0001368365FALSE00013683652024-04-152024-04-15

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of report (Date of earliest event reported): April 15, 2024

remarkholdingslogo.jpg
Remark Holdings, Inc.

Delaware001-3372033-1135689
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
800 S. Commerce Street
Las Vegas, NV
89106
702-701-9514
(Address of principal executive offices)(Zip Code)(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None
Title of each classTrading SymbolName of each exchange on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ☐


Item 2.02    Results of Operations and Financial Condition.

On April 15, 2024, we issued a press release announcing our financial results for the year ended December 31, 2023. A copy of such release is furnished herewith as Exhibit 99.1.

The information hereunder shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01     Financial Statements and Exhibits.

(d)    Exhibits




Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    
Remark Holdings, Inc.
Date:April 15, 2024By:/s/ Kai-Shing Tao
Name:Kai-Shing Tao
Title:Chief Executive Officer



EXHIBIT 99.1

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Remark Holdings Announces Fiscal Year 2023 Financial Results

LAS VEGAS, NV - April 15, 2024 - Remark Holdings, Inc. (OTCQX: MARK), a diversified global technology company with leading artificial intelligence (“AI”) powered computer vision solutions, today announced its financial results for the fiscal year ended December 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
“We spent much time and effort during 2023 on building a global sales network to help our Remark AI platform to more rapidly expand. We previously relied on our staff to sell directly to customers, but with partnerships like ours with Microsoft—and soon to be with others—we expect our sales will grow rapidly,” said Kai-Shing Tao, Chairman and Chief Executive Officer of Remark Holdings. “We have spent the last month planning and will soon launch our go-to market with Microsoft, which excites us for what is to come. We are finding significant interest in our respective security, construction, and infrastructure AI solutions.”
Mr. Tao continued, “We also recently began our first proof of concept with one of the largest construction developments in the world, which is located in Saudi Arabia. We expect this will lead to many other significant opportunities in the region given our experience in deploying our smart construction platform.”
“Finally, we expect that our recent success with the Clark County School District will, given that such school district is one of the top five school districts in the U.S., lead to our ability to expand our solutions into many other school districts throughout the U.S.,” concluded Mr. Tao.

Fiscal Year 2023 Business Highlights
•The company’s Remark AI subsidiary, with its AI-powered Smart Safety Platform (“SSP”), won the first phase of a rollout by the Rio De Janeiro police department to equip their existing police car fleet with license plate and facial recognition capabilities. The value of the contract is $6.0 million, which Remark will recognize as revenue over a 30-month period once deployment can begin.

•Remark AI has joined the NVIDIA Metropolis program to increase the sale and delivery of Remark AI’s smart city AI solutions. The program nurtures a rich ecosystem and offers powerful developer tools to supercharge vision AI applications that are designed to make the world’s most important spaces and operations safer and more efficient. Remark also joined NVIDIA as part of PNY Technologies’s booth at the Smart City Expo World Congress in Barcelona held in November 2023.

•During 2023, Remark AI released its natural-language smart chat agent to investigate, file, and fulfill real-time 311 service requests, alleviating the backlog that arises from the lack of human agent support during busy and critical times.

•Remark AI also released version 1.0 of its Aero-engine Inspection Kit (the “AIK”, which was originally called the Airline Engine Safety Inspection System). The AIK is intended for use by airlines, airline maintenance teams, engine manufacturers, airplane manufacturers, aircraft leasing companies, insurance companies, and regulators, among others. In early 2024, the AIK became a part of Remark AI’s aviation


suite of products known as the Aviation Safety Platform, which uses a large multimodal model to provide several functionalities included in three essential components: the AIK; an aircraft towing anti-collision system, and a large multimodal model for business intelligence and reporting.

•The company’s business was affected during 2023 initially by a slow economic recovery in China and then by rising political tensions between the U.S. and China, which led the company to reduce staffing levels in China to save on operating costs until political tensions ease and the business environment becomes more conducive for American companies in the AI space.


Fiscal Year 2023 Financial Results
•Revenue for fiscal year 2023 totaled $4.4 million, reflecting a 62% decrease from $11.7 million during fiscal year 2022.

◦Revenue contributed by Remark’s U.S. businesses remained unchanged at $0.3 million during the fiscal year 2023 when compared to the fiscal year 2022.

◦Revenue from China decreased to $4.1 million in fiscal year 2023 from $11.4 million in fiscal year 2022, primarily due to project completions slowing significantly in China, first as business and economic recovery efforts that began after China lifted most of its onerous COVID-19 related restrictions at the end of 2022 continued to be sluggish, and then as increased political tensions between the U.S. and China continued to make it more difficult than expected for us to complete projects.

◦We completed certain projects in China during the year ended December 31, 2023 worth approximately $1.4 million, but the agreement did not meet the criteria for revenue recognition on an accrual basis. We will recognize the revenue from such agreement as we receive the cash, but we have not yet recorded a material amount from this agreement as revenue.

•The company’s operating loss of $17.2 million during the fiscal year 2023 reflected a decrease of $4.1 million from an operating loss of $21.3 million during the fiscal year 2023. In addition to recording less revenue during 2023, Remark’s cost of revenue decreased $8.0 million in conjunction with the decrease in project completions in China and because the prior year’s cost of revenue included $1.3 million of inventory obsolescence that did not recur materially during 2023. General and administrative expense decreased by $5.0 million as bad debt expense, legal and professional fees, certain business development costs and stock-based compensation all declined during 2023. Partially offsetting the decreases in cost of revenue and general and administrative expense were increases of $1.3 million and $0.4 million, respectively, in asset impairments and sales and marketing expense.

•Remark reported a net loss of $29.1 million, or $1.74 per diluted share, during the fiscal year ended December 31, 2023, compared to a net loss of $55.5 million, or $5.22 per diluted share, during the fiscal year ended December 31, 2022. The company’s net loss decreased primarily because the company reported a $26.4 million loss on investment during the year ended December 31, 2022, whereas no investment gain or loss was reported in 2023. The decrease in Remark’s operating loss described above was offset by the net effect of a $1.8 million decrease in interest expense, which resulted from less debt principal outstanding and a decrease in debt fee and debt discount amortization, and a $6.3 million increase in finance cost, which increased due to the company’s issuance of additional convertible debentures and draws on an equity line of credit pursuant to agreements with Ionic Ventures, LLC.

•On December 31, 2023, the cash balance totaled $0.1 million, compared to a cash balance of less than $0.1 million on December 31, 2022. Net cash used in operating activities was $10.5 million during fiscal year 2023.



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: 844.826.3033
International Number: 412.317.5185
Conference ID: 10186735
Online Webcast:
https://viavid.webcasts.com/starthere.jsp?ei=1658690&tp_key=0f2b4324ec

Participants are advised to log in for the live webcast 10 minutes prior to the scheduled start time.

A call replay will be available after 7:30 p.m. Eastern time on the same day through April 29, 2024, at 11:59 p.m. Eastern time.
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay PIN: 10186735

About Remark Holdings, Inc.
Remark Holdings, Inc. (OTCQX: MARK) is the AI-powered analytics platform that brings valuable insights to the video feeds provided by current cameras and computer vision solutions through its integrated suite of AI tools that help organizations understand their customer behavior and demographics while providing real-time alerts to predetermined inspection and security parameters. Remark’s international team of sector-experienced professionals has created award-winning GDPR-compliant and CCPA-compliant video analytics solutions that service the government agencies, hospitality, public safety, retail, and transportation sectors. 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 our 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)


December 31,
20232022
Assets
Cash$145 $52 
Trade accounts receivable, net1,287 3,091 
Inventory, net750 308 
Deferred cost of revenue6,644 7,463 
Prepaid expense and other current assets614 1,374 
Total current assets9,440 12,288 
Property and equipment, net189 1,699 
Operating lease assets517 180 
Other long-term assets90 269 
Total assets$10,236 $14,436 
Liabilities
Accounts payable$9,348 $9,602 
Advances from related parties1,205 1,174 
Obligations to issue common stock10,033 1,892 
Accrued expense and other current liabilities (including $495 of delinquent payroll taxes)11,921 7,222 
Contract liability570 308 
Notes payable (past due)16,463 14,607 
Total current liabilities49,540 34,805 
Operating lease liabilities, long-term286 56 
Total liabilities49,826 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; 22,038,855 and 11,539,564 shares issued and outstanding at December 31, 2023 and 2022, respectively
22 12 
Additional paid-in-capital379,244 368,945 
Accumulated other comprehensive loss(1,186)(859)
Accumulated deficit(417,670)(388,523)
Total stockholders’ deficit(39,590)(20,425)
Total liabilities and stockholders’ deficit$10,236 $14,436 


REMARK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(dollars in thousands, except per share amounts)


Year Ended December 31,
20232022
Revenue, including amounts from China Business Partner$4,402 $11,666 
Cost and expense
Cost of revenue (excluding depreciation and amortization)3,323 11,331 
Sales and marketing1
1,408 971 
Technology and development1
1,893 2,101 
General and administrative1
13,374 18,399 
Depreciation and amortization285 166 
Impairments1,280 — 
Total cost and expense21,563 32,968 
Operating loss(17,161)(21,302)
Other expense
Interest expense(4,294)(6,073)
Finance cost related to obligations to issue common stock(7,672)(1,422)
Loss on investment— (26,356)
Other loss, net(20)(339)
Total other expense, net(11,986)(34,190)
Loss from before income taxes(29,147)(55,492)
Benefit from income taxes— 9 
Net loss$(29,147)$(55,483)
Other comprehensive loss
Foreign currency translation adjustments(327)(589)
Comprehensive loss$(29,474)$(56,072)
Weighted-average shares outstanding, basic and diluted16,741,677 10,630,771 
Net loss per share, basic and diluted$(1.74)$(5.22)
1 Includes share-based compensation as follows:
Sales and marketing$3 $3 
Technology and development(3)(267)
General and administrative157 1,961 

v3.24.1.u1
Cover Page
Apr. 15, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Apr. 15, 2024
Entity Registrant Name Remark Holdings, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-33720
Entity Tax Identification Number 33-1135689
Entity Address, Address Line One 800 S. Commerce Street
Entity Address, City or Town Las Vegas
Entity Address, State or Province NV
Entity Address, Postal Zip Code 89106
City Area Code 702
Local Phone Number 701-9514
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security
Trading Symbol
Security Exchange Name
Entity Emerging Growth Company false
Entity Central Index Key 0001368365
Amendment Flag false
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