SearchMedia Holdings Limited (“SearchMedia” or the “Company”) (NYSE MKT: IDI) (NYSE MKT: IDI.WS), one of China's leading nationwide multi-platform media companies, today announced it has appointed Mr. Stephen Zhu as the Chief Operating Officer of its China operations, effective August 20, 2012 and has also divested its subsidiary Qingdao Kaixiang Advertising Co. Ltd. (“Qingdao”) in order to further its planned minimization of the Company’s outstanding earnout liability.
Mr. Zhu joins SearchMedia from Symbol Media, an integrated outdoor advertising company he founded in 2009, whose client base includes well-recognized brands such as KFC, Puma, Coca-Cola, Volkswagen, AIA, Samsung, Canon, Ikea, Land Rover and covered many industry sectors including finance, auto, retail and electronics. Symbol Media is the Company’s partner for its previously announced Luxury Mall LCD Joint Venture. Mr. Zhu has now joined SearchMedia full-time as its Chief Operating Officer of China Operations. Through his ten years of experience in the out-of-home advertising industry, Mr. Zhu has developed deep relationships with the major advertising agencies in China, including Kinetic, Zenith, Optimum, Carat, McCann and Dentsu. Mr. Zhu has also been a market leader developing 3D advertising platforms within China.
As part of its previously announced Integration Program and based on an analysis of the recent performance and projections of Qingdao, the Company has agreed to divest Qingdao back to its previous owners and eliminate the related earnout liability of $4.1 million. Beginning August 31, 2012, Qingdao's operating results will no longer be part of the Company's consolidated financial statements. The Company believes that the cost savings from not carrying out the remaining earnout obligations pursuant to the acquisition agreement for Qingdao frees up the Company's resources for use in other more promising opportunities. Through the divestiture of Qingdao, the Company has materially reduced its outstanding earnout obligations by 41% from $10.1 million to $6.0 million.
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