)
reversal
Reversal of
legal         (565)       -           -           -           (565)       -           -
provision
Exchange gain (3)         (46)        (128)       (786)       (8)         (174)       (1,068)
Equity in
loss of       138         -           -           -           186         -           -
affiliates
Gain on
disposal of                                     
property and              (13)                                (21)        (150)       (921)
         (22)                    (137)       (841)
equipments
Changes in
assets and
liabilities,
net of

acquisitions
and
dispositions:
Accounts      733         152         113         694         2,781       265         1,626
receivable
Prepaid
expenses and  169         161         133         816         435         294         1,804
other current
assets
Amount due
from related  999         (1,215)     1,923       11,802      (835)       708         4,345
parties
Deposits and
other         -           -           (25)        (153)       -           (25)        (153)
non-current
assets
Accounts      (517)       365         (260)       (1,596)     (2,039)     105         645
payable
Accrued
expenses and                                    
other current             (2)                                 679         (952)       (5,843)
      (1,063)                 (950)       (5,830)
liabilities
Amount due to
related       53          (194)       39          239         53          (155)       (951)
parties
Net cash used
in operating  (1,414)     (2,271)     (930)       (5,708)     (2,483)     (3,201)     (19,646)
activities
Cash flows
from
investing
activities:
Purchases of
property and  (28)        (41)        -           -           (180)       (41)        (252)
equipment
Proceeds from                                   
disposal of               -                                   23          142         871
property and  23                      142         871
 equipments
Payments for
licensed      (8)         -           (74)        (454)       (148)       (74)        (454)
video
copyrights
Loans to
related                                         
parties                   -                                   (470)       -           -
undercommon  -                       -           -
control
 by Shanda
Repayment of
loans to
related                                         
parties                   3,300                               9,700       3,300       20,254
under        9,700                   -           -
common
controlby
Shanda
Net cash
provided by   9,687       3,259       68          417         8,925       3,327       20,419
investing
activities
Cash flows
from
financing
activities:
Repurchase of
ordinary      -           (41)        (17)        (104)                   (58)        (356)
shares
Repayment of
loans from
related                                                                         
parties under
 common     (6,768)     (3,210)     -           -           (9,904)     (3,210)     (19,701)
control of
Shanda
Net cash used
in financing  (6,768)     (3,251)     (17)        (104)       (9,904)     (3,268)     (20,057)
activities
Effect of
exchange rate                                                                   
changes on
cash and      (9)         3           26          160         (7)         29          178
 cash
equivalents
Net increase
(decrease) in                                                                   
cash and cash
            1,496       (2,260)     (853)       (5,235)     (3,469)     (3,113)     (19,106)
equivalents
Cash and cash                                                                   
equivalents,
beginning of  21,786      13,071      10,811      66,351      26,751      13,071      80,222
 period
Cash and cash
equivalents,  23,282      10,811      9,958       61,116      23,282      9,958       61,116
end of period



Reconciliations of Non-GAAP results of operations measures to the nearest comparable GAAP
financial measures (*)

(Amounts in thousands of United States dollars ("US$") and Renminbi ("RMB"), unaudited)
1. Non-GAAP Gross Profit (Loss)
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Gross profit        (631)     (65)       (476)     (2,921)   518       (541)     (3,320)
(loss)
Add back: expenses
(benefits)
 associated with  (31)      (197)      39        239       64        (158)     (970)
share-based
 compensation
Non-GAAP gross      (662)     (262)      (437)     (2,682)   582       (699)     (4,290)
profit (loss)
2. Non-GAAP Operating Expenses
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Operating expenses  1,644     2,269      3,297     20,235    4,468     5,566     34,161
Deduct: expenses                                                                 
(benefits)
 associated      (29)      (450)      123       755       385       (327)     
with share-based
 compensation                                                                 (2,007)
Non-GAAP operating  1,673     2,719      3,174     19,480    4,083     5,893     36,168
expenses
3. Non-GAAP Product Development Expenses
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Product
development         363       351        952       5,843     942       1,303     7,997
expenses
Deduct: expenses
(benefits)
 associated with  (40)      (161)      19        117       19        (142)     (872)
share-based
 compensation
Non-GAAP product
development         403       512        933       5,726     923       1,445     8,869
expenses
4. Non-GAAP Sales and Marketing Expenses
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Sales and           240       300        642       3,940     609       942       5,782
marketing expenses
Deduct: expenses
(benefits)
 associated      (17)      (60)       10        61        12        (50)      (307)
with share-based
 compensation
Non-GAAP sales and  257       360        632       3,879     597       992       6,089
marketing expenses
5. Non-GAAP General and Administrative Expenses
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
General and
administrative      1,041     1,618      1,703     10,452    2,917     3,321     20,382
expenses
Deduct: expenses
(benefits)
 associated with  28        (229)      94        577       354       (135)     (828)
share-based
compensation
Non-GAAP general
and administrative  1,013     1,847      1,609     9,875     2,563     3,456     21,210
 expenses
6. Non-GAAP Operating Loss
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Operating loss      (2,275)   (2,334)    (3,773)   (23,156)  (3,950)   (6,107)   (37,481)
Add back: expenses
(benefits)
 associated with  (60)      (647)      162       994       449       (485)     (2,977)
share-based
 compensation
Non-GAAP operating  (2,335)   (2,981)    (3,611)   (22,162)  (3,501)   (6,592)   (40,458)
loss
7. Non-GAAP Net Loss
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Net loss            (1,471)   (1,672)    (2,541)   (15,595)  (3,260)   (4,213)   (25,857)
Add back: expenses
(benefits)
 associated with  (60)      (647)      162       994       449       (485)     (2,977)
share-based
 compensation
Non-GAAP net loss   (1,531)   (2,319)    (2,379)   (14,601)  (2,811)   (4,698)   (28,834)
8. Adjusted EBITDA Loss
                    FortheThreeMonthsEnded               FortheSixMonthsEnded
                    June30,  March31,  June30,  June30,  June30,  June30,  June30,
                    2012      2013       2013      2013      2012      2013      2013
                    US$       US$        US$       RMB       US$       US$       RMB
Net loss            (1,471)   (1,672)    (2,541)   (15,595)  (3,260)   (4,213)   (25,857)
Add back (deduct):
Interest income     (162)     (30)       (16)      (98)      (333)     (46)      (282)
Interest expenses   213       16         -         -         450       16        98)
Income tax benefit  -         -          -         -         -         -         -
Depreciation and
amortization
 (excluding
amortization and    851       937        917       5,628     1,676     1,854     11,379
 write-down
of licensed video
copyrights)
EBITDA loss         (569)     (749)      (1,640)   (10,065)  (1,467)   (2,389)   (14,662)
Adjustments:
Share-based         (60)      (647)      162       994       449       (485)     (2,977)
compensation
Equity in loss of   138       -          -         -         186       -         -
affiliates
Other income        (993)     (648)      (1,216)   (7,463)   (993)     (1,864)   (11,440)
Adjusted EBITDA     (1,484)   (2,044)    (2,694)   (16,534)  (1,825)   (4,738)   (29,079)
loss
* For more information on the Non-GAAP financial measures, please see the section
captioned "About Non-GAAP Financial Measures" in the earnings release.

SOURCE Ku6 Media Co., Ltd.

Website: http://www.ku6.com/
Website: http://www.media-server.com/m/p/fqugr3qc
Website: http://www.media-server.com/m/p/z2v9kooi
Website: http://ir.ku6.com
Contact: Ms. Helen Zou, Investor Relations Director, +86 10 5758 6835,
ir@ku6.com