Acorn International Enters into Definitive Merger Agreement for Going Private Transaction

Posted by Elaine in Press Release, Uncategorized

SHANGHAI, Oct. 12, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced that it has entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with First Ostia Port Ltd., a Cayman Islands exempted company (the “Controlling Shareholder”) and its wholly owned subsidiary Second Actium Coin Ltd., a Cayman Islands exempted company (“Merger Sub”), pursuant to which, the Merger Sub will merge with and into the Company thereby becoming a wholly-owned subsidiary of the Controlling Shareholder (the “Merger”). The Company will be acquired in an all-cash transaction by the Controlling Shareholder.

Pursuant to the terms of the Merger Agreement, each ordinary share, par value $0.01 per share, of the Company (a “Share” or, collectively, the “Shares”), including Shares represented by American Depositary Shares, each representing twenty Shares (the “ADSs”), issued and outstanding immediately prior to the Effective Time, other than the Excluded Shares (as defined in the Merger Agreement) shall be cancelled in exchange for the right to receive $1.05 in cash per Share without interest (the “Per Share Merger Consideration”). As each ADS represents twenty Shares, each ADS issued and outstanding immediately prior to the Effective Time, other than ADSs representing Excluded Shares, shall represent the right to receive $21.00 in cash without interest (the “Per ADS Merger Consideration”) pursuant to the terms and conditions set forth in the Merger Agreement.

The Per Share Merger Consideration represents a premium of 44.1% over the Company’s closing price of US$14.57 per ADS as quoted on the New York Stock Exchange (“NYSE”) on August 17, 2020, the last trading day prior to the day when the Company received a non-binding “going private” proposal from the Controlling Shareholder. The Merger Consideration also represents an increase of approximately 38.0% over the US$15.22 per ADS offered by the Controlling Shareholder in its revised “going-private” proposal on August 18, 2020, and a premium of approximately 39.4% over the Company’s closing price of US$15.07 per ADS on October 9, 2020, the last trading day prior to issuance of this press release.

The Controlling Shareholder intends to fund a substantial portion of the consideration for the Merger in the form of debt funding from a third-party lender and has delivered to the Company duly executed copies of the Loan and Security Agreement.

The Board, acting upon the unanimous recommendation of a committee of independent directors established by the Board (the “Special Committee”), approved the Merger Agreement and the Merger. The Special Committee negotiated the terms of the Merger Agreement with the assistance of its independent financial and legal advisors.

The Merger, which is currently expected to close during the last quarter of 2020, is subject to customary closing conditions, including the approval of the Merger Agreement by a requisite Company vote of Shares representing at least two-thirds of the voting power of the Shares present and voting in person or by proxy at a meeting of the Company’s shareholders which will be convened to consider the approval of the Merger Agreement and the Merger. The Company will call a shareholders meeting for the purpose of voting on the adoption of the Merger Agreement and the transactions contemplated by the Merger Agreement as soon as practicable. If the Merger is completed, the Company will continue its operations as a privately held company and will be wholly owned by the Controlling Shareholder and, as a result of the Merger, the Company will no longer be listed on the NYSE.

Duff & Phelps, LLC is serving as the financial advisor to the Special Committee. Hogan Lovells International LLP is serving as the U.S. legal counsel to the Special Committee.

Jean M. Roche & Associates is serving as the U.S. legal counsel to the Controlling Shareholder.

Additional Information about the Merger

The Company will furnish to the U.S. Securities and Exchange Commission (the “SEC”) a current report on Form 6-K regarding the Merger, which will include as an exhibit thereto the Merger Agreement. All parties desiring details regarding the Merger are urged to review these documents, which will be available at the SEC’s website (http://www.sec.gov).

In connection with the Merger, the Company will prepare and mail a proxy statement to its shareholders. In addition, certain participants in the Merger will prepare and mail to the Company’s shareholders a Schedule 13E-3 transaction statement that will include the proxy statement. These documents will be filed with or furnished to the SEC. INVESTORS AND SHAREHOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE MATERIALS AND OTHER MATERIALS FILED WITH OR FURNISHED TO THE SEC WHEN THEY BECOME AVAILABLE, AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE MERGER AND RELATED MATTERS. In addition to receiving the proxy statement and Schedule 13E-3 transaction statement by mail, shareholders also will be able to obtain these documents, as well as other filings containing information about the Company, the Merger and related matters, without charge, from the SEC’s website (http://www.sec.gov) or at the SEC’s public reference room at 100 F Street, NE, Room 1580, Washington, D.C. 20549.

The Company and certain of its directors, executive officers and other members of management and employees may, under SEC rules, be deemed to be “participants” in the solicitation of proxies from our shareholders with respect to the Merger. Information regarding the persons who may be considered “participants” in the solicitation of proxies will be set forth in the proxy statement and Schedule 13E-3 transaction statement relating to the Merger when it is filed with the SEC. Additional information regarding the interests of such potential participants will be included in the proxy statement and Schedule 13E-3 transaction statement and the other relevant documents filed with the SEC when they become available.

This announcement is neither a solicitation of a proxy, an offer to purchase nor a solicitation of an offer to sell any securities and it is not a substitute for any proxy statement or other filings that may be made with the SEC should the Merger proceed.

About Acorn International, Inc.

Acorn International is a leading marketing and branding company in China, leveraging a twenty-year direct marketing history to monetize brand IP, content creation and distribution, and product sales, through digital media in China. For more information visit www.acorninternationalgroup.com.

Safe Harbor Statement

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “would,” “potential,” “proposal” and similar statements. Such statements are based on current expectations and current economic, market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond control, including whether certain conditions precedent to the Merger will be satisfied, which (if they are not) would mean the Merger may not close, and may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Acorn International, Inc.	Compass Investor Relations
Mr. Jacob A. Fisch	Ms. Elaine Ketchmere, CFA
Phone +86-21-5151-8888	Phone: +1-310-528-3031
Email: ir@chinadrtv.com	Email: Eketchmere@compass-ir.com
www.acorninternationalgroup.com	www.compassinvestorrelations.com

Sep30

Acorn International Reports Second Quarter 2020 Financial Results

Posted by Elaine in Press Release

SHANGHAI, Sept. 30, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced its preliminary unaudited financial results for the quarter ended June 30, 2020.

Second Quarter Estimated Results Highlights

Net revenues increased 3.6% year-over-year in Q2 2020 to US$8.7 million.
Gross profit decreased 0.8% year-over-year in Q2 2020 to US$6.0 million.
Gross margin was 69.4% in Q2 2020, compared to 72.4% in Q2 2019.
Loss from continuing operations was US$0.7 million in Q2 2020, compared to a loss from continuing operations of US$0.4 million in Q2 2019.
Net income was US$2.0 million in Q2 2020 as compared to net income of US$0.1 million in Q2 2019. In Q2 2020, the Company recorded a $2.5 million gain from the sale of shares of E-Money Holding Co., Ltd. (“E-Money”) (formerly known as Shanghai Yimeng Software Technology Co., Ltd.).

Preliminary Financial Results for the Second Quarter of 2020:

Total net revenues were US$8.7 million in the second quarter of 2020, up 3.6% from US$8.4 million in the second quarter of 2019, primarily due to the growth in sales of Acorn Fresh products and the inclusion of Acorn Digital Services in revenues (in the year ago period, this business segment was included in other operating income). These increases were partially offset by lower sales of Babaka branded products and lower revenues from oxygen-generating products related primarily to the sale of the Company’s subsidiary Zhuhai Acorn Electronic Technology Co., Ltd (“Zhuhai Acorn”).

Cost of sales in the second quarter of 2020 was US$2.7 million, up 15% from US$2.3 million in the second quarter of 2019. The increase was primarily attributable to the inclusion of Acorn Digital Services in cost of sales in the second quarter of 2020 (in the year ago period, this business segment was included in other operating income), and a higher proportion of Acorn Fresh products, which have a slightly lower margin than Babaka branded products, in the product mix.

Gross profit in the second quarter of 2020 was US$6.0 million, down 0.8% from US$6.1 million in the second quarter of 2019. Gross margin was 69.4% in the second quarter of 2020, compared with 72.4% in the second quarter of 2019.

Total operating expenses in the second quarter of 2020 were US$6.8 million, up 5.3% from US$6.4 million in the second quarter of 2019. The increase was primarily due to a slight increase in media spending which was partially offset by lower general and administrative expenses.

Loss from continuing operations was US$0.7 million in the second quarter of 2020, as compared to a loss from continuing operations of US$0.4 million in the second quarter of 2019.

Other income was US$2.6 million in the second quarter of 2020, primarily due to a US$2.5 million gain from the sale of shares of E-Money.

Net income from continuing operations was US$2.0 million in the second quarter of 2020. This compares to net income from continuing operations of US$0.3 million in the second quarter of 2019. Net loss from discontinued operations, which reflects the sale of a majority stake in the Company’s HJX electronic learning products business to a third-party investor and operator in 2017 as well as the Company’s call center operations which were discontinued in the third quarter of 2019 (refer to “Discontinued Operations” discussion below), was US$26 thousand in the second quarter of 2020, compared to net loss from discontinued operations of US$0.1 million in the second quarter of 2019.

Net income attributable to Acorn was US$2.0 million in the second quarter of 2020. This compares to net income attributable to Acorn of US$0.1 million in the second quarter of 2019.

Preliminary Financial Results for the First Half of 2020:

Total net revenues were US$16.7 million in the first half of 2020, down 1.9% from US$17.0 million in the first half of 2019, primarily due to the impact of COVID-19 as well as lower revenues of oxygen-generating products related primarily to the sale of the Company’s Zhuhai Acorn subsidiary.

Cost of sales in the first half of 2020 was US$5.2 million, up 10.7% from US$4.7 million in the first half of 2019. The increase was primarily attributable to the inclusion of Acorn Digital Services in cost of sales in the first half of 2020 (in the year ago period, this business segment was included in other operating income), and a higher proportion of Acorn Fresh products, which have a slightly lower margin than Babaka branded products, in the product mix.

Gross profit in the first half of 2020 was US$11.5 million, down 6.6% from US$12.4 million in the first half of 2019. Gross margin was 69.1% in the first half of 2020, compared with 74.3% in the first half of 2019.

Total operating expenses in the first half of 2020 were US$12.6 million, up 3.2% from US$12.2 million in the first half of 2019. The increase was primarily due to a slight increase in media spending which was partially offset by lower general and administrative expenses.

Loss from continuing operations was US$1.0 million in the first half of 2020, as compared to income from continuing operations of US$0.2 million in the first half of 2019.

Other income was US$5.7 million in the first half of 2020, primarily due to a US$5.6 million gain from the sale of shares of E-Money. Other income in the first half of 2019 was US$4.9 million, and includes a US$3.8 million gain on the sale of the Company’s former principal office in Shanghai to a third party.

Net income from continuing operations was US$4.8 million in the first half of 2020. This compares to net income from continuing operations of US$5.2 million in the first half of 2019. Net loss from discontinued operations, which reflects the sale of a majority stake in the Company’s HJX electronic learning products business to a third-party investor and operator in 2017 as well as the Company’s call center operations which were discontinued in the third quarter of 2019 (refer to “Discontinued Operations” discussion below), was US$54 thousand in the first half of 2020, compared to net loss from discontinued operations of US$0.2 million in the first half of 2019.

Net income attributable to Acorn was US$4.7 million in the first half of 2020. This compares to net income attributable to Acorn of US$4.9 million in the first half of 2019.

As of June 30, 2020, Acorn’s estimated cash and cash equivalents, with restricted cash, totaled US$19.9 million. This compares to cash and equivalents, with restricted cash, of US$13.5 million as of December 31, 2019.

Discontinued Operations

In 2017, Acorn reached an agreement to sell a majority stake in its HJX electronic learning products business (“HJX Business”) to a third-party investor and operator, allowing the Company to focus on its core business. Acorn maintains a 37.5% stake in a joint venture established with this third party. As a result of this transaction, the Company is required by applicable accounting rules to treat the historical operations of the wholly-owned HJX Business as discontinued operations and the minority stake in the HJX Business as equity in losses of affiliates in the consolidated statements of operations for all periods presented, subject to the consolidation of the HJX Business into the joint venture entity.

In the third quarter of 2019, the Company completed closing of its call center in Wuxi, China. As a result, the Company is required by applicable accounting rules to treat the historical operations of the call center as discontinued operations for all periods presented.

Receipt of Non-binding Proposal to Acquire the Company

On August 17, 2020, the board of directors of the Company (the “Board”), received a preliminary non-binding proposal letter, dated August 17, 2020 (the “Proposal”), from Mr. Robert W. Roche, Executive Chairman of the Company, to acquire all of the outstanding shares of the Company not already owned by the Buyer Vehicle (as defined below) at US$15.22 per American Depositary Share (the “ADS,” each ADS representing twenty ordinary shares) or US$0.761 per ordinary share in cash, subject to certain conditions (the “Proposed Acquisition”). According to the Proposal, it is anticipated that the Buyer Vehicle or its shareholders will control approximately 75% of the outstanding shares of ordinary shares of the Company.

According to the Proposal, Mr. Robert W. Roche will form a transaction vehicle (the “Buyer Vehicle”) for the purpose of pursuing the proposed transaction. It is currently expected that substantially all of the capital for the Proposed Acquisition would be borrowed from third parties in the form of debt funding. In that regard, the Buyer Vehicle has entered into an agreement with a third party lender pursuant to which, subject to certain terms and conditions, such lender will provide such proposed funds. The third party lender will require a timely opportunity to conduct customary legal, financial and accounting due diligence, and satisfactory completion of such due diligence is a condition to the lender providing the proposed funds.

The Special Committee of the Board has conducted several meetings to consider the Proposal. No decisions have been made with respect to the Company’s response to the Proposed Acquisition, and has been engaged in discussions with representatives of the Buyer Vehicle regarding the terms of the Proposed Acquisition. There can be no assurance that any definitive offer will be made, that any agreement with respect thereto will be reached or executed, or that this or any other transaction will be approved or consummated.

About Acorn International, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “strives,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” and similar statements. Such statements are based on management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the Company’s control, including the extent and duration of the COVID-19 crisis whether any definitive offer will be made with respect to the Proposed Acquisition, whether any agreement with respect thereto will be reached or executed, and whether the Proposed Acquisition or any other transaction will be approved or consummated, which may cause the Company’s actual results, performance, or achievements to differ materially from those in these preliminary financial results and the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Other factors that could cause forward-looking statements to differ materially from actual future events or results include risks and uncertainties related to: the Company’s ability to successfully improve or introduce new products and services, including to offset declines in sales of existing products and services; the Company’s ability to stay abreast of consumer market trends and maintain the Company’s reputation and consumer confidence; the Company’s ability to execute and maintain a successful market strategy; potential unauthorized use of the Company’s intellectual property; potential disruption of the Company’s manufacturing processes; increasing competition in China’s consumer market; the Company’s U.S. tax status as a passive foreign investment company; and general economic and business conditions in China, as well as potential friction between the U.S. and China associated with their current trade dispute and related factors, which could potentially impact Acorn. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2019 annual report on Form 20-F filed with SEC on June 3, 2020. For a discussion of other important factors that could adversely affect the Company’s business, financial condition, results of operations and prospects, see “Risk Factors” beginning on page 4 of the Company’s 2019 annual report on Form 20-F filed with the SEC on June 3, 2020. The Company’s actual results of operations for the second quarter and first half of 2020 are not necessarily indicative of its operating results for any future periods. Any projections in this release are based on limited information currently available to the Company, which is subject to change. Although such projections and the factors influencing them will likely change, the Company will not necessarily update the information. Such information speaks only as of the date of this release.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company’s year-end audit, which could result in significant differences from this preliminary unaudited condensed financial information.

– Financial Tables Follow –

ACORN INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In US dollars)

	For the three months ended 6/30/2020		For the six months ended 6/30/2020
	For the three months ended 6/30/2020		For the six months ended 6/30/2020
	2019	2020	2019	2020
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Net revenues
Direct sales	7,080,222	$ 7,400,631	$ 14,284,404	$ 14,295,213
Distribution sales	1,305,523	1,285,341	2,754,845	2,423,600
Total net revenues	8,385,745	8,685,972	17,039,249	16,718,813

Cost of revenues
Direct sales	(1,918,287)	(2,240,353)	(3,754,739)	(4,337,784)
Distribution sales	(396,953)	(421,231)	(916,850)	(832,558)
Total cost of revenues	(2,315,240)	(2,661,584)	(4,671,589)	(5,170,342)

Gross profit
Direct sales	5,161,935	5,160,278	10,529,665	9,957,429
Distribution sales	908,570	864,110	1,837,995	1,591,042
Total gross profit	6,070,504	6,024,388	12,367,660	11,548,471
	72.4%	69.4%	74.3%	69.1%
Operating (expenses) income
Other selling and marketing expenses	(4,432,673)	(4,976,148)	(8,300,954)	(9,065,483)
General and administrative expenses	(2,456,675)	(2,236,374)	(4,917,081)	(4,374,492)
Other operating income, net	462,205	442,166	1,042,781	876,463
Total operating (expenses) income	(6,427,144)	(6,770,356)	(12,175,254)	(12,563,512)
Income (loss) from continuing operations	(356,639)	(745,968)	192,406	(1,015,041)

Interest expense	–	21,378	–	–
Interest income	70,864	8,029	153,225	54,046
Other income (expenses), net	288,687	2,618,513	4,862,536	5,666,693
Income (loss) from continuing operations before income taxes and equity in losses of affiliates	2,912	1,901,952	5,208,167	4,705,698

Income tax – current	256,078	188,954	(51,507)	188,954
Income tax – deferred	–	(67,812)	–	(104,624)
Income (loss) from continuing operations before equity in losses of affiliates	258,990	2,023,094	5,156,660	4,790,028

Discontinued operations :
Income (loss) from discontinued operations	(127,636)	(26,383)	(230,512)	(54,270)
Income (loss) from discontinued operations before equity in losses of affiliates	(127,636)	(26,383)	(230,512)	(54,270)

Equity in losses of affiliates	–	–	–	–

Net income (loss)	131,354	1,996,711	4,926,148	4,735,758

Net income (loss) attributable to non-controlling interests	(1,290)	(288)	(3,028)	(499)
Net income (loss) attributable to Acorn International, Inc.	$132,644	$1,996,999	$4,929,176	$4,736,257

ACORN INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In US dollars)

	2019/12/31	2020/06/30


Cash and cash equivalents	$13,461,368	$19,803,702
Restricted cash	75,543	74,977
Accounts receivable, net	3,611,177	3,239,056
Inventory, net	3,042,762	2,274,861
Other prepaid expenses and current assets	7,112,042	6,956,071
Loan receivable	3,754,735	3,822,748
Loan to related party	14,804,052	14,809,594
Held-for-sale assets	468,191	466,520
Assets to be abandoned	116,559	–
Current assets	46,446,429	51,447,529

Property and equipment, net	559,964	594,888
Investments in affiliates		91,309
Available-for-sale securities	25,681,848	11,686,899
Right of use assets	1,785,194	1,310,135
Deferred tax assets, net	4,997,111	4,900,471
Other long-term assets	693,518	813,026
Total assets	$80,164,064	$70,844,257

Accounts payable	3,172,263	1,848,777
Dividend payable	133,405	131,206
Accrued expenses and other current liabilities	6,564,390	6,701,726
Lease Liability	881,349	833,027
Income taxes payable	1,648,520	1,482,499
Deferred revenue	68,798	16,948
Liabilities to be abandoned	222,578	–
Current liabilities	12,691,303	11,014,183

Lease Liability	1,032,645	610,926
Deferred tax liability, net
Total liabilities	13,723,948	11,625,109

Ordinary shares	918,844	918,844
Additional paid-in capital	117,445,969	117,445,969
Statutory reserve	8,350,141	8,350,141
Retained earnings	(77,913,299)	(73,177,042)
Beginning balance	(87,749,530)	(77,913,299)
Net income (loss) attributable to Acorn	9,836,231	4,736,257
Appropriation of statutory reserve fund
Accumulated other comprehensive income	45,635,771	33,769,027
Treasury stock, at cost	(28,320,324)	(28,405,594)
Total Acorn International, Inc. shareholders’ equity	66,117,102	58,901,345

Noncontrolling interests	323,014	317,804
Total equity	66,440,116	59,219,149
Total liabilities and equity	$80,164,064	$70,844,257

Jul22

Acorn International Terminates Share Repurchase Plan

Posted by Elaine in Press Release, Uncategorized

Acorn International Terminates Share Repurchase Plan

SHANGHAI, July 22, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced that it has terminated its previously authorized 10b5-1 share repurchase program due to questions and information Acorn has received suggesting that a new take private offer for the Company may be forthcoming soon. Accordingly, the Company has determined, out of an abundance of caution, that it would be prudent to terminate the share repurchase program.

Acorn’s Board of Directors originally authorized the repurchase of up to US$2.5 million worth of its American depositary shares (“ADSs”) over a 12-month period. As of July 20, 2020, the Company had purchased approximately 10,000 ADSs at an average price of US$14.34 per ADS.

About Acorn International, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements, and include Acorn’s expectation that a revised take private offer for the Company may be forthcoming soon. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Acorn’s control, including the extent and duration of the adverse impact of COVID-19, the availability of financing, and the performance of the capital markets in the U.S. and elsewhere, each of which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Contact:

Compass Investor Relations
Ms. Elaine Ketchmere, CFA
Phone: +1-310-528-3031
Email: Eketchmere@compass-ir.com

Jun04

Acorn International Files 2019 Annual Report on Form 20-F

Posted by Elaine in Press Release

Acorn International Files 2019 Annual Report on Form 20-F

SHANGHAI, June 4, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”) today announced that it has filed its annual report on Form 20-F for the fiscal year ended December 31, 2019 with the Securities and Exchange Commission on June 3, 2020. The annual report can be accessed on the Company’s investor relations website at http://www.acorninternationalgroup.com.

Acorn will provide a hard copy of its annual report for the fiscal year ended December 31, 2019, free of charge, to its shareholders and ADS holders upon request. Requests should be directed to the Company’s IR representatives, or in writing to Acorn International, Inc., 5/F, YueShang Plaza, 1 South Wuning Road, Shanghai 200042, People’s Republic of China.

About Acorn International, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Acorn’s control, including the extent and duration of the adverse impact of COVID-19, which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Contact:

Compass Investor Relations
Ms. Elaine Ketchmere, CFA
Phone: +1-310-528-3031
Email: Eketchmere@compass-ir.com

May04

Acorn International Announces US$2.5 Million Share Repurchase Plan

Posted by Elaine in Press Release, Uncategorized

Acorn International Announces US$2.5 Million Share Repurchase Plan

SHANGHAI, May 4, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced that the Company adopted a repurchase plan based upon a form approved by the Company’s Board of Directors in accordance with guidelines specified by Rule 10b5-1 under the Securities and Exchange Act of 1934, as amended, as well as Acorn’s insider trading policy. The Company may repurchase up to US$2.5million worth of its American depositary shares (“ADSs”) over the next 12 months under the repurchase plan.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The timing and extent of any purchases will depend upon market conditions, the trading price of its ADSs and other factors, and are subject to the restrictions relating to volume, price and timing under applicable law. The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size. The Company plans to fund repurchases from its existing cash balance.

About Acorn International, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Acorn’s control, including the extent and duration of the adverse impact of COVID-19, which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Contact:
Compass Investor Relations
Ms. Elaine Ketchmere, CFA
Phone: +1-310-528-3031
Email: Eketchmere@compass-ir.com

Apr30

Acorn International Reports First Quarter 2020 Financial Results

Posted by Elaine in Press Release

Acorn International Reports First Quarter 2020 Financial Results

SHANGHAI, April 30, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced its preliminary unaudited financial results for the quarter ended March 31, 2020.

First Quarter Estimated Results Highlights

Net revenues decreased 7.2% year-over-year in Q1 2020 to US$8.0 million.
Gross profit decreased 12.3% year-over-year in Q1 2020 to US$5.5 million.
Gross margin was 68.8% in Q1 2020, compared to 72.8% in Q1 2019.
Loss from continuing operations was US$0.3 million in Q1 2020, compared to income from continuing operations of US$0.6 million in Q1 2019.
Net income was US$2.7 million in Q1 2020 as compared to net income of US$4.8 million in Q1 2019. In Q1 2020, the Company recorded a $3.0 million gain from the sale of shares of E-Money Holding Co., Ltd. (“E-Money”) (formerly known as Shanghai Yimeng Software Technology Co., Ltd.). The year-ago period includes a US$3.8 million gain on the sale of the Company’s former principal office in Shanghai to a third party.

“Our results for the first quarter of 2020 reflect the impact of the COVID-19 crisis on our business. As previously disclosed, although we have seen some increased demand for certain products as more Chinese consumers are shopping from home, we have also experienced some demand reduction, supply-side disruption and delivery challenges caused by COVID-19,” said Mr. Jacob A. Fisch, CEO and President of Acorn International.

Preliminary Financial Results for the First Quarter of 2020:

Total net revenues were US$8.0 million in the first quarter of 2020, down 7.2% from US$8.7 million in the first quarter of 2019, primarily due to the impact of COVID-19 as well as lower revenues of oxygen-generating products related primarily to the sale of the Company’s subsidiary Zhuhai Acorn Electronic Technology Co., Ltd.

Cost of sales in the first quarter of 2020 was US$2.5 million, up 6.5% from US$2.4 million in the first quarter of 2019. The increase was primarily attributable to the inclusion of Acorn Digital Services in revenues and cost of sales in the first quarter of 2020 (in the year ago period, this business segment was included in other operating income), and a higher proportion of Acorn Fresh products, which have a slightly lower margin than Babaka branded products, in the product mix.

Gross profit in the first quarter of 2020 was US$5.5 million, down 12.3% from US$6.3 million in the first quarter of 2019. Gross margin was 68.8% in the first quarter of 2020, compared with 72.8% in the first quarter of 2019.

Total operating expenses in the first quarter of 2020 were US$5.8 million, up 0.9% from US$5.7 million in the first quarter of 2019.

Loss from continuing operations was US$0.3 million in the first quarter of 2020, as compared to income from continuing operations of US$0.6 million in the first quarter of 2019.

Other income was US$3.0 million in the first quarter of 2020, primarily due to a US$3.0 million gain from the sale of shares of E-Money. The year-ago period includes a US$3.8 million gain on the sale of the Company’s former principal office in Shanghai to a third party.

Net income from continuing operations was US$2.8 million in the first quarter of 2020. This compares to net income from continuing operations of US$4.9 million in the first quarter of 2019. Net loss from discontinued operations, which reflects the sale of a majority stake in the Company’s HJX electronic learning products business to a third-party investor and operator in 2017 as well as the Company’s call center operations which were discontinued in the third quarter of 2019 (refer to “Discontinued Operations” discussion below), was US$28 thousand in the first quarter of 2020, compared to net loss from discontinued operations of US$0.1 million in the first quarter of 2019.

Net income attributable to Acorn was US$2.7 million in the first quarter of 2020. This compares to net income attributable to Acorn of US$4.8 million in the first quarter of 2019.

As of March 31, 2020, Acorn’s estimated cash and cash equivalents, with restricted cash, totaled US$13.9 million. This compares to cash and equivalents, with restricted cash, of US$13.5 million as of December 31, 2019.

Discontinued Operations

About Acorn International, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “strives,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” and similar statements. Such statements are based on management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the Company’s control, including the extent and duration of the COVID-19 crisis, which may cause the Company’s actual results, performance, or achievements to differ materially from those in these preliminary financial results and the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Other factors that could cause forward-looking statements to differ materially from actual future events or results include risks and uncertainties related to: the Company’s ability to successfully improve or introduce new products and services, including to offset declines in sales of existing products and services; the Company’s ability to stay abreast of consumer market trends and maintain the Company’s reputation and consumer confidence; the Company’s ability to execute and maintain a successful market strategy; potential unauthorized use of the Company’s intellectual property; potential disruption of the Company’s manufacturing processes; increasing competition in China’s consumer market; the Company’s U.S. tax status as a passive foreign investment company; and general economic and business conditions in China, as well as potential friction between the U.S. and China associated with their current trade dispute and related factors, which could potentially impact Acorn. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2018 annual report on Form 20-F filed with SEC on April 30, 2019. For a discussion of other important factors that could adversely affect the Company’s business, financial condition, results of operations and prospects, see “Risk Factors” beginning on page 9 of the Company’s 2018 annual report on Form 20-F filed with the SEC on April 30, 2019. The Company’s actual results of operations for the first quarter of 2020 are not necessarily indicative of its operating results for any future periods. Any projections in this release are based on limited information currently available to the Company, which is subject to change. Although such projections and the factors influencing them will likely change, the Company will not necessarily update the information. Such information speaks only as of the date of this release.

Statement Regarding Unaudited Financial Information

Contact:
Acorn International, Inc.	Compass Investor Relations
Mr. Martin Key	Ms. Elaine Ketchmere, CFA
Phone +86-21-5151-8888	Phone: +1-310-528-3031
Email: ir@chinadrtv.com	Email: Eketchmere@compass-ir.com
www.chinadrtv.com	www.compassinvestorrelations.com

– Financial Tables Follow –

ACORN INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In US dollars)

	For the three months ended
	For the three months ended
	2019/03/31	2020/03/31
	(Unaudited)	(Unaudited)
Net revenues
Direct sales	7,204,182	$ 6,894,582
Distribution sales	1,449,322	1,138,259
Total net revenues	8,653,504	8,032,841

Cost of revenues
Direct sales	-1,836,452	-2,097,431
Distribution sales	-519,897	-411,327
Total cost of revenues	-2,356,349	-2,508,758

Gross profit
Direct sales	5,367,729	4,797,151
Distribution sales	929,425	726,932
Total gross profit	6,297,154	5,524,083
	72.8%	68.8%
Operating (expenses) income
Other selling and marketing expenses	-3,868,281	-4,089,335
General and administrative expenses	-2,452,609	-2,138,118
Other operating income, net	580,576	434,297
Total operating (expenses) income	-5,740,314	-5,793,156
Income (loss) from continuing operations	556,841	-269,073

Interest expense	–	-21,378
Interest income	82,361	46,017
Other income (expenses), net	4,573,849	3,048,180
Income (loss) from continuing operations before income taxes and equity in losses of affiliates	5,213,051	2,803,746

Income tax – current	-307,585	–
Income tax – deferred	0	-36,812
Income (loss) from continuing operations before equity in losses of affiliates	4,905,466	2,766,934

Discontinued operations :
Income (loss) from discontinued operations	-110,673	-27,887
Income (loss) from discontinued operations before equity in losses of affiliates	-110,673	-27,887
Equity in losses of affiliates		–

Net income (loss)	4,794,793	2,739,047

Net income (loss) attributable to non-controlling interests	1,738	-211
Net income (loss) attributable to Acorn International, Inc.	$4,796,531	$2,739,258

ACORN INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In US dollars)

	2019/12/31	2020/03/31


Cash and cash equivalents	$13,461,368	$13,825,003
Restricted cash	75,543	74,918
Accounts receivable, net	3,611,177	4,731,741
Inventory, net	3,042,762	2,528,777
Other prepaid expenses and current assets	7,112,042	9,837,301
Loan receivable	3,754,735	3,776,552
Held-for-sale assets	468,191	466,431
Assets to be abandoned	116,559
Current assets	31,642,377	35,240,722

Property and equipment, net	559,964	544,058
Investments in affiliates	–	91,309
Available-for-sale securities	25,681,848	20,705,511
Loan to related party	14,804,052	14,698,550
Right of use assets	1,785,194	1,533,427
Deferred tax assets, net	4,997,111	4,963,568
Other long-term assets	693,518	732,396
Total assets	$80,164,064	$78,509,540

Accounts payable	3,172,263	2,141,762
Dividend payable	133,405	131,206
Accrued expenses and other current liabilities	6,564,390	8,773,664
Lease Liability	881,349	858,089
Income taxes payable	1,648,520	1,615,086
Deferred revenue	68,798	42,338
Liabilities to be abandoned	222,578	–
Current liabilities	12,691,303	13,562,145

Lease Liability	1,032,645	814,786
Deferred tax liability, net
Total liabilities	13,723,948	14,376,932

Ordinary shares	918,844	918,844
Additional paid-in capital	117,445,969	117,445,969
Statutory reserve	8,350,141	8,350,141
Retained earnings	(77,913,299)	(75,174,041)
Beginning balance	(87,749,530)	(77,913,299)
Net income (loss) attributable to Acorn	9,836,231	2,739,258
Appropriation of statutory reserve fund
Accumulated other comprehensive income	45,635,771	40,594,179
Treasury stock, at cost	(28,320,324)	(28,320,324)
Total Acorn International, Inc. shareholders’ equity	66,117,102	63,814,768

Noncontrolling interests	323,014	317,841
Total equity	66,440,116	64,132,609
Total liabilities and equity	$80,164,064	$78,509,540

Mar12

Acorn International Reports Financial Results for the Fourth Quarter and Full Year 2019

Posted by Elaine in Press Release

Acorn International Reports Financial Results for the Fourth Quarter and Full Year 2019

Full Year Net Revenues Increased 49.5% Year-Over-Year to US$37.5 Million

SHANGHAI, March 12, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced its preliminary unaudited financial results for the fourth quarter and year ended December 31, 2019.

Fourth Quarter 2019 Financial Highlights

Net revenues increased 21.9% year-over-year in Q4 2019 to US$9.1 million.
Gross profit rose 16.8% year-over-year in Q4 2019 to US$6.3 million.
Gross margin was 68.8% in Q4 2019, compared to 71.8% in Q4 2018.
Income from continuing operations was US$0.4 million in Q4 2019, compared to US$1.6 million in Q4 2018.
Net income was US$1.7 million in Q4 2019 as compared to net income of US$3.7 million in Q4 2018. In Q4 2019, the Company recorded a $1.3 million gain from the sale of its subsidiary Zhuhai Acorn Electronic Technology Co., Ltd. (“Zhuhai Acorn”). The year-ago period includes a US$2.0 million gain from the sale of the Company’s Bright Rainbow Investments Limited (“Bright Rainbow”) subsidiary.

Full Year 2019 Financial Highlights

Net revenues increased 49.5% year-over-year in 2019 to US$37.5 million.
Gross profit rose 46.4% year-over-year in 2019 to US$27.0 million.
Gross margin was 72.1% in 2019, compared to 74.3% in 2018.
Income from continuing operations was US$1.8 million in 2019, compared to US$2.6 million in 2018.
Net income was US$7.8 million in 2019 as compared to net income of US$31.1 million in 2018. In 2019, the Company recorded a US$3.8 million gain on the sale of its former principal office in Shanghai to a third party and a US$1.3 million gain from the sale of its Zhuhai Acorn subsidiary, to a third party. Full-year 2018 results include a US$32.1 million gain from the sale Bright Rainbow.

“We closed 2019 on a positive note, with revenues up 49.5%, gross margin in excess of 70%, and net income of US$7.8 million,” said Mr. Jacob A. Fisch, CEO and President of Acorn International. “Both our Babaka branded posture correction products and Acorn Fresh had strong 11.11 Singles Day e-commerce performance, supporting a strong quarter and the close to a strong year.”

“The year 2020 has brought the COVID-19 crisis, and we are making every effort to support our employees, customers and partners through this challenging time. While some of our businesses are seeing increasing demand as more Chinese consumers are shopping from home, we are concerned about supply-side disruption, delivery challenges and the potential for waning consumer demand caused by COVID-19. We continue to monitor this rapidly evolving situation and are taking measures to cut costs and conserve our cash reserves,” Mr. Fisch concluded.

Preliminary Financial Results for the Fourth Quarter of 2019:

Total net revenues were US$9.1 million in the fourth quarter of 2019, up 21.9% from US$7.5 million in the fourth quarter of 2018, primarily due to an increase in e-commerce sales of Babaka branded products and other products, which was partially offset by lower revenues of oxygen-generating products related primarily to the sale of Zhuhai Acorn.

Cost of sales in the fourth quarter of 2019 was US$2.9 million, up 34.9% from US$2.1 million in the fourth quarter of 2018. The increase was attributable to increased sales volume and net revenues.

Gross profit in the fourth quarter of 2019 was US$6.3 million, up 16.8% from US$5.4 million in the fourth quarter of 2018. Gross margin was 68.8% in the fourth quarter of 2019, compared with 71.8% in the fourth quarter of 2018. The slight decrease in gross margin was primarily due to changes in the product and platform mix of Babaka and a higher proportion of Acorn Fresh products, which have a slightly lower margin than Babaka branded products, in the product mix.

Total operating expenses in the fourth quarter of 2019 were US$5.9 million, up 56.0% from US$3.8 million in the fourth quarter of 2018. The increase in operating expenses was due primarily to an increase in selling and marketing expenses to support e-commerce sales and higher general and administrative expenses associated with higher staff expenses due to the expansion of Acorn Digital Services. These expenses were partially offset by an increase in other operating income due to increased revenues from Acorn Digital Services and interest from the long-term loan to Cachet Hotels & Resorts.

Income from continuing operations was US$0.4 million in the fourth quarter of 2019, as compared to income from continuing operations of US$1.6 million in the fourth quarter of 2018.

Other income was US$1.5 million in the fourth quarter of 2019, compared to other income of US$2.0 million in the fourth quarter of 2018. The fourth quarter of 2019 includes a $1.3 million gain from the sale of Zhuhai Acorn, while the year-ago period includes a US$2.0 million gain from the sale of the Company’s Bright Rainbow subsidiary.

Net income from continuing operations was US$2.0 million in the fourth quarter of 2019. This compares to net income from continuing operations of US$3.7 million in the fourth quarter of 2018. Net loss from discontinued operations, which reflects the sale of a majority stake in the Company’s HJX electronic learning products business to a third-party investor and operator in 2017 as well as the Company’s call center operations which were discontinued in the third quarter of 2019 (refer to “Discontinued Operations” discussion below), was US$0.3 million in the fourth quarter of 2019, compared to net income from discontinued operations of US$0.3 million in the fourth quarter of 2018.

Net income attributable to Acorn was US$1.7 million in the fourth quarter of 2019. This compares to net income attributable to Acorn of US$3.7 million in the fourth quarter of 2018.

Preliminary Full Year 2019 Financial Results

Total net revenues were US$37.5 million in 2019, up 49.5% from US$25.1 million in 2018, primarily due to an increase in e-commerce sales of Babaka branded products as well as other products, which was partially offset by lower revenues of oxygen-generating products related primarily to the sale of Zhuhai Acorn.

Cost of sales in 2019 was US$10.5 million, up 58.1% from US$6.6 million in 2018. The increase was attributable to increased sales volume and net revenues.

Gross profit in 2019 was US$27.0 million, up 46.4% from US$18.5 million in 2018. Gross margin was 72.1% in 2019, compared with 74.3% in 2018. The slight decrease in gross margin was primarily due to changes in the product and platform mix of Babaka and a higher proportion of Acorn Fresh products, which have a slightly lower margin than Babaka branded products, in the product mix.

Total operating expenses in 2019 were US$25.2 million, up 59.2% from US$15.8 million in 2018. The increase in operating expenses was due primarily to an increase in selling and marketing expenses to support e-commerce sales as well as higher general and administrative expenses associated with higher staff expenses due to the expansion of Acorn Digital Services and office lease expense, which the Company began to incur starting in December 2018 after the sale of its former principal office. These expenses were partially offset by an increase in other operating income due to increased revenues from Acorn Digital Services and interest from the long-term loan to Cachet Hotels & Resorts.

Income from continuing operations was US$1.8 million in 2019, as compared to income from continuing operations of US$2.6 million in 2018.

Other income was US$7.1 million in 2019, primarily associated with a US$3.8 million gain on the sale of the Company’s former principal office in Shanghai to a third party and a US$1.3 million gain from the sale of Zhuhai Acorn. In 2018, other income was US$32.1 million, which was primarily due to a gain on the sale of the Company’s Bright Rainbow subsidiary.

Net income from continuing operations was US$9.2 million in 2019, which is primarily due to the previously mentioned gain on the sale of the Company’s former principal office to a third party and the gain from the sale of Zhuhai Acorn. This compares to net income from continuing operations of US$35.1 million in 2018, which was primarily due to the previously mentioned gain from the sale of Bright Rainbow.

Net loss from discontinued operations, which reflects the sale of a majority stake in the Company’s HJX electronic learning products business to a third-party investor and operator in 2017 as well as the Company’s call center operations which were discontinued in the third quarter of 2019 (refer to “Discontinued Operations” discussion below), was US$1.2 million in 2019, compared to a net loss from discontinued operations of US$1.0 million in 2018.

Net income attributable to Acorn was US$7.8 million in 2019. This result compares to net income attributable to Acorn of US$31.1 million in 2018.

As of December 31, 2019, Acorn’s cash and cash equivalents, with restricted cash, totaled US$13.5 million. The cash balance at the end of 2019 reflects the payment of cash dividends totaling approximately US$4.5 million in 2019 and a drawdown of approximately US$4.9 million under the long-term loan to Cachet Hotels & Resorts after the increase of loan capacity from US$10 million to US$15 million. This compares to cash and equivalents, with restricted cash, of US$20.2 million as of December 31, 2018. In February 2020, the Company sold an aggregate of approximately US$3.4 million of available-for-sale securities.

Discontinued Operations

Sale of Oxygen-Generating Products Business

In the fourth quarter of 2019, the Company’s wholly-owned subsidiary, China DRTV, Inc. entered into an equity transfer agreement to sell 100% of the equity interests in its wholly-owned subsidiary, Zhuhai Acorn, which is engaged in oxygen-generating products business, to an unrelated third-party for a purchase price of US$1,450,000 in cash. The sale was completed in the fourth quarter of 2019 with a $1.3 million gain recorded and the receivables for the purchase price were outstanding as of the date of this report.

Suspension November 2019 Take Private Proposal

On February 14, 2020, Mr. Robert W. Roche, Chairman of Acorn, delivered a letter (the “February 2020 Letter”) to the special committee of the board of directors of the Company (the “Special Committee”) informing the Special Committee that in light of the uncertainties regarding the impact that the 2019 novel coronavirus outbreak will have on the economy, at this time he and the shareholders of the buyer vehicle are not prepared to pursue the acquisition of the Company (the “Acquisition”) at a purchase price of $0.975 per ordinary share or $19.50 per American Depositary Share as set out in his preliminary non-binding proposal letter dated November 4, 2019. Mr. Roche also stated in the February 2020 Letter that he and the shareholders of the buyer vehicle remain interested in continuing negotiations with the Special Committee regarding the Acquisition. No additional terms or proposals have been discussed at this time and there can be no assurance that negotiations will continue or that a revised offer will be made, that any agreement related to the Acquisition will be reached, or that the Acquisition or any other similar transaction will be consummated.

The Special Committee conducted a meeting to consider next steps in light of the February 2020 Letter. The Committee determined that it would continue discussions with Mr. Roche as and to the extent he was willing to do so, and evaluate next steps based on the nature of these discussions and other factors, with no assurance that any agreement related to the Acquisition will be reached, or that the Acquisition or any other similar transaction will be consummated.

About Acorn International, Inc.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “strives,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” and similar statements and include statements with respect to the future impact of COVID-19 on the Company’s business, as well as potential future discussions with Robert Roche re a possible future Acquisition or similar transaction. Such statements are based on management’s current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the Company’s control, including the extent and duration of the COVID-19 crisis, Mr. Roche’s willingness to engage in discussions re a possible future Acquisition or similar transaction, and the nature of any terms he proposes for the same, which may cause the Company’s actual results, performance, or achievements to differ materially from those in these preliminary financial results and the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Other factors that could cause forward-looking statements to differ materially from actual future events or results include risks and uncertainties related to: the Company’s ability to successfully improve or introduce new products and services, including to offset declines in sales of existing products and services; the Company’s ability to stay abreast of consumer market trends and maintain the Company’s reputation and consumer confidence; the Company’s ability to execute and maintain a successful market strategy; potential unauthorized use of the Company’s intellectual property; potential disruption of the Company’s manufacturing processes; increasing competition in China’s consumer market; the Company’s U.S. tax status as a passive foreign investment company; and general economic and business conditions in China, as well as potential friction between the U.S. and China associated with their current trade dispute and related factors, which could potentially impact Acorn. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2018 annual report on Form 20-F filed with SEC on April 30, 2019. For a discussion of other important factors that could adversely affect the Company’s business, financial condition, results of operations and prospects, see “Risk Factors” beginning on page 9 of the Company’s Form 20-F for the fiscal year ended December 31, 2018. The Company’s actual results of operations for the second quarter and first nine months of 2019 are not necessarily indicative of its operating results for any future periods. Any projections in this release are based on limited information currently available to the Company, which is subject to change. Although such projections and the factors influencing them will likely change, the Company will not necessarily update the information. Such information speaks only as of the date of this release.

Statement Regarding Unaudited Financial Information

Contact:
Acorn International, Inc.	Compass Investor Relations
Mr. Martin Key	Ms. Elaine Ketchmere, CFA
Phone +86-21-5151-8888	Phone: +1-310-528-3031
Email: ir@chinadrtv.com	Email: Eketchmere@compass-ir.com
www.chinadrtv.com	www.compassinvestorrelations.com

– Financial Tables Follow –

ACORN INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In US dollars)

	For the three months ended		For the twelve months ended
	For the three months ended		For the twelve months ended
	2018/12/31	2019/12/31	2018/12/31	2019/12/31
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Net revenues
Direct sales	$ 5,873,472	$ 7,755,221	$ 20,279,172	$ 31,628,939
Distribution sales	1,622,897	1,383,254	4,800,328	5,855,551
Total net revenues	7,496,369	9,138,475	25,079,500	37,484,490

Cost of revenues
Direct sales	-1,618,963	-2,379,087	-5,068,524	-8,539,108
Distribution sales	-496,164	-474,037	-1,559,922	-1,937,195
Total cost of revenues	-2,115,127	-2,853,124	-6,628,446	-10,476,303

Gross profit
Direct sales	4,254,509	5,376,134	15,210,648	23,089,831
Distribution sales	1,126,733	909,217	3,240,406	3,918,356
Total gross profit	5,381,242	6,285,351	18,451,054	27,008,187
	71.8%	68.8%	74.3%	72.1%
Operating (expenses) income
Other selling and marketing expenses	-3,421,911	-4,598,921	-10,803,845	-18,179,109
General and administrative expenses	-881,257	-1,988,333	-7,196,150	-9,289,440
Other operating income, net	525,834	694,557	2,182,435	2,282,257
Total operating (expenses) income	-3,777,333	-5,892,697	-15,817,560	-25,186,292
Income (loss) from continuing operations	1,603,909	392,654	2,633,494	1,821,895

Interest expense	–	–	-95	–
Interest income	14,102	27,689	399,335	295,295
Other income (expenses), net	2,037,033	1,547,831	32,094,726	7,070,293
Income (loss) from continuing operations before income taxes and equity in losses of affiliates	3,655,044	1,968,173	35,127,460	9,187,483

Income tax – current	-275,047	-3,229	-3,018,150	-194,101
Income tax – deferred			–	–
Income (loss) from continuing operations before equity in losses of affiliates	3,379,997	1,964,944	32,109,310	8,993,382

Discontinued operations :
Income (loss) from discontinued operations	289,591	-286,058	-986,563	-1,151,729
Income (loss) from discontinued operations before equity in losses of affiliates	289,591	-286,058	-986,563	-1,151,729

Equity in losses of affiliates	–	–	–	–

Net income (loss)	3,669,588	1,678,886	31,122,747	7,841,653

Net income (loss) attributable to non-controlling interests	882	-1,737	-4,436	-5,775
Net income (loss) attributable to Acorn International, Inc.	$3,670,470	$1,680,623	$31,127,183	$7,847,428

ACORN INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In US dollars)

	2018/12/31	2019/12/31


Cash and cash equivalents	$20,143,783	$13,461,368
Restricted cash	76,243	75,543
Accounts receivable, net	3,520,440	3,611,177
Inventory, net	1,590,319	3,044,758
Other prepaid expenses and current assets	7,936,100	9,173,941
Loan receivable	3,597,392	3,754,735
Held-for-sale assets	2,881,370	468,191
Assets to be abandoned	579,644	16,295
Current assets	40,325,291	33,606,007

Property and equipment, net	660,157	559,964
Available-for-sale securities	38,858,216	38,228,793
Loan to related party	10,050,054	14,804,052
Right of use assets	–	1,133,789
Other long-term assets	243,236	270,745
Total assets	$90,136,954	$88,603,350

Accounts payable	2,057,539	3,172,263
Dividend payable	174,658	133,405
Accrued expenses and other current liabilities	12,726,641	7,881,924
Lease Liability	–	663,285
Income taxes payable	2,096,987	1,394,782
Deferred revenue	174,826	68,798
Liabilities to be abandoned	272,428	214,473
Current liabilities	17,503,079	13,528,930

Lease Liability	–	572,758
Deferred tax liability, net	630,574	620,360
Total liabilities	18,133,653	14,722,048

Ordinary shares	918,844	918,844
Additional paid-in capital	121,962,650	117,445,969
Statutory reserve	8,350,141	8,350,141
Retained earnings	(87,749,530)	(79,902,102)
Beginning balance	(118,876,713)	(87,749,530)
Net income (loss) attributable to Acorn	31,127,183	7,847,428
Appropriation of statutory reserve fund
Accumulated other comprehensive income	56,507,394	55,065,759
Treasury stock, at cost	(28,320,324)	(28,320,324)
Total Acorn International, Inc. shareholders’ equity	71,669,175	73,558,288

Noncontrolling interests	334,126	323,014
Total equity	72,003,301	73,881,302
Total liabilities and equity	$90,136,954	$88,603,350

Mar02

Acorn International Suspends Quarterly Dividend Policy Indefinitely; Takes Defensive Measures Given Potential for Coronavirus Outbreak to Materially Impact its E-Commerce Business

Posted by Elaine in Press Release

Acorn International Suspends Quarterly Dividend Policy Indefinitely; Takes Defensive Measures Given Potential for Coronavirus Outbreak to Materially Impact its E-Commerce Business

SHANGHAI, March 2, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), announced that at its regularly scheduled meeting in February, 2020, the Company’s board of directors voted to indefinitely suspend its quarterly dividend of US$0.0125 per ordinary share, or US$0.25 per ADS, due to current business impact and uncertainties concerning the potential longer-term impact of the 2019 novel coronavirus (COVID-19) outbreak on the Company’s e-commerce business.

Discovered in Wuhan, China in December 2019, COVID-19 causes severe respiratory illness in humans. While it has begun to spread throughout the world, the vast majority of coronavirus cases are in mainland China, with over 78,000 diagnosed cases and over 2,700 deaths, based on the latest statistics from the World Health Organization as of the date of this release. Actions by the Chinese government to curtail the spread of the virus include limiting the transportation of people and goods within and outside of China. Many countries around the world have imposed travel bans to China and are quarantining travelers arriving from China.

“The outbreak of the coronavirus could have a material impact on our business in 2020. There has been disruption to our production capacity and our ability to deliver to customers in parts of China. There is also uncertainty about whether our ability to import raw material for our Acorn Fresh business will be affected materially. Finally, while we are adapting to work-from-home and flexible working arrangements, we have historically operated within a traditional office environment in Shanghai,” said Mr. Jacob A. Fisch, CEO and President of Acorn International.

“Some of our online businesses appear to be experiencing increased demand, as customers prefer to shop from home. But we are concerned that the combination of supply-side disruption, delivery challenges and potential, long-term waning consumer demand caused by COVID-19, potentially exacerbated by other factors, could negatively impact our business. While we continue to monitor the situation, at this point it is difficult to assess the probable significance or duration of any disruption. As a result, we are taking a number of defensive measures to cut costs and conserve our cash resources, including salary reductions and the indefinite suspension of the quarterly dividend until we have more confidence concerning the current situation.”

About Acorn International, Inc.

Safe Harbor Statement

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Acorn’s control, including the extent and duration of the adverse impact of COVID-19, which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Contact:
Compass Investor Relations
Ms. Elaine Ketchmere, CFA
Phone: +1-310-528-3031
Email: Eketchmere@compass-ir.com

Feb18

Acorn International Announces Suspension of Current Roche Take Private Proposal; Buyer Group Cites Uncertainty Regarding COVID-19

Posted by Elaine in Press Release

Acorn International Announces Suspension of Current Roche Take Private Proposal; Buyer Group Cites Uncertainty Regarding COVID-19

SHANGHAI, Feb. 18, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), today announced that on February 14, 2020, Mr. Robert W. Roche delivered a letter (the “February 2020 Letter”) to the special committee of the board of directors of the Company (the “Special Committee”) informing the Special Committee that in light of the uncertainties regarding the impact that the 2019 novel coronavirus outbreak will have on the economy, at this time he and the shareholders of the buyer vehicle are not prepared to pursue the acquisition of the Company (the “Acquisition”) at a purchase price of $0.975 per ordinary share or $19.50 per American Depositary Share as set out in his preliminary non-binding proposal letter dated November 4, 2019. Mr. Roche also stated in the February 2020 Letter that he and the shareholders of the buyer vehicle remain interested in continuing negotiations with the Special Committee regarding the Acquisition. No additional terms or proposals have been discussed at this time and there can be no assurance that negotiations will continue or that a revised offer will be made, that any agreement related to the Acquisition will be reached, or that the Acquisition or any other similar transaction will be consummated.

The Special Committee scheduled a meeting to consider next steps in light of the February 2020 Letter. No decisions have been made with respect to the Company’s response.

About Acorn International, Inc.

Safe Harbor Statement

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Acorn’s control, including whether an Agreement will be reached with respect to the Acquisition, which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Contact:
Compass Investor Relations
Ms. Elaine Ketchmere, CFA
Phone: +1-310-528-3031
Email: Eketchmere@compass-ir.com

Jan22

Acorn International Announces Appointment of Independent Financial Advisor and Legal Counsel to Special Committee

Posted by Elaine in Press Release

Acorn International Announces Appointment of Independent Financial Advisor and Legal Counsel to Special Committee

SHANGHAI, Jan. 22, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), a leading marketing and branding company in China, today announced that the special committee of independent directors of the Company’s board of directors, consisting of Urs P. Zimmerman, Jenny Hseau-Jean Wang and Eric Haibing Wu (the “Special Committee”), has retained Duff & Phelps, LLC and Duff & Phelps Securities, LLC as its independent financial advisor and Sheppard Mullin Richter & Hampton LLP as its legal counsel. The Special Committee was formed to consider the preliminary non-binding “going private” proposal set out in a November 4, 2019 letter from Mr. Robert W. Roche, Executive Chairman of the Company (the “Proposal”).

The Board cautions the Company’s shareholders and others considering trading in its securities that no decisions have been made with respect to the Company’s response to the Proposal. There can be no assurance that any definitive offer will be made, that any agreement will be reached or executed, or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.

About Acorn International, Inc.

For more information visit www.acorninternationalgroup.com.

Safe Harbor Statement

This news release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond control, which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

Investor Contacts:

Acorn International, Inc.	Compass Investor Relations
Mr. Jacob A. Fisch	Ms. Elaine Ketchmere, CFA
Phone +86-21-5151-8888	Phone: +1-310-528-3031
Email: ir@chinadrtv.com	Email: Eketchmere@compass-ir.com
www.chinadrtv.com	www.compassinvestorrelations.com