Investor Relations

◆NowNews Digital Media Technology Reports FY 2016 Second Quarter Results

08/15/2016

Taipei City, Taiwan, August 15, 2016 -- NowNews Digital Media Technology Co. Ltd. (“NOWnews” or “the Company”) (OTCQB: NDMT), a new media company that provides news, information, e-commence and multimedia platform service, today released its financial results for the second quarter of 2016.

Second Quarter 2016 Highlights

• Net revenue increased $0.33 million, an increase of 62% from the corresponding period in 2015.
• Gross profit increased approximately $0.10 million, or 55%, as compared to the same period in 2015, due to the substantial increase in revenue.

“We are glad to see a steady increase in our advertisement and licensing business,” Shuo-Wei Shih, CEO of NDMT said. “In the second quarter of 2016, we have taken a new step in entering the Malaysian and Laos markets, which will add new revenue sources to the company.”

Second Quarter 2016 Results

Net Revenue

Net revenue for the three months ended June 30, 2016 was $0.85 million, an increase of $0.33 million or 62% from $0.52 million for the three months ended June 30, 2015. The increase was primarily due to the increase in advertisement revenue and licensing revenue.

--Advertising

For the three months ended June 30, 2016, the advertising avenue was $0.78 million, an increase of $0.31 million, or 66%, from $0.47 million for the three months ended June 30, 2015. The increase was because the Company focuses on the more profitable internet advertising and marketing business.

--Licensing

Revenue from content licensing and services was $0.06 million for the three months ended June 30, 2016, an increase of $0.01 million, or 20%, from $0.05 million for the three months ended June 30, 2015. The increase was primarily due to new customers acquired during the three months ended June 30, 2016.

Cost of Revenue

Cost of revenue was $0.55 million for the three months ended June 30, 2016, compared to $0.33 million for the three months ended June 30, 2015, an increase of $0.22 million, or 67%. The increase was mainly due to the increase of $0.19 million in advertisement cost, and $0.03 million in labor cost.

Gross Profit

Gross profit for the three months ended June 30, 2016 increased approximately $0.10 million, or 55%, as compared to the same period in 2015, due to the substantial increase in revenue. Gross profit margin was 34.59% for the three months ended June 30, 2016 as compared to 36.27% for the same period in 2015.

Selling Expenses

The amount increased by $0.07 million, or 77%, from $0.09 million for the three months ended June 30, 2015, to $0.16 million for the three months ended June 30, 2016. The increase in selling expenses was primarily due to the increase in labor costs resulting from the increase in the number of salespersons.

General and Administrative Expenses

General and administrative expenses increased by approximately $0.01 million, or 3%, from $0.25 million for the three months ended June 30, 2015 to $0.26 million for the three months ended June 30, 2016. The increase in general and administration expenses was principally due to the increase in labor costs.

Financial advisory service fee – related party

Financial advisory service fee increased $2.97 million due to service provided by GIA Consulting Limited. In resolution of the Company’s outstanding obligations pertaining to Services that have been rendered to the Company as of June 30, 2016, the Company and GIA Consultants Limited (“GIA Consultants”) will enter into a Financial Advisory Service Recognition Agreement (the “Agreement”) by the end of August 2016, pursuant to which the Company will issue 660,000 shares of common stock, par value $0.001 per share, to GIA Consultants. The common stock price was $4.50 per share as of closing on August 12, 2016, the closing price as of the last business day prior to the date of this filing, totaling an aggregate sum of $2,970,000.00.

Net Loss

As a result of the above factors, the Company has net loss of approximately $3.09 million for the three months ended June 30, 2016 as compared to net loss of approximately $0.21 million for the three months ended June 30, 2015, representing an increase of loss of approximately $2.88 million, or approximately 1,397%.

Cash, Liquidity and Financial Position

As of June 30, 2016, cash and cash equivalents were $124,792, compared to $301,205 at the end of 2015. The Company had a working capital deficit of $3.75 million at June 30, 2016, with $0.64 million of current assets and $4.39 million of current liabilities. The Company believes it can successfully secure financing to meet all working capital and capital expenditure needs for the next twelve months. However, there can be no guarantee that the Company will succeed in raising additional financing.

About NowNews Digital Media Technology Co. Ltd.

NowNews Digital Media Technology Co. Ltd. (OTCQB: NDMT) is a U.S.-listed holding company, through its subsidiaries, engaging in creating, collecting and distributing news and information through its website and applications on mobile phones or tablets. NowNews is also the largest online self-produced news content provider of Taiwan and the only Taiwanese online news website fully accessible in Mainland China. After launched Professional Category news brands, we launched Nownews Mobile Web and Apps. In July 2013, Nownews launched a new concept newspaper “NOWnews”, which is the first O2O case in Taiwan. Nownews owns a great amount of brands, such as the largest online self-produced news content provider「NOWnews」, the biggest Citizen Journalist platform「WEnews」, online video shopping website「NOWshopping」, etc. Its partners include CCTV, Yahoo, MSN, Hinet, Yam, Sina and other telecoms operators.

Forward-Looking Statements

This news release contains “forward-looking statements”, which may include, but is not limited to, statements that express the company’s intentions, beliefs, expectations, strategies, predictions or any other statements relating to its future activities or other future events or conditions. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Nownews Digital Media Technology Co. Ltd. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Nownews Digital Media Technology Co. Ltd. disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

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