Remark Holdings Announces First Quarter 2024 Financial Results
Management Commentary
"The
"We look forward to beginning sales of our Remark AI computer vision solutions on Microsoft's
Fiscal Year 2023 Business Highlights
- Remark signed a five-year agreement with Microsoft which is expected to drive approximately
$240 million in AI business by 2029. The company's AI Video Analytics Platform will be sold and marketed in theMicrosoft Azure Marketplace . Remark will also utilize Microsoft's Azure Cloud and GPU Services to accelerate deployment of AI services and empower industry transformation. - On the heels of recent, well-publicized failures in Boeing's safety inspection processes, Remark released its AI-powered Aviation Safety Platform (ASP), which includes an engine inspection kit, towing anti-collision system, and a business intelligence reporter, to reduce the time required to complete aircraft engine inspections while simultaneously more accurately detecting potentially dangerous aircraft engine damage, to help reduce the risk of accidents in certain aviation operations, and to provide real-time data analysis.
- During its first quarter, the company was named as a supplier under a contract with the
Clark County School District . The contract, which was confirmed by the school district'sBoard of Trustees in April, is a one-year contract with nine one-year extensions worth approximately$5.0 million per year for a total of as much as$50.0 million . The company expects to begin recognizing revenue from such contract during its second quarter.
First Quarter 2024 Financial Results
- Revenue for the first quarter of fiscal year 2024 totaled
$0.4 million , reflecting a 50% decrease from$0.8 million during the same quarter in 2023.- The decrease in revenue is a result of the company's decision to downsize its staff in
China , which caused delays in project completion, leading to revenue from cash collected for a 2023 project for a new client that did not meet accrual basis criteria for revenue recognition.
- The decrease in revenue is a result of the company's decision to downsize its staff in
- Remark incurred an operating loss of
$3.7 million in the first quarter of 2024, compared to an operating loss of$3.0 million in the same period of 2023. In addition to the decrease in revenue causing an increase in operating loss, certain expenses related to business development increased by$0.6 million in during the first quarter of 2024, though they were partially offset by a$0.2 million decrease in franchise taxes and as well as by other small decreases that were not representative of significant business trends. In the first quarter of 2023, the company received a tax credit of approximately$0.5 million from theUK government which was recorded as an offset to expense, but no such credit was received during the first quarter of 2024. The company also experienced a$0.3 million decrease in payroll-related expenses during the first quarter of 2024 due to the reduction of its workforce inChina . - Remark reported a net loss of
$13.8 million , or$0.40 per basic and diluted share in the first quarter endedMarch 31, 2024 , compared to a net loss of$8.2 million , or$0.63 per basic and diluted share in the same quarter of 2023. In addition to the impact of the items affecting operating loss, net loss increased primarily as a result of a$5.6 million increase in finance cost related to the establishment of and remeasurement of Remark's obligations to issue its common stock pursuant to transactions related to certain convertible debentures and the company's equity line of credit. The increase in finance cost was partially offset by a decrease in interest expense of$0.6 million . - On
March 31, 2024 , the company's cash balance totaled$0.2 million , compared to a cash balance of$0.1 million onDecember 31, 2023 . Net cash used in operating activities was$3.4 million .
Conference Call Information
Management will hold a conference call this afternoon at
The live conference may be accessed via telephone or online webcast.
Date:
Time:
Toll-Free Number: 844.826.3033
International Number: 412.317.5185
Conference ID: 10189441
Online Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1671520&tp_key=03deeace35
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
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay ID: 10189441
About
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
Company Contacts
Vice President of Investor Relations
F.Tian@remarkholdings.com
(+1) 626-623-2000
(+65) 8715-8007
Condensed Consolidated Balance Sheets (dollars in thousands, except share and per share amounts) |
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(Unaudited) |
|
|
Assets |
|
|
|
Cash |
$ 239 |
|
$ 145 |
Trade accounts receivable, net |
1,155 |
|
1,287 |
Inventory, net |
742 |
|
750 |
Deferred cost of revenue |
6,178 |
|
6,644 |
Prepaid expense and other current assets |
840 |
|
614 |
Total current assets |
9,154 |
|
9,440 |
Property and equipment, net |
478 |
|
189 |
Operating lease assets |
432 |
|
517 |
Other long-term assets |
74 |
|
90 |
Total assets |
$ 10,138 |
|
$ 10,236 |
Liabilities |
|
|
|
Accounts payable |
$ 9,880 |
|
$ 9,348 |
Advances from related parties |
1,017 |
|
1,205 |
Obligations to issue common stock |
12,173 |
|
10,033 |
Accrued expense and other current liabilities (including |
12,235 |
|
11,921 |
Contract liability |
559 |
|
570 |
Notes payable (including a past due amount of |
16,475 |
|
16,463 |
Total current liabilities |
52,339 |
|
49,540 |
Operating lease liabilities, long-term |
235 |
|
286 |
Total liabilities |
52,574 |
|
49,826 |
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Stockholders' Deficit |
|
|
|
Preferred stock, |
— |
|
— |
Common stock, |
41 |
|
22 |
Additional paid-in-capital |
390,247 |
|
379,244 |
Accumulated other comprehensive loss |
(1,263) |
|
(1,186) |
Accumulated deficit |
(431,461) |
|
(417,670) |
Total stockholders' deficit |
(42,436) |
|
(39,590) |
Total liabilities and stockholders' deficit |
$ 10,138 |
|
$ 10,236 |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (dollars in thousands, except per share amounts) |
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Three Months Ended |
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|
2024 |
|
2023 |
Revenue |
$ 387 |
|
$ 826 |
Cost and expense |
|
|
|
Cost of revenue (excluding depreciation and amortization) |
350 |
|
455 |
Sales and marketing |
300 |
|
366 |
Technology and development |
346 |
|
169 |
General and administrative |
3,023 |
|
2,833 |
Depreciation and amortization |
64 |
|
46 |
Total cost and expense |
4,083 |
|
3,869 |
Operating loss |
(3,696) |
|
(3,043) |
Other income (expense) |
|
|
|
Interest expense |
(943) |
|
(1,544) |
Finance cost related to obligations to issue common stock |
(9,147) |
|
(3,576) |
Other gain, net |
(5) |
|
1 |
Total other expense, net |
(10,095) |
|
(5,119) |
Loss before income taxes |
(13,791) |
|
(8,162) |
Provision for income taxes |
— |
|
— |
Net loss |
$ (13,791) |
|
$ (8,162) |
Other comprehensive income |
|
|
|
Foreign currency translation adjustments |
(77) |
|
(318) |
Comprehensive loss |
$ (13,868) |
|
$ (8,480) |
|
|
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|
Weighted-average shares outstanding, basic and diluted |
34,173,686 |
|
13,004,071 |
|
|
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Net loss per share, basic and diluted |
$ (0.40) |
|
$ (0.63) |
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