LAS VEGAS, Aug. 20, 2020
/PRNewswire/ -- Remark Holdings, Inc. (NASDAQ: MARK), a
diversified global technology company with leading artificial
intelligence ("AI") solutions and digital media properties, today
responded to recent inaccurate reports regarding the company's
ownership in Sharecare and other issues.
Management Commentary
As we evaluate what further actions we will take, we wanted to
take this opportunity to respond to Wolfpack Research's misleading
statements and outdated information from last week.
- Wolfpack Research's key allegation is that we do not actually
own shares of Sharecare as we report in our filings with the
Securities and Exchange Commission. Such assertion is absolutely
false. As of June 30, 2020, we owned
approximately 4.5% of the issued shares of Sharecare and our CEO,
Kai-Shing Tao, occupies a seat on
Sharecare's Board of Directors. Additionally, as of this writing,
the litigation that we previously reported in our SEC filings that
could have potentially resulted in our loss of control over the
investment in Sharecare has been resolved, as we recently paid in
full all amounts owed in satisfaction of the judgment entered into
against us during the litigation.
Remark never ceased to own its approximately 4.5% Sharecare stake,
as the ability to settle the legal matter without loss of control
of the Sharecare investment was always under our control. The
payment in full of the underlying judgment against Remark means
that there is no longer any basis for potential seizure of the
Sharecare investment owned by Remark.
- Wolfpack Research alleges that we must not have control of our
China subsidiaries that we report,
for accounting purposes, as variable interest entities (VIEs)
simply because we did not publicly disclose the contents of the
contracts that give us control over the VIEs; the allegation is
simply wrong. We have standard VIE contracts in place, including
related loan agreements, that were drawn up and executed several
years ago with the assistance of Arnold & Porter, an
internationally well regarded law firm. VIE control may not be the
same as direct equity ownership, but it is a very common framework
with Chinese companies controlled by foreign entities. In fact,
Alibaba, Tencent, Netease, JD.com and
Baidu are some of the many examples of major companies who have
structured their China business
using VIEs.
- Though we initially sourced cameras and other components from
various third parties, including HIKvision (whose cameras are still
readily available on websites like Amazon.com), we never shared any
of our AI technology with them nor did HIKvision at any time have
access to our technology.
We are now an original design manufacturer for our thermal cameras
and thermal pads. We design the cameras and pads and have hired a
contract manufacturer to produce the products. The manufacturers
build according to our design and specifications, which is why the
products are now Remark-branded products. Remark has always
maintained control of the technology and intellectual property.
- Regarding our investment in AIO, we originally planned to
invest $1 million in the company, but
after funding $500,000, we determined
that we would need to work with AIO to improve their results before
we further funded the company. One of our China subsidiaries subscribed for AIO's 20%
equity interests at a post-money valuation of $5 million, and paid in $500,000. In connection with that, AIO increased
its registered capital from one million Chinese Yuan to 1.25
million Chinese Yuan, and the difference between $500,000 and 250,000 Chinese Yuan was deposited
to the capital surplus account which is not reflected as AIO's
registered capital. Such transaction is very typical. The comment
from Wolfpack regarding our China
subsidiary's capital contribution based on their purported review
of the SAIC filing is flawed and seems intended to mislead or
confuse Remark's investors.
- Finally, they allege working capital and cash issues, each of
which we address in every one of our SEC filings over the past few
years, but they inaccurately calculate working capital and they do
not provide any source material, other than referring to obtaining
tax documents in China, that would
allow us refute their inaccurate assertion that we do not
consolidate our Chinese subsidiaries under GAAP. We are a public
company with well-regarded auditors who regularly review and audit
our financials.
- As of June 30, 2020, our cash
balance exceeded $10 million and our
debt had been paid down substantially.
We are proud to be helping our customers safely reopen their
businesses and schools as they try to comply with the latest safety
standards.
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
e-commerce 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
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SOURCE Remark Holdings, Inc.