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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Remark Holdings Inc | NASDAQ:MARK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.272 | 0.27 | 0.29 | 0 | 01:00:00 |
|
Delaware
|
|
33-1135689
|
|
|
State of Incorporation
|
|
IRS Employer Identification Number
|
|
|
|
|
|
|
|
3960 Howard Hughes Parkway, Suite 900
Las Vegas, NV 89169
|
|
702-701-9514
|
|
|
Address, including zip code, of principal executive offices
|
|
Registrant’s telephone number, including area code
|
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☑
|
|
|
|
Emerging growth company
|
☐
|
PART I
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
15,970
|
|
|
$
|
6,893
|
|
Restricted cash
|
11,670
|
|
|
9,405
|
|
||
Trade accounts receivable
|
1,050
|
|
|
1,372
|
|
||
Prepaid expense and other current assets
|
4,828
|
|
|
3,323
|
|
||
Notes receivable, current
|
190
|
|
|
181
|
|
||
Assets held for sale
|
404
|
|
|
—
|
|
||
Total current assets
|
34,112
|
|
|
21,174
|
|
||
Restricted cash
|
—
|
|
|
2,250
|
|
||
Notes receivable
|
—
|
|
|
190
|
|
||
Property and equipment, net
|
14,036
|
|
|
15,531
|
|
||
Investment in unconsolidated affiliate
|
1,030
|
|
|
1,030
|
|
||
Intangibles, net
|
31,135
|
|
|
37,406
|
|
||
Goodwill
|
28,889
|
|
|
26,763
|
|
||
Other long-term assets
|
544
|
|
|
1,355
|
|
||
Total assets
|
$
|
109,746
|
|
|
$
|
105,699
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Accounts payable
|
$
|
20,096
|
|
|
$
|
16,546
|
|
Accrued expense and other current liabilities
|
14,810
|
|
|
13,965
|
|
||
Deferred merchant booking
|
9,990
|
|
|
6,991
|
|
||
Deferred revenue
|
6,531
|
|
|
4,072
|
|
||
Note payable
|
3,000
|
|
|
—
|
|
||
Current maturities of long-term debt, net of debt issuance cost
|
37,896
|
|
|
100
|
|
||
Capital lease obligations
|
—
|
|
|
179
|
|
||
Total current liabilities
|
92,323
|
|
|
41,853
|
|
||
Long-term debt, less current portion and net of debt issuance cost
|
—
|
|
|
37,825
|
|
||
Warrant liability
|
22,679
|
|
|
25,030
|
|
||
Other liabilities
|
4,166
|
|
|
3,591
|
|
||
Total liabilities
|
119,168
|
|
|
108,299
|
|
||
|
|
|
|
||||
Commitments and contingencies (
Note 12
)
|
|
|
|
|
|
||
|
|
|
|
||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 100,000,000 shares authorized; 25,301,842 and 22,232,004 shares issued and outstanding; each at September 30, 2017 and December 31, 2016, respectively
|
25
|
|
|
22
|
|
||
Additional paid-in-capital
|
201,245
|
|
|
190,507
|
|
||
Accumulated other comprehensive loss
|
4
|
|
|
(16
|
)
|
||
Accumulated deficit
|
(210,696
|
)
|
|
(193,113
|
)
|
||
Total stockholders’ equity (deficit)
|
(9,422
|
)
|
|
(2,600
|
)
|
||
Total liabilities and stockholders’ equity
|
$
|
109,746
|
|
|
$
|
105,699
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue, net
|
$
|
19,449
|
|
|
$
|
15,142
|
|
|
$
|
52,004
|
|
|
$
|
44,371
|
|
Cost and expense
|
|
|
|
|
|
|
|
||||||||
Cost of revenue (excluding depreciation and amortization)
|
5,641
|
|
|
2,864
|
|
|
12,270
|
|
|
7,837
|
|
||||
Sales and marketing
|
6,326
|
|
|
4,887
|
|
|
17,975
|
|
|
15,349
|
|
||||
Technology and development
|
865
|
|
|
1,066
|
|
|
2,657
|
|
|
1,904
|
|
||||
General and administrative
|
9,971
|
|
|
7,921
|
|
|
26,656
|
|
|
24,251
|
|
||||
Depreciation, amortization and impairments
|
2,510
|
|
|
2,525
|
|
|
8,265
|
|
|
7,401
|
|
||||
Other operating expense
|
66
|
|
|
77
|
|
|
168
|
|
|
506
|
|
||||
Total cost and expense
|
25,379
|
|
|
19,340
|
|
|
67,991
|
|
|
57,248
|
|
||||
Operating loss
|
(5,930
|
)
|
|
(4,198
|
)
|
|
(15,987
|
)
|
|
(12,877
|
)
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(1,080
|
)
|
|
(1,224
|
)
|
|
(3,279
|
)
|
|
(3,649
|
)
|
||||
Other income (loss), net
|
—
|
|
|
(1
|
)
|
|
20
|
|
|
29
|
|
||||
Loss on extinguishment of debt
|
—
|
|
|
(9,157
|
)
|
|
—
|
|
|
(9,157
|
)
|
||||
Change in fair value of warrant liability
|
(5,978
|
)
|
|
(647
|
)
|
|
2,351
|
|
|
2,691
|
|
||||
Other loss
|
(33
|
)
|
|
(33
|
)
|
|
(85
|
)
|
|
(104
|
)
|
||||
Total other expense, net
|
(7,091
|
)
|
|
(11,062
|
)
|
|
(993
|
)
|
|
(10,190
|
)
|
||||
Loss before income taxes
|
(13,021
|
)
|
|
(15,260
|
)
|
|
(16,980
|
)
|
|
(23,067
|
)
|
||||
Provision for income taxes
|
(229
|
)
|
|
—
|
|
|
(603
|
)
|
|
—
|
|
||||
Net loss
|
$
|
(13,250
|
)
|
|
$
|
(15,260
|
)
|
|
$
|
(17,583
|
)
|
|
$
|
(23,067
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding, basic and diluted
|
22,811
|
|
|
20,359
|
|
|
22,744
|
|
|
20,104
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share, basic and diluted
|
$
|
(0.58
|
)
|
|
$
|
(0.75
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
(1.15
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Net cash provided by (used in) operating activities
|
$
|
616
|
|
|
$
|
(1,950
|
)
|
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, equipment and software
|
(2,631
|
)
|
|
(2,465
|
)
|
||
Business acquisitions, net of cash received
|
—
|
|
|
(7,330
|
)
|
||
Other asset acquisitions
|
(29
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(2,660
|
)
|
|
(9,795
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock, net
|
8,315
|
|
|
4,368
|
|
||
Proceeds from debt issuance
|
3,000
|
|
|
7,597
|
|
||
Payment of debt issuance cost
|
—
|
|
|
(163
|
)
|
||
Payments of capital lease obligations
|
(179
|
)
|
|
(182
|
)
|
||
Net cash provided by financing activities
|
11,136
|
|
|
11,620
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
9,092
|
|
|
(125
|
)
|
||
Cash, cash equivalents and restricted cash:
|
|
|
|
||||
Beginning of period
|
18,548
|
|
|
17,088
|
|
||
End of period
|
$
|
27,640
|
|
|
$
|
16,963
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
3,031
|
|
|
$
|
2,661
|
|
|
|
|
|
||||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
||||
Warrants issued in business acquisition transactions
|
$
|
—
|
|
|
$
|
7,993
|
|
Issuance of common stock upon conversion of debt instruments
|
$
|
121
|
|
|
$
|
—
|
|
•
|
monetize existing assets
|
•
|
work with our creditors to modify existing arrangements or refinance our debt
|
•
|
obtain additional capital through equity issuances, including but not limited to equity issuances to Aspire Capital under its existing purchase commitment (which equity issuances may dilute existing stockholders)
|
|
Preliminary Purchase Price Allocation
|
|
|
|
Final Purchase Price Allocation
|
||||||
|
September 30, 2016
|
|
Adjustments
|
|
September 30, 2017
|
||||||
Cash and cash equivalents
|
$
|
70
|
|
|
$
|
(10
|
)
|
A
|
$
|
60
|
|
Accounts receivable
|
365
|
|
|
(42
|
)
|
B
|
323
|
|
|||
Other current assets
|
17
|
|
|
—
|
|
|
17
|
|
|||
Total current assets
|
$
|
452
|
|
|
$
|
(52
|
)
|
|
$
|
400
|
|
Intangibles
|
9,206
|
|
|
(1,772
|
)
|
C
|
7,434
|
|
|||
Total identifiable assets acquired
|
$
|
9,658
|
|
|
$
|
(1,824
|
)
|
|
$
|
7,834
|
|
Accounts payable
|
378
|
|
|
65
|
|
D
|
443
|
|
|||
Taxes payable
|
—
|
|
|
298
|
|
E
|
298
|
|
|||
Deferred revenue
|
145
|
|
|
—
|
|
|
145
|
|
|||
Other current liabilities
|
12
|
|
|
94
|
|
F
|
106
|
|
|||
Net identifiable assets acquired
|
$
|
9,123
|
|
|
$
|
(2,281
|
)
|
|
$
|
6,842
|
|
Goodwill
|
6,270
|
|
|
2,281
|
|
|
8,551
|
|
|||
Total purchase consideration
|
$
|
15,393
|
|
|
$
|
—
|
|
|
$
|
15,393
|
|
A.
|
a certain amount of cash was owed to another party as of the acquisition date and was not part of assets acquired,
|
B.
|
certain amounts were not valid receivables as of the acquisition date,
|
C.
|
the realizable value of certain intangible assets should be changed,
|
D.
|
additional amounts were owed to several vendors as of the acquisition date,
|
E.
|
a tax liability owed to the China taxing authorities existed as of the acquisition date, and
|
F.
|
penalties were owed as of the acquisition date in relation to a lawsuit settled prior to the acquisition date for which all other amounts had been accrued or paid prior to the acquisition date.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
|
VDC
|
|
CBG
|
|
VDC
|
|
CBG
|
||||
Financing Warrants
|
|
|
|
|
|
|
|
||||
Expected volatility
|
50.00
|
%
|
|
50.00
|
%
|
|
50.00
|
%
|
|
50.00
|
%
|
Risk-free interest rate
|
1.62
|
%
|
|
1.62
|
%
|
|
1.64
|
%
|
|
1.64
|
%
|
Expected remaining term (years)
|
2.98
|
|
|
2.98
|
|
|
3.73
|
|
|
3.73
|
|
Acquisition Warrants
|
|
|
|
|
|
|
|
||||
Expected volatility
|
50.00
|
%
|
|
50.00
|
%
|
|
50.00
|
%
|
|
50.00
|
%
|
Risk-free interest rate
|
1.62
|
%
|
|
2.04
|
%
|
|
1.64
|
%
|
|
2.21
|
%
|
Expected remaining term (years)
|
2.98
|
|
|
5.97
|
|
|
3.73
|
|
|
6.72
|
|
Change in volatility
|
Increase
|
|
Decrease
|
||||
CBG Financing Warrants
|
$
|
375
|
|
|
$
|
435
|
|
VDC Financing Warrants
|
390
|
|
|
360
|
|
||
CBG Acquisition Warrants
|
980
|
|
|
980
|
|
||
VDC Acquisition Warrants
|
515
|
|
|
600
|
|
||
|
|
|
|
||||
Change in stock price
|
|
|
|
||||
CBG Financing Warrants
|
$
|
290
|
|
|
$
|
320
|
|
VDC Financing Warrants
|
240
|
|
|
180
|
|
||
CBG Acquisition Warrants
|
460
|
|
|
460
|
|
||
VDC Acquisition Warrants
|
260
|
|
|
260
|
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
||||
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
25,030
|
|
|
$
|
19,195
|
|
New warrant issuances
|
—
|
|
|
11,625
|
|
||
Increase (decrease) in fair value
|
(2,351
|
)
|
|
(5,790
|
)
|
||
Balance at end of period
|
$
|
22,679
|
|
|
$
|
25,030
|
|
|
|
|
|
Balance at beginning of period
|
$
|
2,860
|
|
Change in fair value of contingent consideration
|
50
|
|
|
Balance at end of period
|
$
|
2,910
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Cash and cash equivalents
|
$
|
15,970
|
|
|
$
|
6,893
|
|
Restricted cash reported in current assets
|
11,670
|
|
|
9,405
|
|
||
Restricted cash reported in long-term assets
|
—
|
|
|
2,250
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
27,640
|
|
|
$
|
18,548
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Prepaid expense
|
$
|
3,062
|
|
|
$
|
2,160
|
|
Deposits
|
596
|
|
|
137
|
|
||
Inventory, net
|
319
|
|
|
314
|
|
||
Other current assets
|
851
|
|
|
712
|
|
||
Total
|
$
|
4,828
|
|
|
$
|
3,323
|
|
|
|
|
|
|
Estimated Life
(Years)
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Vehicles
|
5
|
|
$
|
224
|
|
|
$
|
150
|
|
Computers and equipment
|
2 - 12
|
|
1,590
|
|
|
1,192
|
|
||
Furniture and fixtures
|
2 - 9
|
|
254
|
|
|
244
|
|
||
Software
|
3 - 5
|
|
20,609
|
|
|
19,538
|
|
||
Software development in progress
|
|
|
1,661
|
|
|
839
|
|
||
Leasehold improvements
|
1
|
|
325
|
|
|
166
|
|
||
Total property, equipment and software
|
|
|
$
|
24,663
|
|
|
$
|
22,129
|
|
Less accumulated depreciation
|
|
|
(10,627
|
)
|
|
(6,598
|
)
|
||
Total property, equipment and software, net
|
|
|
$
|
14,036
|
|
|
$
|
15,531
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Gross Amount
|
|
Accumulated
Amortization |
|
Net Amount
|
|
Gross Amount
|
|
Accumulated
Amortization |
|
Net Amount
|
||||||||||||
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domain names
|
$
|
2,591
|
|
|
$
|
(1,748
|
)
|
|
$
|
843
|
|
|
$
|
3,041
|
|
|
$
|
(1,554
|
)
|
|
$
|
1,487
|
|
Customer relationships
|
25,770
|
|
|
(9,493
|
)
|
|
16,277
|
|
|
27,064
|
|
|
(6,513
|
)
|
|
20,551
|
|
||||||
Media content and broadcast rights
|
3,006
|
|
|
(885
|
)
|
|
2,121
|
|
|
3,491
|
|
|
(541
|
)
|
|
2,950
|
|
||||||
Acquired technology
|
578
|
|
|
(440
|
)
|
|
138
|
|
|
578
|
|
|
(268
|
)
|
|
310
|
|
||||||
Other intangible assets
|
68
|
|
|
(68
|
)
|
|
—
|
|
|
68
|
|
|
(61
|
)
|
|
7
|
|
||||||
|
$
|
32,013
|
|
|
$
|
(12,634
|
)
|
|
$
|
19,379
|
|
|
$
|
34,242
|
|
|
$
|
(8,937
|
)
|
|
$
|
25,305
|
|
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and trade names
|
$
|
11,628
|
|
|
|
|
$
|
11,628
|
|
|
$
|
12,001
|
|
|
|
|
$
|
12,001
|
|
||||
License to operate in China
|
128
|
|
|
|
|
128
|
|
|
100
|
|
|
|
|
100
|
|
||||||||
Total intangible assets
|
$
|
43,769
|
|
|
|
|
$
|
31,135
|
|
|
$
|
46,343
|
|
|
|
|
$
|
37,406
|
|
|
Nine Months Ended September 30, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||||||||||
|
Travel and Entertainment Segment
|
|
Corporate Entity and Other Business Units
|
|
Total
|
|
Travel and Entertainment Segment
|
|
Corporate Entity and Other Business Units
|
|
Total
|
||||||||||||
Balance at beginning of period
|
$
|
18,514
|
|
|
$
|
8,249
|
|
|
$
|
26,763
|
|
|
$
|
18,514
|
|
|
$
|
1,823
|
|
|
$
|
20,337
|
|
Business acquisitions
|
—
|
|
|
2,116
|
|
|
2,116
|
|
|
—
|
|
|
6,426
|
|
|
6,426
|
|
||||||
Other
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance at end of period
|
$
|
18,514
|
|
|
$
|
10,375
|
|
|
$
|
28,889
|
|
|
$
|
18,514
|
|
|
$
|
8,249
|
|
|
$
|
26,763
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Loan due September 2018
|
$
|
35,500
|
|
|
$
|
35,500
|
|
Unamortized debt issuance cost
|
(104
|
)
|
|
(175
|
)
|
||
Carrying value of Loan
|
35,396
|
|
|
35,325
|
|
||
Exit fee payable in relation to Loan
|
2,500
|
|
|
2,500
|
|
||
Convertible promissory note payable to an accredited investor
|
—
|
|
|
100
|
|
||
Total long-term debt
|
$
|
37,896
|
|
|
$
|
37,925
|
|
Less: current portion
|
(37,896
|
)
|
|
(100
|
)
|
||
Long-term debt, less current portion and net of debt issuance cost
|
$
|
—
|
|
|
$
|
37,825
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Contingent consideration liability, net of current portion
|
$
|
930
|
|
|
$
|
1,840
|
|
Deferred rent
|
1,884
|
|
|
1,002
|
|
||
Deferred tax liability, net
|
1,352
|
|
|
749
|
|
||
Total
|
$
|
4,166
|
|
|
$
|
3,591
|
|
|
|
|
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2017
|
7,344,140
|
|
|
$
|
5.01
|
|
|
|
|
|
||
Granted
|
2,927,000
|
|
|
2.07
|
|
|
|
|
|
|||
Exercised
|
(2,500
|
)
|
|
1.99
|
|
|
|
|
|
|||
Forfeited, cancelled or expired
|
(270,337
|
)
|
|
4.46
|
|
|
|
|
|
|||
Outstanding at September 30, 2017
|
9,998,303
|
|
|
$
|
4.16
|
|
|
8.3
|
|
$
|
4,974
|
|
Options exercisable at September 30, 2017
|
7,954,236
|
|
|
$
|
4.60
|
|
|
7.9
|
|
$
|
2,098
|
|
•
|
the outstanding stock options described above;
|
•
|
the outstanding CBG Acquisition Warrant, which may be exercised to purchase
40,000
shares of our common stock at a per-share exercise price of
$10.00
(we are also committed to the future issuance of additional CBG Acquisition Warrants at the same per-share exercise price as the CBG Acquisition Warrant that has already been issued), and the outstanding CBG Financing Warrants, which may be exercised to purchase
2,892,731
shares of our common stock at an exercise price of
$5.08
per share;
|
•
|
the outstanding VDC Acquisition Warrants, which may be exercised to purchase
8,601,410
shares of our common stock at an exercise price of
$9.00
per share, and the outstanding VDC Financing Warrants, which may be exercised to purchase
2,998,872
shares of our common stock at an exercise price of
$7.74
per share; and
|
•
|
the warrants issued in conjunction with our acquisition of Hotelmobi, Inc., which may be exercised to purchase
1,000,000
shares of our common stock, half at an exercise price of
$8.00
per share and half at an exercise price of
$12.00
per share.
|
|
Segment
|
|
Corporate Entity and Other
|
|
Consolidated
|
||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||||
GAAP financial measures:
|
|
|
|
|
|
||||||
Net revenue
|
$
|
16,284
|
|
|
$
|
3,165
|
|
|
$
|
19,449
|
|
Operating loss
|
$
|
(200
|
)
|
|
$
|
(5,730
|
)
|
|
$
|
(5,930
|
)
|
Non-GAAP financial measure:
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
1,955
|
|
|
$
|
(3,779
|
)
|
|
$
|
(1,824
|
)
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||||
GAAP financial measures:
|
|
|
|
|
|
||||||
Net revenue
|
$
|
45,765
|
|
|
$
|
6,239
|
|
|
$
|
52,004
|
|
Operating loss
|
$
|
(1,977
|
)
|
|
$
|
(14,010
|
)
|
|
$
|
(15,987
|
)
|
Non-GAAP financial measure:
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
4,322
|
|
|
$
|
(9,884
|
)
|
|
$
|
(5,562
|
)
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
||||||
GAAP financial measures:
|
|
|
|
|
|
||||||
Net revenue
|
$
|
14,891
|
|
|
$
|
251
|
|
|
$
|
15,142
|
|
Operating loss
|
$
|
(245
|
)
|
|
$
|
(3,953
|
)
|
|
$
|
(4,198
|
)
|
Non-GAAP financial measure:
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
1,788
|
|
|
$
|
(2,881
|
)
|
|
$
|
(1,093
|
)
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
||||||
GAAP financial measures:
|
|
|
|
|
|
||||||
Net revenue
|
$
|
42,668
|
|
|
$
|
1,703
|
|
|
$
|
44,371
|
|
Operating loss
|
$
|
(1,223
|
)
|
|
$
|
(11,654
|
)
|
|
$
|
(12,877
|
)
|
Non-GAAP financial measure:
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
4,851
|
|
|
$
|
(7,390
|
)
|
|
$
|
(2,539
|
)
|
|
|
|
|
|
|
|
Segment
|
|
Corporate Entity and Other
|
|
Consolidated
|
||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
1,955
|
|
|
$
|
(3,779
|
)
|
|
$
|
(1,824
|
)
|
Less:
|
|
|
|
|
|
||||||
Depreciation, amortization and impairments
|
(2,155
|
)
|
|
(355
|
)
|
|
(2,510
|
)
|
|||
Share-based compensation expense
|
—
|
|
|
(1,629
|
)
|
|
(1,629
|
)
|
|||
Other income, net
|
—
|
|
|
—
|
|
|
—
|
|
|||
Plus:
|
|
|
|
|
|
||||||
Other loss
|
—
|
|
|
33
|
|
|
33
|
|
|||
Operating loss
|
$
|
(200
|
)
|
|
$
|
(5,730
|
)
|
|
$
|
(5,930
|
)
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
4,322
|
|
|
$
|
(9,884
|
)
|
|
$
|
(5,562
|
)
|
Less:
|
|
|
|
|
|
||||||
Depreciation, amortization and impairments
|
(6,280
|
)
|
|
(1,985
|
)
|
|
(8,265
|
)
|
|||
Share-based compensation expense
|
—
|
|
|
(2,225
|
)
|
|
(2,225
|
)
|
|||
Other income, net
|
(19
|
)
|
|
(1
|
)
|
|
(20
|
)
|
|||
Plus:
|
|
|
|
|
|
||||||
Other loss
|
—
|
|
|
85
|
|
|
85
|
|
|||
Operating loss
|
$
|
(1,977
|
)
|
|
$
|
(14,010
|
)
|
|
$
|
(15,987
|
)
|
|
|
|
|
|
|
||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
1,788
|
|
|
$
|
(2,881
|
)
|
|
$
|
(1,093
|
)
|
Less:
|
|
|
|
|
|
||||||
Depreciation, amortization and impairments
|
(2,033
|
)
|
|
(492
|
)
|
|
(2,525
|
)
|
|||
Share-based compensation expense
|
—
|
|
|
(614
|
)
|
|
(614
|
)
|
|||
Other income, net
|
—
|
|
|
1
|
|
|
1
|
|
|||
Plus:
|
|
|
|
|
|
||||||
Other loss
|
—
|
|
|
33
|
|
|
33
|
|
|||
Operating loss
|
$
|
(245
|
)
|
|
$
|
(3,953
|
)
|
|
$
|
(4,198
|
)
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
||||||
Adjusted EBITDA
|
$
|
4,851
|
|
|
$
|
(7,390
|
)
|
|
$
|
(2,539
|
)
|
Less:
|
|
|
|
|
|
||||||
Depreciation, amortization and impairments
|
(6,045
|
)
|
|
(1,356
|
)
|
|
(7,401
|
)
|
|||
Share-based compensation expense
|
—
|
|
|
(3,012
|
)
|
|
(3,012
|
)
|
|||
Other income, net
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||
Plus:
|
|
|
|
|
|
||||||
Other loss
|
—
|
|
|
104
|
|
|
104
|
|
|||
Operating loss
|
$
|
(1,223
|
)
|
|
$
|
(11,654
|
)
|
|
$
|
(12,877
|
)
|
|
|
|
|
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Travel and entertainment segment
|
$
|
77,372
|
|
|
$
|
76,074
|
|
Corporate entity and other business units
|
32,374
|
|
|
29,625
|
|
||
Consolidated
|
$
|
109,746
|
|
|
$
|
105,699
|
|
|
|
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue, net
|
|
$
|
16,284
|
|
|
$
|
14,891
|
|
|
$
|
1,393
|
|
|
9
|
%
|
Sales and marketing
|
|
6,151
|
|
|
4,742
|
|
|
1,409
|
|
|
30
|
%
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue, net
|
|
$
|
45,765
|
|
|
$
|
42,668
|
|
|
$
|
3,097
|
|
|
7
|
%
|
Cost of revenue
|
|
8,144
|
|
|
7,627
|
|
|
517
|
|
|
7
|
%
|
|||
Sales and marketing
|
|
17,531
|
|
|
14,840
|
|
|
2,691
|
|
|
18
|
%
|
|||
Technology and development
|
|
1,877
|
|
|
638
|
|
|
1,239
|
|
|
194
|
%
|
|||
General and administrative
|
|
13,744
|
|
|
14,257
|
|
|
(513
|
)
|
|
(4
|
)%
|
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue, net
|
|
$
|
19,449
|
|
|
$
|
15,142
|
|
|
$
|
4,307
|
|
|
28
|
%
|
Cost of revenue
|
|
5,641
|
|
|
2,864
|
|
|
2,777
|
|
|
97
|
%
|
|||
Sales and marketing
|
|
6,326
|
|
|
4,887
|
|
|
1,439
|
|
|
29
|
%
|
|||
General and administrative
|
|
9,971
|
|
|
7,921
|
|
|
2,050
|
|
|
26
|
%
|
|||
Loss on debt extinguishment
|
|
—
|
|
|
(9,157
|
)
|
|
9,157
|
|
|
(100
|
)%
|
|||
Change in FV of warrant liability
|
|
(5,978
|
)
|
|
(647
|
)
|
|
(5,331
|
)
|
|
824
|
%
|
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2017
|
|
2016
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue, net
|
|
$
|
52,004
|
|
|
$
|
44,371
|
|
|
$
|
7,633
|
|
|
17
|
%
|
Cost of revenue
|
|
12,270
|
|
|
7,837
|
|
|
4,433
|
|
|
57
|
%
|
|||
Sales and marketing
|
|
17,975
|
|
|
15,349
|
|
|
2,626
|
|
|
17
|
%
|
|||
Technology and development
|
|
2,657
|
|
|
1,904
|
|
|
753
|
|
|
40
|
%
|
|||
General and administrative
|
|
26,656
|
|
|
24,251
|
|
|
2,405
|
|
|
10
|
%
|
|||
Depreciation and amortization
|
|
8,265
|
|
|
7,401
|
|
|
864
|
|
|
12
|
%
|
|||
Loss on debt extinguishment
|
|
—
|
|
|
(9,157
|
)
|
|
9,157
|
|
|
(100
|
)%
|
|||
Provision for income taxes
|
|
(603
|
)
|
|
—
|
|
|
(603
|
)
|
|
|
•
|
increased net revenue by $0.7 million and $1.7 million, respectively
|
•
|
increased Cost of revenue by $0.6 million and $0.9 million, respectively
|
•
|
increased General and administrative expense by $0.4 million and $1.6 million, respectively
|
•
|
Payroll and related cost, exclusive of share-based compensation expense, increased by $0.7 million and $1.3 million, respectively, during the three and
nine
months ended
September 30, 2017
. The $0.5 million increase primarily resulted from acceleration of product development in our KanKan operations, which also accounted for approximately half of the year-to-date increase compared to the same period of 2016. The remaining year-to-date increase primarily relates to the hiring of two senior management positions in the fourth quarter of 2016 and early second quarter of 2017, plus routine salary increases.
|
•
|
Rent expense increased by $0.4 million during the
nine
months ended
September 30, 2017
.
|
•
|
monetize existing assets
|
•
|
work with our creditors to modify existing arrangements or refinance our debt
|
•
|
obtain additional capital through equity issuances, including but not limited to under the Aspire Purchase Agreement (which issuances may dilute existing stockholders)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDING
S
|
ITEM 1A.
|
RISK
FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER
INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
Incorporated Herein
By Reference To
|
||||
Exhibit Number
|
|
Description
|
|
Document
|
|
Filed On
|
|
Exhibit Number
|
|
|
8-K
|
|
09/19/2017
|
|
10.1
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
REMARK HOLDINGS, INC.
|
|
|
|
|
|
Date:
|
November 13, 2017
|
By:
|
|
/s/ Douglas Osrow
|
|
|
|
|
Douglas Osrow
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(principal financial officer)
|
1 Year Remark Chart |
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