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Edited Transcript of MARK earnings conference call or presentation 14-May-18 12:30pm GMT

Thomson Reuters StreetEvents

Q1 2018 Remark Holdings Inc Earnings Call

Atlanta May 18, 2018 (Thomson StreetEvents) -- Edited Transcript of Remark Holdings Inc earnings conference call or presentation Monday, May 14, 2018 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Douglas M. Osrow

Remark Holdings, Inc. - CFO

* Kai-Shing Tao

Remark Holdings, Inc. - Chairman & CEO

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Conference Call Participants

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* Darren Paul Aftahi

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

* Ron Nash

Nash & Company

* George Kafkarkou

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Presentation

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Operator [1]

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Good morning. Welcome to Remark Holdings First Quarter 2018 Earnings Conference Call. My name is Paul, and I will be your operator this morning. Joining us for today's presentation are Remark Holdings' Chairman and CEO, Shing Tao; and CFO, Douglas Osrow.

Following their remarks, we will open the call for questions from the company's institutional investors and analysts.

Some of these statements made today may be 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 full in its filings with the SEC. Also, please note the company uses financial measures not in accordance with generally accepted accounting principles, commonly known as GAAP, to monitor the financial performance of 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 will now turn the call over to Chairman and CEO, Shing Tao. Sir, please proceed.

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [2]

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Thank you, operator. Good morning, everyone, from Asia, and thank you for joining us today.

Before the market opened, we issued a press release announcing our results for the first quarter ended March 31, 2018, a copy of which is available in the Investor Relations section of our website.

Our first quarter financial and operating results were in line with our plan and remained well on track in laying the groundwork to achieve our forecast of consolidated net revenue in excess of $120 million for the full year.

Our 2018 outlook reflects the solid progress we're making in driving adoption and deployment of our AI technology across multiple sectors in China and Southeast Asia, and our ongoing success in driving conversion and transaction revenues at Vegas.com.

Our robust revenue forecast for KanKan in 2018 is directly based on the agreements and contracts we've signed and the actual deployment steps we've currently taken in conjunction with our clients on the ground. Depending on the sector, it can take 3 to 9 months for deployment of our product to commence following the signing of an agreement with the client.

We believe our $50 million revenue guidance for our AI business is attainable based on our installed plant for the full year. For perspective, in the retail sector, to date we have secured agreements to install our AI technology in over 20,000 retail stores and over 50 large-scale supermarkets with an upfront deployment fee in each store and a separate annual license fee.

We would need to install only a small amount of the contracted installs in 2018 to achieve our AI business guidance. And this does not take into account the revenue from our other AI businesses, principally our FinTech and safety products. Our second quarter revenues have shown improvement over the first quarter, both sequentially and year-over-year, with the bulk of our top line KanKan growth starting to advance in the third quarter as installed volume accelerates.

To recap, our primary goal is to efficiently leverage our advanced AI technology to enable a broad range of applications across multiple sectors. We're initially focusing our efforts on the financial services, retail and workplace and public safety arenas, and we're gaining traction in each segment.

Our business plan is designed to quickly support a stream of recurring, predictable and growing revenues as our products are installed. In addition, our recurring license fee model, coupled with only modest incremental expenses, will allow us to generate profitable cash flows as we achieve scale.

As I noted, we are working closely with our partners in setting the stage for deployment and the process is moving forward on plan. We developed a very practical, accessible and easy-to-install solution, aimed at addressing our clients' needs through a combination of our computer vision, semantic, cognitive and perceptual computing platform that we've been building for the past 4 years. We believe no other company in the market can provide the level of AI solution that we've developed, coupled with the simplicity, ease of deployment and price wise that we are offering to our clients.

Now let me briefly walk you through our progress during first quarter, beginning with our FinTech business. We've continued to build on our partnerships with the top picks we announced last year, while expanding the number of financial institutions, utilizing our credit risk analysis and lead acquisition products. Our FinTech performance during the first quarter was impacted by a temporary sector-wide shutdown in China within their lending industry. The shutdown is directly related to an audit being conducted industry-wide by the Chinese banking regulatory commission. We are ready to resume and well positioned to ramp up our operation when the audit is complete, which we expect will be soon.

During the quarter, we've served 6 lenders, up from 2 lenders year-over-year. And our credit risk analysis product helped several large institutions successfully issue over 4 million credit cards. Adapting to the strength of our credit risk analysis product and supporting our ongoing sales strategies, we closed the first quarter with a default rate of 0.58%. This is an exceptional outcome that supports our expectation to grow the total loan amount attributable to our solution by up to RMB 1 billion or USD 107 million for all of 2018, which will represent a year-over-year increase exceeding 1,000%.

These products are off to a very good start, as we continue to demonstrate the efficiency and effectiveness of our AI technology in reducing credit risk and enabling financial institutions to identify attractive loan candidates.

Turning now to our retail business. During the quarter, we've also continued to lay the groundwork to introduce our AI technology within the retail sector. Through the combination of our computer vision technologies and our strong intelligent data analysis capabilities provided by our KanKan data platform, we are able to provide a broad range of services, aimed at improving customer interaction and satisfaction and driving sales.

To date, we've entered into agreements with 4 major retail organizations, spanning fresh food stores, supermarkets, convenience stores, super brand malls and fast food chains. As I mentioned, these agreements cover in excess of 20,000 retail locations.

Our intelligent retail solutions are designed to embed with each of our clients' franchises and deliver the most relevant data that will allow them to drive a more personalized experience and engage in a one-on-one relationships with each of the customers.

This approach is relevant because the on-site retail model has largely moved to a one-to-many environment, where brick-and-mortar businesses have become increasingly depersonalized in the quest to pursue cost savings in the face of intense competition from e-commerce and mobile shopping.

Comparing to other so-called AI technologies in the market, which focus only on computer vision or facial recognition, our KanKan intelligent system with strong semantic, perceptual and cognitive computing capabilities can connect physical data, Internet data, social data and convert them into actionable smart data, which gives business a deeper insight in intelligent predictions.

Our technology represents a simple and easy-to-install solution that arms the stores' frontline and back-office staff with the insights and targeting features that come from our intelligent system, so they can create a much better shopping experience for their customers, with much lower costs and higher conversion rate.

The moment a consumer walks into the store, the on-site team (inaudible) is empowered with a personalized recommendation system, aiding the sales and service effort in a very direct and efficient way. The ongoing data we use to train the models will continually adjust and strengthen the stores' product marketing approaches to the benefit of both the store operators and the customer.

From a business model standpoint, each of the deals we've entered into varies in terms of contractual arrangements. Each includes an upfront fee upon location deployment, as well as an ongoing licensing fees or revenue share model throughout the term. As I noted, this is a model characterized by a rapid revenue ramp as installs are achieved, combined with low ongoing capital requirements.

Turning to public safety and surveillance. Products that combine our computer vision, intelligent behavioral analysis and intention analysis models are also being rolled out in the institutional and public safety arenas, where our platform can be utilized to determine when a violation or safety risk has occurred, fostering a highly compliant environment.

We are continuing to move forward in executing against a number of agreements, expanding construction sites, college campuses, restaurants and traffic monitoring and enforcement. With over 200,000 eating establishments in Shanghai alone, the restaurant business represents a particularly attractive market for our technology.

At the close of the year, based on current agreements with local government agencies, we expect our intelligent food safety product will be utilized in over 10,000 restaurant locations. We will be testing our intelligent construction safety product in 2 large construction sites in Beijing and Tianjin, respectively, starting in the third quarter. Our total target market in this sector amounts to 7,000 construction sites annually. Our revenue model in this segment includes a fixed implementation fee based on the number of cameras installed plus an annual service fee for each site.

Turning to Vegas.com. We continue to generate a significant improvement in our financial and operating metrics. We delivered a strong first quarter performance, which has capped off with record ticket sales in March. Our conversion improved 29% year-over-year during the quarter, as we continue to leverage the improvements we made to the site in the past year and deliver a better customer experience. Attesting to the quality of our site, we continued to receive solid trust score rankings, with our Google seller rating recently achieving a 4.5, ahead of Expedia, hotels.com and Kayak.com.

Vegas.com has evolved into a premier destination site that consistently attracts a growing audience that increasingly utilizes the site to purchase show tickets and hotel rooms. Looking at the year ahead, we continue to expect Vegas.com to generate net revenue of $70 million to $80 million with EBITDA margins between 12% to 15%, making it one of the most successful entertaining e-commerce sites on the web.

I should also note that we are closely monitoring the news on the Supreme Court's anticipated ruling, with regard to legalizing online sports betting in New Jersey. Right now, legal sports bets are primarily confined to Nevada, but the New Jersey case could invalidate the Professional Amateur Sports Protection Act, a 1992 law that bans sports betting in most states. Should this occur, legal sports betting could be launched in New Jersey as well as additional states, such as New York and Pennsylvania. For perspective, a legal sports betting is estimated to exceed $100 billion nationally every year.

Looking ahead, we have 2 of the best URLs with the potential legalization of online gaming in Vegas.com and LasVegas.com. A notable amount of our traffic to our site is already related to customers who are interested in sports and betting. While several events need to occur and timing is unpredictable, and ultimately may not happen, we are optimistic about the effects of how legalization of online gaming could significantly help BDC's results.

With regard to the remaining businesses in our portfolio, these assets are operated at a net minimal cost and represent a source of significant untapped value that we believe is not reflected in our equity valuation. And we continue to work with our advisers on various strategies to unlock this value.

I'm often asked by investors how to establish a valuation for our stake in Sharecare, given that it's a private company. One of them I can point to is the recent IPO in Hong Kong by Ping An Good Doctor. This is China's largest online health care platform, which is owned by China's largest insurance company and one of the world's largest. The IPO raised over $1.1 billion value to company and approximately USD 10 billion. This equated to approximately 9x projected sales in 2019. Good Doctor's revenue was $275 million in 2017, and they lost $158 million during the same period. Given Sharecare has a more favorable financial performance, this gives you some indication of the potential value of our stake.

In summary, our first quarter results were in line with our plan, and we remained well on track in executing our strategy and working towards our financial and operating goals in 2018. We're driving initial deployment of our AI technology across multiple sectors in China, and we are progressing well in executing our retail rollout. Based on our progress and working directly with clients on the ground to advance the installed process, we believe our 2018 revenue forecast is attainable and we're excited about the year ahead.

Our second quarter revenues have shown improvement sequentially and year-over-year followed by significant ramp beginning in the third quarter as installed volume accelerates. Our AI business model is centered on rapidly building a diverse mix of sustainable, predictable and growing revenue streams, combined with the benefits of modest ongoing capital requirements.

We're also continuing to generate increased conversion in transaction revenues at Vegas.com, as we leverage our investments in this premier digital platform to build on its visibility and growing audience. We look forward to continuing to keep you abreast of our strategic progress in the year ahead.

Finally, as we announced today, Doug will be stepping down from the company as CFO to pursue other interests, but will remain as a senior consultant as we continue our search for Remark's next CFO. In addition, we have established a board CFO search committee to help us accelerate and manage the process.

Before turning the call over to Doug, I'd like to take a minute to thank him for his years of service to our company. He has played an integral role in elevating Remark to its current position of strength today, and we are grateful for his many efforts and contributions. Doug will still be meeting with investors on our behalf, and will be at The Cowen Conference in New York on May 30 and LD Micro conference in L.A. on June 5.

Now before we turn the call over to questions, I'd like to hand the call over to Doug, who'll walk us through the financial results for the quarter and year.

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [3]

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Thanks, Shing, and good morning, everyone. First, I want to thank Shing and the entire team at Remark and many of you on this call. I very much enjoyed my nearly 5 years here and look forward to working together on a smooth transition. And with that, turning to the financial results for the quarter ended March 31, 2018.

Our net revenue for the first quarter of 2018 increased 9% to $16.7 million from $15.3 million in Q1 of last year. Of this amount, revenue from our artificial intelligence subsidiary, KanKan, accounted for $1.2 million in the first quarter of 2018 as compared to $100,000 for the same period in 2017.

As an additional note, KanKan's top line was impacted in the first quarter of this year, due to a temporary sector-wide shutdown in China within their lending industry. The shutdown is directly related to an audit being conducted, as Shing mentioned earlier, industry-wide by the Chinese banking regulatory commission. We are ready to resume and ramp up our operations when the audit is complete, which we expect will be soon.

Turning to our expenses. Our total cost and expense for the quarter of 2018 was $37.9 million, which was up from $20.7 million in Q1 of last year. The increase is primarily due to noncash charges related to early lease termination and employee stock compensation. This -- the increase in expense, partially offset by the increased revenue, resulted in an operating loss for the first quarter of 2018 with $21.2 million compared to $5.4 million in the first quarter of last year.

Our net loss for the first quarter of 2018 totaled $14.1 million or $0.43 per diluted share. This compares to a net loss of $25,000 or $0.00 per diluted share in Q1 of last year. Net loss for the first quarter of 2018 included an $8.6 million noncash gain related to a change in the fair value of our warrant liability, which occurred as a result of the decrease in our stock price during the period. For the first quarter of 2017, we recorded a $6.6 million gain related to the change in the fair value of the company's warrant liability during the period.

Although it is a non-GAAP measure, I thought it might be helpful to address our cash burn. As our press release earlier today stated, adjusted EBITDA for the first quarter of 2018 was negative $6.9 million, which includes an early lease termination of approximately $2.3 million, bringing our quarterly cash burn to $4.6 million. Don't forget, however, that the first quarter is consistently by far the weakest quarter for adjusted EBITDA for Vegas.com and is also the quarter in which we spend the most on page search related to our Vegas.com offerings. Therefore, as we've consistently explained, Remark's cash burn on average is approximately $1 million per month and we expect this to mitigate throughout this year.

Now turning to our balance sheet. Our cash position remained strong at $21.9 million with an additional $11.7 million of restricted cash, bringing our combined cash position to $33.5 million at quarter end. This compares to a combined cash balance of $34.3 million at December 31, 2017.

Improving the balance sheet, we were able to amend the finance agreement with our lenders on April 30. Among other changes, the result is 150 basis point decrease in the interest rate and a maturity date extended September 2020 for the majority of the principal amount.

Shifting gears to our financial outlook for 2018. Starting with our travel and entertainment segment, Vegas.com, or VDC, continues to demonstrate significant improvement in our financial and operating metrics. We are reiterating our expectations for Vegas.com to generate gross bookings of more than $375 million and net revenue between approximately $70 million to $80 million. We also anticipate that our EBITDA margin for this segment will range between 12% and 15% revenue for fiscal 2018. Based on our performance to date and outlook for 2018, we believe Vegas.com to be one of the most successful entertainment e-commerce sites.

For KanKan, or our technology and data intelligence segment, we expect to generate more than $50 million in revenue for fiscal 2018. Our forecast for KanKan is directly based on the agreements and contracts we've signed and the actual deployments steps we're currently taking in conjunction with our clients on the ground.

Looking ahead, we currently anticipate our total consolidated revenues for the second quarter to improve both sequentially and year-over-year followed by a more pronounced uptick starting in the third quarter, as we increase our AI deployments and installations.

In total, we expect to generate consolidated revenue in excess of $120 million with KanKan's artificial intelligence platform as the primary driver of the growth, as its revenue rapidly increases during the course of 2018.

Our outlook for 2018 reflects the solid progress we're making in driving adoption and deployment of our AI technology across multiple sectors in China and Southeast Asia, as well as our ongoing success in driving conversion in transaction revenues at Vegas.com.

And then a few housekeeping items I just wanted to briefly discuss. Given the confusion on the last call regarding our warrant liability, it is worth noting what transpired this quarter. As you can see in the balance sheet in the press release, Remark's warrant liability decreased from $89 million at year-end to roughly $21 million at 3/31, which leads to my next point that investors often ask regarding the number of our outstanding shares and potential effect that our outstanding options and warrants could have on that number. For context, using this past Friday's close price of $6.17, if all in the money options and warrants were exercised on a net basis, the number of outstanding shares would only increase by approximately 4.2 million shares.

I will now turn the call over to the operator for our Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Darren Aftahi from Roth Capital.

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

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Best of luck, Doug. It was great to work with you. Just first on KanKan, the revenue in the quarter, the $1.2 million. Can you just talk about the mix of what was financial services versus other verticals?

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

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Darren, it's Shing. So for the first quarter the -- I would say the bulk is primarily the FinTech revenue. For the second, third and fourth quarter is when you'll see the revenue recognition from our other businesses.

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

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Got it. And then, when we're sort of thinking about that $50 million in the ramp, I appreciate things will go up in the second quarter and then kind of ramp significantly in the second half of the year. But can you just give us kind of a directional understanding of how much revenue you expect to kind of generate in the first half of the year? And then, some of these larger deployments in retail, where are you in terms of being ready to kind of implement? Just any kind of color on that will be helpful.

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

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Sure. I mean, I think first of all, it's important to note that these companies that we've been able to cross the finish line and getting these deals signed, AI is something new really to -- to really everyone, right? And so it's happened over the last couple of years. And so when you're deploying the AI technology across such a large base, a careful strategy in terms of how we implement it and the process of doing it is very important. So we believe that by the -- by this -- that we'll begin by the second quarter, and that's when we'll first begin to test in a subsection of all of the stores, just say -- I would say, we will look to test under 5% of the base. And then as we begin to show the success, it will be an eventual rollout into the third and fourth quarter.

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

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Great. And maybe one for Doug. Just given the EBITDA burn, it looked like the cash balance sequentially was pretty flat. Was there anything in terms of cash inflow in the quarter that you maybe didn't call out? And then the lease termination fee, can you explain what that was related to?

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [7]

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Absolutely, Darren. So the first part was there any cash inflow that came in given that our -- there was some cash burn. And then the second piece was regarding the lease termination. So on the first piece, there was no cash inflow other than the normal timing of our cash is -- of our cash flow. And you'll see in our 10-Q should be filed after the market today. And you'll be able to see that in the 10-Q clearly that there was no additional cash inflow in the quarter from raises or anything of that nature. Does that answer the first part of your question?

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

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It does.

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [9]

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Okay. And then on the lease termination, as many of you know or -- and some of you have actually been out to the original Vegas.com site out in -- by Green Valley. We ended that lease -- we ended the -- the lease actually took effect when we sublet the sectors out this quarter. And you're hit with a one-time charge when we no longer use that space. So the $2.3 million is the loss that we'll take, but it is a one-time charge. But you take it all within the given quarter, noncash.

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

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Got it. That's fair. Two more from me. Just what was the travel and entertainment EBITDA in the quarter? And then, Shing, could you give us just a sense on timing on the new CFO search?

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [11]

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Shing, do you want to go first?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [12]

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No.

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [13]

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And so travel and entertainment sector for -- and again, this will be in our Q later on, was $167,000, which was the EBITDA for the first quarter. What -- you'll also notice though when the Q comes out later today is that bookings for future dates are up significantly. So as Shing mentioned on the call, March is one of the best months we've ever had. And -- but the bookings followed equivalently for -- through April, May and June are also quite strong. So it's deferred revenue.

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [14]

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Darren, in terms of your question, I think the -- clearly, we're going to look to bring on and then recruit the best candidate as fast as possible. But to finding a replacement in terms of -- for -- as a CFO in terms of our next stage of growth doing business in the U.S. and in China across a multitude of different industries is not the easiest search out there, but we're certainly moving as fast as possible. And we expect to find somebody over the course of the next few months.

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Operator [15]

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Our next question comes from George Kafkarkou, who is a private investor.

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George Kafkarkou, [16]

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Can you hear me?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [17]

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Yes.

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [18]

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Yes.

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George Kafkarkou, [19]

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Doug, thank you for your good work, and best of luck in the future. Guys, there was an article fairly recently published, whereby the author claim to have spoken to, I think it was Doug, about dual listing in the Asian markets. Can you guys talk to that? And what you guys think of dual listing? Is that a possibility that you guys are researching?

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

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George, this is Shing. Clearly, the markets in Asia, given that the valuations are: one, significantly higher; and number two, more importantly, there's a much greater understanding and appreciation for AI companies, that's certainly a route that we're looking at. I think there has been a number of rules that have relaxed in terms of listing in Hong Kong and in Mainland China. So when the kind of right time and opportunity comes up, we are -- we'll certainly look to take advantage of that. But yes, it's something that we are looking at very seriously.

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George Kafkarkou, [21]

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Okay. Has that required a lot of internal administrative work to prepare for that? Has that work been done?

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

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That requires -- I think, right now it's -- there is -- we -- I'd say, in general, we look at all possibilities, but the kind -- the type of the actual concrete rules haven't exactly been established yet on the exchanges. So it's hard for us to kind of move in any particular direction until that's been established.

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George Kafkarkou, [23]

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Okay. All right. And one final question. In the past, Shing, you've mentioned that -- I think I can always quote the [datum] that the only thing that's not sacred is KanKan. Does that mean Vegas.com with its growing strength and improvement, is that an asset that you guys will consider releasing on the right terms going forward, if the conditions were conducive?

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

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If the conditions are right, I think we'd look at -- we certainly -- it's our fiduciary duty to look at everything. The Vegas business is very solid and growing very fast right now. So if the right opportunity exists, we'll certainly take advantage of that.

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Douglas M. Osrow, Remark Holdings, Inc. - CFO [25]

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George, I just wanted to add one little -- just one little piece. Structurally, our VIE structure was set up for a possible listing in mind. I'm not sure if that was what you were going for before, but I wanted to make sure we -- that, that was noted.

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George Kafkarkou, [26]

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Yes. Yes. Yes. So it's not unreasonable for me to take away that structurally we're all set and it's a question of timing now and conditions being appropriate.

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Operator [27]

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(Operator Instructions) Our next question comes from Ron Nash from Nash Partners.

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Ron Nash, Nash & Company [28]

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As George referred to recently, a number of AI companies have taken listing on the Hong Kong Exchange. Do you need and how do you compare to a number of these companies that are in the AI field?

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

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Ron, I would look at it from a couple of different ways. First of all, it's -- when the company says that they are AI, you obviously got to kind of understand what kind of AI that they do. Most of the companies that we've seen and that are operating in China are primarily either FinTech based or just facial recognition based. And many of those companies are -- have invested and lost a lot of money over the last couple of years. Our platform, I think, is very different in the sense that we do much more than just facial recognition. The ability to understand what's happening and to be the sort of the cognitive understanding of what's happening in a particular video feed or a picture or what's happening real time is really what's giving us an -- what we believe an edge versus our competitors. So we certainly feel that: number one, we're doing more; we're doing it with a lot less money invested; and the third part is, I think the most important is that our results are better.

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Operator [30]

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(Operator Instructions) Our next question comes from [Poli Kanakara,] who is a private investor.

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Unidentified Participant, [31]

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My question is, since you are focusing heavily on AI, I was curious whether you will be participating in the AI World Conference, which is going to happen in Boston in December this year?

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [32]

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I'm sorry. I just heard in December an AI conference. Are we -- are you referring to the World Internet Conference that we presented at last December? And whether we should be doing that this year?

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Unidentified Participant, [33]

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No. This year, there is an AI World Conference and Expo, which will be held in Boston in December this year. So I just wanted to know...

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Kai-Shing Tao, Remark Holdings, Inc. - Chairman & CEO [34]

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Right now, we don't have any plans on participating in that Expo.

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Operator [35]

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We will now take a follow-up question from George Kafkarkou, who is a private investor.

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George Kafkarkou, [36]

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I'm sorry. I think I hit the wrong key. I've already asked my questions. But as I'm on, can I ask one question? Are you guys considering more investments in the company like the CP Group did? I can't remember exactly when the CP Group, I think, invested $10 million at a $12 valuation. Are you guys continually looking at investments like that?

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

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George, I think that a number of different groups like CP Group would be now -- that if we are able to come to agreements, we certainly welcome an investment from a group that is able to bring us the type of pipeline of deals just as CP has done. That has been a great partnership and a strategic partnership so far. So we are certainly open to discussions with other groups in the future.

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Operator [38]

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This concludes today's Q&A session. I'd now like to turn the call back over to management for any further or closing remarks.

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

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Thank you very much for joining the call, and we look forward to updating you on the next conference call.

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Operator [40]

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This concludes today's call. Thank you for your participation. You may now disconnect.