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Edited Transcript of MARK earnings conference call or presentation 12-Nov-19 9:30pm GMT

Q3 2019 Remark Holdings Inc Earnings Call

Atlanta Dec 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Remark Holdings Inc earnings conference call or presentation Tuesday, November 12, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* E. Brian Harvey

Remark Holdings, Inc. - Director of Capital Markets & IR

* Kai-Shing Tao

Remark Holdings, Inc. - Chairman & CEO

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Conference Call Participants

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* Darren Aftahi

Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst

* Thomas Maurice Fitzgerald

Longbow Capital Partners, L.P. - Founder, President and Managing Partner

* George Kafkarkou;TheFutbolApp

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Presentation

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Operator [1]

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Welcome to the Remark Holdings Third Quarter 2019 Financial Results Conference Call. My name is James, and I'll be the operator today and will handle the Q&A. As a reminder, this conference is being recorded.

Now I'd like to turn the call over to Brian Harvey.

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E. Brian Harvey, Remark Holdings, Inc. - Director of Capital Markets & IR [2]

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Thank you, James. Good afternoon, everyone, and welcome to Remark Holdings Third Quarter 2019 Financial Results Conference Call. I'm Brian Harvey, Director of Capital Markets and Investor Relations for Remark. On the call with me this afternoon is Kai-Shing Tao, Remark's Chairman and Chief Executive Officer. In just a moment, I will recap our third quarter 2019 financial results, and Mr. Tao will then provide an update on our business. Following his remarks, we will open the call to questions.

I would like to take this opportunity to remind you that some of the statements made today may contain forward-looking statements. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements reflect Remark Holdings' current views, and Remark Holdings expressly disclaims any obligation to update or revise any forward-looking statements after the date hereof. This disclaimer is only a summary of Remark Holdings' statutory forward-looking statements disclaimer, which is included in its full filing with the SEC.

Also, please note that the company uses financial measures not in accordance with the generally accepted accounting principles, commonly known as GAAP. To monitor the financial performance of these operations, non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the reported financial results as determined in accordance with GAAP. To support the company's views of adjusted EBITDA later in this call, a reconciling table is provided at www.remarkholdings.com, and a similar reconciling table will be included in the company's Form 10-Q filed with the SEC.

I'd now like to provide a brief overview of our financial results for the third quarter ended September 30, 2019. Revenue from continuing operations for the third quarter of 2019 was $686,000, down from $1.8 million during the comparable period of last year. Regulatory changes in China's financial services market caused us to discontinue our FinTech business in 2018, resulting in no FinTech revenue this year, compared to reporting $363,000 of FinTech revenue in the last year's third quarter. Our advertising and other revenue decreased approximately $600,000 when compared to the third quarter of 2018, which was almost entirely a decline in revenue from our Remark Entertainment business due to contracts that ended in the prior year.

Our AI-based products and services revenue showed a slight decline of approximately $100,000. Revenue growth was constrained primarily by working capital shortfalls that prevented us from purchasing equipment that would have led to significantly greater revenue. As this is not a demand issue, we believe that such shortfalls are temporary in nature and will be reflected in further -- future revenue as we actively work to monetize our investment in Sharecare while we explore additional financing options with working capital partners to finance our equipment purchases.

Total cost and expense for the third quarter of 2019 was $5 million, a decrease from the $8.1 million reported in the third quarter of 2018. The decrease is primarily attributable to decreases in cost of sales as a result of the discontinuation of the FinTech services, head count reductions and the timing on vesting of stock options awarded under our equity incentive plans. Operating loss declined to $4.3 million in the third quarter of 2019 from $6.4 million, commensurate with the cost and expense declines.

During the 3 months ended September 30, 2019, adjusted EBITDA was a negative $4 million from continuing operations, including losses from forgiveness on intercompany balances as compared to an adjusted EBITDA loss of $5.1 million during the 3 months ended September 30, 2018. Our net loss from continuing operations totaled $4.9 million or $0.11 per diluted share in the third quarter ended September 30, 2019, compared to a net loss from continuing operations of $3.8 million or $0.08 per diluted share in the comparable period a year ago.

At September 30, 2019, the cash and cash equivalents balance was $656,000 compared to a cash position of $1.4 million at December 31, 2018. Cash decrease is primarily due to ongoing operating losses that were offset by the issuance of common stock shares.

I would now like to turn the call over to Remark's CEO, Mr. Tao, so he can provide additional color on Remark's business. Shing?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [3]

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Thank you, Brian, and thank you to everyone joining us on this afternoon's call. The third quarter of 2019 saw Remark Holdings continuing its transformation into a pure-play artificial intelligence and data intelligence platform. We successfully partnered with Hanvon Technology, a publicly listed Chinese systems integrator, to win the master retail contract to transform China Mobile's 17,800 corporate stores into smart retail stores. The first phase of this partnership with Hanvon is expected to bring $50 million of revenue to the company over the 3-year deployment period. This contract took over 18 months to win as our technology needed to be tested and proven for both our dual metrics of increased sales and cost savings. As this is new for both parties, we are creating the playbook as we deploy and implement real time, making it more important that we set aside a time to make sure we do it right.

For perspective, China Mobile is the largest mobile telecommunications corporation by market capitalization in the world, trading on both the New York Stock Exchange and Hong Kong Exchange, and is the world's largest mobile network operator by total number of subscribers with over 900 million subscribers at last estimate, nearly triple the number of AT&T and Verizon subscribers combined. Remark's AI terminal is the first point of contact for customers entering a China Mobile store, where customer information is captured and relayed to the in-house sales staff. VIP customers are immediately identified, along with personalized recommendations, based upon prior visit purchase history, which allows the staff to directly service the customer with their individualized requirements, increasing sales conversions while cutting service costs.

Our proprietary heat map highlights where customers are gravitating to allowing for optimal product placement. Our store manager dashboard summarizes store activities for managers, so that they can understand the customer flow and metrics behind daily sales numbers. We have uploaded a video of what a smart China Mobile retail store will look like upon conversion to our YouTube channel, RemarkAI, 1 word.

In addition, we have recently won a contract with a bank to design and implement their traditional bank branches into smart branches. The financial institution sector is exciting for us, as financial institutions have actively set aside allocated budget for AI spending as they are focused solely on cost savings and return on investment provided by our AI platform. Again, please refer to our YouTube channel to view this implementation. Design and deployment on this project are expected early in 2020 and discussions are underway with several additional large Chinese banks.

We continue to grow our urban life cycle business by expanding on our school safety and attendance management systems. Parents are willing to spend money to give their students an edge in the competition for higher education. Our AI platform automates the attendance record keeping of students while providing access control to restricted areas. Parents are able to authorize guardians who can remove their child from the campus while communicating with their children via a private social channel.

During the quarter, KanKan AI's school solutions teamed with Tongyue's recent launch of its Kindergarten Medical Robot, which is a simple version of the health robot from the movie Big Hero 6, which identifies a student's health condition, weight, height and body temperature within 10 seconds to determine whether the student is suspected of contracting hand, foot and mouth disease or other potentially infectious diseases. Our AI robot replaces the previously time-consuming process of a medical professional individually measuring each student's health metrics. Initial plans are to launch in Hangzhou with 30 kindergartens, representing 12,000 students, with a longer-term goal to deploy to over 500 kindergartens in the Hangzhou province, representing 200,000 students.

As part of our agricultural efforts, a year ago, we started working with our partner, CP Group, the world's largest animal feed producer and largest hog producer in China, on ways to promote biosafety on farms. It took a year of development to get it right, and now we are ready for the initial deployment at a farm with over 1 million pigs. African swine disease has caused farmers to be decimated nearly 30% of their swine livestock. Our solution monitors people working on the farm, health of the livestock, cleanliness of the property and provides updated status on the pigs, including elevated temperatures, which could be a sign of disease infestation.

With the high profile win of China Mobile, this has allowed us to pursue additional opportunities -- similar opportunities in Japan, South East Asia and the United States. In light of this, we recently hired a senior project manager to oversee the rollout of our U.S. business. We are currently in a paid POC test with a hospitality management company as well as an urban shopping center. It is important to note that what we've built over the last few years is a platform of scalability. We will not have to hire additional workforce to handle all this new deal flow.

Brian and I received a lot of calls and questions about our previously discussed plans for the monetization of our Sharecare ownership. As of our last financial results conference call, we have identified several potential buyers for all or a portion of our investment in Sharecare. Since our ownership stake includes Board rights, per our shareholders' agreement, Sharecare's Board has the right of first refusal and must approve any transaction. Recent developments at Sharecare, which include a strategic investment led by Quest Diagnostics, a partnership with Walmart to open up health clinics and, most recently, an investment from Aflac Corporate Ventures, continues to build upon the value that has been created.

Additionally, these events and the recent progress made by other digital health care companies, like Livongo and Health Catalyst, have brought attention to Sharecare. As a result, we are receiving new requests and indications of interest regarding our ownership stake. We are actively working with both Sharecare and interested parties to facilitate the due diligence necessary for timely monetization transaction, and we'll update shareholders as soon as we can.

The other question we get has to do with the progress on hiring a new CFO. Three candidates have been identified, and we are working to finalize a deal with 1. As soon as we come to an agreement, we will be sure to issue a press release to let everyone know. In the interim, our financial operations continue to run smoothly. I continue to believe Remark Holdings provides investors with both the value, due to our stake in Sharecare, and optionality based on the growth opportunities in AI that are in front of us.

With that, I'd like to turn the call back to Brian.

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E. Brian Harvey, Remark Holdings, Inc. - Director of Capital Markets & IR [4]

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Thank you, Shing.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And we'll take our first question today from Darren Aftahi with Roth Capital Partners.

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Darren Aftahi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [2]

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Just a couple, if I may. Shing, I think you said in the press release, it was quoted that the Sharecare monetization is close. I know the last time on the call when you said 6, 12 weeks, I appreciate this isn't a perfect science. Is this something you feel like you'll have wrapped up by end of this fiscal year?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [3]

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Yes, yes. I mean we have every confidence in doing that. We need to do that. The -- when we -- just to give a little bit more color, when we had our last call, we had already identified a buyer for a portion of our stake. We -- With the recent developments that I -- as I just mentioned in my remarks, it brought on a number of new interest. We needed to vet out the new interest as well. And with that, we are now past that stage and looking to finalize the monetization of that. So it's -- yes, so the process is moving forward.

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Darren Aftahi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [4]

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Great. On the Hanvon deal with China Mobile, can you kind of explain what exactly your role will be? How you're going to get paid? When is this going to be implemented? Is this going to be kind of a phased rollout? 100 stores, 1,000 stores, what have you. And then I think as a derivative of that question, you say it's the first sort of phase of a $50 million kind of rollout. I'm curious if you could expand on if there's more to this deal beyond just these smart terminals.

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [5]

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Yes. I mean the smart terminals, as we said, is just the first -- was just the first phase. I think, as you can imagine, when you're transforming, these guys have a large footprint. And as you're making them into a smart retail store, there's a lot of different, I guess, elements that you need to do to change it. So we are kind of just at the first step. I don't think -- as we win kind of each step along the way, we'll certainly issue a press release to talk about it. Right now probably isn't the right time. But I would say it's -- in transforming an old-style store into a smart retail, there are about 10 different steps that are required to make it most efficient. So that's a lot of opportunity for us.

As it relates to Hanvon, right now, they've been a great partner to us. And they brought us in on this deal frankly because they didn't -- they were looking for a technology partner that had the -- saw the skill sets that we brought to the table. There was -- after we launched the live store with CP Lotus back in September, and it was -- because it was able to convince the senior management that we were the right partner. That was back towards the fourth quarter of last year. It took a number of months this year to basically create the right product for what they need for their stores. And now we are moving right along. Having said that, this is not -- even after we signed the contract, this is not something that you flip the switch. It still takes very careful planning to deploy across such a wide base. We're in about over 100 stores right now, and we're looking to certainly increase that and move faster. Certainly, China Mobile wants us to move fast as well, and -- but we first need to make sure that we get the first few steps right first.

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Darren Aftahi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [6]

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Great. So as you scale this, is there anything on your end that would capital constrain you, i.e., you need implementation personnel that you'd be on the hook for? Is this something where Hanvon, yourselves and China Mobile are kind of all committing to? I guess, said another way, is your balance sheet limiting your ability to scale a transaction like this?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [7]

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It definitely affects us. Having said that, we are in talks with different groups to help us with our working capital situation. They do working capital financing. So even after we monetize our Sharecare stake, we will still be going down this path because it is -- it's kind of a win-win for both sides.

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Darren Aftahi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [8]

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And just lastly...

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [9]

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I'm sorry. What I was going to say was, just to be clear, of course, it definitely has an effect on us, certainly on our first phase, because what we are selling to China Mobile is an integrated product of both hardware and software.

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Darren Aftahi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [10]

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Got it. I guess just last one on that. Is there going to be a recurring component piece to the terminal initially? Or will there be a 12-month lag where this is a hardware and software sale and then 12 months later there's a recurring piece going forward?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [11]

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We expected there will be a 12-month lag. The -- we expect to charge the software services after the first year.

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Darren Aftahi, Roth Capital Partners, LLC, Research Division - MD & Senior Research Analyst [12]

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Got it. And then just one last for me. How much common stock did you raise in the quarter or issue?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [13]

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That is going to be -- yes, we raised a little bit of money from a very large investment fund, and that will be detailed in the Q after the call.

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Operator [14]

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Next, we'll hear from George Kafkarkou with -- a private investor.

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George Kafkarkou;TheFutbolApp, [15]

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A couple of questions. Shing, from your comment about Sharecare, it sounds like -- I want to be sure I heard this right because of the increased interest, because of the increased activity and investment in Sharecare, does that mean the value of our asset has increased? And you now expect more from the monetization back, for example, before Walmart got involved or before Quest got involved. Is that fair to assume?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [16]

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No. I don't like to assume anything, George. I think what would be -- what's just important is that we have to follow a process for -- obviously, our -- for Remark shareholders, but also there's a very specific shareholders' agreement that we need to follow as well. So when we were looking to sell our stake, there were -- certainly, with the new investment from the different groups as well as the Walmart activity, it did bring on a bunch of new interest. And it's our duty to make sure that we know we -- that each one up, especially if they are serious in their financing set. So -- but that's really all I'm prepared to say at this point.

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George Kafkarkou;TheFutbolApp, [17]

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Okay. Very good. I think it was May of this year we announced the $6 million deal with a pharmacy patient terminal that we will -- that was going to be deployed $6 million worth in 2019. Is that still on track? Or is the lack of our working capital going to defer that?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [18]

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That -- it did defer that. We had -- as we announced that deal, that -- okay, just to be clear, while that's being deferred, that will come back. We -- as we -- as this China Mobile deal began to really catch up steam, and as we're about to cross the finish line, this was such a large deal that we needed to focus all of our resources on winning this particular deal because, obviously, it's many times larger.

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George Kafkarkou;TheFutbolApp, [19]

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Yes. Of course, of course, and profitable, I would hope. There was some deferred revenue between $6.8 million and $7 million in Q4 that was going to be collected this fiscal year. How are we doing against that?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [20]

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We -- we're -- the clients that we work with are very large government companies, so we don't see that -- the payment to be an issue. Timing might be an issue sometimes, so we don't see that as a problem moving forward.

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George Kafkarkou;TheFutbolApp, [21]

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Okay. And the last question. You mentioned just now about working capital. I think you said that even after we raise money from the sale of the Sharecare asset, be that in part or in whole, we would still work with companies that can provide us or raise us additional working capital. So do I take that to...

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [22]

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Well, I want to be clear. I want to be clear when I said even after the Sharecare deal, there are working capital financing versus not -- and I think what you're alluding to is, are we going to raise additional equity for working capital, which is no. We would be -- but we would be seeking out working capital financing options because there is a very good market for that. We think that, certainly, the deal that we have struck with our partners allow us to seek that working capital financing while achieving profitability and scalability for us.

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George Kafkarkou;TheFutbolApp, [23]

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Good. Okay. All right. Obviously, the company is under some kind of constraint, given the poor balance sheet and the working capital we need. How would you describe morale in the team, Shing?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [24]

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I mean we're fighters. I mean we've never -- just to be clear, we've never had an IPO where we had a lot of cash to work with. Everything has been built, really, from right from the bottom, and we built it through different twists and turns. But now, here we are today. We've -- just over the last couple of years, we've entered a partnership with one of the largest agricultural companies/financial companies. We just won this deal with China Mobile, bidding out much larger and better finance companies than we are. And with all the different troubles that we might have encountered or roadblocks, we continue to win deals. And so the demand is there, definitely, for our technology. Now we're -- but it's a battle that we -- we're fighting battles on all fronts, and we're fighting each one, one by one.

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Operator [25]

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(Operator Instructions) We have a question from Barry Fitzgerald (sic) [Terry Fitzgerald] with Longbow.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [26]

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As it relates to the Sharecare monetization process, I wonder if you wouldn't mind expanding on it a little further. Specifically, who would you describe as being in charge of the Sharecare monetization process? Is it Sharecare? Or is it Remark?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [27]

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I would answer that by -- in 2 ways. The first fashion is if we were to sell a direct stake in Sharecare, that process would need to be approved by the Sharecare shareholders in terms of the right of first refusal. If we were to sell the stake in our -- in an SPV that holds our interest in Sharecare in terms of a minority interest, then that's something that we would not have to go through that process.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [28]

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Okay. Great. The second question is how many potential investors that you've been speaking with has Sharecare permitted to examine their financial statements thus far?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [29]

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I can't answer that, Terry. Sorry.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [30]

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The third question is does MCC (sic) [MGG] still have a lien on your Sharecare position?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [31]

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Yes. MGG, yes.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [32]

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MGG, excuse me. And fourth question as it relates to Sharecare is the method of monetization. At one point, and I think it was on the last call, there had been some discussion about you pursuing a strategy, which involve pledging the shares. It now strikes me that the conversation today is more oriented around the sale of shares. Can you help us sort of think about how you're evaluating the 2? And what strategy is likely to be the prevailing strategy based on the information that you have available to you at this juncture?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [33]

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Yes. I think, right now, certainly, the -- it seems to us that the shareholders do not like the debt on our balance sheet. We certainly do not either. And so instead of incurring more debt, even if it's at better rates or better terms, going through a sale where we can eliminate the debt from our balance sheet is the best course of action because it allows us to have much more flexibility in other options, while having the debt on our balance sheet certainly constricts us from doing different things.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [34]

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That's good. I'll concur with it. Great. A final question relates to the Hanvon contract, and I apologize for asking for precision. But there are certain defined terms, capitalized references to the company without any specific tieback to whether it's Remark or Hanvon that we're talking about. But as I understand your headline and the substance of this document that $50 million is a contract that would entitle Remark to a $50 million in revenues over a 3-year period of time. Or is it $50 million is what the combination of Hanvon and Remark might receive over the 3-year period of time?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [35]

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To Remark.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [36]

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To Remark, great. And in this instance, would you be looking to China Mobile or to Hanvon to deliver those revenues to you?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [37]

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Well, ultimately, it's China Mobile, right, because they're the end customer.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [38]

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Ultimately. But is there debate because Hanvon is having a large part of the overall value, and it appears that the contract may have been with Hanvon in the first instance. Does China Mobile pay Hanvon, and then you're obligated to collect the revenues from Hanvon? Or is it a direct payment from China Mobile?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [39]

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No. We will collect it from Hanvon. I mean we're -- Hanvon, they brought us in on this deal, and we're going to continue to work with them. So -- but this is, like I said, this is just a -- this is just the first phase, so doesn't -- it won't mean the second, third or fourth will have the same type of terms. Each one will be different. But at least for the first phase, we'll be getting pay -- we'll be getting paid for Hanvon.

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Thomas Maurice Fitzgerald, Longbow Capital Partners, L.P. - Founder, President and Managing Partner [40]

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Okay. So the credit is Hanvon, not China Mobile. That's great, and congratulations on the $50 million contract.

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Operator [41]

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Our final question will come from [Poli Kanakara].

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Unidentified Participant, [42]

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Can you hear me?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [43]

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Yes, [Poli], we can.

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Unidentified Participant, [44]

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Yes. My question is I've read in the news that worth $50 million contract with Hanvon, so that means that's close to $15 million per year in a span of 3 years, right? So how are they paying you, by quarter-by-quarter or around $15 million per year? How are they -- how are you planning to collect those money, quarter-by-quarter or end of the year?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [45]

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I'm not sure if I'm understanding the question correctly, but we -- the $50 million over 3 years, the way we will recognize, this certainly will be lumpy. As we deploy across such a wide group of stores, each implementation effort will be different. So it's very hard for us to certainly forecast that in a straight line. So each problems has different conditions, so we need to account for that.

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Unidentified Participant, [46]

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Yes. Since you have these contracts also, are these -- [are you urgently] selling the Sharecare investment?

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E. Brian Harvey, Remark Holdings, Inc. - Director of Capital Markets & IR [47]

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Could you repeat that, please?

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Unidentified Participant, [48]

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Since you got these contracts, right, so what is the urgency of selling the Sharecare investment?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [49]

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Oh, what's the urgency of selling Sharecare with this contract? Well, I think, for us is twofold. One is our shareholders will like us to operate with no debt on our balance sheet. We certainly do. That's number one. So the monetization of the Sharecare company, even though it's performing very well and growing, allows us to eliminate our debt immediately. That's number one.

And number two, for our core AI business, we are growing very fast right now, and working capital is needed to support that. So instead of -- we've had to, in the past, dilute shareholders in order to achieve that goal. Once we monetize the Sharecare stake, we won't have to dilute the shareholders anymore.

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Unidentified Participant, [50]

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Okay. One last question. What do you have to tell your investors, who have been with you for many years, to give them some relief because we have been waiting for some big news. Personally, I was an investor in your company for a long time, so what relief do you -- can you give to your investors? What time line you can give.

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [51]

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Yes. I think the relief is just exactly what you just mentioned, which is our win with China Mobile. As you know, artificial intelligence is an industry that's new to everybody. It's new to the people that are providing the solutions. It's new to the people that are -- the customers and the beneficiaries of this technology. So it takes time, and we've set out to build this out, really, since 2014. And we know and believe that we were able to achieve what we've been able to do, and we've done that. Our technology has been able to separate ourselves from our competitors, and we've been able to win very large contracts from the biggest of names, like China Mobile. So I think in terms of the confidence, I think that you should take into account that the demand is not the issue. People want our products. We certainly have had balance sheet issues, which we're solving right now. And once we solve those balance sheet issues, then -- and then it just becomes a sole focus on execution of our deployment.

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Unidentified Participant, [52]

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I'm really passionate about what you do in your company, that's -- so that's the reason I'm still investing -- continue to invest with your company.

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [53]

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I appreciate your support. Thank you.

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E. Brian Harvey, Remark Holdings, Inc. - Director of Capital Markets & IR [54]

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Thank you, Poli.

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Operator [55]

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And that will conclude today's question-and-answer session. I would now like to turn the call over to Brian Harvey for any additional or closing comments.

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E. Brian Harvey, Remark Holdings, Inc. - Director of Capital Markets & IR [56]

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Thank you, everyone, for participating in Remark Holdings Third Quarter 2019 Financial Results Conference Call. A replay will be available in approximately 4 hours through the same link issued on our November 1 press release. Thank you again. Have a good night.

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Operator [57]

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That does conclude today's conference. Thank you for your participation. You may now disconnect.