Annual Revenue Increases 58% to $16.0 Million
Full Year Earnings Per Share Total
$0.27
LAS
VEGAS, March 31, 2022 /PRNewswire/ -- Remark
Holdings, Inc. (NASDAQ: MARK), a diversified global technology
company with leading artificial intelligence ("AI") solutions and
digital media properties, today announced financial results for its
fiscal year ended December 31,
2021.
Management Commentary
"Fourth quarter 2021 revenue of $6.3
million represented a 33% increase compared to the fourth
quarter of 2020, and powered a 58% year-over-year increase.
Adoption of our AI-powered solutions came from diverse industries
including construction, infrastructure, banking and education,"
noted Kai-Shing Tao, Chairman and
Chief Executive Officer of Remark Holdings. "Our AI-driven security
solutions are currently being evaluated for several U.S.-based
infrastructure projects in the rail and public safety industries as
well as for border control."
Fiscal Year 2021 Business Highlights
- Beginning in the third quarter of 2021, pandemic prevention
controls at school campuses became a national priority in
China. Additionally, regional and
local governments implemented policies to increase automated campus
administration. Such initiatives increased demand for smart campus
solutions, and by the end of 2021 Remark's solutions were delivered
to over 400 elementary schools, with a market opportunity of
160,000 schools in major cities.
- AI solutions were utilized in the construction industry to
monitor safety protocols at building sites, and to ensure safety
codes for heavy equipment and personnel in construction zones were
being followed. Business development is expected to continue
throughout China for manufacturing
and other industrial applications.
- KanKan continued work with China Mobile to install KanKan AI's
smart community offerings. Despite pandemic related slowdowns,
implementations continue at over 150 residential communities.
Solutions include access control for vehicles, residents, and
delivery personnel, additional applications include elderly and
child safety, elevator access control, restricted area access
control, behavioral analysis, and messaging via communication
screens.
- Remark began development of VegasVerz, an augmented and virtual
reality app platform powered by Remark AI, in partnership with a
world renowned hospitality conglomerate and an acclaimed music
company in order to enhance the customer experience by offering fun
interactive games that bridge the physical and virtual worlds. In
addition, Remark partnered with isMedia to launch a non-fungible
token ("NFT") platform, with a drop anchored by the intellectual
property collection of its Bikini.com subsidiary, expected to
launch in mid-2022. The first phase of the carefully-curated NFT
platform will feature collectible NFTs from Bikini.com's
influencers.
- Remark AI achieved a top-five ranking in computer-vision
testing (the Face Recognition Vendor Test, or "FRVT") conducted by
the U.S. National Institute of Standards and Technology.
Specifically, 198 systems were tested in the FRVT for their ability
to verify that a person is wearing a face mask.
- During the year, Remark announced a collaboration with
Brightline, the only provider of modern, eco-friendly
intercity rail in the United
States, to implement Remark's Smart Safety Platform for
unauthorized intrusion detection while working with
Brightline to incorporate AI in additional technologies for
other applications.
Fiscal Year 2021 Financial Results
- Revenue for fiscal year 2021 totaled $16.0 million, up 58% from $10.1 million during fiscal year 2020.
-
- Revenue in China grew by
$4.3 million in 2021 to $12.2 million due to increased completions of
AI-related projects, including bank branch conversions and ongoing
projects with school districts.
- Revenue from the U.S. was positively impacted by the completion
of an AI data intelligence project with a new customer which offset
a decrease in revenue from our biosafety business. Total US revenue
increased by $1.5 million, or 68%, to
$3.8 million.
- Gross profit improved to $4.5
million in fiscal 2021 from $3.7
million in fiscal 2020 commensurate with increased revenue.
Increased cost of revenue from a data analytics project was almost
entirely offset by lower cost of revenue from our biosafety
business.
- The company incurred an operating loss of $13.9 million in 2021, a slight improvement from
the operating loss of $14.2 million
in 2020. Sales and marketing expense declined as startup costs
associated with the biosafety business did not repeat. Increased
technology and development expense came from new product
development for the Smart Sentry product that is expected to be
utilized by railway customers. Fiscal year 2021 general and
administrative expense increased primarily from $3.5 million of share-based compensation from the
recognition of the 2020 stock option issuance that did not have an
accounting grant date until July
2021.
- Net income totaled $27.5 million,
or $0.27 per diluted share in the
fiscal year ended December 31, 2021,
compared to net loss of ($13.7
million), or ($0.16) per
diluted share in the fiscal year ended December 31, 2020. Net income was positively
impacted by recording a $43.6 million
gain on the revaluation of the investment in Sharecare, which was
slightly offset by $2.3 million of
interest expense.
- At December 31, 2021, the cash
balance totaled $14.2 million,
compared to a cash position of $0.9
million at December 31, 2020.
Cash increased primarily due to $32.2
million in net proceeds from debt issuances and $5.7 million in proceeds from a stock issuance,
which were partially offset by debt repayments and payments of
other operating liability payments.
"For fiscal year 2022, we anticipate continued growth in both
our US and China AI businesses. Additionally, we have a robust
pipeline of business opportunities in Europe which represents a previously untapped
market. Finally, we will be introducing several new initiatives in
the NFT and metaverse spaces in the coming months that are powered
by our AI technology," concluded Mr. Tao.
Conference Call Information
Management will hold a conference call this afternoon at
4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the Company's
financial results and provide an update on recent business
developments. A question and answer session will follow
management's presentation.
The live conference may be accessed via telephone or online
webcast.
Date: Thursday, March 31, 2022
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
Toll-Free Number: 800.239.9838
International Number: 323.794.2551
Conference ID: 5585955
Online Webcast:
https://themediaframe.com/mediaframe/webcast.html?webcastid=NaLJr4Ne.
Participants are advised to login for the live webcast 10
minutes prior to the scheduled start time. A replay of the call
will be available after 7:30 p.m. Eastern
time on the same day through April 5,
2022.
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay ID: 5585955
About Remark Holdings, Inc.
Remark Holdings, Inc. (NASDAQ: MARK), its subsidiaries, and the
variable-interest entities that the company consolidates,
constitute a diversified global technology business with leading
artificial intelligence ("AI") and data-analytics, as well as a
portfolio of digital media properties The company's easy-to-install
AI products are being rolled out in a wide range of applications
within the retail, urban life cycle and workplace and food
safety arenas. The company also owns and operates digital media
properties that deliver relevant, dynamic content and ecommerce
solutions. The company's corporate headquarters and U.S. operations
are based in Las Vegas, Nevada,
and it also maintain operations in London, England and Shanghai, China. The operations of the
variable interest entities the company consolidates are
headquartered in Chengdu, China
with additional operations in Hangzhou. For more information, please visit
the company's website at http://www.remarkholdings.com/.
Forward-Looking Statements
This press release may contain forward-looking statements,
including information relating to future events, future financial
performance, strategies, expectations, competitive environment and
regulation. Words such as "may," "should," "could," "would,"
"predicts," "potential," "continue," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates," and similar
expressions, as well as statements in future tense, identify
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors, including those
discussed in Part I, Item 1A. Risk Factors in Remark Holdings'
Annual Report on Form 10-K and Remark Holdings' other filings with
the SEC. Any forward-looking statements reflect Remark Holdings'
current views with respect to future events, are based on
assumptions and are subject to risks and uncertainties. Given such
uncertainties, you should not place undue reliance on any
forward-looking statements, which represent Remark Holdings'
estimates and assumptions only as of the date hereof. Except as
required by law, Remark Holdings undertakes no obligation to update
or revise publicly any forward-looking statements after the date
hereof, whether as a result of new information, future events or
otherwise.
Company Contacts
E. Brian Harvey
Senior Vice President of Capital Markets and Investor Relations
Remark Holdings, Inc.
ebharvey@remarkholdings.com
702-701-9514
Fay Tian
Vice President of Investor Relations
F.Tian@remarkholdings.com
(+1) 626.623.2000
(+86) 13702108000
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
Consolidated Balance
Sheets
(dollars in thousands,
except share and per share amounts)
|
|
|
December 31,
|
|
2021
|
|
2020
|
Assets
|
|
|
|
Cash
|
$
14,187
|
|
$
854
|
Trade accounts receivable, net
|
10,267
|
|
5,027
|
Inventory, net
|
1,346
|
|
874
|
Investment in marketable securities
|
42,349
|
|
—
|
Prepaid expense and other current assets
|
6,363
|
|
2,043
|
Total current assets
|
74,512
|
|
8,798
|
Property and equipment, net
|
357
|
|
321
|
Operating lease assets
|
194
|
|
492
|
Investment in unconsolidated affiliate
|
—
|
|
1,030
|
Other long-term assets
|
440
|
|
670
|
Total assets
|
$
75,503
|
|
$
11,311
|
Liabilities
|
|
|
|
Accounts payable
|
$
10,094
|
|
$
8,589
|
Accrued expense and other current liabilities
|
5,963
|
|
6,660
|
Contract liability
|
576
|
|
310
|
Notes payable, net of unamortized discount and debt issuance
cost of $2,189 and
zero at December 31, 2021 and 2020,
respectively
|
27,811
|
|
1,500
|
Total current
liabilities
|
44,444
|
|
17,059
|
Long-term debt
|
—
|
|
1,425
|
Operating lease liabilities, long-term
|
25
|
|
194
|
Warrant liability
|
—
|
|
1,725
|
Total liabilities
|
44,469
|
|
20,403
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
Stockholders' Equity
(Deficit)
|
|
|
|
Preferred stock, $0.001 par value; 1,000,000 shares
authorized; zero issued
|
—
|
|
—
|
Common stock, $0.001 par value; 175,000,000 shares
authorized; 105,157,769
and 99,505,041 shares issued and outstanding at
December 31, 2021 and 2020,
respectively
|
105
|
|
100
|
Additional paid-in-capital
|
364,239
|
|
351,546
|
Accumulated other comprehensive income
|
(270)
|
|
(226)
|
Accumulated deficit
|
(333,040)
|
|
(360,512)
|
Total stockholders' equity
(deficit)
|
31,034
|
|
(9,092)
|
Total liabilities and
stockholders' equity (deficit)
|
$
75,503
|
|
$
11,311
|
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
Consolidated Statements
of Operations and Comprehensive Loss
(dollars in thousands,
except per share amounts)
|
|
|
Year Ended December 31,
|
|
2021
|
|
2020
|
Revenue, including $3.8
million from China Business Partner
|
$
15,990
|
|
$
10,145
|
Cost and
expense
|
|
|
|
Cost of revenue (excluding depreciation and
amortization)
|
11,455
|
|
6,422
|
Sales and marketing
|
971
|
|
1,848
|
Marketing expense (recovery) - China Business Partner
activity
|
(1,530)
|
|
1,530
|
Technology and development
|
4,692
|
|
4,142
|
General and administrative
|
14,120
|
|
9,368
|
Depreciation and amortization
|
191
|
|
308
|
Impairments
|
—
|
|
772
|
Other operating expense
|
—
|
|
—
|
Total cost and
expense
|
29,899
|
|
24,390
|
Operating
loss
|
(13,909)
|
|
(14,245)
|
Other income
(expense)
|
|
|
|
Interest expense
|
(2,308)
|
|
(1,342)
|
Other income (expense), net
|
(592)
|
|
—
|
Change in fair value of warrant liability
|
123
|
|
(1,610)
|
Gain on investment revaluation
|
43,642
|
|
—
|
Gain on debt extinguishment
|
425
|
|
—
|
Gain on lease termination
|
—
|
|
3,582
|
Other gain (loss), net
|
100
|
|
(70)
|
Total other income,
net
|
41,390
|
|
560
|
Income (loss) from
before income taxes
|
27,481
|
|
(13,685)
|
Provision for income taxes
|
(9)
|
|
—
|
Net income
(loss)
|
$
27,472
|
|
$
(13,685)
|
Other comprehensive
loss
|
|
|
|
Foreign currency translation adjustments
|
(44)
|
|
1
|
Comprehensive income
(loss)
|
$
27,428
|
|
$
(13,684)
|
|
|
|
|
Weighted-average shares
outstanding, basic
|
101,362
|
|
85,578
|
Weighted-average shares
outstanding, diluted
|
101,719
|
|
85,578
|
|
|
|
|
Net income (loss) per
share, basic
|
$
0.27
|
|
$
(0.16)
|
Net income (loss) per
share, diluted
|
$
0.27
|
|
$
(0.16)
|
|
|
|
|
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SOURCE Remark Holdings, Inc.