LAS VEGAS, May 17, 2021 /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,
2021.
U.S. revenue increasing by over half a million dollars and revenue
from China increasing by more than
10 times
Management Commentary
"Our first quarter was highlighted by substantial increases in
revenue coming from the United
States and China, despite
each country's slow emergence from COVID-19 lockdowns that dampened
business in the first quarter of last year. Momentum from last
year's second half continued with first quarter U.S. revenue
increasing by over half a million dollars and revenue from
China increasing by more than 10
times compared to the first quarter of 2020," noted Kai-Shing Tao, Chairman and Chief Executive
Officer of Remark Holdings. "Demand for our AI solutions came from
schools, retail outlets, bank branches, and medical facilities and
we expect demand momentum, particularly in the United States, to carry forward throughout
2021. Additionally, during the quarter we saw the initial
implementation of our AI marketing program that we believe will be
a big catalyst for 2021."
First Quarter 2021 Business Highlights
- China Mobile continues to implement Remark's KanKan AI Platform
throughout their retail locations. The Smart Queueing System was
installed in more than 350 stores during the quarter. The company
expects to win several additional software service phases during
the year, adding to the initial scope and significantly growing the
addressable opportunity.
- Based on the successful launch of the company's Digital
Marketing Platform ("DMP") with Bank of China in the Sichuan province, several other large banks
began implementing the DMP during the first quarter, diversifying
the company's revenue mix, and providing large opportunities across
multiple banks. One large banking customer is deploying in Tibet,
and two other large banks have signed on to outfit over 200
branches in the coming months.
- During the first quarter, Smart Campus solutions were deployed
across more than two dozen campuses. Sales efforts and new
partnerships are targeting expansion of the Smart Campus solution
to several new provinces.
- A Smart Community data center project was completed for the
city of Chengdu, and forty
communities in the city of Bazhong began installing KanKan systems
during the first quarter of 2021.
- Remark AI's health security solutions expanded relationships
with hospitals and clinics and were deployed by the Springfield
Clinic, a major Midwest health clinic group based in Illinois, to enhance their customer experience
while simultaneously reducing costs and enhancing back office
operations with more than 100 rPads and several thermal kits across
their more than 30 locations. This allowed the Clinic to achieve an
estimated 10x return on investment by redeploying employee staff to
pursue higher value-added tasks. Springfield is currently exploring additional
AI productivity solutions with Remark.
- During the first quarter, Remark Entertainment was named the
exclusive marketing partner for SuperDraft, Inc.
(https://www.caesars.com/SuperDraft), the innovative online daily
fantasy sports platform. Remark is responsible for developing a
brand identity by managing and leading the digital and offline
marketing efforts on SuperDraft's behalf. The company is using its
predictive-modeling AI platform to expand into other markets and is
closing in on signing deals with two large mortgage companies,
other online gaming/casino operators, and live-streaming
services.
Fiscal First Quarter 2021 Financial Results
- Revenue for the fiscal first quarter of 2021 totaled
$4.4 million, up from $0.4 million during fiscal first quarter of
2020.
-
- First quarter 2021 revenue in China grew by $3.4
million to $3.7 million due to
ramped up execution of larger projects, the continued roll out of
bank branch conversions to smart branches, and the recognition of
revenue from ongoing projects with school districts.
- Revenue from the US contributed $0.7
million compared to $0.1
million, as the company delivered health security solutions
to a variety of businesses including the aforementioned Midwest
health clinic, and completed the initial phase of an AI marketing
program.
- Gross profit improved to $1.7
million in the first quarter of 2021 from $0.4 million in the first quarter of 2020,
commensurate with increased revenue. The overall gross profit
margin for the first quarter of 2021 was 37.5%.
- The company incurred an operating loss of $3.7 million in the first quarter of 2021
compared to an operating loss of $3.5
million in the comparable quarter of 2020. Increased
technology and development costs of $0.9
million, primarily associated with continuous improvement of
the company's biosafety products, were the primary reason for the
increased expense.
- Net loss totaled $5.5 million, or
$0.05 per diluted share in the first
quarter ended March 31, 2021,
compared to a net loss of $2.4
million, or $0.05 per diluted
share in the quarter ended March 31,
2020. The increase in the company's stock price between
December 31, 2020 and March 31, 2021 led to a $1.6 million increase in the liability associated
with certain outstanding warrants. In the first quarter of 2020,
the company recorded a $1.5 million
gain on the termination of a lease.
- At March 31, 2021, the cash and
cash equivalents balance totaled $0.9
million, compared to a cash position of $0.9 million at December
31, 2020. A short-term debt issuance of $4.8 million and stock issuances associated with
options exercises of $0.8 million was
offset by $5.5 million of cash used
to generally operate the business.
"First quarter revenue growth set a positive tone for 2021. Our
China business was strong and is
expected to get stronger as the year progresses with retail,
banking, school, smart community and environmental sustainability
opportunities growing. Our U.S. business is expanding in health
security, predictive analytics and retail, as seen with our
recently won deal to outfit Shryne Group's flagship Stiiizy
Cannabis retail location. Finally, we anticipate the closing of the
Sharecare merger with Falcon Acquisition will fund our balance
sheet while simultaneously supporting working capital needs to meet
our growth goals," 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.
Toll-Free Number: 888.394.8218
International Number: 323.701.0225
Conference ID: 5953927
Online Webcast: http://public.viavid.com/index.php?id=144799
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 May 22,
2021.
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay ID: 5953927
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, public safety and
workplace arenas. The company also owns and operates an e-commerce
digital media property focused on a luxury beach lifestyle. 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 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)
|
|
|
March 31,
2021
|
|
December 31,
2020
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Cash and cash
equivalents (includes VIE $335 and $278, respectively)
|
$
|
906
|
|
|
$
|
854
|
|
Trade accounts
receivable, net (includes VIE $7,825 and $4,850,
respectively)
|
7,953
|
|
|
5,027
|
|
Inventory, net
(includes VIE $57 and $112, respectively)
|
1,669
|
|
|
874
|
|
Prepaid expense and
other current assets (includes VIE $277 and $248,
respectively)
|
1,507
|
|
|
2,043
|
|
Total current
assets
|
12,035
|
|
|
8,798
|
|
Property and
equipment, net (includes VIE $20 and $43, respectively)
|
274
|
|
|
321
|
|
Operating lease assets
(includes VIE $222 and $281, respectively)
|
402
|
|
|
492
|
|
Investment in
unconsolidated affiliates
|
1,030
|
|
|
1,030
|
|
Other long-term assets
(includes VIE $57 and $68, respectively)
|
640
|
|
|
670
|
|
Total
assets
|
$
|
14,381
|
|
|
$
|
11,311
|
|
Liabilities and
Stockholders' Deficit
|
|
|
|
Accounts payable
(includes VIE $4,468 and $3,655, respectively)
|
$
|
9,016
|
|
|
$
|
8,589
|
|
Accrued expense and
other current liabilities (includes VIE $3,873 and $3,782,
respectively)
|
7,727
|
|
|
6,660
|
|
Contract liability
(includes VIE $169 and $147, respectively)
|
355
|
|
|
310
|
|
Notes payable, net of
unamortized discount and debt issuance cost
|
6,048
|
|
|
1,500
|
|
Total current
liabilities
|
23,146
|
|
|
17,059
|
|
Loans payable,
long-term
|
1,425
|
|
|
1,425
|
|
Operating lease
liabilities, long-term (includes VIE $51 and $79,
respectively)
|
145
|
|
|
194
|
|
Warrant
liability
|
3,335
|
|
|
1,725
|
|
Total
liabilities
|
28,051
|
|
|
20,403
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Preferred stock,$0.001
par value; 1,000,000 shares authorized; zero issued
|
—
|
|
|
—
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized; 99,916,941 and
99,505,041 shares issued and outstanding at March 31, 2021 and
December 31,
2020, respectively
|
100
|
|
|
100
|
|
Additional
paid-in-capital
|
352,387
|
|
|
351,546
|
|
Accumulated other
comprehensive income
|
(184)
|
|
|
(226)
|
|
Accumulated
deficit
|
(365,973)
|
|
|
(360,512)
|
|
Total stockholders'
deficit
|
(13,670)
|
|
|
(9,092)
|
|
Total liabilities and
stockholders' deficit
|
$
|
14,381
|
|
|
$
|
11,311
|
|
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
|
Consolidated
Statements of Operations and Comprehensive Loss
|
(dollars in
thousands, except per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Revenue
|
$
|
4,406
|
|
|
$
|
431
|
|
Cost and
expense
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
2,752
|
|
|
21
|
|
Sales and
marketing
|
1,001
|
|
|
416
|
|
Technology and
development
|
1,550
|
|
|
648
|
|
General and
administrative
|
2,697
|
|
|
2,740
|
|
Depreciation and
amortization
|
66
|
|
|
90
|
|
Total cost and
expense
|
8,066
|
|
|
3,915
|
|
Operating
loss
|
(3,660)
|
|
|
(3,484)
|
|
Other income
(expense)
|
|
|
|
Interest
expense
|
(235)
|
|
|
(461)
|
|
Other income,
net
|
1
|
|
|
—
|
|
Change in fair value
of warrant liability
|
(1,610)
|
|
|
57
|
|
Gain on lease
termination
|
—
|
|
|
1,538
|
|
Other income (loss),
net
|
43
|
|
|
(73)
|
|
Total other income
(expense), net
|
(1,801)
|
|
|
1,061
|
|
Net loss
|
$
|
(5,461)
|
|
|
$
|
(2,423)
|
|
Other comprehensive
loss
|
|
|
|
Foreign currency
translation adjustments
|
42
|
|
|
182
|
|
Comprehensive
loss
|
$
|
(5,419)
|
|
|
$
|
(2,241)
|
|
|
|
|
|
Weighted-average shares
outstanding, basic and diluted
|
99,759
|
|
|
53,775
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
$
|
(0.05)
|
|
|
$
|
(0.05)
|
|
|
|
|
|
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SOURCE Remark Holdings, Inc.