Q2 2023 Remark Holdings Inc Earnings Call

Participants

Fay Tian; VP of IR; Remark Holdings, Inc.

Kai-Shing Tao; Chairman & CEO; Remark Holdings, Inc.

Todd Brown; Senior Manager of Financial Reporting; Remark Holdings, Inc.

Brendan O'Neill

Stephen Hans Wagner; President, Investment Advisor, CIO & CEO; Integrity Wealth Advisors, LLC

Unidentified Analyst

Presentation

Operator

Good day, and welcome to the Remark Holdings Fiscal Second Quarter 2023 Financial Results Earnings Call. (Operator Instructions) Please note that this event is being recorded. Now I'd like to turn the call over to Ms. Fay Tian, Investor Relations. Please go ahead.

Fay Tian

Thank you, Nick. Good afternoon, everyone, and welcome to Remark Holdings' Second Quarter Fiscal 2023 Financial Results Conference Call. I am Fay Tian, Vice President of Investor Relations for Remark. On the call with me this afternoon is Kai-Shing Tao, Remark's Chairman and Chief Executive Officer; and Mr. Todd Brown, Vice President of Finance. In just a moment, Mr. Tao will provide an update on our businesses and Mr. Brown will recap our second quarter 2023 fiscal results.
Following these remarks, we will open the call to questions. But before I turn the call over to Mr. Tao, I would like to take this opportunity to remind you that some of the 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 this 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.
I will now turn the call over to Remark's Chairman and Chief Executive Officer, Mr. Tao, so he can provide additional information on Remark's businesses and recent developments.
Please go ahead, Shing.

Kai-Shing Tao

Thank you for taking the time to listen to our Q2 update, and we're excited to share what lies ahead of us. But first, a recap of Q2, which was revenue that was strongly driven by our business in China by the current economic and political headwinds that China is facing.
First, the construction sector. In Q2 2023, we've completed 25 Remark AI construction product deployments, which contributed over $2 million. The deployments are for smart construction platform, which includes worker check-in and checkout, worker PPE monitoring, worker safety enforcement, hazard zone intrusion prevention, fire and smoke alerts, environmental protection monitoring. We continue to develop construction SOP and autonomous operation-related AI algorithms and applications, which will include autonomous crane operation system and autonomous cement mixing system.
Two, school sector. In Q2 '23, we continue our Remark AI school product development and deployment. We've added 43 schools in our customer base in Q2, which makes our AI school products to serve over 700 schools and 1.5 million students. Our school safety, food safety and AI energy controlling system, along with new products released in Q2, which include eye protection and restroom environment monitoring system are making us a unique AI product provider in the school education market.
We are now expanding our footprint into 2 new provinces in China and into the city of (inaudible), which is 1 of the 4 principal municipalities of China. To date, our systems cover less than 1% of the total of 400,000 campuses in China. Three, our community. We completed the entire deployment of our smart community projects, over 1,800 communities deployed in which we do that in conjunction with China Mobile for Phase I. We are in the process of negotiating additional Smart Community project Phase 2, which will cover an additional 3,000 residential communities and over 5 million residents. Phase 2 is expected to start in Q3, Q4 of this year.
Four, Airline sector. As we mentioned before in our calls, Remark AI has introduced the first AI aviation platform in the industry. We are currently in the final bidding process for 3 of the airline AI projects after delay due to COVID from 2022. The projects include airport safety system, engine inspection system and airplane collision prevention system. To remind you of the use cases here, typically, it takes 1 hour plus for 10 workers to inspect the engine to make sure there are no burns or cracks in the blade. With our computer vision AI, we are now able to do this inspection in under 10 minutes and with only 1 inspector.
And lastly, in the retail sector, we are currently working with 1 of the largest ice cream and pizza chains in China and have deployed our AI smart retail products to over 600 stores. The products include staff, check-in and checkout and performance analysis, food processing, safety, theft prevention, store food material waste management, product presentation and placement, and loss of sales prevention, replenishment management and et cetera.
We are expecting an additional 600 more chain stores to be online by the end of Q1 '24. Going beyond China. During the last 2 conference calls, we have shared with you the large total addressable markets, otherwise known as TAM, Remark Holdings is seeking to capture. To recap, there are currently approximately 100 million cameras in the United States and another 200 million globally, excluding Greater China.
Our mission is to utilize our award-winning AI power technology to bring intelligence to the 300 million sum cameras that are in the marketplace outside China, providing detailed analytics such as identity recognition, large density people counting, loitering object detection, weapons detection through our SSP, otherwise known as our Smart Safety platform that is camera and platform-agnostic. Modeling $100 per month analytic fee per video stream or $1,200 annually. That reflects an annual total addressable market of $3.6 billion in recurring revenue globally, excluding Greater China.
With such a large TAM, how are we going to capture this market opportunity. We have been in discussions actively with sales and marketing partnerships with technology market share leaders that have wide distribution and a vested interest in participating in the rapid growth in the implementation of AI technology. It's not a secret that the competition is very intense for market share out there, and these large companies want to fund the best partners to help them rapidly advance their AI business.
While Remark AI's platform is broadening its capabilities, what we have uniquely distinct ourselves is in the specific AI area of computer vision. Our focus is on making industrial applications run more efficiently as that is a large-scale business that is moving rapidly too and is what customers are paying for now. As we deepen our relationships and partnerships, it is very clear that we are 1 of the leaders in this area, and we are well positioned to further our lead in this race.
We also recently announced our partnership in working with global leaders with both NVIDIA and Intel. We have optimized our AI computer technology with each respective company's latest chip, which now allows us to jointly market our computer vision technology to their customer bases, utilizing their 5,000-plus sales force who are trained to help sell our Smart Safety Platform. The collaboration with Intel does not stop within the U.S. as we are actively partnering to deliver the SSP to their Latin American customers that complement our existing system integrator relationships.
With Intel, we will be initially working with them in retail and quick service restaurant space with both understanding how their customers shop and eat on the front end and then working with their food and customer safety and security on the back end. This is exciting for us as we first worked with Intel a couple of years ago in launching a kitchen safety platform in China and have now jointly upgraded offering globally.
Each group will be initially focused on different areas. Some may overlap, but in general, it's a divide and conquer strategy. Our partnership with NVIDIA through its metropolis ecosystem was recently acknowledged by NVIDIA program manager, David Gregory, who recognize our team's successful working relationship in establishing a strong foothold in the smart city space. This includes traffic control and providing meaningful analytics and data insights to cities, stadiums, and major events.
We are now also working with the largest global software company and the largest EV manufacturer in the world to train their product and salespeople on Remark's Smart Safety Platform and how they can help their end customers enjoy an immediate return on investment by providing real-time analytical data that helps to understand their customer preferences as well as augmenting their security teams monitoring capabilities with AI tools to prevent disruptive incidents.
This operating leverage gained from our partner's existing distribution channels changes the playing field and allows us to scale quickly. During the quarter, we announced a partnership with 1 of the best companies in the people counting space called WaitTime. We expect to share sales resources with them as they have very established sales channels with Cisco and Intel has made a strong entry here in the U.S., selling their people counting products.
Our strategy is to piggyback our sales team and relationships to help expand their offerings to their customers. As you know, once we win this, many similar opportunities will present themselves after we win. As a point of reference, these deals are all 7-figure opportunities with a combination of both hardware and software, which ultimately means high-margin business for Remark AI. To provide another example, previously, we've disclosed our relationship with the Barclays arena, where we are integrating our AI analytics with their existing Genentech video management system to help provide area, arena security, monitor crowd density as well as extend coverage for the exterior square attached to the public transit station.
Our software partner has direct relationships with 150 sports teams in the NBA, NFL, NHL, MLB, MLS as well as over 200 stadiums and arena, speeding up the sales conversations with decision-makers as we leverage our future placement in their platform marketplace as a preferred supplier we sell directly by their sales force. More importantly, the credibility from this partnership provides an indirect technology stamp of approval for most corporate IT departments, which are already running on their operating systems.
Recently, we are in discussions with the world's largest EV manufacturer for them to bring EV transport buses and school buses to Nevada. Given Remark's extensive expertise in AI-powered video analytics and our proven track record of developing fast and effective innovative solutions, we are well positioned to have our suite of SSP products to outfit the EV bus to provide functions such as people counting, violence detection and driver monitoring. The federal government through the Federal Transit Administration, FTA will be funding Axis 2050, which is focused on improving the transportation system through the U.S., the #1 of the top 5 priorities of this plan is safety.
Safety is what Remark's products are built to provide as we have now shown through our deployments around the world. This includes here in Fremont Street Las Vegas to Brazil with the police departments and 2, the U.K. with border and traffic control. Our capabilities drive meaningful change, foster efficiency and contribute to the realization of Axis 2050's overarching mission solidifying our role as a front runner in the pursuit of the $3.74 billion that is allocated for improving safety from the Axis 2050 overall spend.
As you may recall in our last earnings, I noted about the opportunity for us to work with 1 of the largest providers of school buses in the U.S. using our AI safety security technology. We're able to make progress in those discussions and with this opportunity in Nevada will only significantly enhance the opportunity. In addition, we are partnering with large global systems integrators with deep industry relationships who already sell and service the end market that we are seeking to capture. One example of this partnership is with [Intellicity], working with them to outfit the Rio de Janeiro police car fleet with mobile facial and license plate recognition capabilities as police officers patrol the city looking for wanted persons or vehicles.
In a short period of time, we were able to customize our technology offerings for the Brazil market and subsequently win. While this is just the initial phase, it showcased our ability to move fast and make the requirements of our customers, and we're confident you will see many opportunities like this in Latin America in the second half of the year. One of the key advantages to Remark AI is the speed we are able to move in the versatility of our Remark AI platform. Recently, we are presented with a very small window of opportunity to present our platform to address the 911, 311 call center problems that cities around the U.S. are facing.
Our competitors thought we would be unable to customize our AI, however, in the short time frame, we were able to do so. We built a platform that was unique and embrace the latest AI technology to help address the issues that city was facing. Many of you know the wait times for 311 or 911 are very long. A key reason for that is the lack of dispatches. Remark AI's 311 platform can simultaneously service 20 sessions in 40 different languages. With the average 311 session costing $3.50 per session and as high as $7 in some major cities, Remark AI's platform immediately delivers cost savings and a return on investments for its urban customers, while increasing the speed and breadth of services through a wider audience.
Our platform combines the best in generative AI and computer vision AI. When a caller dials 311, our AI agent will speak to them to help understand this situation. Simultaneously as they are speaking, our AI agent fills out the necessary paperwork to document this call. Lastly, if they say a picture is worth a thousand words, the caller would take a picture or video to showcase the situation and our computer vision AI would better understand and independently verify the nature of the call.
This solution was unique and very well received by our listeners. We are confident that after we win this opportunity, similar opportunities will present itself not only in other cities, but any other -- in any business that deals with forms and paperwork, and obviously as well as anything to do with customer service, like airports and restaurants.
On a final note, we would like to begin letting you know about the new market, which will be a Q3, Q4 story is Remark AI entering the Middle East, in particular with Saudi Arabia. As it appears this is a special opportunity to take part in the rapid transformation of the Saudi's economy and national infrastructure. Unless you've been hiding under a rock, Saudi is spending hundreds of billions of dollars to transform the economy into 1 that is not reliant solely on oil.
We have been approached by several groups that are involved in this transformation, who want our expertise in handling large-scale construction projects like in China and bring it back to the Kingdom of Saudi Arabia. We are very excited about the opportunity as it is unprecedented. And also, we are confident we are 1 of the very few that can provide such solutions.
These include managing a workforce that will grow from a current number of 50,000 workers to 400,000 workers by the end of the year, using AI and LiDAR jointly for construction planning or having construction run 24/7 autonomously and in the dark to save power. This is a once-in-a-lifetime opportunity for Remark, and we intend to open an office sometime in 2023 in Riyadh to handle these opportunities.
In conclusion, I'd like to emphasize that our business model is built upon annual multiyear recurring subscription revenue that provides a total turnkey AI-powered platform for our customers and partners. Our technology has been proven by our partners and clients to be robust and flexible at the same time. As we set a solid footing into the various markets we have mentioned, our continuous focus is on the mutual goals of positive cash flow generation and growth and believe that this quarter has set us on the trajectory to reach our goals by the end of the fiscal year.

Todd Brown

All right. Thank you, Shing, and thank you to everybody for joining us on today's call. As we noted when we last spoke to you during the first quarter earnings call, we expected that our project completions in China would begin to accelerate in the second quarter and they have. Though China's former zero-COVID policy had been adversely affecting our business in China and such policies lingering effects as well as COVID infections continued during the first quarter of 2023, we were able to ramp up our work with vendors and customers during the 2023 second quarter to complete many more projects than we did in the first quarter of '23 and even more projects than we did in the 2022 second quarter.
The increase in project completions led to revenue for the 2023 second quarter, totaling $3.2 million, reflecting a 24% increase from the $2.6 million earned during the same quarter in 2022. The revenue in Q2 is almost entirely related to our smart construction project, under which we were able to complete installations of 25 more sites and our smart campus solutions, which we were able to deploy yet an additional 43 educational campuses in China, bringing total installations to more than 700 campuses and helping to protect more than 1.5 million students.
With revenue and cost of revenue increasing by about the same amount during the 2023 second quarter compared to the same period of 2022, gross profit remained essentially unchanged at approximately $0.7 million.
Our operating loss also remained essentially unchanged at $4 million. Though operating loss did not change, we did experience a $0.7 million decrease in general and administrative expense that resulted from a $0.5 million reduction in stock-based compensation and a $0.4 million decrease in business development expense. Those decreases in G&A expense were partially offset because we recorded a total of $0.4 million of asset impairments in the 2023 second quarter compared to having no impairments in the same quarter of 2022.
Increases in sales and marketing expense and technology and development expense also partially offset the decrease in G&A. Net loss totaled $5.9 million or $0.42 per basic and diluted share in the 2023 second quarter compared to a net loss of $12.5 million or $1.19 per basic and diluted share in the same quarter of 2022.
Since operating loss was unchanged, the decrease in net loss was primarily the result of the 2022 second quarter including $6.9 million of loss on an investment that did not recur in the 2023 second quarter. Also, a decrease in interest expense because significantly less debt principal was outstanding during the 2023 second quarter and during the same period of the prior year was offset by an increase in finance costs related to the obligations to issue our common stock that resulted from our transactions with Ionic Ventures LLC.
On April 12, 2023, we issued the second of 2 debentures to Ionic Ventures pursuant to the debenture purchase agreement that we and Ionic signed on March 14, 2023, and we received $1 million pursuant to such debenture. We also received an advance of $2 million during the 2023 second quarter pursuant to the equity line of credit with Ionic Ventures that was established in October of 2022. The convertible debentures we issued in March and April of 2023 plus the advance pursuant to the equity line of credit during the 2023 second quarter give rise to obligations to issue our common stock and, in turn, caused the increase in finance costs.
As of June 30, 2023, we were obligated to issue an estimated 5,711,148 shares of our common stock to Ionic, representing an obligation with an estimated aggregate fair value of [5.6 million]. As of June 30, 2023, we still owed an aggregate total of $16.3 million to our lenders, an amount which currently must be repaid by October 31, 2023.
We continue to have ongoing conversations with our lenders regarding that outstanding debt and are confident that we will reach a positive solution that is beneficial to all stakeholders. Also as of June 30, 2023, our cash balance totaled $0.2 million compared to a cash balance of $0.1 million at December 31, 2022. Net cash used in operating activities was $5.2 million for the 6 months ended June 30, 2023, representing a 53% decrease compared to the $11.1 million we used in operating activities during the same period of 2022.
And with that, I will turn the call over to the operator to begin the question-and-answer portion of the call.

Question and Answer Session

Operator

(Operator Instructions) The first question will be from Steve Wagner of Integrity Wealth Advisors.

Stephen Hans Wagner

I just -- we are hearing so much about AI -- and I've had some -- I read -- actually, I read a really good book on it called The Spatial Web. And I'm learning that there -- everyone's doing generative AI, but -- it seems like that's a commodity. Is that what you're doing? Is there any difference between what you're doing than what everybody else is doing in this regard with the computer vision and (inaudible)?

Kai-Shing Tao

I would -- thanks, Steve. I think within AI and certainly generative AI with what we're seeing with ChatGPT has definitely garnered the attraction. Where we focus on is computer vision. We feel that's a much bigger market, that's where customers are paying. And I really believe the value that AI brings us in the industrial applications. So we've been -- we have our own large language model.
We -- actually, that was what we -- one of our first ventures in AI, and I think those back in 2017, 2018. So we've actually been able to update our model and been able to use that with some of our customers. But as a stand-alone business, it's very difficult. It's very difficult to get customers to pay for it. And so that's why we had pivoted almost 6 or 7 years ago. And we're glad that we do that. You can see once ChatGPT had released their product, very quickly, there were a lot of other companies that introduced their language model. So the barriers to entry is not very high.
For what we do, we think the barriers to entry are very high because it's not just the -- it's not just coming up with the technology, but it's the ability to deploy it as well. The implementation is not so simple.

Stephen Hans Wagner

Sure. As you look across the spectrum of AI outside of the magnificent 7, it seems like there's been just a gigantic fair market sell-off in market valuations. I mean what are you seeing in private wise -- private valuations on AI? And what -- I mean, how would you measure where Remark should be given what you guys are doing and seem to be really enthusiastic over?

Kai-Shing Tao

Yes. I mean it's obviously frustrating where our share price is and where our valuation is. But I think this is a -- this is not a sprint. It's certainly a long-distance race. And so yes, it's -- I think you see a lot of private companies right now that are raising monies with -- in the several hundred million dollar valuations with less than $2 million of revenue. I just don't think that's sustainable.
I feel that where there are companies that are incredibly overvalued in terms of their metrics where we obviously feel we're very undervalued. We have a technology that we built from the ground up. We've got a blue chip customers around the world, and we're generating real numbers without taking huge losses to get there. And we feel we're on track to breakeven this year, which I think will be the first for any AI company doing these kinds of numbers.
So it is -- inevitably, it is a distraction when you read it in the press but when it comes down to actual execution, I like where we are -- what path we're going down.

Stephen Hans Wagner

Okay. In terms of headcount, I mean where are you guys now that way? I mean -- and do you see -- obviously, as you get these contracts, there may be more of a need for capital? Or do you think that will be offset by upfront deposits or revenue. And I would like you to expand on that because I think 1 of the things we shareholders are kind of looking at is we understand that you've been hearing about the revenue. And obviously, it's great to see some money coming in from the China side of things. But like bringing on a domestic customer, is there any upfront revenue? How is that going to work?

Kai-Shing Tao

Yes. I mean we don't do unpaid POCs, right? So that's -- it's not -- when we go through a proof-of-concept, they're paying customers. So I think we're kind of -- we certainly feel we're past that stage where we're doing things for free, right? So -- but as we expand, I think certainly with our partnerships that we mentioned with Intel and with NVIDIA and the software partners that will -- there won't be that unformed cost for, just say, additional salespeople because we'll be able to leverage upon their existing sales team.
As far as deployment, we will be covering as these opportunities are being presented, of course, we're working with local systems integrators, but a lot of times, we'll need our guys on the ground as well. So I could see certainly an expansion there. Certainly, the ability to handle so many different projects. I mean, I think we're uniquely positioned to do that. So we didn't -- we've been doing this for almost 10 years now.
So we didn't do this spend all this time to just be a one-trick pony, right? So we had a vision 10 years ago to really build a comprehensive AI platform, and now we're seeing that. And these opportunities are presented to us that no one else is able to execute. They may claim they do it, but when it comes to execution, it's different. So yes, so obviously, we would have to staff appropriately for that. But obviously, with these partnerships, that upfront cost will come at a lot lower number than what it would have been if we're going to do everything ourselves.

Stephen Hans Wagner

Okay. So -- and again, I apologize. I was -- I came into the call literally 20 minutes late. So I missed a lot of it. So it sounds like these are partnerships, as you mentioned, I think, with Intel and NVIDIA that they will provide funding for. Is that -- am I hearing that correctly?

Kai-Shing Tao

No, you didn't hear that correctly. What they're providing is their sales team, right? So I think each company has their own marketing program where say, for example, if there is a potential customer that's a little bit hesitant on incurring the cost of a paid POC, that company will come in and provide $300,000, $400,000 that would pay us to execute that, right? So obviously, that's very -- that's -- that's exciting.
Even more exciting is the fact that now we can leverage they have over 5,000 kind of a sales force and being trained on how to sell the Remark's AI solutions obviously speeds everything up for us. We cover a lot of areas faster. I can get to the -- frankly, get to the key decision-makers great. So I think in any type of enterprise account, you have to hit the company from a bunch of different angles. And I think this just makes our pitch more compelling.

Operator

Our next question will come from Ross (inaudible), [Silvan International].

Unidentified Analyst

Yes. So a question I have for you is -- you look at a lot of companies in the AI space, you don't see a ton of execution. I look at Remark, and I see you've already won an initial $6 million agreement for -- with the Rio de Janeiro police cars. And then you've got a $1 trillion company in NVIDIA, who you've joined this metropolis ecosystem. I mean what's -- how are you so differentiated from these other, like what's differentiating you or what's your secret sauce as it relates to these opportunities? And what's making you stand out, I guess, is what my question is?

Kai-Shing Tao

Okay. So I think I'd answer that in 3 -- kind of the 3-part answer. The number 1 is we've been doing this for a long time, and we're not -- we didn't just start this AI company in the last 2 years and certainly over the last 6 months to capture the wave. So it took us 6 years to build the technology in just in the last 3 or 4 years to gain the experience on how to deploy it.
Each customer obviously has different requests and the actual expertise in putting up these cameras and the angles and the placements and all that takes time. And obviously, every type of vertical has their own intricacies. But I would say, taking a step back, the 2 most important part, which answers a bigger question, which is why are we able to go into these different industries, is really our core algorithm, right?
So the way that our algorithm is trained allows us to is number one, train any type of solution that we don't have under kind of our stable to do it in a very fast manner. So typically, it takes 9 to 10 months to train something new, we can do it under 1 month. And then the second part is you probably have heard about with these AI algorithms you need, it's all about the data sets and how much data you need.
A key point to ours is that we don't need a lot of data to train our algorithms. We actually call that our few-shot training algorithm. And we'll post a white paper on it just to give further detail on it. But that allows us to train the algorithm much faster than anybody else and with a lot less data. And because many times, the solution pain point that you're looking to solve doesn't have the data sets to train it under.
So I think those are the things that really differentiate ourselves from a preparation standpoint and then number two, from an execution standpoint. I hope that answers it.

Operator

(Operator Instructions) Next question will be from Brendan O'Neill, Ionic Ventures.

Brendan O'Neill

I have a couple of questions for you around kind of your interest in developing the non-China-based revenue streams. And kind of going back to kind of the earlier calls, April and May calls, you touched on a couple of things. I was wondering if you could give a further update on the yellow school bus program in partnership with Netwatch. I think at the time in April on the call, you had launched a pilot program and school starting up here, so I just wonder if you could update us on how that program is going.

Kai-Shing Tao

Okay. Sure. That was what I kind of alluded to in our discussions with the trends in school buses. I would say the discussions are moving along. As you can imagine, this is covering a large school bus space. But the opportunity is right there in front of us. So we continue to customize our algorithms for their needs, and we hope to have something for you over the next couple of months as this is a big deal for everyone, right? Because we would be outfitting over 50,000 buses using our algorithms. But we think there will be something where you'll see in the future where, with Taiwan, what we were doing with them. Also with the large EV company we mentioned on our call and what they're doing in Nevada.

Brendan O'Neill

Okay. And similar to other opportunities, I know on August 1, you announced your 311 product that you kind of alluded to on the May call of a various opportunity. Is that a product launch? Do you have a current customer? Or what would be your strategy to now getting municipalities and people to use this product?

Kai-Shing Tao

Yes. Right now, as you can imagine, when you do with municipalities is that you have to go through their technology governance board, which is always -- always a hurdle. We just passed one. And right now, we're waiting for the formal approval from the other one, from the other city (inaudible) right now, I'd say, close to the finish line for really on 2 major cities in the U.S. And it's a major problem. It's a very -- of very high urgency.
We were doing 1 presentation just 3 weeks ago. And tragically, a mother was shot while the daughter was waiting on hold for a 911 call. So this is something and this is what we were presenting to the technology board. So this is obviously something of very high importance. But obviously, we have to jump through the hoops. But I say we're -- because of the urgency, we're moving faster than any other group is on this area. But it would be 1 major city on the West Coast and 1 major city on the East Coast that we're doing this.

Operator

Our next question will be from Andrew (inaudible), Breton Capital.

Unidentified Analyst

I have a quick question. I know you mentioned the Neom, the -- the Saudi Arabian city of the future and all the investments they're making in AI. And so I'm wondering how you think you're able to compete there and what your competitive advantage is participating (inaudible) in the business? It seems like all the really big players are trying to get a stead in there.

Kai-Shing Tao

Yes. I mean it's not easy. I mean, a lot of these things were, for sure, the smallest company, that's probably participating there. But what we do have and what we keep on saying is our AI is unique. And very few companies have the experience in working on large-scale projects like we do. We've had over 5-plus years of working with the largest construction company in China working on their largest projects. So we can take that expertise and bring it to Neom, which is where similar-sized projects are now being designed and built.
So I think we're uniquely qualified for that. And it's not just a qualification, it's that we -- there aren't many, if you were to look around, there -- there are AI companies in the construction industry that provide 1 or 2 features rather than a real full complete platform.
So we're able to go in, provide 20 different solutions immediately. We don't have to wait 6 to 9 months to customize, but we can be up and running within 4 to 6 weeks. And everything you realize as you spend more time in Saudi is that they want to move fast. They don't want to wait. The capital is not an issue. The issues are you able to deliver and execute. And we think we are. And construction is just 1 industry of where we potentially may work with them.
They are building 1 of the largest sea ports in the world. They're building 1 of the largest airports in the world. So -- and these are all areas that we have uniquely developed a platform to handle. And we just don't see other competitors doing the same thing. I mean they tell us the same thing. So I think many of the counterparts, when we talk to them are surprised that there is even something out there like this.
So we are just going through the process. I think when we first started having conversations with them was back in late spring. And so things are moving along pretty fast where we can -- right now, when we talk about construction, but there are 3 to 4 other verticals within that we think we can bring to a project like Neom over the course by the end of this year.

Operator

That concludes our question-and-answer session. I'd like to turn the conference back over to Mr. Fay Tian for closing remarks.

Fay Tian

Thank you, Nick. Thank you, everyone, for participating in Remark Holdings Second Quarter Fiscal 2023 Financial Results Conference Call. A replay will be available in approximately 4 hours through the same link issued in our August 2 press release. Have a good afternoon.

Operator

Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.