LAS VEGAS, July 6, 2020 /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 first
quarter ended March 31, 2020.
Management Commentary
"The first quarter of 2020 was one of renewed focus for Remark
Holdings as our development team localized our award winning
AI-solutions for the U.S. market, and improved our educational
thermal scanning product in response to the ongoing COVID-19
pandemic. Our product line of high-quality, highly-effective
thermal imaging solutions leverages our innovative software to
provide customers with the ability to scan crowds and areas of high
foot traffic for indications that certain persons may require
secondary screening," noted Kai-Shing
Tao, Chairman and Chief Executive Officer of Remark
Holdings. "We spent much of the quarter on product development and
building out our U.S. sales and support team, recently showing
initial success with casinos, entertainment complexes, sports
venues, restaurants, hospitals and medical centers as well as other
industries."
First Quarter 2020 Business Development Highlights
- Repurposed our AI-based product offerings for the United States and European markets. KanKan
AI improved its already-robust Smart Monitor technology by adding
thermal detection, including body temperature detection, and
improved its facial recognition capability to include compliance
with public sanitary regulations such as the wearing of protective
masks. This builds upon the successful technology platform that has
already been deployed among students within the Hangzhou school systems for early flu
detection.
- Announced that following the successful openings of CP Lotus's
Xuzhou University Road store and the Junsheng store in the
Jiangsu Province, Remark's KanKan
was once again chosen by CP Lotus to transform one of their
traditional supermarkets into a "smart" store by applying their
award winning AI technologies in facial recognition, object
recognition, and behavior recognition.
First Quarter 2020 Financial Results
- Revenue for the first quarter of 2020 was $0.4 million, down from $1.2 million during the first quarter of 2019.
The company's business was adversely impacted by several factors
including January's Chinese New Year celebrations, the trade war
between the U.S. and China, the
COVID-19-related quarantines and working capital constraints, which
factors combined to negatively affect revenue by preventing
personnel in China from continuing
project roll outs and by delaying project testing and customization
work on larger projects. The result was a slight decrease in the
Company's Technology & Data Intelligence business segment
instead of expected revenue growth.
Additionally, Advertising and Other revenue decreased by nearly
$0.7 million due to certain Remark
Entertainment contracts that were not renewed as the company scaled
back such business, and due to a decline in e-commerce revenue
resulting from the combined effects of the COVID-19 pandemic
changing consumer behavior and a decision by the company to sell
certain inventory at lower prices.
- Total cost and expense for the first quarter of 2020 was
$3.9 million, a decrease from the
$7.1 million reported in the same
period of 2019. The decrease is primarily attributable to a
$1.6 million decline in the cost of
revenue resulting from fewer project completions, while a
$1.0 million decrease in payroll and
related expense as well as in stock-based compensation expense as
headcount declined also contributed. The fewer project completions
and headcount declines were heavily influenced by the trade war
between the U.S. and China, the
COVID-19 pandemic and working capital constraints.
- Operating loss declined to $3.5
million in the first quarter of 2020 from $5.9 million in the first quarter of 2019
commensurate with the cost and expense declines.
- Loss from continuing operations totaled $2.4 million, or $0.05 per diluted share, in the first quarter
ended March 31, 2020, compared to a
net loss from continuing operations of $7.7
million, or $0.20 per diluted
share in the first quarter ended March 31,
2019.
- At March 31, 2020, the cash and
cash equivalents balance was $1.6
million, compared to a cash position of $0.3 million at December
31, 2019. Cash increased primarily due to proceeds from
common stock issuances, which proceeds offset operating losses, as
well as from the timing of payments related to elements of working
capital.
"We remain extremely optimistic about our current business
prospects as we have been installing our solutions throughout the
U.S. for a diverse group of customers. We are pleased to be helping
the country safely get back to normal," 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 these
financial results and provide an update on recent business
developments. A question and answer session will follow
management's presentation.
Toll-Free Number: 866.548.4713
International Number: 323.794.2093
Conference ID: 1160760
Participant Link: http://public.viavid.com/index.php?id=140492
Please call the conference telephone number 10 minutes prior to
the start time. An operator will register your name and
organization. The conference call will be broadcast simultaneously
and available for replay via the investor section of the company's
website here. A replay of the call will be available after
7:30 pm Eastern time on the same day
through July 11, 2020.
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay ID: 1160760
About Remark Holdings, Inc.
Remark Holdings, Inc. (NASDAQ: MARK) delivers an integrated
suite of AI solutions that enable businesses and organizations to
solve problems, reduce risk and deliver positive outcomes. The
company's easy-to-install AI products are being rolled out in a
wide range of applications within the retail, financial, public
safety and workplace arenas. The company also owns and operates
digital media properties that deliver relevant, dynamic content and
ecommerce solutions. The company is headquartered in Las Vegas, Nevada, with additional operations
in Los Angeles, California and in
Beijing, Shanghai, Chengdu and Hangzhou, China. 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 Contact
E. Brian Harvey, Director of
Capital Markets and Investor Relations
Remark Holdings, Inc.
ebharvey@remarkholdings.com
702-701-9514
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(dollars in
thousands, except share and per share amounts)
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,617
|
|
|
$
|
272
|
|
Trade accounts
receivable, net
|
1,540
|
|
|
1,964
|
|
Receivable from
related parties
|
531
|
|
|
—
|
|
Prepaid expense and
other current assets
|
4,617
|
|
|
4,623
|
|
Total current
assets
|
8,305
|
|
|
6,859
|
|
Property and
equipment, net
|
180
|
|
|
341
|
|
Operating lease
assets
|
314
|
|
|
4,359
|
|
Investment in
unconsolidated affiliates
|
1,934
|
|
|
1,935
|
|
Intangibles,
net
|
490
|
|
|
509
|
|
Other long-term
assets
|
773
|
|
|
824
|
|
Total
assets
|
$
|
11,996
|
|
|
$
|
14,827
|
|
Liabilities and
Stockholders' Deficit
|
|
|
|
Accounts
payable
|
$
|
8,525
|
|
|
$
|
8,126
|
|
Accrued expense and
other current liabilities
|
13,307
|
|
|
14,326
|
|
Contract
liability
|
367
|
|
|
313
|
|
Note
payable
|
3,000
|
|
|
3,000
|
|
Loans payable,
current, net of unamortized discount and debt issuance
cost
|
11,931
|
|
|
12,025
|
|
Total current
liabilities
|
37,130
|
|
|
37,790
|
|
Operating lease
liabilities, long-term
|
79
|
|
|
4,650
|
|
Warrant
liability
|
58
|
|
|
115
|
|
Total
liabilities
|
37,267
|
|
|
42,555
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Preferred stock,
$0.001 par value; 1,000,000 shares authorized; none
issued
|
—
|
|
|
—
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized; 66,133,888 and 51,055,159
shares issued and outstanding at March 31, 2020 and December 31,
2019, respectively
|
66
|
|
|
51
|
|
Additional
paid-in-capital
|
323,958
|
|
|
319,275
|
|
Accumulated other
comprehensive income
|
(45)
|
|
|
(227)
|
|
Accumulated
deficit
|
(349,250)
|
|
|
(346,827)
|
|
Total stockholders'
deficit
|
(25,271)
|
|
|
(27,728)
|
|
Total liabilities and
stockholders' deficit
|
$
|
11,996
|
|
|
$
|
14,827
|
|
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,
|
|
2020
|
|
2019
|
Revenue
|
$
|
431
|
|
|
$
|
1,209
|
|
Cost and
expense
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
21
|
|
|
1,593
|
|
Sales and
marketing
|
416
|
|
|
859
|
|
Technology and
development
|
648
|
|
|
1,304
|
|
General and
administrative
|
2,740
|
|
|
2,977
|
|
Depreciation and
amortization
|
90
|
|
|
325
|
|
Other operating
expense
|
—
|
|
|
6
|
|
Total cost and
expense
|
3,915
|
|
|
7,064
|
|
Operating
loss
|
(3,484)
|
|
|
(5,855)
|
|
Other income
(expense)
|
|
|
|
Interest
expense
|
(461)
|
|
|
(387)
|
|
Other income
(expense), net
|
—
|
|
|
(45)
|
|
Change in fair value
of warrant liability
|
57
|
|
|
(1,416)
|
|
Gain on lease
termination
|
1,538
|
|
|
—
|
|
Other loss,
net
|
(73)
|
|
|
(26)
|
|
Total other income
(expense), net
|
1,061
|
|
|
(1,874)
|
|
Loss from continuing
operations before income taxes
|
(2,423)
|
|
|
(7,729)
|
|
Benefit from income
taxes
|
—
|
|
|
—
|
|
Loss from continuing
operations
|
$
|
(2,423)
|
|
|
$
|
(7,729)
|
|
Loss from discontinued
operations, net of tax (Note 17)
|
—
|
|
|
(1,123)
|
|
Net loss
|
$
|
(2,423)
|
|
|
$
|
(8,852)
|
|
Other comprehensive
income (loss)
|
|
|
|
Foreign currency
translation adjustments
|
182
|
|
|
(94)
|
|
Comprehensive
loss
|
$
|
(2,241)
|
|
|
$
|
(8,946)
|
|
|
|
|
|
Weighted-average
shares outstanding, basic and diluted
|
53,775
|
|
|
39,258
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
|
|
|
Continuing
operations
|
$
|
(0.05)
|
|
|
$
|
(0.20)
|
|
Discontinued
operations
|
—
|
|
|
(0.03)
|
|
Consolidated
|
$
|
(0.05)
|
|
|
$
|
(0.23)
|
|
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SOURCE Remark Holdings, Inc.