Document


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of report (Date of earliest event reported): November 14, 2016
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Remark Media, Inc.

Delaware
 
001-33720
 
33-1135689
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
3960 Howard Hughes Parkway, Suite 900
Las Vegas, NV
 
89169
 
702-701-9514
(Address of principal executive offices)
 
(Zip Code)
 
(Registrant’s telephone number, including area code)
 
 
 
 
 
 
(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02
Results of Operations and Financial Condition.

On November 14, 2016, Remark Media, Inc. (“we”, “us” or “our”) issued a press release announcing our financial results for the three and nine months ended September 30, 2016. A copy of such release is furnished herewith as Exhibit 99.1.

The information hereunder shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01
Financial Statements and Exhibits.

(d)
Exhibits

Exhibit Number
 
Description
99.1
     
Press release dated November 14, 2016






Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    
 
 
 
 
Remark Media, Inc.
 
 
 
 
 
Date:
November 14, 2016
 
By:
/s/ Douglas Osrow
 
 
 
Name:
Douglas Osrow
 
 
 
Title:
Chief Financial Officer




Exhibit

EXHIBIT 99.1



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Remark Media Reports Third Quarter 2016 Results
Increased quarterly net revenue to $15.1 million, up $14.3 million over Q3 2015, reflecting Vegas.com acquisition and improvements implemented since

LAS VEGAS, NV - November 14, 2016 - Remark Media (NASDAQ: MARK), a global digital media technology company, reported its financial results for the third quarter of 2016.

Kai-Shing Tao, Remark Media's Chairman and CEO, stated: “During the third quarter of 2016, we drove meaningful year-over-year growth in net revenue, which reflects the addition of Vegas.com to our digital media portfolio as well as the enhancements we have made to the asset over the last year. Further enhancing our portfolio, in September of this year we acquired FansTang, which adds significant synergies to our entire asset base as well as an additional revenue stream.

We have also continued our focus on growing and developing KanKan into a unique and powerful source of consumer data with near-term monetization opportunities. In fact, we are preparing to launch our first KanKan business-to-business product with a financial services customer in the fourth quarter of this year, with first revenues expected in early 2017. While this is a significant milestone for us, we are pursuing many additional opportunities to leverage this unique and powerful data intelligence platform with customers in multiple industries including finance, travel, retail and entertainment. As we look ahead, we are more excited than ever about our ability to expand our leadership position in global consumer data intelligence and monetize our offerings in that arena.”


Financial Results for the Three Months Ended September 30th: 2016 Compared to 2015
The financial results for the third quarter of 2016 reflect the operating results of Vegas.com, which was acquired in September 2015.
Net revenue was $15.1 million, compared to $0.8 million.
Total cost and expense was $19.3 million, compared to $10.1 million.
Operating loss was $4.2 million, compared to $9.3 million.
Net loss was $15.3 million, or $0.75 per diluted share, and included a loss on extinguishment of debt of $9.2 million. This compares to $11.1 million, or $0.75 per diluted share.
At September 30, 2016, the cash and cash equivalents balance was $5.3 million, and total restricted cash was $11.7 million, bringing the total combined cash position to $17.0 million.

Financial Results for the Nine Months Ended September 30th: 2016 Compared to 2015
The financial results for the 2016 nine-month period reflect the operating results of Vegas.com, which was acquired in September 2015.
Net revenue was $44.4 million, compared to $2.4 million.
Total cost and expense was $57.2 million, compared to $17.8 million.
Operating loss was $12.9 million, compared to $15.4 million.
Net loss was $23.1 million, or $1.15 per diluted share, and included the aforementioned $9.2 million loss on extinguishment of debt. This compares to $17.4 million, or $1.25 per diluted share.





EXHIBIT 99.1


Conference Call Information
Remark Media’s management team will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss its third quarter 2016 earnings results, review recent activity and answer questions. To access the call in the U.S. please dial 1-888-329-7568 and for international calls dial 1-719-325-2228 approximately 10 minutes prior to the start of the conference. The conference ID is 4087761. The conference call will also be broadcast live over the Internet and available for replay for one year at www.remarkmedia.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the replay, in the U.S., please dial 1-877-870-5176 and internationally, 1-858-384-5517. Enter access code 4087761.

About Remark Media, Inc.
Remark Media, Inc. (NASDAQ: MARK) owns, operates and acquires innovative digital media properties across multiple verticals that deliver culturally relevant, dynamic content that attracts and engages users on a global scale.  The company leverages its unique digital media assets to target the Millennial demographic, which provides it with access to fast-growing, lucrative markets.  The company is headquartered in Las Vegas, Nevada, with additional operations in Los Angeles, California and in Beijing, Shanghai, Chengdu and Hangzhou, China. For more information, please visit the company’s website at www.remarkmedia.com.

Forward-Looking Statements
This press release may contain forward-looking statements, including information relating to future events, future financial performance, strategies, expectations, competitive environment and regulation. Words such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, including those discussed in Part I, Item 1A. Risk Factors in Remark Media’s Annual Report on Form 10-K and Remark Media’s other filings with the SEC. Any forward-looking statements reflect Remark Media’s current views with respect to future events, are based on assumptions and are subject to risks and uncertainties. Given such uncertainties, you should not place undue reliance on any forward-looking statements, which represent Remark Media’s estimates and assumptions only as of the date hereof. Except as required by law, Remark Media undertakes no obligation to update or revise publicly any forward-looking statements after the date hereof, whether as a result of new information, future events or otherwise.

Investor Contact:
Douglas Osrow
Remark Media, Inc.
dosrow@remarkmedia.com
702-701-9514 ext. 3025

Investor Relations Contact:
Becky Herrick/ Kirsten Chapman
LHA Investor Relations
remarkmedia@lhai.com
415-433-3777
[Tables to follow]




EXHIBIT 99.1

REMARK MEDIA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 2016

 
September 30, 2016
 
December 31, 2015
 
(Unaudited)
 
 
Assets
 
 
 
Cash and cash equivalents
$
5,307

 
$
5,422

Restricted cash
9,406

 
9,416

Trade accounts receivable
1,167

 
746

Prepaid expense and other current assets
3,218

 
2,637

Notes receivable, current
181

 
172

Total current assets
19,279

 
18,393

Restricted cash
2,250

 
2,250

Notes receivable
190

 
371

Property and equipment, net
16,305

 
17,338

Investment in unconsolidated affiliate
1,030

 
1,030

Intangibles, net
40,170

 
34,867

Goodwill
26,607

 
20,337

Other long-term assets
1,323

 

Total assets
$
107,154

 
$
94,586

 
 
 
 
Liabilities and Stockholders’ Equity
 
 
 
Accounts payable
$
12,602

 
$
14,422

Accrued expense and other current liabilities
16,186

 
11,827

Deferred merchant booking
9,178

 
6,997

Deferred revenue
4,725

 
3,262

Current maturities of long-term debt
100

 
100

Capital lease obligations
180

 
205

Total current liabilities
42,971

 
36,813

Long-term debt, less current portion and net of unamortized discount and debt issuance cost
37,839

 
23,616

Warrant liability
28,129

 
19,195

Other liabilities
1,845

 
2,904

Total liabilities
110,784

 
82,528

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Stockholders’ equity
 
 
 
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued

 

Common stock, $0.001 par value; 100,000,000 shares and 50,000,000 shares authorized; 20,711,078 and 19,659,362 shares issued and outstanding; each at September 30, 2016 and December 31, 2015, respectively
21

 
20

Additional paid-in-capital
180,856

 
173,477

Accumulated other comprehensive loss
(6
)
 
(5
)
Accumulated deficit
(184,501
)
 
(161,434
)
Total stockholders’ equity (deficit)
(3,630
)
 
12,058

Total liabilities and stockholders’ equity
$
107,154

 
$
94,586





EXHIBIT 99.1

REMARK MEDIA, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Period Ended September 30, 2016

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Revenue, net
15,142

 
816

 
44,371

 
2,440

 
 
 
 
 
 
 
 
Cost and expense
 
 
 
 
 
 
 
Cost of revenue (excluding depreciation and amortization)
2,864

 
136

 
7,837

 
256

Sales and marketing
4,887

 
469

 
15,349

 
845

Technology and development
1,066

 
61

 
1,904

 
233

General and administrative
7,921

 
8,859

 
24,251

 
15,364

Depreciation and amortization
2,525

 
459

 
7,401

 
909

Other operating expense
77

 
142

 
506

 
189

Total cost and expense
19,340

 
10,126

 
57,248

 
17,796

 
 
 
 
 
 
 
 
Operating loss
(4,198
)
 
(9,310
)
 
(12,877
)
 
(15,356
)
Other income (expense)
 
 
 
 
 
 
 
Debt conversion expense

 
(1,469
)
 

 
(1,469
)
Interest expense
(1,224
)
 
(303
)
 
(3,649
)
 
(708
)
Other income (loss), net
(1
)
 
(80
)
 
29

 
(79
)
Loss on extinguishment of debt
(9,157
)
 

 
(9,157
)
 

Change in fair value of warrant liability
(647
)
 
20

 
2,691

 
241

Other gain (loss)
(33
)
 
6

 
(104
)
 
6

Total other income (expense), net
(11,062
)
 
(1,826
)
 
(10,190
)
 
(2,009
)
 
 
 
 
 
 
 
 
Loss before income taxes
(15,260
)
 
(11,136
)
 
(23,067
)
 
(17,365
)
Provision for income taxes

 

 

 

Net loss
(15,260
)
 
(11,136
)
 
(23,067
)
 
(17,365
)
Other comprehensive income (loss)
 
 
 
 
 
 
 
Foreign currency translation adjustments

 
25

 

 

Comprehensive loss
(15,260
)
 
(11,111
)
 
(23,067
)
 
(17,365
)
 
 
 
 
 
 
 
 
Net loss per share
 
 
 
 
 
 
 
Weighted-average shares outstanding, basic and diluted
20,359

 
14,830

 
20,104

 
13,884

Net loss per share, basic and diluted
(0.75
)
 
(0.75
)
 
(1.15
)
 
(1.25
)

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