文件号024-12515

10月份的初步发售通知 2024年25日

根据与这些相关的法规A的发售声明 证券已向美国证券交易委员会备案。本初步发售通函中包含的信息为 须完成或修改。这些证券不得在发行声明之前出售，也不得接受购买要约 向委员会提交的是合格的。本初步发售通知不构成出售要约或招揽 在任何此类要约、招揽或出售属于非法的州，也不得出售此类证券 在根据任何此类州的法律注册或获得资格之前。我们可以选择履行交付最终产品的义务 通过在我们向您销售完成后两个工作日内向您发送通知来发送通知，其中包含最终地址的URL 可以获得发行通知或提交该最终发行通知的发行声明。

备注控股公司

多达75万股

的

b系列15%累积可赎回永久 优先股

这是公开发行证券（“发行”） Remark Holdings，Inc.，特拉华州公司（“备注”、“公司”、“我们”、 或“我们的”）。此次发行为b系列多达750，000股（“最大发行”）15%累计 可赎回永久优先股，每股价值100.00美元（“b系列优先股”或“股份”） 根据美国证券交易委员会第2级法规，发行价为每股100.00美元 (the“委员会”或“SEC”）。请参阅“证券描述”。b系列优先股是 没有先前交易市场的新发行。

自发行B系列优先股之日起 股票(如适用，“发行日期”)，股息应于B系列优先股每日应计，并应累加。 从并包括适用的发行日期开始，并应支付给B系列优先股(以下简称“系列”)的持有人 B优先股东“)在每个季度结束后的第15天或之后，每季度拖欠的股息(每个，”股息“ 付款日期“)在上一财季最后一天交易结束时，这些持有人出现在我们的股票记录中， 不管是不是一个工作日。股息将从合法可用金额中按相当于每年15%的利率支付 100.00美元，每股声明价值。我们将保留相当于头两(2)年的金额(股息储备) 股息支付(“股息托管期”)，从我们收到的收益，从每一次结束在一个单独的 我们将维护的现金账户(“股息支付账户”)。

从各自两（2）年后的日期开始 发行日期（“赎回期开始日期”），我们可以选择赎回b系列优先股的股份， 全部或部分，现金赎回价格相当于每股100.00美元，加上所有应计和未付股息，但不包括 赎回日期。从赎回期开始日期开始，我们在到期时未支付的任何股息将成为 Remark的累积债务，将自动从Remark筹集的任何超过150万美元的融资金额中支付。 b系列优先股没有规定到期日，不受任何偿债基金或其他强制赎回的约束，并且应 不能转换为或交换我们的任何其他证券。b系列优先股持有者将没有投票权 权利，但本发行通知中可能规定的除外。

发行将于本发行通函之日开始 并于（i）最大发行出售之日，（ii）自该日期起三（3）年之日（以较早者为准）终止 本发行声明的资格;或（iii）当我们因任何原因选择终止发行时（在每种情况下， “终止日期”）。要认购本次发行中的股份，请参阅题为“认购程序”的小节 “分布”。本次发行获得委员会资格后，至少每十二（12）个月，Remark将提交一次 资格后修正案，包括其最近的财务报表，最长期限为三（3）年，从 本发售声明的资格日期。

这些证券是投机证券。对Remark ' s的投资 证券涉及重大风险。只有在您能够承受投资的完全损失的情况下，您才应该购买这些证券。 请参阅“风险因素”。

我们将尽最大努力提供股份。因为没有 最低发行量，在批准本发行通知的任何认购后，我们将立即将上述收益存入我们的 银行账户，并可根据“收益的使用”部分处置收益。

订阅不可撤销，购买价格不可退还 正如本发行通知中明确规定的那样。我们从订阅者那里收到的所有收益都将供我们使用 在我们接受认购股份后。

股份销售将于上市后两个日历日内开始 资格日期，根据规则251（d）（3）（i）（F），这将是连续发行。注：使用发行循环格式 在本发行通知中披露。

在“最大努力”的基础上发行股份意味着 我们的高管将尽其商业上合理的最大努力来要约和出售股份。我们的官员不会收到任何 这些销售的佣金或任何其他报酬。在代表我们发行股份时，官员们将依靠安全港 经修订的1934年证券交易法第3a 4 -1条规定的经纪交易商登记。

本发售通知不构成出售要约或 招揽购买要约，在此类要约、招揽的任何州或司法管辖区也不得出售这些证券 或在根据任何此类州的法律注册或获得资格之前，销售将是非法的。

一般来说，如果总计 您支付的购买价格超过您年收入或净资产中较大者的百分之十（10%）。可能适用不同的规则 认可的投资者和非自然人。在就您的投资没有超过适用阈值做出任何陈述之前， 我们鼓励您审查法规A的第251（d）（2）（i）（C）条。有关投资的一般信息，我们鼓励您参阅www.investor. gov。

Remark是一家控股公司，在特拉华州注册成立，从事 通过其全资子公司运营。我们的大部分业务目前由我们成立的运营子公司进行 位于美国和英国。2024年之前，我们的很大一部分收入来自运营 由我们在中国成立并位于中国的运营子公司实施，但我们在第四季度开始减少在中国的业务 因此，我们预计我们在中国成立并位于中国的运营子公司将产生最小一部分（如果有的话） 2024年及以后的业务。有关中国相关风险的进一步描述，请参阅“风险因素-与我们历史相关的风险 在中国的业务”。

我们在必要时帮助子公司的运营提供资金，方法是 根据债务或股权融资交易获得现金后向其提供的出资或现金预付款。两个人都没有说 它的任何子公司都没有记录彼此之间的公司间收入的实质性金额，也没有记录过彼此之间的任何贷款 彼此之间。截至本发行通函日期，本公司并无任何附属公司向本公司派发股息或分派股息 我们在美国的子公司偶尔会偿还现金预付款。鉴于我们减少了中国子公司和 由于这些子公司的现金数额有限，我们预计不会有大量现金从这些子公司转移出去。 向我们或我们的任何非中国子公司支付，我们不打算分配收益或清偿任何欠款，如果有的话，根据 根据之前的可变利益实体协议，我们在2014年至晚些时候控制了现在的中国子公司 2021年。

我们的审计师Weinberg & Company是一家独立注册公众 总部位于美国的会计师事务所目前受上市公司会计监督委员会（“PCAOB”）管辖 检查并已接受PCAOb定期检查。然而，如果PCAOb无法检查Weinberg & Company的 未来的工作文件，无论是由于外国司法管辖区当局采取的立场还是其他原因，SEC 可以禁止我们的股票在全国证券交易所或场外交易市场交易 美国根据《控股外国公司责任法案》（“HFCA法案”）。我们的停止交易 股权股份或此类停止的威胁可能会对您的投资价值产生重大不利影响。请参阅“总结 - 《持有外国公司责任法案》。

投资我们的股票涉及高度风险。看到 “风险因素”讨论您在投资我们股票时应考虑的某些风险。

目前， 我们的普通股在场外交易中以符号“MARK”报价 OTCQX市场。2024年10月21日，我们普通股收盘价为0.11美元 每股

美国证券交易委员会并未通过 所提供的任何证券或所提供条款的优点或对其的批准，也不会因准确性或完整性而被通过 任何提供通知或其他招揽材料。这些证券是根据豁免注册而提供的 委员会;然而，委员会尚未独立决定所提供的证券免于注册。

本发行通函的日期为[●]， 2024

目录

我们正在出售并寻求购买我们的证券的要约 仅在允许此类报价和销售的司法管辖区。您应仅依赖本发行通知中包含的信息。 我们没有授权任何人向您提供除本发售通函中包含的信息之外的任何信息。的 本发行通知中包含的信息仅在其日期时准确，无论其交付或任何销售的时间如何 或交付我们的证券。本发行通函的交付以及我们证券的任何销售或交付均不得根据 在任何情况下，均表明自本发行通函之日以来我们的事务没有发生任何变化。本发售通函 将在联邦证券法要求的范围内更新并提供交付。

这 发售通告是我们提交给美国证券交易委员会的发售声明的一部分，该声明使用连续 提供流程。我们可能会定期提供《发售通告》的补充资料， 将添加、更新或更改本优惠通告中包含的信息。我们也可能 提交资格审查后修正案(“PQA”)，以反映任何事实或事件 在对发售声明进行限定之后，这些声明分别或合计代表 要约声明中所述信息的根本变化。任何声明 我们在本发售通函(以及其发售声明)中作出的 部分)将被我们在后续版本中做出的任何不一致的声明修改或取代 提供通函补充或PQA。我们提交给美国证券交易委员会的发售声明包括 提供本课程中所讨论事项的更详细说明的展品 圆形的。

的 出售声明以及我们已经或将来将提交的所有补充和PQA 可在SEC网站www.sec.gov上阅读。

在本发行通函中，除非上下文另有说明， 提及“备注”、“我们”、“公司”、“我们的”和“我们”是指活动 Remark Holdings，Inc.的业务和运营的资产和负债及其子公司。

以下是风险因素的总结 影响我们的业务和产品

与我们的商业和工业有关的风险

与我们公司相关的风险

与本次发行和系列所有权相关的风险 b优先股

与我们在中国的历史业务相关的风险

虽然我们的普通股股票在OTCQX上报价，但我们 要求我们在向SEC提交的文件中保持最新状态，以便我们的普通股股份在OTCQX上保持报价并且不会被移动 前往OTC粉红市场。

关于预防性声明 前瞻性陈述

“摘要”下的一些陈述， “风险因素”、“管理层对财务状况和经营成果的讨论和分析”、 “我们的业务”和本发行通函中的其他部分构成前瞻性陈述。前瞻性陈述 与期望、信念、预测、未来计划和策略、预期事件或趋势以及类似事项有关 不是历史事实。在某些情况下，您可以通过“预期”、“相信”等术语来识别前瞻性陈述 “可能”、“估计”、“期望”、“打算”、“可能”、“计划”、“潜力”、 “should”、“will”和“would”或这些术语的否定词或其他类似术语。

您不应过度依赖前瞻性陈述。 本发行通知中列出的警告声明（包括“风险因素”和其他地方）确定了重要的 您在评估我们的前瞻性陈述时应该考虑的因素。尽管本次发行中的前瞻性陈述 通知基于我们的信念、假设和期望，并考虑到我们目前可用的所有信息，我们不能 保证未来的交易、结果、绩效、成就或结果。任何人都不能向任何投资者保证 我们的前瞻性陈述中反映的预期将会实现，或者与预期的偏离不会是重大的， 不利的。除法律要求外，我们不承担重新发布本发行通知或以其他方式公开的义务 更新我们前瞻性陈述的陈述。

RISK FACTORS

An investment in the Shares involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information contained in this Offering Circular, including our consolidated financial statements and notes thereto, before deciding whether to invest in our Shares. Additional risks and uncertainties that we are unaware of may become important factors that affect us. If any of these risks actually occur, our business, financial condition or operating results may suffer, the value of our stock could decline, and you may lose all or part of your investment. Some statements in this Offering Circular, including statements in the following risk factors, constitute forward-looking statements. (See “Cautionary Statement Regarding Forward-Looking Statements”).

Risks Relating to Our Business and Industry

Laws and regulations concerning data privacy are continually evolving. Failure to comply with these laws and regulations could harm our business.

Our business involves collecting and retaining certain internal and external data and information including that of our customers and suppliers and third parties. The integrity and protection of such information and data are crucial to us and our business. Owners of such data and information expect that we will adequately protect their personal information. We are required by applicable privacy and data protection laws in the U.S. and internationally to keep strictly confidential the personal information that we collect, and to take adequate security measures to safeguard such information.

Our failure to comply with existing privacy or data protection laws and regulations could increase our costs, force us to change or limit the features of our AI solutions or result in proceedings or litigation against us by governmental authorities or others, any or all of which could result in significant fines or judgments against us, result in damage to our reputation, and result in negative effects on our financial condition and results of operations. Even if concerns raised by regulators, the media, or consumers about our privacy and data protection or consumer protection practices are unfounded, we could suffer damage to our reputation that causes significant negative effects on our financial condition and results of operations.

Privacy and data protection laws are rapidly changing and likely will continue to do so for the foreseeable future, which could have an impact on how we develop and customize our AI products and software. The growth and development of AI may prompt calls for more stringent consumer privacy protection laws that may impose additional burdens on companies such as ours. Any such changes would require us to devote legal and other resources to address such regulation.

For example, in the U.S., the California Consumer Privacy Act (“CCPA”) became effective on January 1, 2020 and applies to processing of personal information of California residents. Other states, including Nevada, have enacted or are considering similar privacy or data protection laws that may apply to us. The U.S. government, including the Federal Trade Commission and the Department of Commerce, also continue to review the need for greater or different regulation over the collection of personal information and information about consumer behavior on the Internet and on mobile devices, and the U.S. Congress is considering a number of legislative proposals to regulate in this area. Various government and consumer agencies worldwide have also called for new regulation and changes in industry practices. For example, the GDPR became effective on May 25, 2018. GDPR would apply to us should we expand our AI business into member countries of the EU. Violations of the GDPR may result in significant penalties, and countries in the EU are still enacting national laws that correspond to certain portions of the GDPR.

Our continuous access to publicly-available data and to data from partners may be restricted, disrupted or terminated, which would restrict our ability to develop new products and services, or to improve existing products and services, which are based upon our AI platform.

The success of our AI-based solutions depends substantially on our ability to continuously ingest and process large amounts of data available in the public domain and provided by our partners, and any interruption to our free access to such publicly-available data or to the data we obtain from our partners will restrict our ability to develop new products and services, or to improve existing products and services. While we have not encountered any significant disruption of such access to date, there is no guarantee that this trend will continue without costs. Public data sources may change their policies to restrict access or implement procedures to make it more difficult or costly for us to maintain access, and partners could decide to terminate our existing agreements with them. If we no longer have free access to public data, or access to data from our partners, our ability to maintain or improve existing products, or to develop new AI-based solutions may be severely limited. Furthermore, we may be forced to pay significant fees to public data sources or to partners to maintain access, which would adversely affect our financial condition and results of operations.

Our AI software and our application software are highly technical and run on very sophisticated third-party hardware platforms. If such software or hardware contains undetected errors, our AI solutions may not perform properly and our business could be adversely affected.

Our AI-based solutions and internal systems rely on software, including software developed or maintained internally or by third parties, that is highly technical and complex. In addition, our AI-based solutions and internal systems depend on the ability of such software to store, retrieve, process, and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors, bugs, or vulnerabilities. Some errors may only be discovered after the AI-based solution or application software has been released for external or internal use. Errors or other design defects within the software on which we rely may result in a negative experience for our customers, delay product introductions or enhancements, result in measurement or billing errors, or compromise our ability to protect our customers’ data or our intellectual property. Any errors, bugs, or defects discovered in the software on which we rely could result in damage to our reputation, loss of users, loss of revenue, or liability for damages, any of which could adversely affect our business and financial results.

Our business and operations would suffer in the event of system failures.

Our computer systems are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. If such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our business. To the extent that any disruption or security breach were to result in a loss of or damage to our data or applications, or inappropriate disclosure of personal, confidential or proprietary information, we could incur liability and our business could be adversely affected.

We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.

Significant disruptions to our information technology systems or breaches of information security could adversely affect our business. The size and complexity of our AI-based solutions and information technology systems, and those of our third-party vendors with whom we contract, make such systems potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners or vendors, from attacks by malicious third parties, or from intentional or accidental physical damage to our systems infrastructure maintained by us or by third parties. A breach of our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of proprietary information, or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other reason, could adversely affect our business or financial condition. Further, any such interruption, security breach, loss or disclosure of confidential information, could result in financial, legal, business, and reputational harm to us and could have a material adverse effect on our business, financial position, results of operations or cash flow.

Our outstanding senior secured loan agreements contain certain covenants that restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions.

On December 3, 2021, we entered into senior secured loan agreements (the “Original Mudrick Loan Agreements”) with certain of our subsidiaries as guarantors (the “Guarantors”) and certain institutional lenders affiliated with Mudrick Capital Management, LP (collectively, “Mudrick”), pursuant to which the Mudrick extended credit to us consisting of term loans in the principal amount of $30.0 million (the “Original Mudrick Loans”). On March 14, 2023, we entered into a Note Purchase Agreement with Mudrick (the “New Mudrick Loan Agreement”) pursuant to which all of the Original Mudrick Loans were cancelled in exchange for new notes payable to Mudrick (the “New Mudrick Notes”). On August 5, 2024, we entered into an exchange agreement with Mudrick pursuant to which we issued convertible debentures to Mudrick (the “Mudrick Convertible Debentures”) in exchange for the previously-outstanding non-convertible New Mudrick Notes. Pursuant to the Mudrick Convertible Debentures, we are required to satisfy various covenants, including restrictions on our ability to engage in certain transactions without Mudrick’s consent, and may be limited in our ability to respond to changing business and economic conditions. The restrictions include, among other things, limitations on our ability and the ability of our subsidiaries to:

未经授权使用我们的知识产权 以及保护我们知识产权所产生的费用可能会对我们的业务产生不利影响。

我们认为我们的版权、服务标志、商标、 商业秘密和其他知识产权对我们的成功至关重要。第三方未经授权使用我们的知识产权 可能会对我们的业务和声誉造成不利影响。我们依赖商标法和版权法、商业秘密保护和保密。 与我们的员工、客户、业务伙伴和其他人达成协议，以保护我们的知识产权。尽管我们采取了预防措施， 第三方有可能在未经授权的情况下获取和使用我们的知识产权。此外，其有效性、可实施性 互联网相关行业的知识产权保护范围是不确定的，而且仍在不断演变。此外，诉讼 将来可能有必要执行我们的知识产权，保护我们的商业秘密或确定其有效性 以及他人专有权利的范围。未来的诉讼可能会导致巨额费用和资源转移。

我们可能受到知识产权的约束 侵权索赔，这可能迫使我们承担巨额法律费用，并且如果被裁定对我们不利，则会造成重大破坏 我们的业务

我们无法确定我们的品牌和服务 不会侵犯第三方持有的有效专利、版权或其他知识产权。我们无法提供保证 我们将避免对侵犯第三方知识产权的指控进行辩护，无论 他们的优点。知识产权诉讼成本非常高，参与此类诉讼可能会消耗大量费用 我们的一部分管理和财务资源，无论我们是否获胜。更多的资源可能会让我们的一些 竞争对手比我们更有效地承担复杂知识产权诉讼的成本;我们可能无力承担 此类诉讼的费用。

我们是否应该遭受知识分子的不利后果 财产诉讼，我们可能会承担重大责任，我们可能会被要求向第三方许可有争议的权利，或者我们可能 必须停止使用该主题技术。如果我们被发现侵犯第三方知识产权，我们无法提供 保证我们能够以商业上合理的条款（如果有的话）获得此类知识产权的许可，或者 我们可以开发或获得替代技术。如果我们未能以合理的成本获得此类许可，此类失败可能会严重影响 扰乱我们的业务开展，并可能消耗大量资源并造成重大不确定性。任何法律行动 我们或我们的合作者可能会导致：

上面讨论的负面结果可能会产生不利的影响 影响我们开展业务的能力、财务状况、运营结果和现金流。

我们面临着来自更大、 更成熟的公司，我们可能无法有效竞争，这可能会减少对我们服务的需求。

我们提供的服务的市场越来越大 竞争激烈。我们几乎所有的竞争对手都有更长的经营历史，更大的客户基础，更高的品牌认知度 而且比我们拥有更多的财务、营销和其他资源。我们的竞争对手可能会获得更有利的收入安排 与广告商合作，在营销和促销活动上投入更多资源，采取更积极的增长战略，并致力于 在网站和系统开发上投入的资源比我们多得多。此外，互联网媒体和广告业 继续经历整合，包括收购提供旅行和金融相关内容和服务的公司 和付费搜索服务。行业整合导致了规模更大、更成熟、资金更雄厚的竞争对手 全神贯注。如果这些行业趋势继续下去，或者如果我们无法在互联网媒体和付费搜索市场上竞争，我们的财务状况 结果可能会受到影响。

此外，较大的公司可能会实施 搜索引擎或软件中的政策和/或技术使消费者不太可能访问我们的网站和 消费者点击我们广告商的赞助列表的可能性较小。此类技术的实施可以 导致我们的收入减少。如果我们无法成功与当前和未来的竞争对手竞争，我们的运营 结果将受到不利影响。

如果我们不能有效地管理我们的增长， 我们的经营业绩将受到影响，我们的财务状况可能会受到不利影响。

未来需要大幅增长 我们来实现我们的业务目标。只要我们有能力实现这种增长，这将对我们的 管理、运营和财务资源。此外，这种增长将需要我们进行大量的资本支出， 雇用、培训和管理更多的劳动力，并分配宝贵的管理资源。我们必须通过适当的方式管理任何此类增长 每个领域的系统和控制。如果我们不能有效管理业务的增长，我们的业务、财务状况、 经营业绩和现金流可能会受到重大不利影响。

此外，随着我们业务的增长，我们的技术 网络基础设施必须符合我们的需求。未来的需求很难预测，我们可能无法充分预测 除非我们花费大量资金来增强处理增加流量的能力，否则将应对大幅增长。此外，实施 网络容量的增加包含一些执行风险，并可能导致无效或低效率。这可能会导致减少 为我们的消费者和广告商提供体验，并损害我们的声誉和与他们的关系，导致营销能力下降， 对我们的经营业绩产生负面影响。此外，网络技术创新变革的步伐很快，如果我们不跟上 向上，我们可能会落后于竞争对手。升级和改进技术的成本可能会很高，并对我们的业务产生负面影响， 财务状况、经营业绩和现金流量。

与我们公司有关的风险

我们有经营亏损的历史， 我们可能无法产生足够的收入来支持我们的运营。

截至12月的一年内 2023年31日，自成立以来的每个财年，我们都出现了净亏损，并产生了负现金流。 截至2024年6月30日，我们的累计赤字为（4.367亿）美元。

我们无法保证产生的收入 从我们业务的角度来看，将足以维持我们的长期运营。我们已采取措施降低运营成本， 我们并不断评估进一步降低成本的其他机会。我们可能还需要通过股权获得额外的资本 融资或债务融资。如果我们未能成功实施本文描述的计划，这种失败将造成重大影响 对我们的业务产生不利影响，包括可能停止运营。

债务和股票市场的状况， 以及投资者对宏观经济和微观经济状况的情绪波动（特别是由于全球经济状况） 供应链中断、通货膨胀和其他成本增加以及乌克兰和中东的地缘政治冲突）将发挥作用 决定我们是否能够成功获得额外资本的主要作用。我们无法确定我们是否会成功 筹集资本，无论是通过股权融资、债务融资，还是通过剥离某些资产或业务，在商业上合理 条款，如果有的话。此外，如果我们通过发行股权获得资本，此类交易可能会稀释现有股东。

我们可能没有足够的现金来偿还 我们未偿还的高级担保债务。

Mudrick可转换债券有本金 金额约为1，980万美元，按年利率20.5%计算利息，并且如果不转换为我们的股份 普通股于2025年5月15日到期应付。我们的可用现金和其他流动资产目前不足以支付 全部义务。如果我们不在预定到期日或之前全额支付或转换Mudrick可转换债券， Mudrick将享有Mudrick可转换债券和适用法律项下的所有权利，其中包括但不限于 取消Mudrick可转换债券（由我们所有资产组成）的抵押品的赎回权。穆德里克的练习 任何此类权利都可能对我们的财务状况产生重大不利影响。

我们依赖少数客户 占我们收入的很大一部分。

我们交易的业务量很集中 截至2024年6月30日的六个月内，除了小额金额外，我们的所有收入基本上都来自 一名客户，而在截至2023年6月30日的六个月内，我们的三名客户分别占约40%、35%和11% 我们的收入。截至2024年6月30日，来自我们一位客户的应收账款净额约占我们应收账款净额的87%， 而截至2023年12月31日，来自我们三名客户的应收账款净额分别约占37%、34%和12% 我们的应收账款净额

我们的独立注册公共会计 公司截至2023年12月31日和2022年12月31日的财年报告对我们继续运营的能力提出了重大怀疑 作为一家“持续经营的企业”。

我们的独立注册公共会计 公司在截至2023年12月31日及截至2022年12月31日的经审计综合财务报表报告中显示 人们对我们作为一个持续经营的企业的能力有很大的怀疑。“持续经营”的意见表明 编制财务报表时假设我们将继续经营下去，不包括任何调整以反映 未来可能对资产的可回收性和分类的影响，或对以下负债的数额和分类的影响 如果我们不继续作为一个持续经营的企业，可能会导致这种情况。因此，您不应依赖我们的综合资产负债表作为指示。 可用于满足债权人债权并可能可用于分配给股东的收益的数额， 在清算的情况下。在我们的财务报表中出现持续经营票据可能会对关系产生不利影响 我们正在开发，并计划与第三方一起开发，因为我们继续将我们的产品商业化，这可能会使其变得困难 对于我们来说，筹集额外的资金，所有这些都可能对我们的业务和前景产生实质性的不利影响，并导致 你的投资遭受重大或全部损失。

我们继续发展我们的业务战略 并开发新的品牌、产品和服务，我们的未来前景很难评估。

我们正处于不同的发展阶段， 考虑到我们的业务，包括由我们的人工智能平台驱动的人工智能业务，因此必须考虑我们的前景 鉴于公司早期阶段经常遇到的诸多风险、不确定性、费用、延误和困难 商业模式和产品的开发。其中一些风险和困难包括我们能够：

Because of the early stage of development of certain of our business operations, we cannot be certain that our business strategy will be successful or that it will successfully address the risks described or alluded to above. Any failure by us to successfully implement our new business plans could have a material adverse effect on our business, financial condition, results of operations and cash flows. Furthermore, growth into new areas may require changes to our cost structure, modifications to our infrastructure and exposure to new regulatory, legal and competitive risks.

If we fail to manage our growth, we may need to improve our operational, financial and management systems and processes which may require significant capital expenditures and allocation of valuable management and employee resources. As we continue to grow, we must effectively integrate, develop and motivate new employees, including employees in international markets, while maintaining the beneficial aspects of our company culture. If we do not manage the growth of our business and operations effectively, the quality of our platform and efficiency of our operations could suffer, which could harm our brand, results of operations and business.

We cannot assure you that these investments will be successful or that such endeavors will result in the realization of the full benefits of synergies, cost savings, innovation and operational efficiencies that may be possible or that we will achieve these benefits within a reasonable period of time.

Risks Relating to this Offering and Ownership of the Series B Preferred Stock

We are establishing the Dividend Payment Account to hold the first two years of dividend payments for the holders of our Series B Preferred Stock, but after the Dividend Payment Escrow Period has expired, we may not be able to pay dividends on the Series B Preferred Stock unless we have sufficient cash on hand and meet certain financial and solvency requirements of Delaware law relating to the payment of dividends.

We cannot assure you that our business will generate sufficient cash flow from operations, raise additional capital and (or) that future borrowings will be available to us in an amount sufficient to enable us to make dividend distributions on the Series B Preferred Stock after the two-year Dividend Escrow Period has ended. Additionally, Under Delaware corporate law, Remark cannot make any dividend distributions if, after giving effect to such dividend distributions, either: (1) we would not be able to pay our debts as they become due in the usual course of business; or (2) our total assets would be less than the sum of our (i) total liabilities plus (ii) the amount needed to satisfy any preferential rights of certain stockholders on dissolution immediately after the distribution. There can be no assurances that we will satisfy such requirements after the two-year Dividend Escrow Period has ended.

The Series B Preferred Stock ranks junior to all of our indebtedness and other liabilities

In the event of our bankruptcy, liquidation, dissolution, or winding-up of our affairs, our assets will be available to pay obligations on the Series B Preferred Stock only after all of our indebtedness and other liabilities have been paid. The rights of holders of the Series B Preferred Stock to participate in the distribution of our assets will rank junior to the prior claims of our current and future creditors. Also, the Series B Preferred Stock effectively ranks junior to all our existing and future indebtedness and to the indebtedness and other liabilities of our existing subsidiaries and any future subsidiaries. Our existing subsidiaries are, and future subsidiaries would be, separate legal entities and have no legal obligation to pay any amounts to us in respect of dividends due on the Series B Preferred Stock. If we are forced to liquidate our assets to pay our creditors, we may not have sufficient assets to pay amounts due on any or all of the Series B Preferred Stock then outstanding. We may in the future incur debt and other obligations that will rank senior to the Series B Preferred Stock. Nevertheless, the Dividend Reserve that we will put into the Dividend Payment Account will not be our property but will be for the sole benefit of the Series B Preferred Stockholders, payable to them on a quarterly basis, if permitted under Delaware corporate law. As a result, such Dividend Reserve will not, in the ordinary course, be accessible to our third-party creditors.

Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences, and privileges more favorable than those of the Series B Preferred Stock and may result in dilution to owners of the Series B Preferred Stock. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing, or nature of our future offerings. The holders of the Series B Preferred Stock will bear the risk of our future offerings, which may reduce the market price of the Series B Preferred Stock and will dilute the value of their holdings in us.

The Dividend Payment Account could be subject to the claims of creditors.

We will put the Dividend Reserve into the Dividend Payment Account we will create for the benefit of the holders of our Series B Preferred Stock. If we were to have insolvency issues and (or) file for bankruptcy, the proceeds held in the Dividend Payment Account could then be subject to the claims of creditors.

There is no established market for our Series B Preferred Stock, and no assurance that a market will develop and be sustained.

There is no established trading market for our Series B Preferred Stock, and we do not know if a market will develop for the Series B Preferred Stock or, if it does, how active it will be or whether it will be sustained. The liquidity of the market for the Series B Preferred Stock would depend on a number of factors, including prevailing interest rates, our financial condition and operating results, the number of holders of the Series B Preferred Stock, the market for the Series B Preferred Stock, and the interest of securities dealers in making a market in these securities. Further, we cannot predict with certainty the extent of investor interest in the Series B Preferred Stock or how liquid that market will be. Without an active trading market, the liquidity of these securities will be limited.

We may issue additional shares of Series B Preferred Stock and additional series of preferred stock that rank on parity with the Series B Preferred Stock as to dividend rights and rights upon liquidation.

We are allowed to issue additional shares of Series B Preferred Stock and additional series of preferred stock that could rank on parity with the Series B Preferred Stock as to dividend payments and rights upon our liquidation, dissolution, or winding up of our affairs pursuant to our Charter, without any vote of the holders of the Series B Preferred Stock. The issuance of additional shares of Series B Preferred Stock or additional series of preferred stock could have the effect of reducing the amounts available to the holders of Series B Preferred Stock in the form of dividends beyond the Dividend Escrow Period or upon our liquidation or dissolution or the winding up of our affairs.

If we redeem the Series B Preferred Stock, investors will no longer be entitled to dividends.

On or after the date that is two years after each Issue Date of Series B Preferred Stock, we may, at our option, redeem the Series B Preferred Stock, in whole or in part, at any time or from time-to-time, based upon the payment of the stated value of $100.00 per share of Series B Preferred Stock plus accrued dividends. Also, upon the occurrence of a Change of Control, we may, at our option, upon not less than 30 and nor more than 60 days’ written notice, redeem the Series B Preferred Stock, in whole or in part, within 150 days after the date of such written notice. We may have an incentive to redeem the Series B Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at a rate that is lower than the dividend on the Series B Preferred Stock. If we redeem the Series B Preferred Stock, then from and after the redemption date, dividends will cease to accrue on the shares of Series B Preferred Stock that have been redeemed, such shares of Series B Preferred Stock shall no longer be deemed outstanding and all rights as a holder of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption.

If you purchase the Shares, you will have no voting rights except for extremely limited voting rights for the Series B Preferred Stock.

The voting rights of a holder of Series B Preferred Stock are limited. Our shares of common stock are the only classes of our securities that carry full voting rights. The holders of Series B Preferred Stock have no voting rights except with respect to voting on amendments to our Charter that materially and adversely affect the rights of the holders of Series B Preferred Stock. Other than the limited circumstances described in the Offering Circular and except to the extent required by law, holders of Series B Preferred Stock do not have any voting rights. See “Description of Securities – Series B 15% Preferred Cumulative Redeemable Perpetual Preferred Stock.”

The Series B Preferred Stock is not convertible into our common stock.

The Series B Preferred Stock is not convertible into our common stock and earns dividends at a fixed rate. Accordingly, while there is currently a market for our common stock, an increase in market price of our common stock will not necessarily result in an increase in the market price of our Series B Preferred Stock. The market value of the Series B Preferred Stock will depend more on dividend rates for other preferred stock, commercial paper and other investment alternatives and our actual and perceived ability to pay dividends on, and in the event of dissolution, satisfy the liquidation preference with respect to the Series B Preferred Stock.

We are authorized to issue “blank check” preferred stock without stockholder approval, which could adversely impact the rights of holders of our securities.

Our Amended Certificate of Incorporation authorizes us to issue as many as 1,000,000 shares of blank check preferred stock from which shares of Series B Preferred Stock will be designated immediately prior to the first closing of this Offering. Any preferred stock that we issue in the future may rank ahead of our other securities in terms of dividend priority or liquidation preference and may have greater voting rights than our common stock. In addition, such preferred stock may contain provisions allowing those shares to be converted into shares of common stock, which could dilute the value of our common stock to current stockholders and could adversely affect the market price, if any, of our common stock. In addition, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying, or preventing a change in control of Remark.

A significant number of additional shares of our common stock may be issued under the terms of existing securities, which issuances would substantially dilute existing stockholders and may depress the market price of our common stock.

As of October 21, 2024, we had outstanding stock options allowing for the purchase of as many as approximately 1.5 million shares of common stock. Also outstanding were (i) an obligation to issue common stock related to draws we have made under a common stock purchase agreement with Ionic Ventures, LLC (“Ionic”), (ii) shares of our common stock issuable upon conversion of the Mudrick Convertible Debentures, (iii) shares of our common stock issuable upon exercise of a warrant we issued to Armistice Capital Master Fund Ltd. in a private placement (the “Investor Warrant”), which is exercisable for as many as 423,729 shares of common stock, (iv) warrants to purchase as many as an aggregate of 12,712 shares of our common stock issued to A.G.P./Alliance Global Partners and its designees (the “Financial Advisor Warrants”), which are exercisable for as many as an aggregate of 12,712 shares of common stock, and (v) warrants we issued pursuant to a settlement agreement that we entered into with China Branding Group Limited and its joint official liquidators, providing for the right to purchase 571,000 shares of common stock at a per share exercise price of $60.00 (the “CBG Settlement Warrants”).

The Investor Warrant is immediately exercisable and will expire on October 31, 2027. However, we are prohibited from effecting an exercise of the Investor Warrant, and the holder thereof will not have the right to exercise any portion of its Investor Warrant, to the extent that, as a result of such exercise, the warrant holder would beneficially own more than 4.99% of the outstanding shares of our common stock immediately after giving effect to the issuance of shares of issuable upon exercise of the Investor Warrant. The Financial Advisor Warrants are immediately exercisable and will expire on the five-year anniversary of the date of issuance.

The CBG Settlement Warrants are exercisable on a cashless basis only, such that they cannot be exercised for the entire amount of shares purchasable under such warrants, and they effectively cannot be exercised to purchase shares of common stock unless the applicable market value of the common stock exceeds the applicable exercise price under the terms thereof.

The issuance of common stock pursuant to our agreement with Ionic, the Mudrick Convertible Debentures, and the outstanding warrants we issued prior to this Offering would substantially dilute the proportionate ownership and voting power of existing stockholders, and their issuance, or the possibility of their issuance, may depress the market price of our common stock.

Provisions in our Charter and under Delaware law could make an acquisition of Remark more difficult, which acquisition may be beneficial to stockholders.

Provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, as well as provisions of the General Corporation Law of the State of Delaware (the “DGCL”), which may discourage, delay or prevent a merger with, acquisition of or other change in control of Remark, even if such a change in control would be beneficial to our stockholders, include the following:

Additionally, Section 203 of the DGCL prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. We have not opted out of the restriction under Section 203, as permitted under the DGCL.

While our shares are quoted on the OTCQX, we are required to remain current in our filings with the SEC for our shares of common stock to remain quoted on the OTCQX and not be moved to the OTC Pink Market.

While the common stock is quoted on the OTCQX, we will be required to remain current in our filings with the SEC in order for shares of the common stock to be eligible for quotation on the OTCQX. In the event that we become delinquent in our required filings with the SEC, quotation of the common stock on the OTCQX will be terminated following a 30 day grace period if we do not make our required filing during that time, and quotation of our shares of common stock will continue on the OTC Pink Sheets under the “Limited Information” tier. Given the reduced transparency of companies on the OTC Pink Sheets – Limited Information tier, trading for companies listed on this tier tends to be more attenuated and/or unpredictable. Therefore, if the common stock is not eligible for quotation on the OTCQX, investors in the common stock may find it difficult to sell their shares.

Risks Relating to Our Historical Operations in China

Uncertainties with respect to the Chinese legal system could adversely affect us.

As of the date of this Offering Circular, our business activities in China are limited. We could, however, potentially be subject to liability for any actions we took while we conducted significant business activities in China. There is uncertainty regarding how laws are interpreted in China. The Chinese legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value. Since these laws and regulations are relatively new and the Chinese legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and the enforcement of these laws, regulations and rules involves uncertainties.

Since Chinese administrative and court authorities have significant discretion in interpreting and implementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us.

Furthermore, the Chinese legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention. If we failed to comply with applicable Chinese laws or regulations, as interpreted and applied, and are subject to penalties or fines, it could have a material adverse effect on our operating results and our stock price.

Trading in our securities may be prohibited under the HFCA Act.

The HFCA Act was enacted on December 18, 2020, and states that if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit such shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in a foreign jurisdiction. The Consolidated Appropriations Act, 2023, which was signed into law on December 29, 2022, amended the HFCA Act to reduce the number of consecutive non-inspection years required to trigger the trading prohibition under the HFCA Act from three years to two years.

On December 16, 2021, the PCAOB issued a report on its determination that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong because of positions taken by Chinese and Hong Kong authorities in those jurisdictions.

On August 26, 2022, the CSRC, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, taking the first step toward opening access for the PCAOB to completely inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong.

On December 15, 2022, the PCAOB vacated its 2021 determination that the positions taken by authorities in mainland China and Hong Kong prevented it from inspecting and investigating completely registered public accounting firms headquartered in those jurisdictions. In view of the PCAOB’s decision to vacate its 2021 determination and until such time as the PCAOB issues any new adverse determination, the SEC has stated that there are no issuers at risk of having their securities subject to a trading prohibition under the HFCA Act. Each year, the PCAOB will reassess its determinations on whether it can inspect and investigate completely audit firms in China, and if, in the future, the PCAOB determines it cannot do so, or if Chinese authorities do not allow the PCAOB complete access for inspections and investigations for two consecutive years, companies engaging China-based public accounting firms would be delisted pursuant to the HFCA Act.

Our auditor, Weinberg & Company, an independent registered public accounting firm headquartered in the United States, is currently subject to PCAOB inspections and has been inspected by the PCAOB on a regular basis. However, if the PCAOB is unable to inspect Weinberg & Company’s work papers in the future, whether as a result of a position taken by an authority in a foreign jurisdiction or other reason, the SEC could prohibit our equity shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States pursuant to the HFCA Act. The cessation of trading of our equity shares, or the threat of such cessation, may materially and adversely affect the value of your investment.

DISTRIBUTION

This Offering Circular is part of an Offering Statement that we filed with the SEC, using a continuous offering process. Periodically, as we have material developments, we will provide an Offering Circular supplement that may add, update or change information contained in this Offering Circular. Any statement that we make in this Offering Circular will be modified or superseded by any inconsistent statement made by us in a subsequent Offering Circular supplement. The Offering Statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this Offering Circular. You should read this Offering Circular and the related exhibits filed with the SEC and any Offering Circular supplement, together with additional information contained in our annual reports, semi-annual reports and other reports and information statements that we will file periodically with the SEC. See the section entitled “Additional Information” below for more details.

Offering Period and Expiration Date

This Offering will start on or after the Qualification Date and will terminate on the earlier of (i) the date on which the Maximum Offering is sold, (ii) the third anniversary of the date of qualification of this Offering Statement; or (iii) when we elect to terminate the Offering for any reason (in each such case, the “Termination Date”). At least every 12 months after this Offering has been qualified by the Commission, Remark will file a post-qualification amendment to include its recent financial statements, over a maximum period of three (3) years, starting from the date of qualification of this Offering Statement.

Plan of Distribution

As of this date, we have not retained a placement agent, underwriter, or broker-dealer with respect to this Offering and are not paying any underwriting discounts or commissions, except that we will pay introduction fees to registered broker-dealers. With such registered broker-dealers, we may enter into written agreements which will be non-exclusive, exist for a term of thirty (30) days and be cancellable by either party upon five (5) days written notice. We may agree to indemnify the registered broker-dealers against certain liabilities relating to or arising out of their activities under our agreements with them, including liabilities under the Securities Act, and to contribute to payments that registered broker-dealer may be required to make in respect of such liabilities.

There is no minimum number of securities or minimum aggregate proceeds for this Offering to close. We expect to have multiple closings of this Offering prior to the Termination Date.

We anticipate issuing the Series B Preferred Stock sold in this Offering in book-entry uncertificated form, unless the investor requests a certificate to be issued by Computershare LLC, our transfer agent.

Excluding the introduction fees payable to registered broker-dealers (if any), the expenses of the offering payable by us are estimated to be approximately $50,000, which includes legal and professional fees as well as other miscellaneous expenses.

The transfer agent and registrar for our Series B Preferred Stock is Computershare LLC. Computershare LLC address is P.O. Box 43006, Providence, RI 02940, and its telephone number is 1-800-522-6645 (U.S.) and 1-201-680-6528 (outside the U.S.).

Pricing of the Offering

The Offering Price of the Shares was determined by us. The principal factors considered in determining the Offering Price include:

Procedures for Subscribing

Potential investors who are “qualified purchasers” may subscribe to purchase our Shares. Any potential investor wishing to acquire our Shares, must:

Any potential investor will have ample time to review the subscription agreement, along with their counsel, prior to making any final investment decision. We shall only deliver such subscription agreement upon request after a potential investor has had ample opportunity to review this Offering Circular.

Right to Reject Subscriptions

After we receive your complete, executed subscription agreement and the funds required under the subscription agreement have been transferred to our bank account, we have the right to review and accept or reject your subscription in whole or in part, for any reason or for no reason. All decisions as to acceptance or rejection of a subscription by any investor will be made within ten (10) business days after receipt of the investor’s subscription agreement and subscription funds. We will return all monies from rejected subscriptions immediately to the investor, without interest or deduction.

Acceptance of Subscriptions. Upon our acceptance of a subscription agreement, we will countersign the subscription agreement and issue the Shares subscribed at closing. Once you submit the subscription agreement and it is accepted, you may not revoke or change your subscription or request your subscription funds. All accepted subscription agreements are irrevocable.

State Law Exemption and Offerings to “Qualified Purchasers”

The Shares are being offered and sold to “qualified purchasers” (as defined in Regulation A under the Securities Act). As a Tier 2 offering pursuant to Regulation A under the Securities Act, this Offering will be exempt from state “Blue Sky” law review, subject to certain state filing requirements and anti-fraud provisions, to the extent that the Shares offered hereby are offered and sold only to “qualified purchasers”.

“Qualified purchasers” include any person to whom securities are offered or sold in a Tier 2 offering pursuant to Regulation A under the Securities Act. We reserve the right to reject any investor’s subscription in whole or in part for any reason, including if we determine, in our sole and absolute discretion, that such investor is not a “qualified purchaser” for purposes of Regulation A. We intend to offer and sell the Shares to qualified purchasers in every state of the United States.

Dividend Payment Account

We will the Dividend Reserve into the Dividend Payment Account we will maintain. We will offer our Shares on a “best efforts” basis, and since there is no minimum offering, upon the approval of any subscription to this Offering Circular, we shall immediately deposit the proceeds into our bank account and may dispose of the proceeds in accordance with the “Use of Proceeds”.

Other Selling Restrictions

Other than in the United States, no action has been taken by us that would permit a public offering of our Shares in any jurisdiction where action for that purpose is required. Our Shares may not be offered or sold, directly or indirectly, nor may this Offering Circular or any other offering material or advertisements in connection with the offer and sale of our Shares be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this Offering Circular comes are advised to inform themselves about and to observe any restrictions relating to this Offering and the distribution of this Offering Circular. This Offering Circular does not constitute an offer to sell or a solicitation of an offer to buy our Shares in any jurisdiction in which such an offer or solicitation would be unlawful.

An investment in our Shares may involve significant risks. Only investors who can bear the economic risk of the investment for an indefinite period of time and the loss of their entire investment should invest in our Shares. See “Risk Factors”.

USE OF PROCEEDS

For the purpose of calculating the net proceeds from the Offering that we can use, we deducted the approximate offering fees and expenses and the Dividend Reserve to determine the amount of net proceeds available for our use. The table below shows that if we sell the maximum of 750,000 Shares at the maximum price of $100 per Share, we can expect to be able to use, for the purposes identified, an estimate of approximately $47.2 million. The table below also shows the estimated net proceeds we would derive from this Offering assuming the sale of only 75%, 50% or 25% of the Shares.

We cannot assure you that this Offering will be completed, that we will sell all of the Shares or that sales will be made at the maximum end of the range.

The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. We reserve the right to change the use of proceeds at any time.

As indicated in the table above, if we sell only 75%, or 50%, or 25% of the Shares offered for sale in this Offering, we would expect to use the resulting net proceeds for the same purposes as we would use the net proceeds from a sale of 100% of the Shares, and in approximately the same proportions, until such time as such use of proceeds would leave us without working capital reserve. At that point we would expect to modify our use of proceeds by limiting our expansion.

The expected use of net proceeds from this Offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve and change. The amounts and timing of our actual expenditures, specifically with respect to working capital, may vary significantly depending on numerous factors and which may include amounts required to pay officers’ salaries, bonuses, accrued or deferred compensation, consulting fees, professional fees, ongoing public reporting costs, computer equipment costs, office-related expenses and other corporate expenses. None of the proceeds will be used for payments to Remark’s officers and directors or officers and directors of its subsidiaries, except as set forth in the preceding sentence. The precise amounts that we will devote to each of the foregoing items, and the timing of expenditures, will vary depending on numerous factors. As a result, our management will retain broad discretion over the allocation of the net proceeds from this Offering.

We expect to use as much as approximately $5.0 million of the net proceeds to pay the principal and related accrued but unpaid interest related to the Mudrick Convertible Debentures which, as of October 21, 2024, bear interest at a rate of 20.5% per annum and have an aggregate principal amount of approximately $19.8 million.

In the event we do not sell all of the Shares being offered, we may seek additional financing from other sources to support the intended use of proceeds indicated above. If we secure additional equity funding, investors in this Offering would be diluted. In all events, there can be no assurance that additional financing would be available to us when wanted or needed and, if available, on terms acceptable to us.

BUSINESS

Overview

Remark Holdings, Inc., incorporated in Delaware and based in Nevada, along with its subsidiaries (“Remark”, the “Company”, “we”, “us”, or “our”) constitute a diversified global technology business with leading AI-powered analytics, computer vision and smart agent solutions, delivered via an integrated suite of AI tools that help organizations understand their customer demographics and behavior while monitoring, understanding, and acting on potential security threats in real-time.

In providing services to our customers, we neither collect or store the personal data of any individual nor collect or store sensitive customer data. Our AI software solutions function by identifying characteristics; including size, shape, and color among many other general characteristics; of animate or inanimate objects as well as identifying behaviors such as fighting, falling, trespassing, and fare evasion in public transportation environments, among many other behaviors. When our customers use our solutions to, in part, identify persons in situations such as controlling access to certain customer facilities or to identify which persons are authorized to pick up a child from school, the data that can identify individual persons is the responsibility of, and is maintained by, our customers. Our algorithms and the data we use to test and train them are hosted on Microsoft Azure servers based in the U.S. and on AWS servers based in the U.K., with all such data being transitioned to Microsoft Azure. We neither maintain physical or virtual servers in China nor store any of our data in China, meaning that such data is not accessible by any Chinese organization or any level of the government of China. When we test our solutions on new devices, such as on a new type of UAV or robotic device, such testing is conducted in the U.S. or U.K. using servers based in the U.S. or U.K.

We train all our AI models on our FastAI model-training platform, which we offer as a software-as-a-service (“SaaS”) product for businesses that have AI model training needs. FastAI is built on large multimodal model technology that can train and tune up general and specific computer vision models (e.g., models that detect fire, smoke, bags, personnel, appearance, vehicles, etc.). As a SaaS platform, FastAI provides AI training infrastructures (i.e., GPU optimization, GPU resource management, open source frameworks, AI model compression, AI model distribution, and AI model release management, etc.) to ease the training and testing of computer vision models and other multimodal models. The FastAI platform also provides for automated sample annotation using zero-shot training technology, which can annotate training samples using the AI without significant human intervention. Our experience indicates that, on average, FastAI requires approximately 80% fewer samples to be labeled during testing and approximately 60% less training time, which collectively results in more than a 50% reduction in AI model training cost and a fast turn-around/delivery time. The FastAI license is a permanent license per each individual AI model that allows training and testing of the model via the Internet. Once a FastAI license is purchased for an AI model, there is no additional cost for re-training, upgrading or tuning up such model for customization. FastAI represents an ideal platform for training “smaller” models that solve real business problems with precision.

According to a report from IHS Markit, more than one billion security cameras were expected to be in service worldwide by the end of 2021. Other research reports indicate that one can estimate that approximately 400 million security cameras are in service outside of China. We believe the overwhelming majority of existing security cameras lack any form of AI-based analytical ability. Assuming conservatively that only 25% of the 400 million security cameras outside of China will be upgraded with AI-based functionality, and that $1,200 of revenue can be earned per camera stream per year for providing just a basic set of AI-based functionality, the total addressable market annually for upgrading standard security cameras to smart security cameras is potentially about $120 billion. If we can ramp up over five years to garner only about one percent of such potential total addressable market, the recurring revenue stream would approximate $1.2 billion per year. In addition to the market for retrofitting standalone security cameras, we also see significant potential regarding computer-vision-enabled robotic devices. The industrial robotics market alone is projected to reach approximately $35.7 billion by 2029, with a 10.5% compound annual growth rate from 2022 to 2029.

To begin capturing our portions of the described markets, the primary focus of our business is promoting and facilitating the safety of our customers and their customers through our SSP. The SSP, having won numerous industry and government benchmark tests for accuracy and speed, is a leading software solution for using computer vision to detect persons, objects and behavior in video feeds. Real-time alerts from the SSP allow operations staff to respond rapidly to prevent any events or activities that can endanger public security or workplace safety.

We generally configure and deploy the SSP to integrate with each customer’s IT infrastructure, including, in many cases, cameras already in place at the customer’s location(s). When necessary, we also sell and deploy hardware to create or supplement the customer’s monitoring capabilities. Because the SSP is camera-platform agnostic, we can deploy it for customers on anything configured with a camera such that a video feed is provided. For example, versions of the SSP can be configured for use in a motor vehicle, a UAV, a humanoid robot or other robotic device, in addition to being installed in video cameras on stationary mounts or on mobile mounts such as our Mobile Sentry unit. We have already successfully deployed versions of our AI software on robots and we continue to develop such capability, such that soon we expect to be able to port versions of our AI software onto more advanced humanoid robots.

The Mobile Sentry is a wheelable, trailer-style, solar-powered video analytics unit with a telescoping mast on which high-quality cameras are mounted. Based upon customer needs, the cameras may have normal vision and (or) thermal vision capability. The cameras work in conjunction with an edge-computing device that is also mounted to the unit. Optionally, UAVs, talk-down speakers, gunshot-sound detectors and other devices can be mounted to a Mobile Sentry unit to provide additional robust security and public safety functionality. The Mobile Sentry is an example of how we incorporate the SSP into modern IT architectural concepts, including edge computing, cloud computing and microservice architectures. Edge computing, for example, allows the SSP to conduct real-time computing tasks at distributed locations, while cloud computing can share computing resources on the Internet and provide unlimited expansion to support large organizations, thereby dramatically reducing initial costs while integrating numerous and varied sensors at distributed locations.

We have continued working to further expand our sales in the U.S., the U.K., and in Mexico, Central and South America, where we see demand for AI products and solutions in the retail, construction, public safety, workplace safety and public sector/government markets. At the same time, we have scaled down, and will continue to scale down, our operations in China until such operations are insignificant to our business, while we have been looking to expand our business in other parts of Asia. During the second quarter of 2024, we completed a large project for the Clark County School District in Nevada, and we expect additional orders from that client in the near future. We are also in the late stages of bidding on contracts with a large municipality in the U.S. and expect to make an announcement in late 2024. We have successfully signed initial contracts to assist expansion of our sales into South America, Malaysia, and India. Given the lack in those areas of AI companies specializing in computer vision, we believe we have a first-mover advantage with regard to targeting the same industries that we have successfully targeted in the U.S. and U.K.

In conjunction with the geographic diversification of our business, we believe we can more rapidly and more efficiently develop and increase our market presence in the various industries that we have identified as being most important by establishing business relationships with channel partners. To that end, we already have sales and marketing relationships with Microsoft, Oracle, Intel and NVIDIA which will provide us with access to their respective online marketplaces and to their worldwide salesforces, which will be incentivized to sell our solutions. We will continue working to establish additional such channel partners in the future.

Our corporate headquarters, which houses administrative, research and development and operations functions, is based in Las Vegas, Nevada, while we also maintain technical and research and development teams in London, England. Trading of our common stock on The Nasdaq Capital Market LLC (“Nasdaq”) was suspended at the opening of business on February 14, 2024 based upon our non-compliance with the net income standard in Nasdaq Listing Rule 5550(b)(3) and the annual shareholders’ meeting requirement in Nasdaq Listing Rule 5620(a). Concurrent with the suspension of trading of our stock on Nasdaq, our stock began trading on the OTC Pink Market and then, beginning on March 8, 2024, our stock began trading on the OTCQX market under the ticker symbol MARK. On April 9, 2024, Nasdaq filed a Form 25-NSE as official notification that our common stock had been delisted.

On December 21, 2022, we effected a 1-for-10 reverse split of our common stock (the “Reverse Split”). All references made to share or per share amounts in this Offering Circular have been retroactively adjusted to reflect the effects of the Reverse Split.

Litigation

We have no current, pending or threatened legal proceedings or administrative actions either by or against us that could have a material effect on our business, financial condition, or operations and any current, past or pending trading suspensions.

Facilities

We do not own any real property. Remark’s offices are located at 800 S. Commerce St., Las Vegas, Nevada 89106. Our telephone number is (702) 701-9514 and our e-mail address is ir.remarkholdings.com.

Employees

We employed 46 people as of October 21, 2024, all of whom are full-time employees.

ADDITIONAL INFORMATION

We were originally incorporated in Delaware in March 2006 as HSW International, Inc., we changed our name to Remark Media, Inc. in December 2011, and as our business continued to evolve, we changed our name to Remark Holdings, Inc. in April 2017.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this Offering Circular. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors,” “Cautionary Statement regarding Forward-Looking Statements” and elsewhere in this Offering Circular. Please see the notes to our Financial Statements for information about our Critical Accounting Policies and Recently Issued Accounting Pronouncements.

Overview

Remark Holdings, Inc., incorporated in Delaware and based in Nevada, along with its subsidiaries (“Remark”, the “Company”, “we”, “us”, or “our”) constitute a diversified global technology business with leading AI-powered analytics, computer vision and smart agent solutions, delivered via an integrated suite of AI tools that help organizations understand their customer demographics and behavior while monitoring, understanding, and acting on potential security threats in real-time.

Our Business

We generate revenue by using the proprietary data and AI software platform we developed to deliver AI-based computer vision products, computing devices and software-as-a-service solutions for businesses in many industries. We continue to partner with top universities on research projects targeting algorithm, artificial neural network and computing architectures which we believe will keep us among the leaders in technology development.

The primary focus of our business is promoting and facilitating the safety of our customers and their customers through our Smart Safety Platform (the “SSP”). The SSP, having won numerous industry and government benchmark tests for accuracy and speed, is a leading software solution for using computer vision to detect persons, objects and behavior in video feeds. Real-time alerts from the SSP allow operations staff to respond rapidly to prevent any events or activities that can endanger public security or workplace safety.

We deploy the SSP to integrate with each customer’s IT infrastructure, including, in many cases, cameras already in place at the customer’s location(s). When necessary, we also sell and deploy hardware to create or supplement the customer’s monitoring capabilities. Such hardware includes, among other items, cameras, edge computing devices and/or our Smart Sentry units. The Smart Sentry is a large mobile camera unit with a telescoping mast on which a high-quality camera is mounted. Based upon customer needs, the camera may have either standard vision and/or thermal vision capability. The camera works in conjunction with an edge computing device that is also mounted to the unit. The Smart Sentry is an example of how we incorporate the SSP in modern IT architectural concepts, including edge computing and micro-service architectures. Edge computing, for example, allows the SSP to conduct expensive computing tasks at distributed locations without requiring large data transmission over the internet, thereby dramatically reducing costs while integrating numerous and varied sensors at distributed locations.

We customize and sell our innovative AI-based computer vision products and solutions, including the SSP, to customers in the retail, construction, public safety, workplace safety and public sector markets. We have also developed versions of our solutions for application in the transportation and energy markets.

Overall Business Outlook

Two primary factors have been affecting our business in recent quarters and occupying our focus as we plan for the future. We began 2023 having to deal with the slow economic recovery in China as municipalities and businesses there tried to return to fully-normalized operations following strict preventative measures related to the COVID-19 pandemic. As 2023 progressed, the rising political tensions between the U.S. and China reached a point that such tensions also negatively impacted our ability to complete projects in China on a similar pace as we had previously done by making it somewhat more difficult for an American company in the newer but rapidly-developing AI space to overcome politically-based perceptions and do business in China. Though we remain optimistic that political tensions between the U.S. and China will begin to relax, we expect that we may continue to face difficult-to-predict operating results in China for approximately the next 12 months. As a result, we began reducing staffing levels at our China subsidiaries early in the fourth quarter of 2023, such that we can still continue working with existing clients with our smaller footprint while saving on operating costs until such time as the political tensions ease and the business environment for American companies in the AI space in China becomes more conducive to again expand operations.

We have continued working to further expand our sales in the U.S., the U.K., and in Mexico, Central and South America, where we see demand for AI products and solutions in the workplace, government and public safety markets. At the same time, we have scaled down, and will continue to scale down, our operations in China until such operations are insignificant to our business, while we have been looking to expand our business in other parts of Asia. During the second quarter of 2024, we completed a large project for the Clark County School District in Nevada, and we expect additional orders from that client in the near future. We are also in the late stages of bidding on contracts with a large municipality in the U.S. and expect to make an announcement in late 2024. We have successfully signed initial contracts to assist expansion of our sales into South America, Malaysia, and India. Given the lack in those areas of AI companies specializing in computer vision, we believe we have a first-mover advantage with regard to targeting the same industries that we have successfully targeted in the U.S. and U.K.

In conjunction with the geographic diversification of our business, we believe we can more rapidly and more efficiently develop and increase our market presence in the various industries that we have identified as being most important by establishing business relationships with channel partners. To that end, we already have relationships with Microsoft, Oracle, Intel and NVIDIA which will provide us with access to their respective online marketplaces and to their worldwide salesforces, which will be incentivized to sell our solutions. We will continue working to establish additional such channel partners in the future.

Despite our efforts, pandemics of any type and any resulting preventative measures, as well as economic and geopolitical conditions in some international regions, could affect our business and we cannot be sure what the ultimate effects will be. We will continue to pursue geographic diversification, but anticipating when, or if, we can close on the opportunities in front of us is difficult. In addition, we may face a large number of well-known competitors which would make deploying our software solutions in the market segments we have identified difficult.

Inflation and Supply Chain

Other than the impact of inflation on the general economy, we do not believe that inflation has had a material effect on our operations to date. However, there is a risk that our operating costs could be subject to inflationary pressures in the future, which would have the effect of increasing our operating costs and cause additional stress on our working capital resources.

The high level of political tension described above has affected our ability to work with certain vendors in a timely manner. Though we have been able to complete contracts with our customers in China, such political tension has caused delays in the speed at which we can work with certain vendors to deploy our services and complete contracts in China. Also, as we work to increase our sales of computer-vision products and services in the U.S., Europe and South America and thereby geographically diversify our business, we could be subjected to the risk of supply chain disruptions with regard to high-technology products such as servers and related equipment that we use to train our AI software algorithms and which we plan to sell to customers to support operation of our computer-vision products and services.

Business Developments During 2024

As described above, the high level of political tension between the U.S. and China, as well as reducing our staff in China, has made it difficult for us to complete significant projects in China as we did in prior periods. At the same time, we continued building our business outside of China, having success with a large school district in the U.S. We expect additional orders from the large school district in the coming months.

The following table presents our revenue categories as a percentage of total consolidated revenue during the three and six months ended June 30, 2024 and 2023.

CRITICAL ACCOUNTING ESTIMATES

During the six months ended June 30, 2024, we made no material changes to our critical accounting estimates as we disclosed them in Part II, Item 7 of our 2023 Form 10-K, except as described below.

Evaluating Indefinite-Lived Intangible Assets for Impairment

At least annually, we qualitatively assess indefinite-lived intangible assets, such as deferred cost of revenue, to determine whether it is more likely than not that such assets are impaired. If we determine that such assets are, more likely than not, impaired, we compare the fair value of such assets to their carrying value to determine the amount of impairment.

The balance of deferred cost of revenue as of June 30, 2024 can be fully recovered, given that the vendors are able to perform the installations, but completing the projects in China and fully recovering the deferred cost of revenue balance will require additional capital resources. While we have turned our focus to expanding our business outside of China, we will continue working to complete the projects in China, though we may have to impair the asset in future periods to the extent our capital resources are not sufficient to complete all such projects. Given that we have limited capital resources for China, which could cause further delays in completing the projects associated with the deferred cost of revenue, we have reclassified the balance of deferred cost of revenue as a long-term asset as of June 30, 2024.

RESULTS OF OPERATIONS

The following tables summarize our operating results for the unaudited three and six months ended June 30, 2024, and the discussion following the table explains material changes in such operating results compared to the unaudited three and six months ended June 30, 2023.

Revenue and Cost of Revenue. During the three months ended June 30, 2024, our reduction of staff in China and refocusing of efforts outside of China prevented us from completing any significant projects. Our efforts to expand our business outside of China led to our completion of a project for a large school district in the U.S., resulting in our recognition of approximately $3.7 million of revenue. The decrease in revenue from China partially offset almost all the revenue recognized in the U.S., resulting in the increase of approximately $0.5 million. Cost of sales increased in relation to the change in revenue.

During the six months ended June 30, 2024, the lack of project completions that resulted from the reduction of staff in China and a refocusing of efforts outside of China caused a reduction in revenue that almost entirely offset the increase in revenue in the U.S. that resulted from our completion of the school district project. Cost of sales increased in relation to the change in revenue.

Technology and Development. During the three months ended June 30, 2024, a decrease of approximately $0.2 million in payroll-related expense resulted from our reduction in staff in our China operations.

During the six months ended June 30, 2024, a decrease of approximately $0.5 million in payroll-related expense resulted from our reduction in staff in our China operations. During the six months ended June 30, 2023, we received a refundable tax credit of approximately $0.5 million from the government of the United Kingdom resulting from our research and development activities in its jurisdiction and reported such amount as an offset to expense. During the six months ended June 30, 2024, we did not receive such tax credit. The difference in timing of the research and development tax credit resulted in an increase in expense that almost entirely offset the decrease in payroll-related expense.

General and administrative. During the six months ended June 30, 2024, an increase of approximately $0.3 million in certain expenses related to business development and other individually immaterial increases in other expenses that were not indicative of trends in our business was partially offset by a $0.2 million decrease in franchise taxes resulting from a change in estimate, as well as by other individually immaterial decreases in other expenses that were not indicative of trends in our business.

Impairments. During the three months ended June 30, 2023, we determined that certain costs that we had capitalized to software development in progress would no longer be recoverable and we recorded an impairment of approximately $0.2 million. Also, we recorded an impairment of approximately $0.2 million related to certain prepaid expense amounts which were deemed unrecoverable. No such impairments were recorded during the three or six months ended June 30, 2024.

Interest expense. Interest expense decreased during the six months ended June 30, 2024 because the same period of the prior year included an extension fee of approximately $0.8 million we recorded in relation to our entry on March 14, 2023 into the 2023 Mudrick Loan Agreement, along with the Original Mudrick Loan Agreements, described in Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Offering Circular. The increase related to the extension fee was partially offset by an increase in the interest rate related to the 2023 Mudrick Loan Agreement as a result of us not making certain payments of principal when due.

Finance Cost Related to Obligations to Issue Common Stock. The finance cost during the six months ended June 30, 2024 resulted from the establishment and remeasurement of obligations to issue our common stock that we incurred in relation to the ELOC Advances we received from Ionic, all of which is described in Note 12 in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Offering Circular. We had more ELOC Advances outstanding during the six months ended June 30, 2024 than during the same period of the prior year.

RESULTS OF OPERATIONS

The following tables summarize our operating results for the year ended December 31, 2023, and the discussion following the table explains material changes in such operating results compared to the year ended December 31, 2022.

Revenue and Cost of revenue. During the year ended December 31, 2023, our project completions slowed significantly in China, first as business and economic recovery efforts that began after China lifted most of its onerous COVID-19 related restrictions at the end of 2022 continued to be sluggish, and then as the previously-noted political tensions between the U.S. and China continued to make it more difficult than expected for us to complete projects.

Cost of revenue during the year ended December 31, 2023 decreased primarily in conjunction with the decreases in project completions described above. Also, during year ended December 31, 2022, we recorded approximately $1.3 million of inventory obsolescence in cost of revenue, while we did not record a material amount of inventory obsolescence in year ended December 31, 2023.

Sales and marketing. The addition in late 2022 of three new personnel, including two executive positions, on our sales team caused an increase of $0.3 million in payroll and related expense during the year ended December 31, 2023.

General and administrative. During the year ended December 31, 2023, we recorded $1.2 million less bad debt expense than during the prior year because, during the prior year, we had to re-evaluate the amounts receivable from customers based on what was then recent information and, as a result, we substantially increased our reserve for credit losses and there were fewer accounts to review during our evaluation of current expected credit losses. We experienced a decrease of approximately $0.7 million in legal and other professional fees primarily because the year ended December 31, 2022 included expense related to financings and the filing of amendments to registration statements whereas we did not have as much similar activity during 2023. Also contributing to the overall decrease in general and administrative expense was a decrease of $1.5 million in certain expenses related to business development, including short-term workspace rentals. Finally, our share-based compensation expense decreased by $1.8 million due to a large number of stock options with a grant date of July 8, 2021 becoming fully expensed in January 2023, in comparison to having a full year of expense during 2022, and due to the decrease in the number of outstanding cash bonuses to our employees in China.

Impairments. During 2023, we recorded an impairment of approximately $0.8 million related to a software asset for which we no longer have established cash flows to support continued recognition of such asset, and we also determined that certain costs that we had capitalized to software development in progress would no longer be recoverable and we recorded an impairment of approximately $0.2 million. Also during 2023, we deemed a certain prepaid expense amount unrecoverable because the amount related to certain items a vendor had already begun to custom build for us but which we had to cancel, so we recorded an impairment of approximately $0.2 million.

Interest expense. We executed the Original Mudrick Loan Agreements in December 2021, pursuant to which we obtained the Original Mudrick Loans in the aggregate principal amount of $30.0 million. During the year ended December 31, 2022, we recorded in interest expense approximately $2.2 million of amortization of debt discount and debt issuance cost related to the Original Mudrick Loans, but did not have any such amortization during the year ended December 31, 2023 because the debt discount and debt issuance cost were fully amortized during 2022. Interest expense also decreased because significantly less debt principal was outstanding on the Original Mudrick Loans during the year ended December 31, 2023 than during the prior year, even though the interest rate had increased from 16.5% to 20.5%. Partially offsetting the decreases in interest expense was the amendment and extension fee of approximately $0.8 million we recorded in relation to our entry on March 14, 2023 into the New Mudrick Loan Agreement.

Finance cost related to obligations to issue common stock. The finance cost during the year ended December 31, 2023 resulted from the establishment and remeasurement of obligations to issue our common stock that we incurred in relation to the debentures we issued to Ionic in 2022 and 2023, as well as the ELOC Advances we received from Ionic, all of which is described in Note 14 in the Notes to Consolidated Financial Statements. Several obligations related to ELOC Advances were outstanding as of December 31, 2023, in addition to obligations related to debentures we issued during 2023, while the only obligation we had outstanding as of December 31, 2022 related to the debenture we issued to Ionic in October 2022.

Loss on investment. On July 1, 2021, as the result of a business combination involving a U.S.-based venture, Sharecare, Inc. (“Legacy Sharecare”) and Falcon Capital Acquisition Corp., a special purpose acquisition company, the common stock of the surviving entity of such business combination (“New Sharecare”) became listed on the Nasdaq Stock Market LLC and our equity in Legacy Sharecare converted into cash and shares of publicly traded common stock of New Sharecare. As a result of the common stock of New Sharecare being traded on a national securities exchange, we were able to remeasure our investment at fair value. Since July 1, 2021, the value of the New Sharecare stock steadily declined, which caused the losses on investment during the year ended December 31, 2022. On July 11, 2022, we delivered our remaining 6,250,000 shares of New Sharecare to our lender at their request and, as a result, we did not maintain investments during the year ended December 31, 2023.

Other loss, net. During the year ended December 31, 2022, we accrued $0.4 million of liquidated damages related to a registration statement which became effective after the time frame during which we were required to ensure such registration statement became effective. We had no similar activity during the year ended December 31, 2023.

LIQUIDITY AND CAPITAL RESOURCES

Going Concern

During the six months ended June 30, 2024, and in each fiscal year since our inception, we have incurred operating losses which have resulted in a stockholders’ deficit of $(46.3) million as of June 30, 2024. Additionally, our operations have historically used more cash than they have provided. Net cash used in operating activities was $6.1 million during the six months ended June 30, 2024. As of June 30, 2024, our cash balance was $0.4 million. Also, we did not make required repayments of the outstanding loans under the 2023 Mudrick Loan Agreement when due (see Note 10 for more information) and we have accrued approximately $1.4 million of delinquent payroll taxes.

Our history of recurring operating losses, working capital deficiencies and negative cash flows from operating activities give rise to, and management has concluded that there is, substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2023, has also expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We intend to fund our future operations and meet our financial obligations through revenue growth from our AI offerings, as well as through sales of our thermal-imaging products. We cannot, however, provide assurance that revenue, income and cash flows generated from our businesses will be sufficient to sustain our operations in the twelve months following the filing of this Offering Circular. As a result, we are actively evaluating strategic alternatives including debt and equity financings.

Conditions in the debt and equity markets, as well as the volatility of investor sentiment regarding macroeconomic and microeconomic conditions (in particular, as a result of the COVID-19 pandemic, global supply chain disruptions, inflation and other cost increases, and the geopolitical conflict in Ukraine), will play primary roles in determining whether we can successfully obtain additional capital.

A variety of factors, many of which are outside of our control, may affect our cash flow; those factors include regulatory issues, competition, financial markets and other general business conditions. Based on financial projections, we believe that we will be able to meet our ongoing requirements for at least the next 12 months with existing cash and based on the probable success of one or more of the following plans:

However, projections are inherently uncertain and the success of our plans is largely outside of our control. As a result, there is substantial doubt regarding our ability to continue as a going concern, and we may fully utilize our cash resources prior to September 30, 2024.

Mudrick Loans

On December 3, 2021, we entered into the Original Mudrick Loan Agreements pursuant to which we incurred the Original Mudrick Loans in the aggregate principal amount of $30.0 million. The Original Mudrick Loans initially bore interest at 16.5% per annum until the original maturity date of July 31, 2022 and, following an amendment we entered into with Mudrick in August 2022, bore interest at 18.5% per annum. The amendment also extended the maturity date of the Original Mudrick Loans from July 31, 2022 to October 31, 2022. However, we did not make the required repayment of the Original Mudrick Loans by October 31, 2022, which constituted an event of default under the Original Mudrick Loans and triggered an increase in the interest rate under the Original Mudrick Loans to 20.5%.

On March 14, 2023, we entered into the 2023 Mudrick Loan Agreement pursuant to which all of the Original Mudrick Loans were cancelled in exchange for the 2023 Mudrick Notes in the aggregate principal amount of approximately $16.3 million. The 2023 Mudrick Notes bore interest at a rate of 20.5% per annum, which waas payable on the last business day of each month commencing on May 31, 2023. The interest rate increased by 2% and the principal amount outstanding under the 2023 Mudrick Notes and any unpaid interest thereon could have become immediately due and payable upon the occurrence of any event of default under the 2023 Mudrick Loan Agreement. All amounts outstanding under the 2023 Mudrick Notes, including all accrued and unpaid interest, will be due and payable in full on October 31, 2023. See Note 10 in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Offering Circular for additional information regarding the 2023 Mudrick Notes.

To secure the payment and performance of the obligations under the Original Mudrick Loan Agreements and the 2023 Mudrick Loan Agreement, we, together with the Guarantors, granted to TMI Trust Company, as the collateral agent for the benefit of Mudrick, a first priority lien on, and security interest in, all assets of Remark and the Guarantors, subject to certain customary exceptions.

In connection with our entry into the Original Mudrick Loan Agreements, we paid to Mudrick an upfront fee equal to 5.0% of the amount of the Original Mudrick Loans, which amount was netted against the drawdown of the Original Mudrick Loans. We recorded the upfront fee as a debt discount of $1.5 million, and recorded debt issuance cost totaling $1.1 million. We amortized the discount on the Original Mudrick Loans and the debt issuance cost over the life of the Original Mudrick Loans and, during the year ended December 31, 2022, we amortized $2.2 million of such discount and debt issuance cost. In consideration for the amendment we entered into with Mudrick in August 2022, we paid Mudrick an amendment and extension fee in the amount of 2.0% of the then unpaid principal balance of the Original Mudrick Loans, which was approximately $0.3 million, by adding such amount to the principal balance of the Original Mudrick Loans.

On August 5, 2024, we entered into an Exchange Agreement (the “Exchange Agreement”) with Mudrick Capital Management, L.P., on behalf of itself and the holders (the “Investors”) of 2023 Mudrick Notes in an aggregate principal amount of approximately $16.3 million (the “Original Principal”) pursuant to which the Investors and we exchanged the 2023 Mudrick Notes for newly-issued, secured convertible debentures issued by us (the “Secured Convertible Debentures”) in an aggregate principal amount equal to the sum of the Original Principal and accrued and unpaid interest on the Original Principal in the aggregate amount of approximately $3.7 million.

The Secured Convertible Debentures mature on May 15, 2025 and bear interest at a rate of 20.5% per annum, and the interest is payable in kind by our issuance to the Investors of shares of our common stock as described below. The Secured Convertible Debentures are convertible, at the option of the Investors, at any time, into such number of shares of our common stock equal to the principal amount of the Secured Convertible Debentures converted plus all accrued and unpaid interest on such principal amount at a conversion price equal the closing price of our common stock on the trading day immediately preceding the conversion date, subject to a floor price of $0.10, subject to (i) equitable adjustments resulting from any stock splits, stock dividends, recapitalizations or similar events and (ii) the availability of authorized shares of common stock which can be reserved for the purpose of such conversion.

In no event will the Investors be entitled to convert any portion of the Secured Convertible Debentures in excess of that portion which would result in beneficial ownership by it and its affiliates of more than 9.99% of the outstanding shares of common stock, unless such Investors deliver to us written notice at least sixty-one (61) days prior to the effective date of such notice that the provision be adjusted to 9.99%. The Secured Convertible Debentures provide that neither the Investors nor any affiliate may sell or otherwise transfer, directly or indirectly on any trading day any shares of our common stock an amount representing more than 10.0% of the trading volume of the common stock.

In addition, we can redeem the Secured Convertible Debentures at a redemption price equal to 100% of the sum of the principal amount of the Secured Convertible Debentures to be redeemed plus accrued interest, if any.

Upon the occurrence of events of default specified in the Secured Convertible Debentures, including the failure to pay the outstanding principal amount of the Secured Convertible Debentures and all accrued and unpaid interest thereon when due, the breach of the terms of the Exchange Agreement, the Secured Convertible Debentures or the Security Agreement (as defined below), the breach of Remark’s or the Guarantors (as defined below) representations and warranties in the Exchanges Agreement, the Secured Convertible Debentures or the Security Agreement, certain bankruptcy events with respect to Remark or the Guarantors, the failure to pay amounts due and payable under any indebtedness of Remark or a Guarantor in an amount in excess of $100,000 or a final judgment is entered against Remark or a Guarantor in an aggregate amount in excess of $100,000, all amounts owed under the Secured Convertible Debenture, together with default interest at 22.5% per annum, shall then become due and payable. In addition, the Collateral Agent (as defined below) shall have the right to exercise remedies set forth in the Security Agreement.

The Secured Convertible Debentures are guaranteed by certain of our direct and indirect subsidiaries (the “Guarantors”) and are secured by all the assets (wherever located, whether now owned or hereafter acquired) of Remark and the Guarantors pursuant to a Guaranty and Security Agreement dated as of August 5, 2024 (the “Security Agreement”), by and among us, as the Guarantors, the Investors and Argent Institutional Trust Company (the “Collateral Agent”).

Obligations to Issue Common Stock

On October 6, 2022, we entered into a debenture purchase agreement (the “2022 Debenture Purchase Agreement”) with Ionic, pursuant to which we issued a convertible subordinated debenture in the original principal amount of $2.8 million (the “2022 Debenture”) to Ionic for a purchase price of $2.5 million (See Note 12 in the Notes to Unaudited Condensed Consolidated Financial Statements included in this report for additional detail).

In connection with the 2022 Debenture, on October 6, 2022, we also entered into a purchase agreement with Ionic (as amended by those certain letter agreements by and between Remark and Ionic, dated as of January 5, 2023; July 12, 2023; August 10, 2023; September 15, 2023; and February 14, 2024, and by the First Amendment dated January 9, 2024, the “Amended ELOC Purchase Agreement”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Ionic to purchase up to an aggregate of $50.0 million of shares of our common stock over the 36-month term of the Amended ELOC Purchase Agreement. Under the Amended ELOC Purchase Agreement, after the satisfaction of certain commencement conditions, including, without limitation, the effectiveness of a resale registration statement filed with the SEC registering such shares and that the 2022 Debenture shall have been fully converted into shares of common stock or shall otherwise have been fully redeemed and settled in all respects in accordance with the terms of the 2022 Debenture, we have the right to present Ionic with a purchase notice (each, a “Purchase Notice”) directing Ionic to purchase any amount up to $0.5 million of our common stock per trading day, at a per share price equal to 80% (or 70% if our common stock is not then trading on Nasdaq) of the average of the two lowest volume-weighted average prices (“VWAPs”) over a specified measurement period. With each purchase under the Amended ELOC Purchase Agreement, we are required to deliver to Ionic an additional number of shares equal to 2.5% of the number of shares of common stock deliverable upon such purchase. (See Note 12, Note 14 and Note 17 in the Notes to Consolidated Financial Statements included in this report for additional detail).

On January 5, 2023, we and Ionic entered into a letter agreement (the “January 2023 Letter Agreement”) which amended the ELOC Purchase Agreement. Under the January 2023 Letter Agreement, the parties agreed, among other things, to (i) amend the floor price below which Ionic will not be required to buy any shares of our common stock under the ELOC Purchase Agreement from $0.25 to $0.20, determined on a post-reverse split basis, (ii) amend the per share purchase price for purchases under the ELOC Purchase Agreement to 90% of the average of the two lowest daily VWAPs over a specified measurement period, which will commence at the conclusion of the applicable measurement period related to the 2022 Debenture and (iii) waive certain requirements in the ELOC Purchase Agreement to allow for a one-time $0.5 million purchase under the ELOC Purchase Agreement. See Note 12 in the Notes to Consolidated Financial Statements included in this report for additional detail.

On March 14, 2023, we entered into another debenture purchase agreement (the “2023 Debenture Purchase Agreement”) with Ionic pursuant to which we authorized the issuance and sale of two convertible subordinated debentures in the aggregate principal amount of $2.8 million for an aggregate purchase price of $2.5 million. The first debenture is in the original principal amount of $1.7 million for a purchase price of $1.5 million (the “First Debenture”), which was issued on March 14, 2023, and the second debenture is in the original principal amount of $1.1 million for a purchase price of $1.0 million (the “Second Debenture” and collectively with the First Debenture, the “2023 Debentures”). The terms of the 2023 Debentures are further described in Note 12 in the Notes to Consolidated Financial Statements included in this report.

On September 15, 2023, we and Ionic entered into a letter agreement (the “September 2023 Letter Agreement”) which amends the Amended ELOC Purchase Agreement. Under the September 2023 Letter Agreement, which repeated changes made in earlier letter agreements between Remark and Ionic dated July 12, 2023 and August 10, 2023, the parties agreed, among other things, to (i) allow Remark to deliver one or more irrevocable written notices (“Exemption Purchase Notices”) to Ionic in a total aggregate amount not to exceed $20.0 million, which total aggregate amount shall be reduced by the aggregate amount of previous Exemption Purchase Notices, (ii) amend the per share purchase price for purchases under an Exemption Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices (“VWAPs”) over a specified measurement period, (iii) amend the definition of the specified measurement period to stipulate that, for purposes of calculating the final purchase price, such measurement period begins the trading day after Ionic pays Remark the amount requested in the purchase notice, while the calculation of the dollar volume of Remark common stock traded on the principal market to determine the length of the measurement period shall begin on the trading day after the previous measurement period ends, iv) that any additional Exemption Purchase Notices that are not in accordance with the terms and provisions of the Purchase Agreement shall be subject to Ionic’s approval, v) to amend section 11(c) of the Amended ELOC Purchase Agreement to increase the Additional Commitment Fee from $0.5 million to $3.0 million and vi) that by September 29, 2023, the parties will amend the Debenture Transaction Documents to include a so-called Most Favored Nation provision that will provide Ionic with necessary protection against any future financing, settlement, exchange or other transaction whether with an existing or new lender, investor or counterparty, and that, if such amendment is not made by September 29, 2023, the Additional Commitment Fee shall be further increased to approximately $3.8 million.

On January 9, 2024, we and Ionic entered into an amendment (the “First Amendment”) to the Amended ELOC Purchase Agreement. Under the First Amendment, the parties agreed, among other things, (i) to clarify that the Floor Price per the agreement is $0.25, (ii) to amend the per share purchase price for purchases under a Regular Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices (“VWAPs”) over a specified measurement period, (iii) to increase the frequency at which we can submit purchase notices, within limits, and (iv) to amend section 11(c) of the ELOC Purchase Agreement to increase the Additional Commitment Fee from $500,000 to approximately $3.8 million.

On February 14, 2024, we and Ionic entered into a letter agreement (the “February 2024 Letter Agreement”) which amends the Amended ELOC Purchase Agreement. Under the February 2024 Letter Agreement, the parties agreed, among other things, (i) to redefine the definition of Principal Market to include markets in addition to the Nasdaq Capital Market and the OTC Bulletin Board, (ii) that Ionic will forbear from enforcing any noncompliance with the covenants in the Amended ELOC Purchase Agreement as a result of Remark’s delisting from Nasdaq and any related suspension of trading on Nasdaq, and (iii) to clarify that we can still issue Regular Purchase Notices despite the delisting from Nasdaq and any related suspension of trading on Nasdaq so long as the Principal Market is either the OTCQX, OTCQB, or OTCBB and each Regular Purchase does not exceed $500,000.

Cash Flows - Operating Activities

During the six months ended June 30, 2024, we used $0.9 million more cash in operating activities than we did during the same period of the prior year. The increase in cash used in operating activities is primarily the result of the timing of payments related to elements of working capital.

Cash Flows - Investing Activities

During the six months ended June 30, 2024, we purchased approximately $0.6 million of software for internal use and other operating assets, while during the same period of 2023 investing activities were de minimis.

Cash Flows - Financing Activities

During the six months ended June 30, 2024, we received approximately $1.6 million more from financing activities than we did during the same period of 2023. Ionic advanced us an aggregate of approximately $4.8 million during the six months ended June 30, 2024, under the Amended ELOC Purchase Agreement for which we issued 24,965,987 shares of our common stock and for which we expect to issue another estimated 48,746,999 shares of our common stock, we received $2.8 million from an unrelated potential investor/creditor in advance of finalizing an agreement, and we also received $0.7 million of advances from senior management representing various operating expense payments and repaid $1.3 million of advances from senior management. During the same period of 2023, we received $2.5 million from Ionic in exchange for the issuance of a convertible debenture, Ionic also advanced us an aggregate of $3.0 million, and we received $0.7 million of advances from senior management and repaid $0.8 million of advances from senior management representing various operating expense payments made on our behalf.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.

Recently Issued Accounting Pronouncements

Please refer to Note 2 in the Notes to Unaudited Condensed Consolidated Financial Statements included in this report for a discussion regarding recently issued accounting pronouncements which may affect us.

MANAGEMENT

The following table and paragraphs set forth information regarding our executive officers and directors, including the business experience for the past five years (and, in some instances, for prior years) of each such executive officer and director.

Executive Officer

Kai-Shing Tao has served as our Chief Executive Officer since December 2012, previously serving as Co-Chief Executive Officer since October 2012, and as a member of our Board of Directors (the “Board”) since 2007 and Chairman of the Board since October 2012. Mr. Tao also has served as Chairman and Chief Investment Officer of Pacific Star Capital Management, L.P. (“Pacific Star Capital”), a private investment group, since January 2004. Prior to founding Pacific Star Capital, Mr. Tao was a Partner at FALA Capital Group, a single-family investment office, where he headed the global liquid investments outside the operating companies. Mr. Tao has been a director of Paradise Entertainment Limited (SEHK: 1180), a Hong-Kong-Stock-Exchange-traded company engaged in casino services and the development, supply and sales of electronic gaming systems, since April 2014. Mr. Tao previously was a director of Playboy Enterprises, Inc. from May 2010 to March 2011. Mr. Tao is a graduate of the New York University Stern School of Business.

Non-Employee Directors

Theodore P. Botts has served as a member of our Board since 2007. Mr. Botts has been the President of Kensington Gate Capital, LLC, a private corporate finance advisory firm, since April 2001. Previously, Mr. Botts served as Chief Financial Officer of StereoVision Entertainment, Inc., a film entertainment company, from July 2007 until September 2008. Prior to 2000, Mr. Botts served in executive capacities at UBS Group and Goldman Sachs in London and New York. Mr. Botts also served on the board of directors and as chairman of the audit committee of INTAC International, Inc. from 2002 until its merger with a predecessor of Remark in 2006. Mr. Botts served as a member of the board and chairman of both the compensation and audit committees of Crystal Peak Minerals (CPMMF) from 2012 to 2018. Mr. Botts is currently a member of the board of Essentia Analytics, a privately held English company which develops and provides behavioral analytics to active portfolio managers. He served from 2003 to 2012 as a member of the Board of Trustees and head of development for REACH Prep, a non-profit organization serving the educational needs of underprivileged African-American and Latino children in Fairfield and Westchester counties. Mr. Botts graduated with highest honors from Williams College and received an MBA from the New York University Stern School of Business.

Brett Ratner has been a member of our Board since March 2017. Mr. Ratner is one of Hollywood’s most successful filmmakers. His films have grossed more than $2 billion at the global box office. He has served as an executive producer on films such as the Golden-Globe-winning and Oscar-winning The Revenant, starring Leonardo DiCaprio, executive producer and director of the Golden Globe-nominated FOX series Prison Break, and executive producer of the television series Rush Hour, based on his hit films. Mr. Ratner, along with his business partner James Packer, formed RatPac Entertainment, a film finance and media company, in 2013. Since inception, RatPac Entertainment has co-financed 63 theatrically-released motion pictures exceeding $11.6 billion in worldwide box office receipts. In 2017, he received a coveted star on the Hollywood Walk of Fame. Mr. Ratner received a Bachelor in Fine Arts degree from New York University’s Tisch School of the Arts. He is currently attending Harvard University’s Business School Graduate Program.

Daniel Stein has served as a member of our Board since March 2017. Since January 2021, Mr. Stein has held the position of Senior Vice President of Partnerships, Crossix Analytics (which is part of Veeva Systems) where he oversees all media, enablement and product partnerships. He previously served since 2012 as Senior Vice President of Analytics Services & Product Strategy at Crossix Solutions, Inc., a healthcare and analytics and data company, where he was responsible for driving innovation across the Crossix product suite, including digital and TV-based solutions. Prior to joining Crossix, Mr. Stein spent eight years at Digitas and Digitas Health, an advertising agency, where he led the Strategy and Analysis group in New York. At Digitas Health, he built a team focused on leveraging analytics to help pharmaceutical and health-focused clients optimize their marketing plans and partnerships. Mr. Stein brings over 20 years of media, marketing, healthcare and agency experience focusing on products, marketing and innovation. Previously, he worked at Scholastic, where he developed interactive and direct marketing plans to support teachers and parents, and he gained additional healthcare experience at PricewaterhouseCoopers, where he designed and built comprehensive health & welfare systems for large companies. Mr. Stein graduated from the University of Pennsylvania with a B.A. in Economics. He has not served on any other boards or committees in the last five years.

Dr. Elizabeth Xu has served as a member of our Board since 2020. Since September 2020, she has been the Chief Executive Officer of A2C Leadership Group, Inc., a private leadership education firm, and chairperson of Be the Change Foundation, a public non-profit organization that has been helping K-12 students and working professionals establish their leadership skills. Dr. Xu was named as one of the top 50 diversity leaders in 2020, as one of the Silicon Valley Women of Influence in 2015, as a Female of Executive Year, and has received more than 10 other awards from various organizations. Dr. Xu is an international transformational technology leader and senior business executive with more than 20 years of experience that includes digital transformation through the application of artificial intelligence, Internet-of-Things, and other enterprise technology in multiple businesses. She was a Stanford University lecturer for several years, and she currently serves as an Innovation and Entrepreneurship Advisor at the MIT Sloan School of Management and she sits on the advisory board of Women in Technology International. From 2018 to 2019, Dr. Xu served as the Group CTO at Thailand-based Charoen Pokphand Group (CP Group), one of the world’s largest conglomerates, where she drove the company’s technology strategy and advancement and oversaw workforce re-training for more than 200 of the company’s subsidiaries in various industries. During that time period, she also served as CEO of the CP Group subsidiaries in Thailand and the United States that conducted CP Group’s research and development. From 2014 to 2017, Dr. Xu held several leadership roles, including serving as CTO of BMC Software, Inc., a global leader in information technology service management. At BMC, she was responsible for the company’s Central Technology Organization and Digital Service Management BU Engineering Organization.

Director Qualifications

The Board comprises a diverse group of leaders in their respective fields. Some of the current directors have senior leadership experience at major domestic and international corporations. In these positions, they have gained experience in core management skills, such as strategic and financial planning, public company financial reporting, compliance, risk management, and leadership development. Some of our directors also have experience serving on boards of directors and board committees of other public companies, and have an understanding of corporate governance practices and trends, which provides an understanding of different business processes, challenges, and strategies. Other directors have experience as principals in private investment and advisory firms, which brings financial expertise and unique perspectives to the Board. Our directors also have other experience that makes them valuable members, such as experience managing technology and media companies, or developing and pursuing investment or business opportunities in international markets, which provides insight into strategic and operational issues faced by Remark.

We believe that the above-mentioned attributes, along with the leadership skills and other experiences of the directors described below, provide us with a diverse range of perspectives and judgment necessary to guide our strategies and monitor their execution.

Kai-Shing Tao

Theodore P. Botts

Brett Ratner

Daniel Stein

Elizabeth Xu

Family Relationships

There are no family relationships among our executive officers and directors.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to all of our employees, officers and directors. A copy of the Code of Ethics is publicly available on our website at ir.remarkholdings.com/corporate-governance. Amendments to the Code of Ethics or any grant of a waiver from a provision of the Code of Ethics requiring disclosure under applicable SEC rules will also be disclosed on our website.

Director Independence

The Board has determined that all of our current non-employee directors are independent within the meaning of SEC and Nasdaq rules. The Board has also determined that all directors serving on the Audit Committee, Nominating and Governance Committee and Compensation Committee are independent within the meaning of SEC rules.

Board Committees

Our Board has three standing committees to assist it with its responsibilities. We describe the three committees, the charters of which are available on our website at https://remarkholdings.com/ir.html#governance, below.

Audit Committee. The Audit Committee is comprised of directors who satisfy the SEC and Nasdaq audit committee membership requirements, and is governed by a Board-approved charter that contains, among other things, the committee’s membership requirements and responsibilities. The committee’s responsibilities include, but are not limited to:

Our Audit Committee is comprised of Messrs. Botts and Stein and Dr. Xu, each of whom is independent under applicable Nasdaq listing standards and Rule 10A-3 under the Exchange Act. Mr. Botts serves as Chairman of the Audit Committee.

The Board determined that Mr. Botts is an audit committee financial expert, as defined under the Exchange Act. The Board made a qualitative assessment of Mr. Botts’s level of knowledge and experience based on a number of factors, including his experience as a financial professional.

Compensation Committee. The Compensation Committee’s responsibilities include, but are not limited to:

Our Compensation Committee is comprised of Mr. Ratner and Dr. Xu, each of whom is independent under applicable Nasdaq listing standards and are “non-employee directors” as defined in rule 16b-3 promulgated under the Exchange Act. Mr. Ratner serves as Chairman of the Compensation Committee.

Nominating and Governance Committee. The Nominating and Governance Committee considers and makes recommendations on matters related to the practices, policies and procedures of the Board and takes a leadership role in shaping our corporate governance. The committee’s responsibilities include, but are not limited to:

When screening candidates for Board membership, the committee concerns itself with the composition of the Board with regard to depth of experience, balance of professional interests, required expertise and other factors. The committee evaluates prospective nominees that it identifies or which are referred to it by other Board members, management, stockholders or external sources, as well as evaluating all self-nominated candidates.

The committee has not formally established any specific, minimum qualifications that each candidate for the Board must meet, or specific qualities or skills that one or more directors must possess or a diversity policy. However, the committee, when considering a candidate, will factor into its determination the following qualities of a candidate:

The committee may also consider such other factors as it may deem to be in the best interests of Remark and its stockholders.

The committee uses the same criteria for evaluating candidates nominated by stockholders and self-nominated candidates as it does for those proposed by other Board members, management and search companies. For more information on how stockholders can nominate candidates for election as directors, see “Stockholder Proposals” below.

The committee identifies nominees by first evaluating incumbent directors, with skills and experience that are relevant to our business and who are willing to continue in service. Such a practice balances the value of continuity of service with that of obtaining a new perspective. If an incumbent director up for re-election at an upcoming annual meeting of stockholders does not wish to continue in service, the committee identifies the skills and experience desired of a new nominee in light of the criteria above. Current members of the committee and Board will be polled for suggested candidates. Research may also be performed to identify qualified individuals. If the committee believes that the Board requires additional candidates for nomination, it may explore alternative sources for identifying additional candidates, including, if appropriate, a third-party search firm.

Our Nominating and Governance Committee is comprised of Messrs. Ratner and Stein and Dr. Xu, each of whom is independent under applicable Nasdaq listing standards. Mr. Stein serves as Chairman of the Nominating and Governance Committee.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table presents the dollar amounts of salary (the only form of compensation during the years noted) earned by our named executive officer (“NEO”):

During 2023 and 2022, our NEO elected to defer a portion of his salary to future periods.

Employment Agreements

Mr. Tao is an “at will” employee and we do not have employment agreements with Mr. Tao.

Outstanding Equity Awards at Fiscal Year-End

The following table presents information regarding our NEO’s unexercised options to purchase our common stock as of December 31, 2023 (all stock awards to our NEO were fully vested as of December 31, 2023):

Equity Incentive Plans

We have granted stock options and restricted stock under our 2010 Equity Incentive Plan adopted June 15, 2010 (the “2010 Plan”), our 2014 Incentive Plan adopted on February 17, 2014 and amended on December 23, 2014 and January 11, 2016 (the “2014 Plan”), our 2017 Incentive Plan adopted on January 19, 2018 (the “2017 Plan”) and our 2022 Incentive Plan adopted on July 5, 2022 (the “2022 Plan”). The amount of stock options or shares of stock we grant to recipients generally depends upon their particular position with Remark and their achievement of certain performance metrics established by the Board. The Compensation Committee must approve all grants.

While we do not have a formal written policy in place with regard to the timing of awards of options in relation to the disclosure of material nonpublic information, the Compensation Committee does not seek to time equity grants to take advantage of information, either positive or negative, about our company that has not been publicly disclosed. It has been our practice to grant equity awards to our directors upon their appointment to the Board of Directors. We intend to issue equity grants to our officers and/or directors at the same time each year, either upon completion of the annual meeting of stockholders or in connection with our last meeting of the Board of Directors each fiscal year. Option grants are effective on the date the award determination is made by the Compensation Committee, and the exercise price of options is the closing market price of our common stock on the business day of the grant or, if the grant is made on a weekend or holiday, on the prior business day.

Equity Incentive Plans

We have granted stock options and restricted stock under our 2010 Equity Incentive Plan adopted June 15, 2010, our 2014 Incentive Plan adopted on February 17, 2014 and amended on December 23, 2014 and January 11, 2016, our 2017 Incentive Plan adopted on January 19, 2018 and our 2022 Incentive Plan adopted on July 5, 2022. The amount of stock options or shares of stock we grant to recipients generally depends upon their particular position with Remark and their achievement of certain performance metrics established by the Board. The Compensation Committee must approve all grants.

Director Compensation

The Compensation Committee periodically awards our non-employee directors with equity-based compensation. The non-employee directors did not receive any awards during the year ended December 31, 2023. As of December 31, 2023, each non-employee director owned options to purchase shares of common stock as noted in the following table:

No non-employee director owned unvested shares of restricted stock as of December 31, 2023.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table presents information with respect to the beneficial ownership of our common stock as of October 21, 2024, by:

The amounts and percentages of beneficially-owned common stock are reported based upon SEC rules governing the determination of beneficial ownership of securities. The SEC rules:

Except as otherwise indicated in these footnotes, each of the beneficial owners listed has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock. The information relating to our 5% beneficial owners is based on information we received from such holders. The percentage of beneficial ownership is based on 57,527,883 shares of common stock outstanding as of October 21, 2024.

Except as otherwise noted below, the address of persons listed in the following table is:

c/o Remark Holdings, Inc.

800 S. Commerce St.

Las Vegas, Nevada 89106

Securities Authorized for Issuance Under Equity Compensation Plans

The following table presents certain information as of December 31, 2023 regarding our equity compensation plans (the 2010 Equity Incentive Plan, the 2014 Incentive Plan, the 2017 Incentive Plan, and the 2022 Incentive Plan, all of which were approved by our security holders):

The 2010 Equity Incentive Plan has expired, but options issued under the plan while it was active remain outstanding.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Review, Approval or Ratification of Transactions with Related Parties

We have adopted a related-party transactions policy under which our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock, and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related-party transaction with us without the review and approval of our Audit Committee. Such policy and procedures are set forth in the Audit Committee charter.

As of December 31, 2023, our Chief Executive Officer and Chairman, Kai-Shing Tao, had advanced certain expenses on behalf of Remark in the aggregate amount of approximately $1.1 million, $0.2 million of which amount remained outstanding as of October 21, 2024. Also as of December 31, 2023, approximately $0.2 million of accrued salary was owed to Mr. Tao, and most of such amount remained outstanding as of October 14, 2024.

During the last two full fiscal years and the current fiscal year or any currently proposed transaction, there is no transaction involving Remark in which the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for our last three fiscal years.

Limitations on Liability and Indemnification of Officers and Directors

Our Charter and amended and restated bylaws (our “Bylaws”) limit the liability of our officers and directors and provide that we will indemnify our officers and directors, in each case, to the fullest extent permitted by the Delaware General Corporation Law.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors or executive officers, we have been informed that in the opinion of the Commission such indemnification is against public policy and is therefore unenforceable.

Certificate of Incorporation and Bylaw Provisions

Our certificate of incorporation and Bylaws include a number of anti-takeover provisions that may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our Board of Directors rather than pursue non-negotiated takeover attempts. These provisions include:

Advance Notice Requirements. Our Bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of stockholders. These procedures provide that notice of stockholder proposals must be timely and given in writing to our corporate Secretary. Generally, to be timely, notice must be received at our principal executive offices not fewer than 60 calendar days nor more than 90 calendar days prior to the first anniversary date of the previous year’s annual meeting of stockholders. The notice must contain the information required by the bylaws, including information regarding the proposal and the proponent.

Special Meetings of Stockholders. Our Bylaws provides that special meetings of stockholders may only be called by the Board.

No Written Consent of Stockholders. Our Bylaws provide that any action required or permitted to be taken by stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders.

Amendment of Bylaws. Only the Board has the power to amend any provisions of our Bylaws.

Preferred Stock. Our Charter authorizes our Board of Directors to create and issue rights entitling our stockholders to purchase shares of our stock or other securities. The ability of our Board to establish the rights and issue substantial amounts of preferred stock without the need for stockholder approval may delay or deter a change in control of us. See “Preferred Stock” below.

Delaware Takeover Statute

We are subject to Section 203 of the DGCL which, subject to certain exceptions, prohibits a Delaware corporation from engaging in any “business combination” (as defined below) with any interested stockholder for a period of three years following the date that such stockholder became an interested stockholder, unless: (1) prior to such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; (2) on consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding those shares owned (a) by persons who are directors and also officers and (b) by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to this plan will be tendered in a tender or exchange offer; or (3) on or subsequent to such date, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2⁄3% of the outstanding voting stock that is not owned by the interested stockholder.

Section 203 of the DGCL defines generally “business combination” to include: (1) any merger or consolidation involving the corporation and the interested stockholder; (2) any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; (3) subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; (4) any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or (5) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. In general, Section 203 defines an “interested stockholder” as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by such entity or person.

Disclosure of Commission Position on Indemnification for Securities Act Liabilities

Insofar as indemnification for liabilities under the Securities Act may be permitted to officers, directors or persons controlling Remark pursuant to the foregoing provisions, Remark has been informed that is it is the opinion of the SEC that such indemnification is against public policy as expressed in such Securities Act and is, therefore, unenforceable.

Review, Approval or Ratification of Transactions with Related Parties

We have adopted a related-party transactions policy under which our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our common stock, and any members of the immediate family of any of the foregoing persons are not permitted to enter into a related-party transaction with us without the consent of our audit committee. If the related party is, or is associated with, a member of our audit committee, the transaction must be reviewed and approved by another independent body of our Board of Directors, such as our governance committee. Any request for us to enter into a transaction with a related party in which the amount involved exceeds $120,000 and such party would have a direct or indirect interest must first be presented to our audit committee for review, consideration and approval. If advance approval of a related-party transaction was not feasible or was not obtained, the related-party transaction must be submitted to the audit committee as soon as reasonably practicable, at which time the audit committee shall consider whether to ratify and continue, amend and ratify, or terminate or rescind such related-party transaction. All of the transactions described above were reviewed and considered by, and were entered into with the approval of, or ratification by, our Board of Directors.

During the last two full fiscal years and the current fiscal year or any currently proposed transaction, there are transactions involving the issuer, in which the amount involved exceeds the lesser of $120,000 or one percent of the average of the issuer’s total assets at year-end for its last three fiscal years, except compensation awarded to executives.

Legal/Disciplinary History

None of Remark Holdings, Inc.’s Officers or Directors have been the subject of any criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);

None of Remark Holdings, Inc.’s Officers or Directors have been the subject of any entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities;

None of Remark Holdings, Inc.’s Officers or Directors have been the subject of any finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or

None of Remark Holdings, Inc.’s Officers or Directors has been the subject of any entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended or otherwise limited such person’s involvement in any type of business or securities activities.

SECURITIES OFFERED

Current Offering

Remark is offering as much as an aggregate total of 750,000 Shares at an offering price of $100.00 per Share, pursuant to Tier 2 of Regulation A. We will commence sales of the Shares within two days after the Offering Circular is qualified by the SEC.

DESCRIPTION OF SECURITIES

Authorized Stock

Our Charter currently authorizes us to issue as many as 176,000,000 shares, including 175,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.001 per share. As of close of business on October 21, 2024, there were 57,527,883 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding.

Common Stock

The following description of our common stock is a summary of the material provisions and terms of our common stock and is qualified by reference to our Charter and our Bylaws.

Each share of common stock entitles its holder to one vote on all matters to be voted upon by the stockholders. Common stockholders are not entitled to cumulative voting with respect to the election of directors. Subject to the preferences of any outstanding shares of preferred stock, holders of common stock may receive ratably any dividends that our Board may declare out of funds legally available for that purpose. In the event of our liquidation, dissolution or winding up, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and liquidation preferences of any outstanding shares of preferred stock. The common stock has no preemptive rights, conversion rights or other subscription rights or redemption or sinking fund provisions.

Preferred Stock

We are currently authorized to issue as many as 1,000,000 shares of preferred stock. Our Charter authorizes the Board to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. Our Board of Directors could, without stockholder approval, issue preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of common stock and which could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, a majority of our outstanding voting stock.

On October 25, 2024, we filed a Certificate of Designations with the Delaware Secretary of State to designate 800,000 shares of preferred stock as Series B 15% Cumulative Redeemable Perpetual Preferred Stock. A copy of the Certificate of Designations is attached hereto as Exhibit A.

Series B 15% Cumulative Redeemable Perpetual Preferred Stock

We are offering as many as 750,000 shares of the Series B Preferred Stock, which shares will be fully paid and non-assessable. The Shares have no stand-alone rights and will not be certificated or issued as standalone securities. The Series B Preferred Stock is a new issuance with no prior trading market.

No Maturity, Sinking Fund or Mandatory Redemption

The Series B Preferred Stock has no stated maturity, shall not be subject to any sinking fund or other mandatory redemption, and shall not be convertible into or exchangeable for any of our other securities. Shares of the Series B Preferred Stock will remain outstanding indefinitely unless we decide to redeem or otherwise repurchase them. We are not required to set aside funds to redeem the Series B Preferred Stock.

Ranking

The Series B Preferred Stock will rank, with respect to rights to the payment of dividends and the distribution of assets upon our liquidation, dissolution, or winding up:

Dividends

Holders of shares of Series B Preferred Stock are entitled to receive, when, as and if declared by the Board, out of our legally available funds for the payment of dividends, cumulative cash dividends at the rate of 15% of the stated value of $100.00 per share of the Series B Preferred Stock per annum (equivalent to $15.00 per annum per share). Commencing on each Issue Date, dividends shall accrue on the Series B Preferred Stock daily and shall be cumulative from, and including, the applicable Issue Date, and shall be payable on each Dividend Payment Date, which is on quarterly basis in arrears on or after the 15th day after the end of each quarter to the holders of record of Series B Preferred Stock as such holders appear on our stock records at each Dividend Record Date, which is the close of business on the last day of the preceding fiscal quarter, regardless of whether a business day; provided, that if any Dividend Payment Date is not a business day, then the dividend which would otherwise have been payable on that Dividend Payment Date may be paid on the next succeeding business day with the same force and effect as if paid on such Dividend Payment Date and no interest, additional dividends or other sums will accumulate on the amount so payable for the period from and after such Dividend Payment Date to such next succeeding business day. Dividends payable on the Series B Preferred Stock will be computed on the basis of a 360-day year consisting of twelve 30-day months, provided that for partial dividend periods, dividend payments will be pro-rated. The dividends payable on any Dividend Payment Date shall include dividends accumulated to, but not including, such Dividend Payment Date.

No dividends on shares of Series B Preferred Stock shall be authorized by our Board or paid or set apart for payment by us at any time when the terms and provisions of any agreement of ours, including any agreement relating to our indebtedness, prohibit the authorization, payment, or setting apart for payment thereof or provide that the authorization, payment, or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment, or setting apart for payment shall be restricted or prohibited by law.

Notwithstanding the foregoing, dividends on the Series B Preferred Stock will accrue regardless of whether not we have earnings, regardless of whether there are funds legally available for the payment of those dividends and regardless of whether those dividends are declared by our Board. Any dividend payment made on the Series B Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to those shares.

Future distributions on our common stock and any other series of preferred stock (if issued), including the Series B Preferred Stock, will be at the discretion of our Board and will depend on, among other things, our results of operations, cash flow from operations, financial condition and capital requirements, any debt service requirements, and any other factors our Board deems relevant. Accordingly, we cannot guarantee that we will be able to make cash distributions on our Series B Preferred Stock or what the actual distributions will be for any future period.

Unless full cumulative dividends on all shares of Series B Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no dividends shall be declared or paid or set aside for payment upon shares of our common stock or preferred stock that we may issue ranking junior to, or on a parity with, the Series B Preferred Stock as to the payment of dividends or upon liquidation, dissolution or winding up. Nor shall any other distribution be declared or made upon shares of our common stock or preferred stock that we may issue ranking junior to, or on a parity with, the Series B Preferred Stock as to the payment of dividends or the distribution of assets upon liquidation, dissolution or winding up.

When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series B Preferred Stock and the shares of any other series of preferred stock that we may issue ranking on a parity as to the payment of dividends with the Series B Preferred Stock, all dividends declared on the Series B Preferred Stock and any other series of preferred stock that we may issue ranking on a parity as to the payment of dividends with the Series B Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series B Preferred Stock and such other series of preferred stock that we may issue shall in all cases bear to each other the same ratio that accrued dividends per share on the Series B Preferred Stock and such other series of preferred stock that we may issue (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such preferred stock does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series B Preferred Stock that may be in arrears.

Commencing on the Redemption Period Start Date, any dividends on the Series B Preferred Stock that we do not pay as they become due shall become a cumulative debt of Remark to be automatically paid upon any capital raise by Remark exceeding $1.5 million.

Dividend Payment Account

At each closing of the Offering, we will set aside in the Dividend Payment Account an amount equal to the first two (2) years of dividend payments or $30.00 per share for the Series B Preferred Stock. Subject to compliance with Delaware law and any other applicable requirements, we will make dividend distributions from the Dividend Payment Account to the holders of the Series B Preferred Stock on a quarterly basis for two (2) years.

We will invest the proceeds of the Dividend Payment Fund in various capital preservation instruments, such as short-term, investment grade, interest bearing securities and (or) money-market funds. Any investment income earned from the Dividend Payment Account will be remitted to Remark to use for working capital or general corporate purposes, provided that the Dividend Payment Account has sufficient funds to pay all dividends due to the holders of the Series B Preferred Stock during the two (2)-year period after the close of the Offering.

Liquidation Preference

In the event of our voluntary or involuntary liquidation, dissolution, or winding up, the holders of shares of Series B Preferred Stock will be entitled to be paid out of the assets we have legally available for distribution to our stockholders, with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $100.00 per share, plus an amount equal to any accumulated and unpaid dividends to, but not including, the date of payment, before any distribution of assets is made to holders of our common stock or any other class or series of our capital stock we may issue that ranks junior to the Series B Preferred Stock as to liquidation rights.

In the event that, upon any such voluntary or involuntary liquidation, dissolution, or winding up, our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series B Preferred Stock and the corresponding amounts payable on all shares of other classes or series of our capital stock that we may issue ranking on a parity with the Series B Preferred Stock in the distribution of assets, then the holders of the Series B Preferred Stock and all other such classes or series of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

Holders of Series B Preferred Stock will be entitled to written notice of any such liquidation, dissolution, or winding up of no fewer than thirty (30) days and no more than sixty (60) days prior to the payment date. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of our remaining assets. The consolidation or merger of us with or into any other corporation, trust, or entity or of any other entity with or into us, or the sale, lease, transfer, or conveyance of all or substantially all of our property or business, shall not be deemed a liquidation, dissolution or winding up of us (although such events may give rise to the special optional redemption to the extent described below).

Redemption

On and after the date that is two (2) years from the date of each issuance (the “Redemption Period Start Date”), we may, at our option and upon not less than thirty (30) nor more than sixty (60) days’ written notice, redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $100.00 per share, plus any accumulated and unpaid dividends thereon to, but not including, the redemption date.

Redemption Procedures

In the event we elect to redeem Series B Preferred Stock, the notice of redemption will be mailed to each holder of record of the Series B Preferred Stock called for redemption at such holder’s address as it appears on our stock transfer records, not less than thirty (30) nor more than sixty (60) days prior to the redemption date, and will state the following:

If less than all of the Series B Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series B Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series B Preferred Stock except as to the holder to whom notice was defective or not given.

Holders of Series B Preferred Stock to be redeemed shall surrender the Series B Preferred Stock at the place designated in the notice of redemption and shall be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender. If notice of redemption of any shares of Series B Preferred Stock has been given and if we have irrevocably set aside the funds necessary for redemption in trust for the benefit of the holders of the shares of Series B Preferred Stock so called for redemption, then from and after the redemption date (unless default shall be made by us in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accrue on those shares of Series B Preferred Stock, those shares of Series B Preferred Stock shall no longer be deemed outstanding and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption. If any redemption date is not a business day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next business day, and no interest, additional dividends, or other sums will accrue on the amount payable for the period from and after that redemption date to that next business day. If less than all of the outstanding Series B Preferred Stock is to be redeemed, the Series B Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method we determine.

In connection with any redemption of the Series B Preferred Stock, we shall pay, in cash, any accumulated and unpaid dividends to, but not including, the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding dividend payment date, in which case each holder of Series B Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding dividend payment date notwithstanding the redemption of such shares before such dividend payment date. Except as provided above, we will make no payment or allowance for unpaid dividends, regardless of whether in arrears, on shares of the Series B Preferred Stock to be redeemed.

Unless full cumulative dividends on all shares of Series B Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no shares of Series B Preferred Stock shall be redeemed unless all outstanding shares of Series B Preferred Stock are simultaneously redeemed and we shall not purchase or otherwise acquire directly or indirectly any shares of Series B Preferred Stock (except by exchanging it for our capital stock ranking junior to the Series B Preferred Stock as to the payment of dividends and distribution of assets upon liquidation, dissolution or winding up); provided, however, that the foregoing shall not prevent the purchase or acquisition by us of shares of Series B Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series B Preferred Stock.

Subject to applicable law, we may purchase shares of Series B Preferred Stock in the open market, by tender, or by private agreement. Any shares of Series B Preferred Stock that we acquire may be retired and reclassified as authorized but unissued shares of preferred stock, without designation as to class or series, and may thereafter be reissued as any class or series of preferred stock.

No Conversion Rights

The Series B Preferred Stock is not convertible into our common stock.

Voting Rights

Holders of the Series B Preferred Stock do not have any voting rights, except as required by Delaware law. On each matter on which holders of Series B Preferred Stock are entitled to vote under Delaware law, each share of Series B Preferred Stock will be entitled to one vote.

No Preemptive Rights

The holders of the Series B Preferred Stock will not have any preemptive rights to purchase or subscribe to our common stock or any other security.

Record Holders

We and the transfer agent for the Series B Preferred Stock may deem and treat the record holder of any Series B Preferred Stock as the true and lawful owner thereof for all purposes, and neither we nor the transfer agent shall be affected by any notice to the contrary.

Transfer Agent and Registrar

Computershare LLC will act as the registrar and transfer agent in respect of our Series B Preferred Stock. The mailing address of Computershare LLC is 150 Royall Street, Canton, MA 02021.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We currently intend to retain any future earnings for use in the operation of our business and do not intend to declare or pay any cash dividends in the foreseeable future, except with respect to the Series B Preferred Stock as described in this Offering Circular. Any further determination to pay dividends on our capital stock will be at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our Board of Directors considers relevant.

EXPERTS

The consolidated financial statements included in this Offering Circular as of December 31, 2023 and 2022, and for the years then ended, have been included herein in reliance upon the report of Weinberg & Company, P.A. independent registered public accounting firm, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

LEGAL MATTERS

Certain legal matters with respect to the Series B Preferred Stock offered hereby will be passed upon by Fox Rothschild LLP.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a Regulation A Offering Statement on Form 1-A under the Securities Act with respect to the Series B Preferred Stock offered hereby. This Offering Circular, which constitutes a part of the Offering Statement, does not contain all of the information set forth in the Offering Statement or the exhibits and schedules filed therewith. For further information about us and the common stock offered hereby, we refer you to the Offering Statement and the exhibits and schedules filed therewith. Statements contained in this Offering Circular regarding the contents of any contract or other document that is filed as an exhibit to the Offering Statement are not necessarily complete, and each such statement is qualified in all respects by reference to the full text of such contract or other document filed as an exhibit to the Offering Statement. The SEC also maintains an Internet website that contains reports, proxy statements and other information about issuers, including us, that file electronically with the SEC. The address of this site is www.sec.gov.

After the completion of this Tier 2 Regulation A offering, we will be required to comply with certain ongoing disclosure requirements under Rule 257 of Regulation A. We will be required to file: an annual report with the SEC on Form 1-K; a semi-annual report with the SEC on Form 1-SA; and current reports with the SEC on Form 1-U. These reports and other information will be available for inspection and copying at the public reference room and on the SEC’s website referred to above. If and when we decide to and are no longer obligated to file and provide reports pursuant to the requirements of Regulation A, including when we have redeemed the Shares, we will file a Form 1-Z to discontinue our reporting obligations under Regulation A.

EXHIBIT A

REMARK HOLDINGS, INC.

CERTIFICATE OF DESIGNATIONS OF

SERIES B 15% CUMULATIVE REDEEMABLE PERPETUAL PREFERRED STOCK

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, Remark Holdings, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), in accordance with the provisions of Section 103 thereof, does hereby submit the following:

WHEREAS, the Certificate of Incorporation of the Corporation (as amended, the “Certificate of Incorporation”) authorizes the issuance of as many as 1,000,000 shares of preferred stock, par value $0.001 per share, of the Corporation (“Preferred Stock”) in one or more series, and expressly authorizes the Board of Directors of the Corporation (the “Board”), subject to limitations prescribed by law, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock, and, with respect to each such series, to establish and fix the number of shares to be included in any series of Preferred Stock and the designation, rights, preferences, powers, restrictions, and limitations of the shares of such series; and

WHEREAS, it is the desire of the Board to establish and fix the number of shares to be included in a new series of Preferred Stock and the designations, rights, preferences, powers, restrictions, and limitations of the shares of such new series.

NOW, THEREFORE, BE IT RESOLVED, that the Board does hereby provide for the issue of a series of Preferred Stock and does hereby in this Certificate of Designations (this “Certificate of Designations”) establish and fix and herein state and express the designations, rights, preferences, powers, restrictions, and limitations of such series of Preferred Stock as follows:

1. Designation and Amount. The shares of such series of Preferred Stock shall be designated as “Series B 15% Cumulative Redeemable Perpetual Preferred Stock” (the “Series B Preferred Stock”) and the number of shares constituting such series shall be 800,000 shares, par value $.001 per share and a stated value of $100 per share (the “Stated Value”).

2. No Maturity, Sinking Fund, Mandatory Redemption. The Series B Preferred Stock has no stated maturity and will not be subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless the Corporation decides to redeem or otherwise repurchase the Series B Preferred Stock as provided in Section 6 hereof. The Corporation is not required to set aside funds to redeem the Series B Preferred Stock.

3. Ranking. The Series B Preferred Stock will rank, with respect to rights to the payment of dividends and the distribution of assets upon the Corporation’s liquidation, dissolution or winding up, (i) senior to all classes or series of the Corporation’s common stock and to all other equity securities issued by the Corporation other than equity securities referenced in clauses (ii) and (iii) of this Section 3, (ii) on parity with all equity securities issued by the Corporation with terms specifically providing that those equity securities rank on parity with the Series B Preferred Stock with respect to rights to the payment of dividends and the distribution of assets upon the Corporation’s liquidation, dissolution or winding up; and (iii) effectively junior to all of the Corporation’s existing and future indebtedness (including indebtedness convertible into the Corporation’s common stock or Preferred Stock) and to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) the Corporation’s existing subsidiaries and any future subsidiaries.

4. Dividends.

(a) Holders of shares of the Series B Preferred Stock are entitled to receive, when, as and if declared by the Board of Directors, out of funds of the Corporation legally available for the payment of dividends, cumulative cash dividends at the rate of 15% on the stated value of $100.00 per share of the Series B Preferred Stock per annum (equivalent to $15.00 per annum per share). Commencing on the date of issuance of the Series B Preferred Stock (as applicable, the “Issue Date”), dividends shall accrue on the Series B Preferred Stock daily and shall be cumulative from, and including, the applicable Issue Date, and shall be payable on a quarterly basis in arrears on or after the 15th day of each quarter (each, a “Dividend Payment Date”) to the holders of record of the Series B Preferred Stock as they appear on the stock records of the Corporation at the close of business on the last day of the preceding quarter, regardless of whether a Business Day (each, a “Dividend Record Date”); provided, that if any Dividend Payment Date is not a Business Day (as defined below), then the dividend which would otherwise have been payable on that Dividend Payment Date may be paid on the next succeeding Business Day with the same force and effect as if paid on such Dividend Payment Date, and no interest, additional dividends or other sums will accumulate on the amount so payable for the period from and after such Dividend Payment Date to such next succeeding Business Day. Dividends payable on the Series B Preferred Stock will be computed on the basis of a 360-day year consisting of twelve 30-day months, provided that for partial dividend periods, dividend payments will be pro-rated, unless otherwise provided in the applicable securities offering and sale documents. The dividends payable on any Dividend Payment Date shall include dividends accumulated to, but not including, such Dividend Payment Date. For purposes of this Certificate of Designations, “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of Delaware are authorized or obligated by law or executive order to close.

(b) No dividends on shares of Series B Preferred Stock shall be authorized by the Board of Directors or paid or set apart for payment by the Corporation at any time when the terms and provisions of any agreement of the Corporation, including any agreement relating to any indebtedness of the Corporation, prohibit the authorization, payment or setting apart for payment thereof or provide that the authorization, payment or setting apart for payment thereof would constitute a breach of the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment shall be restricted or prohibited by law.

(c) Notwithstanding anything to the contrary contained herein, dividends on the Series B Preferred Stock will accrue regardless of whether the Corporation has earnings, regardless of whether there are funds legally available for the payment of those dividends and regardless of whether those dividends are declared by the Board of Directors. No interest, or sum in lieu of interest, will be payable in respect of any dividend payment or payments on the Series B Preferred Stock which may be in arrears, and holders of the Series B Preferred Stock will not be entitled to any dividends in excess of full cumulative dividends described in Section 4(a) hereof. Any dividend payment made on the Series B Preferred Stock shall first be credited against the earliest accumulated but unpaid dividend due with respect to those shares of Series B Preferred Stock.

(d) Future distributions on the Corporation’s common stock and any other series of Preferred Stock (if issued), including the Series B Preferred Stock, will be at the discretion of the Board of Directors and will depend on, among other things, the Corporation’s results of operations, cash flow from operations, financial condition and capital requirements, any debt service requirements, applicable legal requirements and any other factors the Board of Directors deems relevant. Accordingly, the Corporation cannot guarantee that it will be able to make cash distributions on its Series B Preferred Stock or what the actual distributions will be for any future period.

(e) Unless full cumulative dividends on all shares of Series B Preferred Stock have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof has been or contemporaneously is set apart for payment for all past dividend periods, no dividends shall be declared or paid or set aside for payment upon shares of common stock or Preferred Stock that the Corporation may issue ranking junior to or on parity with the Series B Preferred Stock as to the payment of dividends, or upon liquidation, dissolution, or winding up. Nor shall any other distribution be declared or made upon shares of common stock or Preferred Stock that the Corporation may issue ranking junior to or on parity with the Series B Preferred Stock as to the payment of dividends, or the distribution of assets upon liquidation, dissolution, or winding up.

(f) When dividends are not paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series B Preferred Stock and the shares of any other series of Preferred Stock that the Corporation may issue ranking on a parity as to the payment of dividends with the Series B Preferred Stock, all dividends declared on the Series B Preferred Stock and any other series of Preferred Stock that the Corporation may issue ranking on parity as to the payment of dividends with the Series B Preferred Stock shall be declared pro rata so that the amount of dividends declared per share of Series B Preferred Stock and such other series of Preferred Stock that the Corporation may issue shall in all cases bear to each other the same ratio that accrued dividends per share on the Series B Preferred Stock and such other series of Preferred Stock that the Corporation may issue (which shall not include any accrual in respect of unpaid dividends for prior dividend periods if such Preferred Stock does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series B Preferred Stock that may be in arrears.

5. Liquidation Preference.

(a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Series B Preferred Stock will be entitled to be paid out of the assets the Corporation has legally available for distribution to its stockholders, with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of $100.00 per share, plus an amount equal to any accumulated and unpaid dividends to, but not including, the date of payment, before any distribution of assets is made to holders of the Corporation’s common stock or any other class or series of the Corporation’s capital stock that it may issue that ranks junior to the Series B Preferred Stock as to liquidation rights.

(b) In the event that, upon any such voluntary or involuntary liquidation, dissolution, or winding up, the available assets of the Corporation are insufficient to pay the amount of the liquidating distributions on all outstanding shares of Series B Preferred Stock and the corresponding amounts payable on all shares of other classes or series of capital stock of the Corporation that it may issue ranking on parity with the Series B Preferred Stock in the distribution of assets, then the holders of the Series B Preferred Stock and all other such classes or series of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled.

(c) Holders of Series B Preferred Stock will be entitled to written notice of any such liquidation, dissolution or winding up no fewer than 30 days and no more than 60 days prior to the payment date. After payment of the full amount of the liquidating distributions to which they are entitled, the holders of Series B Preferred Stock will have no right or claim to any of the remaining assets of the Corporation. The consolidation or merger of the Corporation with or into any other corporation, trust or entity or of any other entity with or into the Corporation, or the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Corporation, shall not be deemed a liquidation, dissolution or winding up of the Corporation (although such events may give rise to the special optional redemption described in Section 6 hereof).

6. Redemption.

(a) The Series B Preferred Stock is not redeemable by holders of Series B Preferred Stock under any circumstances. The Series B Preferred Stock is not redeemable by the Corporation prior to the two-year anniversary of the applicable Issue Date of each respective share, except upon a Change of Control.

(b)  On and after the two-year anniversary of the applicable Issue Date, the Corporation may, at its option and upon not less than 30 nor more than 60 days’ written notice, redeem the Series B Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $100.00 per share, plus any accumulated and unpaid dividends thereon up to, but not including, the redemption date.

(c)  Upon the occurrence of a Change of Control as defined in Section 6(d) hereof, regardless of whether before or after the two-year anniversary of the applicable Issue Date, the Corporation may, at its option, upon not less than 30 nor more than 60 days’ written notice, redeem the Series B Preferred Stock, in whole or in part, within 120 days after notice of such Change of Control, for cash at a redemption price of $15.00 per share, plus any accumulated and unpaid dividends thereon up to, but not including, the redemption date.

(d) A “Change of Control” is deemed to occur when any person, including any syndicate or group deemed to be a “person” under Section 13(d)(3) of the Exchange Act of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, shall have acquired the Corporation’s stock entitling that person to exercise more than 50% of the total voting power of all the Corporation’s stock entitled to vote generally in the election of the Corporation’s directors (except that such person will be deemed to have beneficial ownership of all securities that such person has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition).

(e) In the event the Corporation elects to redeem Series B Preferred Stock the notice of redemption will be mailed to each holder of record of the Series B Preferred Stock called for redemption at such holder’s address as it appears on the Corporation’s stock transfer records, not less than 30 nor more than 60 days prior to the redemption date, and will state the following: (i) the redemption date; (ii) the number of shares of Series B Preferred Stock to be redeemed; (iii) the applicable redemption price per share plus any accrued but unpaid dividends; (iv) the place or places where certificates (if any) for the Series B Preferred Stock are to be surrendered for payment of the redemption price; (v) that dividends on the shares to be redeemed will cease to accumulate on the redemption date; and (vi) if applicable, that such redemption is being made in connection with a Change of Control and, in that case, a brief description of the transaction or transactions constituting such Change of Control. If less than all of the shares of Series B Preferred Stock held by any holder are to be redeemed, the notice mailed to such holder shall also specify the number of shares of Series B Preferred Stock held by such holder to be redeemed. No failure to give such notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any shares of Series B Preferred Stock except as to the holder to whom notice was defective or not given.

(f) Holders of Series B Preferred Stock to be redeemed shall surrender the Series B Preferred Stock (if certificated) at the place designated in the notice of redemption and shall be entitled to the redemption price and any accumulated and unpaid dividends payable upon the redemption following the surrender.

(g) If notice of redemption of any shares of Series B Preferred Stock has been given and if the Corporation irrevocably sets aside the funds necessary for redemption in trust for the benefit of the holders of the shares of Series B Preferred Stock so called for redemption, then from and after the redemption date (unless the Corporation shall default in providing for the payment of the redemption price plus accumulated and unpaid dividends, if any), dividends will cease to accrue on those shares of Series B Preferred Stock, those shares of Series B Preferred Stock shall no longer be deemed outstanding, and all rights of the holders of those shares will terminate, except the right to receive the redemption price plus accumulated and unpaid dividends, if any, payable upon redemption.

(h) If any redemption date is not a Business Day, then the redemption price and accumulated and unpaid dividends, if any, payable upon redemption may be paid on the next Business Day and no interest, additional dividends or other sums will accumulate on the amount payable for the period from and after that redemption date to that next Business Day.

(i) If less than all of the outstanding Series B Preferred Stock is to be redeemed, the Series B Preferred Stock to be redeemed shall be selected pro rata (as nearly as may be practicable without creating fractional shares) or by any other equitable method the Corporation shall determine.

(j) In connection with any redemption of the Series B Preferred Stock, the Corporation shall pay, in cash, any accumulated and unpaid dividends up to, but not including, the redemption date, unless a redemption date falls after a Dividend Record Date and prior to the corresponding Dividend Payment Date, in which case each holder of Series B Preferred Stock at the close of business on such Dividend Record Date shall be entitled to the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the redemption of such shares before such Dividend Payment Date. Except as provided in this Section 6(j), the Corporation will make no payment or allowance for unpaid dividends, regardless of whether in arrears, on shares of the Series B Preferred Stock to be redeemed. 

(k) Subject to applicable law, the Corporation may purchase shares of Series B Preferred Stock in the open market, by tender or by private agreement. Any shares of Series B Preferred Stock that the Corporation acquires may be retired and reclassified as authorized but unissued shares of Preferred Stock, without designation as to class or series, and may thereafter be reissued as any class or series of Preferred Stock.

7. No Conversion Right, Amendment. The Series B Preferred Stock is not convertible into the Corporation’s common stock. No provision in this Certificate of Designations may be amended, waived or modified except by the mutual written consent of the Company and the unanimous written consent of the holders of the Series B Preferred Stock.

8. Voting Rights.

(a) Holders of the Series B Preferred Stock will not have any voting rights, except as required by Delaware law. On each matter on which holders of Series B Preferred Stock are entitled to vote, each share of Series B Preferred Stock will be entitled to one vote.

(b) Except as expressly stated in this Section 8 or as may be required by applicable law, the Series B Preferred Stock will not have any relative, participating, optional or other special voting rights or powers and the consent of the holders thereof shall not be required for the taking of any corporate action.

9. No Preemptive Rights. The holders of the Series B Preferred Stock will not have any preemptive rights to purchase or subscribe for the Corporation’s common stock or any other security.

10. Record Holders. The Corporation and the transfer agent for the Series B Preferred Stock may deem and treat the record holder of any Series B Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor the transfer agent shall be affected by any notice to the contrary.

11. Adjustment. If the Corporation effects a stock dividend, a stock split, or a reverse split of the Series B Preferred Stock, the dividend, liquidation and redemption rates will be proportionately adjusted.

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations to be signed in its name and on its behalf on this 25th day of October, 2024.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands, except share and per share amounts)

REMARK HOLDINGS, INC.

INDEX TO FINANCIAL STATEMENTS

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands, except share and per share amounts)

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(dollars in thousands, except per share amounts)

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Stockholders’ Deficit

(in thousands, except number of shares)

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

NOTE 1. ORGANIZATION AND BUSINESS

Organization and Business

Remark Holdings, Inc. and its subsidiaries (“Remark”, “we”, “us”, or “our”) constitute a diversified global technology business with leading artificial intelligence (“AI”) and data-analytics solutions. The common stock of Remark Holdings, Inc. is traded in the OTCQX Best market under the ticker symbol MARK.

We primarily sell AI-based products and services. We currently recognize substantially all of our revenue from the U.S., with additional revenue from sales in the U.K. and China.

Going Concern

During the six months ended June 30, 2024, and in each fiscal year since our inception, we have incurred operating losses which have resulted in a stockholders’ deficit of $46.3 million as of June 30, 2024. Additionally, our operations have historically used more cash than they have provided. Net cash used in operating activities was $6.1 million during the six months ended June 30, 2024. As of June 30, 2024, our cash balance was $0.4 million. Also, we did not make required repayments of the outstanding loans under the 2023 Mudrick Loan Agreement when due (see Note 10 for more information) and we have accrued approximately $1.4 million of delinquent payroll taxes.

Our history of recurring operating losses, working capital deficiencies and negative cash flows from operating activities give rise to, and management has concluded that there is, substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2023, has also expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We intend to fund our future operations and meet our financial obligations through revenue growth from our AI and data analytics offerings. We cannot, however, provide assurance that revenue, income and cash flows generated from our businesses will be sufficient to sustain our operations in the twelve months following the filing of this Form 10-Q. As a result, we are actively evaluating strategic alternatives including debt and equity financings.

Conditions in the debt and equity markets, as well as the volatility of investor sentiment regarding macroeconomic and microeconomic conditions (in particular, as a result of the COVID-19 pandemic, global supply chain disruptions, inflation and other cost increases, and the geopolitical conflict in Ukraine), will play primary roles in determining whether we can successfully obtain additional capital. We cannot be certain that we will be successful at raising additional capital.

A variety of factors, many of which are outside of our control, may affect our cash flow; those factors include the lingering effects of the COVID-19 pandemic in China, regulatory issues, competition, financial markets and other general business conditions. Based on financial projections, we believe that we will be able to meet our ongoing requirements for at least the next 12 months with existing cash and based on the probable success of one or more of the following plans:

However, projections are inherently uncertain and the success of our plans is largely outside of our control. As a result, there is substantial doubt regarding our ability to continue as a going concern, and we may fully utilize our cash resources prior to September 30, 2024.

Reclassification

On our consolidated balance sheet for the year ended December 31, 2023, we reclassified approximately $0.4 million from Accrued expense and other current liabilities to Advances from related parties to conform to the current year presentation.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We prepared the accompanying unaudited Condensed Consolidated Balance Sheet as of June 30, 2024, with the audited Consolidated Balance Sheet amounts as of December 31, 2023 presented for comparative purposes, and the related unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss, the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Deficit for the six months ended June 30, 2024 in accordance with the instructions for Form 10-Q. In compliance with those instructions, we have omitted certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. GAAP, though management believes the disclosures made herein are sufficient to ensure that the information presented is not misleading.

Our results of operations and our cash flows as of the end of the interim periods reported herein do not necessarily indicate the results we may experience for the remainder of the year or for any other future period.

Management believes that we have included all adjustments (including those of a normal, recurring nature) considered necessary to fairly present our unaudited Condensed Consolidated Balance Sheet and our unaudited Condensed Consolidated Statement of Stockholders’ Deficit, each as of June 30, 2024, as well as our unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss and Condensed Consolidated Statements of Cash Flows for all periods presented. You should read our unaudited condensed consolidated interim financial statements and footnotes in conjunction with our consolidated financial statements and footnotes included within the Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”).

Consolidation

We include all of our subsidiaries in our condensed consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation.

Use of Estimates

We prepare our consolidated financial statements in conformity with GAAP. While preparing our financial statements, we make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes. Accordingly, actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, deferred cost of revenue, share-based compensation, deferred income taxes, and inventory reserve, among other items.

Cash

Our cash consists of funds held in bank accounts.

We maintain cash balances in United States dollars (“USD”), British pounds (“GBP”), Chinese Yuan (“CNY”) and Hong Kong dollars (“HKD”).

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

The following table, reported in USD, disaggregates our cash balances by currency denomination (in thousands):

We maintain substantially all of our USD-denominated cash at a U.S. financial institution where the balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At times, however, our cash balances may exceed the FDIC-insured limit. As of June 30, 2024, we do not believe we have any significant concentrations of credit risk. Cash held by our non-U.S. subsidiaries is subject to foreign currency fluctuations against the USD, although such risk is somewhat mitigated because we transfer U.S. funds to China to fund local operations. If, however, the USD is devalued significantly against the CNY, our cost to further develop our business in China could exceed original estimates.

Fair Value of Financial Instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price). When reporting the fair values of our financial instruments, we prioritize those fair value measurements into one of three levels based on the nature of the inputs, as follows:

The fair value hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs may not be available.

We believe the reported carrying amounts for cash, receivables, prepaids and other current assets, accounts payable, accrued expense and other current liabilities, and short-term debt approximate their fair values because of the short-term nature of these financial instruments.

Foreign Currency Translation

We report all currency amounts in USD. Our overseas subsidiaries, however, maintain their books and records in their functional currencies, which are GBP in the United Kingdom (“U.K.”) and CNY in China.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

In general, when consolidating our subsidiaries with non-USD functional currencies, we translate the amounts of assets and liabilities into USD using the exchange rate on the balance sheet date, and the amounts of revenue and expense are translated at the average exchange rate prevailing during the period. The gains and losses resulting from translation of financial statement amounts into USD are recorded as a separate component of accumulated other comprehensive loss within stockholders’ deficit.

We used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted:

Revenue Recognition

AI-Based Products

We generate revenue by developing AI-based products, including fully-integrated AI solutions which combine our proprietary technology with third-party hardware and software products to meet end-user specifications. Under one type of contract for our AI-based products, we provide a single, continuous service to clients who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Under another type of contract, we have performance obligations to provide fully-integrated AI solutions to our customer and we recognize revenue at the point in time when each performance obligation is completed and delivered to, tested by and accepted by our customer.

We recognize revenue when we transfer control of the promised goods or services to our customers, and we recognize an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. If there is uncertainty related to the timing of collections from our customer, which may be the case if our customer is not the ultimate end user of our goods, we consider this to be uncertainty of the customer’s ability and intention to pay us when consideration is due. Accordingly, we recognize revenue only when we have transferred control of the goods or services and collectability of consideration from the customer is probable.

When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation.

For contracts under which we have not yet completed the performance obligation, deferred costs are recorded for any amounts incurred in advance of the performance obligation.

For our contracts with customers, we generally extend short-term credit policies to our customers, typically up to one year for large-scale projects.

We record the incremental costs of obtaining contracts as an expense when incurred.

We offer extended warranties on our products for periods of one to three years. Revenue from these extended warranties is recognized on a straight-line basis over the warranty contract term.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

Other

We generate revenue from other sources, such as from advertising and marketing services. We recognize the revenue from these contracts at the point in time when we transfer control of the good sold to the customer or when we deliver the promised promotional materials or media content. Substantially all of our contracts with customers that generate Other revenue are completed within one year or less.

Inventory

We use the first-in first-out method to determine the cost of our inventory, then we report inventory at the lower of cost or net realizable value. We regularly review our inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated sales forecasts. At June 30, 2024 and December 31, 2023, reserve for inventory was $2.2 million and $2.2 million, respectively.

Internal Use Software

We acquire or develop applications and other software that help us meet our internal needs with respect to operating our business. For such projects, planning cost and other costs related to the preliminary project stage, as well as costs incurred for post-implementation activities, are expensed as incurred. We capitalize costs incurred during the application development phase only when we believe it is probable the development will result in new or additional functionality. The types of costs capitalized during the application development phase include fees incurred with third parties for consulting, programming and other development activities performed to complete the software. We amortize our internal use software on a straight-line basis over an estimated useful life of three years. If we identify any internal use software to be abandoned, the cost less the accumulated amortization, if any, is recorded as amortization expense. Once we have fully amortized internal use software costs that we capitalized, we remove such amounts from their respective accounts.

Net Income (Loss) per Share

We calculate basic net income (loss) per share using the weighted-average number of common stock shares outstanding during the period. For the calculation of diluted net income (loss) per share, we give effect to all the shares of common stock that were outstanding during the period plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is anti-dilutive. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options and warrants.

For the six months ended June 30, 2024 and 2023, there were no reconciling items related to either the numerator or denominator of the loss per share calculation, as their effect would have been anti-dilutive.

Securities which may have affected the calculation of diluted earnings per share for the three and six months ended June 30, 2024 if their effect had been dilutive include 1,518,078 total outstanding options to purchase our common stock, 1,007,441 outstanding warrants to purchase our common stock, as well as an estimated 101,193,753 shares of our common stock issuable to Ionic Ventures, LLC (“Ionic”) in relation to our transactions with Ionic (see Note 12).

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

Segments

Existing GAAP, which establishes a management approach to segment reporting, defines operating segments as components of an entity about which separate, discrete financial information is available for evaluation by the chief operating decision maker. We have identified our Chief Executive Officer as our chief operating decision maker, who reviews operating results to make decisions about allocating resources and assessing performance based upon only one operating segment.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. For us, ASU 2023-07 will be effective on January 1, 2024 and interim periods beginning in fiscal year 2025, with early adoption permitted. The adoption of ASU 2023-07 did not have a material impact on our results of operations, financial position or cash flows.

We have reviewed all accounting pronouncements recently issued by the FASB and the SEC. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof.

NOTE 3. CONCENTRATION OF RISK

Revenue and Accounts Receivable

The disaggregation of revenue tables in Note 4 demonstrate the concentration in our revenue from certain products and the geographic concentration of our business. We also have a concentration in the volume of business we transacted with customers, as during the six months ended June 30, 2024, apart from a de minimis amount, essentially all of our revenue resulted from one customer, while during six months ended June 30, 2023, three of our customers represented about 40%, 35% and 11%, respectively, of our revenue. At June 30, 2024, net accounts receivable from one of our customers represented about 87% of our net accounts receivable, while at December 31, 2023, net accounts receivable from three of our customers represented about 37%, 34% and 12%, respectively, of our net accounts receivable.

Deferred Cost of Revenue

See Note 6 for a discussion of a risk concentration regarding our deferred cost of revenue.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

Cost of Sales and Accounts Payable

The various hardware we purchase to fulfill our contracts with customers is not especially unique in nature. Based on our analysis, we believe that should any disruption in our current supply chain occur, a sufficient number of alternative vendors is available to us, at reasonably comparable specifications and price, such that we would not experience a material negative impact on our ability to procure the hardware we need to operate our business.

NOTE 4. REVENUE

We primarily sell AI-based products and services based upon computer vision and other technologies.

We do not include disclosures related to remaining performance obligations because substantially all our contracts with customers have an original expected duration of one year or less or, with regard to our stand-ready obligations, the amounts involved are not material.

Disaggregation of Revenue

The following table presents a disaggregation of our revenue by category of products and services (in thousands):

The following table presents a disaggregation of our revenue by country (in thousands):

Significant Judgments

When accounting for revenue we make certain judgments, such as whether we act as a principal or as an agent in transactions or whether our contracts with customers fall within the scope of current GAAP regarding revenue, that affect the determination of the amount and timing of our revenue from contracts with customers. Based on the current facts and circumstances related to our contracts with customers, none of the judgments we make involve an elevated degree of qualitative significance or complexity such that further disclosure is warranted in terms of their potential impact on the amount and timing of our revenue.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

Contract Assets and Contract Liabilities

We do not currently generate material contract assets. During the six months ended June 30, 2024, our contract liability changed only as a result of routine business activity.

During the six months ended June 30, 2024 and 2023, the amount of revenue we recognized that was included in the beginning balance of Contract liability was not material.

During the six months ended June 30, 2024 and 2023, we did not recognize revenue from performance obligations that were satisfied in previous periods.

Certain Agreements Related to AI-Based Product Sales in China

We completed certain projects in China during the year ended December 31, 2023 worth approximately $1.4 million, but the agreement did not meet the criteria for revenue recognition on an accrual basis. We will recognize the revenue from such agreement as we receive the cash. We recognized approximately $0.4 million of such amount during the six months ended June 30, 2024.

NOTE 5. TRADE ACCOUNTS RECEIVABLE

Generally, it is not unusual for Chinese entities to pay their vendors on longer timelines than the timelines typically observed in U.S. commerce. Trade receivables related to our China AI projects at June 30, 2024 and December 31, 2023; including approximately $0.7 million and $0.7 million, respectively, of trade receivables from projects related to work with our China Business Partner (see Note 16 for more information regarding our China Business Partner and related accounting); represented essentially all our gross trade receivables in each such period. When evaluating for current expected credit losses during 2023, we took into account our historical experience as well as our expectations based upon how we believe the COVID-19 pandemic has caused lingering effects on us and our customers.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

NOTE 6. DEFERRED COST OF REVENUE

Deferred cost of revenue as of June 30, 2024 and December 31, 2023 of $0.0 million and $6.6 million, respectively, represent amounts we have paid in advance to vendors who provide services to us in relation to various projects in China. Specifically, the deferred cost of revenue balance as of June 30, 2024, a large percentage of which was paid to a single vendor in 2022 for project installations we expect will be provided to us through our China Business Partner (described in more detail in Note 16), will be utilized as the vendors install our software solutions and/or hardware at numerous sites across various regions of China for our customers and as the vendors perform other services for us pursuant to customer requirements. Because most of the projects for which we have engaged the vendors require purchases of hardware, equipment and/or supplies in advance of site visits, we made the prepayments in anticipation of several large batches of project installations. We did not make any additional advance payments to vendors in 2024 related to projects, and we were able to complete installations of projects that reduced by $0.4 million the deferred cost of revenue balance associated with the vendor which performs the project installations provided to us through our China Business Partner.

Lengthy COVID-19 related lockdowns that occurred in various regions in China during 2022 were the initial cause of delays in completing projects for which we had paid in advance. A slow recovery from such lockdowns in addition to increased political tensions between the U.S. and China led to our decision to reduce staff in China, all of which has made progress in completing projects slow. The balance of deferred cost of revenue as of June 30, 2024 can be fully recovered, given that the vendors are able to perform the installations, but completing the projects in China and fully recovering the deferred cost of revenue balance will require additional capital resources. While we have turned our focus to expanding our business outside of China, we will continue working to complete the projects in China, though we may have to impair the asset in future periods to the extent our capital resources are not sufficient to complete all such projects. Given that we have limited capital resources for China, which could cause further delays in completing the projects associated with the deferred cost of revenue, we have reclassified the balance of deferred cost of revenue as a long-term asset as of June 30, 2024.

NOTE 7. PREPAID EXPENSE AND OTHER CURRENT ASSETS

The following table presents the components of prepaid expense and other current assets (in thousands):

NOTE 8. PROPERTY AND EQUIPMENT

Property and equipment consist of the following (in thousands, except estimated lives):

For the six months ended June 30, 2024 and 2023, depreciation (and amortization of software) expense was not material.

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the Six Months Ended June 30, 2024 and 2023

NOTE 9. ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES

The following table presents the components of Accrued expense and other current liabilities (in thousands):