LAS
VEGAS, May 22, 2023 /PRNewswire/ -- Remark
Holdings, Inc. (NASDAQ: MARK), a diversified global technology
company with leading artificial intelligence ("AI") solutions and
digital video analytics, today announced its financial results for
its first quarter fiscal 2023 ended March
31, 2023. For complete details of the consolidated financial
statements and accompanying management's discussion and analysis,
please see Remark's filings with the SEC (www.sec.gov).
Management Commentary
"In Q1 2023, we continue to expand our Remark AI footprint into
the U.S. and Europe. The demand
for our AI platform is unprecedented as companies and governments
need a solution to help them drive effectiveness and save on
costs," noted Kai-Shing Tao,
Chairman and Chief Executive Officer of Remark Holdings. "With
China reopening itself for business, we have positioned ourselves
to handle the growth from both sides of the pacific. Looking
forward, we are confident about our continued growth with existing
customers and look forward to our rapid expansion into Latin
American and the Middle East this
quarter and beyond. The foundation that we have put in place over
the past nine years has allowed us to quickly expand into new
territories and verticals. Finally, to fully unleash the power of
our AI platform, we will launch our Software-as-a-Service platform
with a major cloud provider."
First Quarter 2023 Business Highlights
- Remark AI successfully completed a trial of its Smart Safety
Platform ("SSP") with the city of Edinburgh, Scotland, which utilized the SSP to
manage occupancy and traffic during the Hogmanay Festivities, which
attract more than 30,000 visitors to the city during a 48-hour
period each year. The SSP collected video data in real-time and
shared that data with Edinburgh's
public safety team via web browser and mobile application.
- Remark AI announced a partnership with AAEON, a leader in
AI-based edge computing. The partnership allows for the creation
and deployment of a complete vision system that detects,
identifies, tracks, and characterizes objects, people, vehicles,
and behaviors at scale and speed while providing actionable
insights.
- The company released version 3.0 of its innovative and
extensible video analytics solution, the Smart Safety Platform. The
latest release added features that include weapons, smoke, and fire
detection with actionable intelligence.
- The company deployed its Smart Campus solutions to an
additional 23 educational campuses in China, bringing total installations to more
than 650 campuses and helping protect more than 1.3 million
students. Additional deployments during Q1 contributed
approximately $0.3 million
revenue.
- Remark AI spent Q1 providing to its existing construction
project clients a major software upgrade which added critical
functionality, and now expects clients to refocus on the continued
completions of the second 60-site project during the second
quarter.
- The company restarted its Smart Community project with China
Mobile. Despite the ongoing negative effects resulting COVID-19
infections in China and the
resulting lockdowns and restrictions, most of which were only
lifted at the end of 2022, the company was able to complete
installations in 100 communities, earning $0.4 million revenue.
Fiscal Year 2022 Financial Results
- Revenue for the first quarter of fiscal year 2023 totaled
$0.8 million, reflecting an 82%
decrease from $4.7 million during the
same quarter in 2022.
-
- The decrease in revenue resulted because the company's business
in China was adversely impacted by
the lingering effects of China's
Zero-COVID policy that was only lifted at the end of 2022. High
rates of COVID-19 infection continued into the first quarter of
2023, and business and economic recovery efforts have been slow and
methodical, which prevented as many project completions as had been
planned or as had been completed in the same period of the prior
year. The company expects project completions in China to begin to accelerate late in the
second quarter and into the third quarter of 2023 as its customers
begin to restart projects put on hold during Zero-COVID period and
initiate new projects that had been on the drawing board when the
strict preventative measures were ongoing in 2022.
- Gross profit remained essentially unchanged at approximately
$0.4 million, as the cost of revenue
primarily decreased 89% commensurate with the decrease
revenue.
- The company incurred an operating loss of $3.0 million in the first quarter 2023, a 27%
improvement from the operating loss of $4.2
million in the same period of 2022. The improvement is
mainly the result of a $0.7 million
decrease in certain expenses related to Remark's development of its
business, as well as a decrease of $0.3 in stock compensation expense. Also, the
company received a refundable tax credit of approximately
$0.5 million from the government of
the United Kingdom resulting from
the company's research and development activities in its
jurisdiction during the 2022 tax year. The credit was recorded as a
decrease in technology and development expense.
- Net loss totaled $8.2 million, or
$0.63 per basic and diluted share in
the first quarter ended March 31,
2023, compared to a net loss of $25.4
million, or $2.42 per basic
and diluted share in the same quarter of 2022. In addition to the
impact of the items affecting operating loss, net loss decreased
primarily because the first quarter of 2022 included a $19.0 million loss on marketable securities that
was not repeated in 2023. The decrease in loss on marketable
securities, plus a roughly $0.6
million decrease in interest expense, was partially offset
by an increase in finance cost of $3.6
million.
- On March 14, 2023, the company
entered into a debenture purchase agreement with Ionic Ventures,
LLC pursuant to which the company authorized the issuance of two
convertible subordinated debentures in the aggregate principal
amount of $2.8 million for an
aggregate purchase price of $2.5
million. The first of the convertible debentures was issued
during the first quarter of 2023, and the company received
$1.5 million pursuant to such
debenture. Remark also received a total advance of $1.0 million during January 2023 pursuant to its equity line of
credit with Ionic Ventures. The convertible debentures the company
has issued, plus the advance pursuant to the equity line of credit,
gave rise to obligations to issue the company's common stock and
the increase in finance cost.
- Also on March 14, 2023, Remark
entered into a new notes payable with its existing lender which
will result in the company repaying an aggregate of $16.3 million by October
31, 2023.
- At March 31, 2023, the company's
cash balance totaled $0.4 million,
compared to a cash balance of $0.1
million at December 31, 2022.
Net cash used in operating activities was $2.1 million.
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: Monday, May 22, 2023
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
Toll-Free Number: 844.826.3033
International Number: 412.317.5185
Conference ID: 10178864
Online Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1614686&tp_key=c833470662
Participants are advised to log in 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
May 26, 2023.
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay ID: 10178864
About Remark Holdings, Inc.
Remark Holdings, Inc. (NASDAQ: MARK) the industry leader in
AI-powered analytics computer vision and smart agent solutions,
delivers an integrated suite of AI tools that help organizations
understand their customer demographics and behavior while
monitoring, understanding and acting on potential security threats
in real time. Remark consists of an international team of
sector-experienced professionals that have created award winning
video analytics. The company's GDPR-compliant and CCPA-compliant
solutions focus on sectors including government agencies,
hospitality, public safety, retail and transportation. The
company's headquarters are in Las Vegas,
Nevada, USA, with operational offices in New York and international offices in
London, England. For more
information, please visit the company's home page at
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
regulations. 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 the 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 concerning future events, are based on assumptions,
and are subject to risks and uncertainties. Given such
uncertainties, you should not rely 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
Fay Tian
Vice President of Investor Relations
F.Tian@remarkholdings.com
(+1) 626-623-2000
(+65) 8715-8007
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
Consolidated Balance
Sheets
(dollars in thousands,
except share and per share amounts)
|
|
|
March 31,
2023
|
|
December 31,
2022
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash
|
$
364
|
|
$
52
|
Trade accounts
receivable, net
|
2,719
|
|
3,091
|
Inventory,
net
|
309
|
|
308
|
Deferred cost of
revenue
|
7,485
|
|
7,463
|
Prepaid expense and
other current assets
|
1,275
|
|
1,374
|
Total current
assets
|
12,152
|
|
12,288
|
Property and
equipment, net
|
1,660
|
|
1,699
|
Operating lease
assets
|
135
|
|
180
|
Other long-term
assets
|
226
|
|
269
|
Total
assets
|
$
14,173
|
|
$
14,436
|
Liabilities
|
|
|
|
Accounts
payable
|
$
9,751
|
|
$
9,602
|
Advances from related
parties
|
1,077
|
|
1,174
|
Obligations to issue
common stock
|
4,984
|
|
1,892
|
Accrued expense and
other current liabilities
|
7,139
|
|
7,222
|
Contract
liability
|
481
|
|
308
|
Notes
payable
|
16,488
|
|
14,607
|
Total current
liabilities
|
39,920
|
|
34,805
|
Operating lease
liabilities, long-term
|
30
|
|
56
|
Total
liabilities
|
39,950
|
|
34,861
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
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; 13,633,992 and 11,539,564
shares issued and outstanding at March 31, 2023 and December 31,
2022, respectively
|
14
|
|
12
|
Additional
paid-in-capital
|
372,071
|
|
368,945
|
Accumulated other
comprehensive loss
|
(1,177)
|
|
(859)
|
Accumulated
deficit
|
(396,685)
|
|
(388,523)
|
Total stockholders'
deficit
|
(25,777)
|
|
(20,425)
|
Total liabilities and
stockholders' deficit
|
$
14,173
|
|
$
14,436
|
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
Unaudited Condensed
Consolidated Statements of Operations and Comprehensive
Loss
(dollars in thousands,
except per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
Revenue, including
amounts from China Business Partner
|
$
826
|
|
$
4,667
|
Cost and
expense
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
455
|
|
4,270
|
Sales and
marketing
|
366
|
|
148
|
Technology and
development
|
169
|
|
455
|
General and
administrative
|
2,833
|
|
3,939
|
Depreciation and
amortization
|
46
|
|
41
|
Total cost and
expense
|
3,869
|
|
8,853
|
Operating
loss
|
(3,043)
|
|
(4,186)
|
Other income
(expense)
|
|
|
|
Interest
expense
|
(1,544)
|
|
(2,186)
|
Finance cost related
to obligations to issue common stock
|
(3,576)
|
|
—
|
Loss on
investment
|
—
|
|
(19,056)
|
Other gain (loss),
net
|
1
|
|
(1)
|
Total other expense,
net
|
(5,119)
|
|
(21,243)
|
Loss before income
taxes
|
(8,162)
|
|
(25,429)
|
Provision for income
taxes
|
—
|
|
—
|
Net loss
|
$
(8,162)
|
|
$
(25,429)
|
Other comprehensive
income
|
|
|
|
Foreign currency
translation adjustments
|
(318)
|
|
2
|
Comprehensive
loss
|
$
(8,480)
|
|
$
(25,427)
|
|
|
|
|
Weighted-average shares
outstanding, basic and diluted
|
13,004,071
|
|
10,515,777
|
|
|
|
|
Net income (loss) per
share, basic and diluted
|
$
(0.63)
|
|
$
(2.42)
|
|
|
|
|
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SOURCE Remark Holdings, Inc.