Q2 2024 Remark Holdings Inc Earnings Call

August 19, 2024

Speaker Change: Good day and welcome to the Remark Holdings second quarter 2024 financial results call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: All participants will be in a listen-only mode.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone telephone. To withdraw your question, please press star, then two.

Operator: After today's presentation, there will be an opportunity to ask questions.

Operator: To ask a question, you may press star, then one on a touchtone telephone.

Operator: To ask a question, you may press star then 1 on a touchtone telephone.

Speaker Change: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch-tone telephone. To withdraw your question, please press star, then 2. Please note this event is being recorded.

Operator: To withdraw your question, please press star, then two.

Operator: To withdraw your question, please press star then 2.

Operator: Please note this event is being recorded.

Operator: I would now like to turn the conference over to Fay Tian. Please go ahead.

Operator: I would now like to turn the conference over to Fay Tian.

Operator: Please go ahead.

Speaker Change: I would now like to turn the conference over to Fay Tian. Please go ahead.

Fay Tian: Thank you, Nick.

Nick: Thank you, Nick.

Operator: Please go ahead.

Fay Tian: Good afternoon, everyone, and welcome to Remark Holdings' 2nd quarter 2024 financial results conference call. I am Fay Tian, Vice President of Investor Relations for Remark. On the call with me this afternoon is Kai Xing-Tao, Remark's chairman and chief executive officer and Mr. Todd Brown, vice president of finance. In just a moment, Mr. Todd will provide an update on our businesses, and Mrs. Brown will recap our 2nd quarter 2024 financial results. Following these remarks, we will open the call to questions.

Fay Tian: Thank you, Nick.

Fay Tian: Thank you, Nick. Good afternoon, everyone, and welcome to Remark Holdings' second quarter 2024 financial results conference call.

Fay Tian: Good afternoon, everyone, and welcome to Remark Holdings' second quarter 2024 financial results conference call.

Fay Tian: I am Fay Tian, Vice President of Investor Relations for Remark.

Speaker Change: On the call with me this afternoon is Kai Xing Tao, Remarks Chairman and Chief Executive Officer, and Mr. Todd Brown, Vice President of Finance.

Speaker Change: In just a moment, Mrs. Howe will provide an update on our businesses and Mrs. Brown will recap our second quarter 2024 financial results. Following these remarks, we'll open the call to questions.

Fay Tian: But before I turn the call over to Mr. Tau, I would like to take this opportunity to remind you that some of the statements made today may be forward-looking statements. These statements involve risk on certain things and other factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements reflect Remark Holdings' current views, and Remark Holdings expressly disclaims any obligation to update or revise any forward-looking statements after the date hereof. This disclaimer is only a summary of Remark Holdings' statutory for looking statements, which is included in full in its filings with the FCC.

Fay Tian: I am Fay Tian, Vice President of Investor Relations for Remark.

Fay Tian: On the call with me this afternoon is Kai-Hsing Tsao, Remark's Chairman and Chief Executive Officer, and Mr. Todd Brown, Vice President of Finance.

Speaker Change: But before I turn the call over to Mr. Chow, I would like to take this opportunity to remind you that some of the statements made today may be forward-looking statements.

Fay Tian: In just a moment, Mr. Tsao will provide an update on our businesses, and Mr. Brown will recap our second quarter 2024 financial results.

Speaker Change: These statements involve risk, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by these four looking statements.

Speaker Change: Any forward-looking statements reflect Remark Holdings' current views, and Remark Holdings expressly disclaims any obligation

Speaker Change: to update or revise any forward-looking statements after the date to hear off. This disclaimer is only a summary of Remark Holding's Statutory Forward-Looking Statements Disclaimer, which is included in full in its filings with the FCC.

Fay Tian: On the call with me this afternoon is Kaixin Tao, Remark's Chairman and Chief Executive Officer, and Mr. Todd Brown, Vice President of Finance.

Fay Tian: I will now turn the call over to Remark's Chairman and Chief Executive Officer, Mrs. Tau, so he can provide additional information to Remark's businesses and recent developments. Please go ahead, Qing.

Fay Tian: Following these remarks, we'll open the call to questions.

Fay Tian: In just a moment, Mr. Tao will provide an update on our businesses, and Mr. Brown will recap our second quarter 2024 financial results.

Mr. Tao: I will now turn the call over to Remarks Chairman and Chief Executive Officer, Mr. Tao, so he can provide additional information to Remarks businesses and recent developments. Please go ahead, Ching.

Fay Tian: Following these remarks, we'll open the call to questions.

Fay Tian: But before I turn the call over to Mr. Tsao, I would like to take this opportunity to remind you, that some of the statements made today may be forward-looking statements.

Fay Tian: But before I turn the call over to Mr. Tao, I would like to take this opportunity to remind you that some of the statements made today may be forward-looking statements.

Fay Tian: These statements involve risk, uncertainties, and other factors, that could cause actual results to differ materially from those expressed or implied by these forward-looking statements.

Fay Tian: These statements involve risk, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements.

Fay Tian: Any forward-looking statements reflect Remark Holdings' current views, and Remark Holdings expressly disclaims any obligation to update or revise any forward-looking statements after the date to hear of.

Kai Xing-Tao: Thank you. It's been no secret about our intention to transition our revenue base from Asia to the US, especially due to the political conflicts between the US and China. While it's taken us some time to do so, as most government contracts do, we are proud to see the successful fruits of our labor begin to show with our recent contract win with the Clark County School District, which is the fifth largest school district in the United States. Our recent contract win for implementing weapon detection technology in the Clark County School District is a significant milestone that will likely lead to a multitude of future opportunities, both within Clark County and other school districts of similar size.

Fay Tian: I will now turn the call over to Remark's Chairman and Chief Executive Officer, Mr. Tao, so he can provide additional information to Remark's businesses and recent developments.

Fay Tian: This disclaimer is only a summary of Remark Holdings' statutory forward-looking statements disclaimer,

Fay Tian: This disclaimer is only a summary of Remark Holdings' Statutory Forward-Looking Statements Disclaimer, which is included in full in its filings with the FCC.

Tao: Thank you. It's been no secret about our intention to transition our revenue base from Asia to the U.S. especially due to the political conflicts between the U.S. and China.

Tao: while it's taken us some time to do so.

Fay Tian: Please go ahead, Ching.

Speaker Change: As most government contracts do, we are proud to see the successful fruits of our labor begin to show with our recent contract win with the Clark County School District.

Fay Tian: which is included in its filings with the SEC.

Kaixin Tao: Thank you.

Fay Tian: I will now turn the call over to Remark's Chairman, and Chief Executive Officer, Mr. Tsao, so he can provide additional information

Speaker Change: which is the fifth largest school district in the United States.

Fay Tian: to Remark's businesses and recent developments.

Speaker Change: Our recent contract win for implementing weapon detection technology in the Clark County School District is a significant milestone that will likely lead to a multitude of future opportunities both within Clark County and other school districts of similar size.

Kaixin Tao: It's been no secret about our intention to transition our revenue base from Asia to the U.S., especially due to the political conflicts between the U.S. and China, while it's taken us some time to do so, as most government contracts do. We are proud to see the successful fruits of our labor begin to show with our recent contract win with the Clark County School District, which is the fifth largest school district in the United, Our recent contract win for implementing weapon detection technology in the Clark County School District is a significant milestone that will likely lead to a multitude of future opportunities both within Clark County and other school districts of similar size.

Fay Tian: Please go ahead, Ching.

Kai-Hsing Tsao: Thank you.

Kai-Hsing Tsao: It's been no secret about our intention, to transition our revenue base from Asia to the U.S., especially due to the political conflicts between the U.S. and China.

Kai Xing-Tao: We are optimistic that the contract value will meet or exceed its proposed $45 million value over nine years as we expand and introduce the value-added functionality of our Smart Safety Platform. By successfully deploying weapon detection technology in a large school district, Remark AI demonstrates its capabilities, building trust with potential clients. The Clark County School District serves as a high-profile reference, enabling Remark AI to showcase its expertise and technology in a large real-world setting. This contract win attracts attention from other educational institutions, law enforcement agencies, and government organizations, potentially leading to new partnerships. Remark AI can leverage the success to enter adjacent markets, such as other school districts and educational institutions, public venues, government facilities and buildings, and private enterprises.

Kaixin Tao: We are optimistic that the contract value will meet or exceed its proposed $45 million value over nine years, as we expand and introduce the value-added functionality of our smart safety platform.

Speaker Change: We are optimistic that the contract value will meet or exceed its proposed 45 million dollar value over nine years.

Speaker Change: As we expand, introduce the value-added functionality of our smart safety platform.

Kaixin Tao: By successfully deploying weapon detection technology in a large school district, Remark AI demonstrates its capabilities, building trust with potential clients. The Clark County School District serves as a high-profile reference, enabling Remark AI to showcase its expertise and technology in a large and real-world setting.

Kai-Hsing Tsao: While it's taken us some time to do so, as most government contracts do, we are proud to see the successful fruits of our labor begin to show with our recent contract win with the Clark County School District, which is the fifth-largest school district in the United States. Our recent contract win for implementing weapon detection technology, in the Clark County School District is a significant milestone that will likely lead to a multitude of future opportunities, both within Clark County and other school districts of similar size.

Kai-Hsing Tsao: We are optimistic that the contract value will meet or exceed, its proposed $45 million value over nine years as we expand and introduce the value-added functionality of our smart safety platform.

Kai-Hsing Tsao: By successfully deploying weapon detection technology, in a large school district, Remark AI demonstrates its capabilities, building trust with potential clients. The Clark County School District serves as a high-profile reference, enabling Remark AI to showcase its expertise and technology in a large and real-world setting.

Speaker Change: By successfully deploying weapon detection technology in a large school district, Remark AI demonstrates its capabilities, building trust with potential clients.

Speaker Change: The Clark County School District serves as a high-profile reference, enabling Remark AI to showcase its expertise and technology in a large and real-world setting.

Kai-Hsing Tsao: This contract win attracts attention from other educational institutions, law enforcement, agencies, and government organizations, potentially leading to new partnerships.

Kaixin Tao: This contract win attracts attention from other educational institutions, law enforcement agencies, and government organizations, potentially leading to new partners.

Speaker Change: This contract win attracts attention from other educational institutions, law enforcement agencies, and government organizations, potentially leading to new partnerships.

Kaixin Tao: Remark AI can leverage this success to enter adjacent markets, such as other school districts and educational institutions.

Kai-Hsing Tsao: Remark AI can leverage this success to enter adjacent markets such as other school districts, and educational institutions, public venues, government facilities and buildings, and private enterprises. Remark AI can offer complementary solutions like facial recognition, fight detection, unattended object detection, and advanced analytics to existing and new clients.

Speaker Change: Remark AI can leverage this success to enter adjacent markets such as other school districts and educational institutions.

Kaixin Tao: Public Venues, Government Facilities and Buildings, and Private Enterprise.

Speaker Change: Public Venues

Speaker Change: Government Facilities and Buildings.

Kai Xing-Tao: Remark AI can offer complementary solutions like facial recognition, fight detection, unattended object detection, and advanced analytics to existing and new clients.

Kaixin Tao: Remark AI can offer complementary solutions like facial recognition, fight detection, unattended object detection, and Advanced Analytics to Existing and New Clients.

Speaker Change: and private enterprises.

Speaker Change: Remark AI can offer complementary solutions like facial recognition, fight detection, unattended object detection, and advanced analytics to existing and new clients.

Kai Xing-Tao: We have already started our POC with one of the largest subway systems in the U.S., and we look forward to updating you on our progress. Other highlights for Remark AI this past quarter. We showcased our AI fire and smoke, our AI fire and smoke, smart city, and smart agent solutions at the New York City Smart City Expo, in conjunction with Oracle and Nvidia. The success and uniqueness of our AI products has led to additional POCs to help the top 100 U.S. cities turn into modern 21st century smart city. We completed the POC at the headquarters train station for one of the largest European railway systems with over 600 stations deploying our AI-powered passenger counting, fare evasion, fire and smoke detection, and unattended baggage detection.

Kaixin Tao: We have already started our POC with one of the largest subway systems in the U.S. and we look forward to updating you on our progress.

Kai-Hsing Tsao: We have already started our POC with one of the largest subway systems in the U.S., and, we look forward to updating you on our progress.

Speaker Change: We have already started our POC with one of the largest subway systems in the U.S. and we look forward to updating you on our progress.

Kaixin Tao: Other highlights for Remark AI this past quarter, we showcased our AI fire and smoke. Our AI Fire and Smoke, Smart City, and Smart Agent Solutions at the New York City Smart City Expo in conjunction with Oracle and NVIDIA.

Kai-Hsing Tsao: Other highlights for Remark AI this past quarter. We showcased our AI fire and smoke, smart city, and smart agent solutions at the New, York City Smart City Expo in conjunction with Oracle and NVIDIA.

Speaker Change: Other highlights for Remark AI this past quarter.

Speaker Change: and smoke.

Speaker Change: Our AI Fire and Smoke, Smart City, and Smart Agent Solutions at the New York City Smart City Expo in conjunction with Oracle and NVIDIA.

Kaixin Tao: The success and uniqueness of our AI products has led to additional POCs to help the top 100 U.S. cities turn into modern 21st century smart cities.

Kai-Hsing Tsao: The success and uniqueness of our AI products has led to additional POCs to help the top, 100 U.S. cities turn into modern 21st century smart cities.

Speaker Change: The success and uniqueness of our AI products has led to additional POCs to help the top 100 U.S. cities turn into modern 21st century smart city.

Kaixin Tao: We completed the POC at the headquarters train station for one of the largest European railway systems with over 600 stations, deploying our AI-powered passenger counting, fare evasion, fire and smoke detection, and unattended baggage. The success of this PLC has led to current contract negotiations to close the deal in the second half of 2020.

Kai-Hsing Tsao: We completed the POC at the headquarters train station for one of the largest European, railway systems with over 600 stations, deploying our AI-powered passenger counting, fare evasion, fire and smoke detection, and unattended baggage detection. The success of this POC has led to current contract negotiations to close the deal in, the second half of 2024.

Speaker Change: We completed the POC at the headquarters train station for one of the largest European railway systems with over 600 stations, deploying our AI-powered passenger counting, fare evasion, fire and smoke detection, and unattended baggage detection.

Kai Xing-Tao: The success of this POC has led to current contract negotiations to close the deal in the second half of 2024. Another highlight is that we have completed a successful POC for the migrant centers in one of the largest sanctuary cities in the U.S., where we deployed our AI-powered facial recognition, fight warnings, fire and smoke detection, as well as weapons detection modules. The success of this POC has led to preparations to deploy our technology across multiple city agencies as we negotiate the close of contract also for the second half of 2024.

Speaker Change: The success of this PLC has led to current contract negotiations to close the deal in the second half of 2024.

Kaixin Tao: Another highlight is that we have completed a successful POC for the migrant centers in one of the largest sanctuary cities in the U.S. where we deployed our AI-powered facial recognition, fight warnings, fire and smoke detection, as well as weapons detection modules.

Kai-Hsing Tsao: Another highlight is that we have completed a successful POC for the migrant centers in, one of the largest sanctuary cities in the U.S., where we deployed our AI-powered facial recognition, fight warnings, fire and smoke detection, as well as weapons detection modules. The success of this POC has led to preparations to deploy our technology across multiple city, agencies as we negotiate to close the contract also for the second half of 2024.

Speaker Change: Another highlight is that we have completed a successful POC for the migrant centers in one of the largest sanctuary cities in the U.S. where we deployed...

Speaker Change: Our AI-powered facial recognition, fight warnings, fire and smoke detection, as well as weapons detection modules.

Kaixin Tao: The success of this PLC has led to preparations to deploy our technology across multiple city agencies as we negotiate to close a contract, also for the second half of 2025.

Speaker Change: The success of this PLC has led to preparations to deploy our technology across multiple city agencies as we negotiate to close a contract, also for the second half of 2024.

Kai Xing-Tao: As far as the new platform and product introductions going into the second half of 2024, we are introducing our remarked FAST AI training platform. The FAST AI is a FAST product that can train and tune up general and specific computer vision models, for example, fire and smoke detection, unattended bags, unauthorized personnel, and vehicles. As a FAST program platform, it provides AI training infrastructures, i.e. GPU optimization, GPU resource management, TensorFlow framework, CLIP framework and SAM framework. To ease the training and testing of computer vision and multi-modal models, it also offers the zero-shot sample annotation, which can annotate training samples by AI itself without a large amount of human labeling.

Kaixin Tao: As far as the new platform and product introductions going into the second half of 2024.

Kai-Hsing Tsao: As far as the new platform and product introductions going into the second half of 2024, we are introducing our Remark Fast AI training platform. Fast AI is a fast product that can train and tune up general and specific computer vision, models. For example, fire and smoke detection, unattended bags, unauthorized personnel, and vehicles. As a fast platform, it provides AI training infrastructures, i.e., GPU optimization, GPU, resource management, TensorFlow framework, CLIP framework, and SAM framework to ease the training and testing of computer vision and multi-modal models. It also offers the zero-shot sample annotation, which can annotate training samples by AI, itself without a large amount of human labeling.

Speaker Change: As far as the new platform and product introductions going into the second half of 2024, we are introducing our Remark fast AI training platform.

Kaixin Tao: We are introducing our Remark Fast AI training platform. Fast AI is a fast product that can train and tune up general and specific computer vision models. For example, fire and smoke detection, unattended bags, unauthorized personnel and vehicles.

Speaker Change: FAST AI is a SAS product that can train and tune up general and specific computer vision models. For example, fire and smoke detection, unattended bags, unauthorized personnel, and vehicles.

Kaixin Tao: As a SAS platform, it provides AI training infrastructures, i.e. GPU optimization. GPU Resource Management, TensorFlow Framework, CLIP Framework, and SAM Framework, to ease the training and testing of computer vision and multi-modal models.

Speaker Change: As a SAS platform, it provides AI training infrastructures, i.e. GPU optimization, GPU resource management, TensorFlow framework, CLIFF framework, and SAM framework.

Speaker Change: to ease the training and testing of computer vision and multi-modal models.

Kaixin Tao: It also offers the zero-shot sample annotation, which can annotate training samples by AI itself without a large amount of human labor.

Speaker Change: It also offers the zero-shot sample annotation, which can annotate training samples by AI itself without a large amount of human labeling.

Kai Xing-Tao: FAST AI license is a permanent license and fixed cost for individual AI models. With training testing hardware provided in the cloud, there is no extra cost for AI model retraining, upgrades, or tune-ups for customization.

Kaixin Tao: Fast AI License is a permanent license.

Kai-Hsing Tsao: Fast AI license is a permanent license and a fixed cost for individual AI models.

Kaixin Tao: Fixed Costs for Individual AI Models, with training, testing hardware provided in the cloud.

Speaker Change: Fast AI license is a permanent license and fixed cost for individual AI models.

Kai-Hsing Tsao: With training, testing hardware provided in the cloud, there is no extra cost for AI model, customers.

Kaixin Tao: There is no extra cost for AI model retraining, upgrades, or tune-ups for customization.

Speaker Change: With training, testing hardware provided in the cloud, there is no extra cost for AI model retraining, upgrades, or tune-ups for customization. The IP of the training data and the trained tuned models belongs to our customers.

Kai Xing-Tao: The IP of the training data and the train tune models belongs to our. Why do we think this is a winning proposition in the U.S.? I'm sure you have read about how our businesses are looking for smaller models, ones that solve real business problems with precision, while those large language models solve creativity problems with bearable errors. Bearable errors for them, but unbearable for business solutions. Let alone the cost, data privacy, and IP problems that are unsolvable, yet with large language models like ChatGBT. During the second quarter, we've continued our alignment with both the Microsoft and Oracle sales teams.

Kaixin Tao: The IP of the training data and the trained tune models belongs to our company.

Kai-Hsing Tsao: Why do we think this is a winning proposition in the U.S.?

Kaixin Tao: Why do we think this is a winning proposition in the U.S.?

Kaixin Tao: I'm sure you have read about how our businesses are looking for smaller models, ones that solve real business problems with precision, while those large language models solve creativity problems with bearable errors.

Kai-Hsing Tsao: I'm sure you have read about how our businesses are looking for smaller models, ones that solve real business problems with precision, while those large language models solve creativity problems with bearable errors.

Speaker Change: Why do we think this is a winning proposition in the U.S.?

Speaker Change: I'm sure you have read about how our businesses are looking for smaller models, ones that solve real business problems with precision, while those large language models solve creativity problems with bearable errors.

Kai-Hsing Tsao: Bearable errors for them, but unbearable for business solutions.

Kaixin Tao: Bearable error is for them, but unbearable for business.

Kaixin Tao: Let alone the cost, data privacy, and IP problems that are unsolvable, yet with large language models like Chatbot.

Speaker Change: Bearable errors for them, but unbearable for business solutions.

Kai-Hsing Tsao: Let alone the cost, data privacy, and IP problems that are unsolvable, yet with large, language models like ChatGBT.

Speaker Change: Let alone the cost, data privacy, and IP problems that are unsolvable, yet with large language models like ChatGBT.

Kai-Hsing Tsao: During the second quarter, we've continued our alignment with both the Microsoft and Oracle sales team.

Kaixin Tao: During the second quarter, we've continued our alignment with both the Microsoft and Oracle sales.

Speaker Change: During the second quarter, we've continued our alignment with both the Microsoft and Oracle sales team.

Kaixin Tao: Remark AI completed its migration to the Microsoft Azure platform, preparing Remark's smart safety platform, otherwise known as the SSP, to be marketplace ready, allowing Microsoft's global sale force to begin selling Remark's SSP across multiple industry verticals and through established systems in a... Integrating with leading cloud providers like Microsoft Azure and Oracle Cloud is crucial for success, especially as we are now able to tap into their vast customer base and expand our market presence.

Kai Xing-Tao: Remark AI completed its migration to the Microsoft Azure platform, preparing remarks Smart Safety Platform, otherwise known as the SSP, to be marketplace ready, allowing Microsoft's global sales force to begin selling remarks SSP across multiple industry verticals and through established systems integrators. Integrating with leading cloud providers like Microsoft Azure and Oracle Cloud is crucial for success, especially as we are now able to tap into their vast customer base and expand our market presence. Our focus with Microsoft Azure Marketplace is simple and straightforward. Based upon our mutual analysis of the potential for Microsoft and Remark to jointly capture $400 million of business together in the next five years, we've committed to consume 80 million of services on the Azure platform, which incentivizes Microsoft's sales force to evangelize and wildly deploy our AI products.

Kai-Hsing Tsao: Remark AI completed its migration to the Microsoft Azure platform, preparing Remark's smart safety platform, otherwise known as the SSP, to be, marketplace ready, allowing Microsoft's global sale force to begin selling Remark's SSP across multiple industry verticals and through established systems integrators.

Speaker Change: where Mark Gai completed his migration to the Microsoft Azure platform.

Speaker Change: preparing Remark's Smart Safety Platform, otherwise known as the SSP, to be marketplace ready, allowing Microsoft's global sales force to begin selling Remark's SSP across multiple industry verticals and through established systems integrators.

Kai-Hsing Tsao: Integrating with leading cloud providers like Microsoft Azure and Oracle Cloud is crucial for success, especially as we are now able to tap into their vast customer base and expand our market presence.

Speaker Change: Integrating with leading cloud providers like Microsoft Azure and Oracle Cloud is crucial for success, especially as we are now able to tap into their vast customer base and expand our market presence.

Kaixin Tao: Our focus with Microsoft Azure Marketplace is simple and straightforward.

Kai-Hsing Tsao: Our focus with Microsoft Azure marketplace is simple and straightforward. Based upon our mutual analysis of the potential for Microsoft and Remark to jointly capture $400 million of business together in the next five years, we've committed to consume $80 million of services on the Azure platform, which incentivizes Microsoft's sales force to evangelize and widely deploy our AI products.

Speaker Change: Our focus with Microsoft Azure Marketplace is simple and straightforward.

Kaixin Tao: Based upon our mutual analysis of the potential for Microsoft and Remark to jointly capture $400 million of business together in the next 5 years, we've committed to consume $80 million of services on the Azure platform, which incentivizes Microsoft Salesforce to evangelize and widely deploy our AI products.

Speaker Change: Based upon our mutual analysis of the potential for Microsoft and Remark to jointly capture $400 million of business together in the next five years.

Speaker Change: We've committed to consume 80 million of services on the Azure platform, which incentivizes Microsoft Salesforce to evangelize and widely deploy our AI products.

Kai-Hsing Tsao: We are conducting regular teach-in sessions to their sales force by specific industry expertise.

Kai Xing-Tao: We are conducting regular teaching sessions to their sales force by specific industry expertise. Microsoft sales force is tracked and paid commission based upon how much remarks software is consumed and priced by the annual recurring revenue SaaS model. With Oracle, we'll be one of the companies featured in the Oracle AI Pavilion along in partnership with NVIDIA at the upcoming Oracle Cloud World taking place in our town of Las Vegas in early September as one of Oracle's key innovation partners. This will be the second event we'll be presenting together. The first happened this past May at the New York City Smart City Expo in conjunction with Oracle and NVIDIA, highlighting the broad capabilities of our AI Smart City platform.

Kaixin Tao: We are conducting regular teach-in sessions to their sales force by specific industry experts.

Kai-Hsing Tsao: Microsoft's sales force is tracked and paid commission based upon how much Remark software is consumed and priced by the annual recurring revenue, SASMOM.

Speaker Change: We are conducting regular teaching sessions to their sales force by specific industry expertise.

Kaixin Tao: Microsoft Salesforce is tracked in paid commission based upon how much Remark software is consumed and priced by the annual recurring revenue, SAS.

Speaker Change: Microsoft Salesforce is tracked in paid commission based upon how much remark software is consumed and priced by the annual recurring revenue SAS model.

Kai-Hsing Tsao: With Oracle, we'll be one of the companies featured in the Oracle AI pavilion, along, in partnership with NVIDIA at the upcoming Oracle Cloud World taking place in our town of Las Vegas in early September as one of Oracle's key innovation partners. This will be the second event we'll be presenting together. The first happened this past May at the New York City Smart City Expo in conjunction with Oracle and NVIDIA, highlighting the broad, capabilities of our AI Smart City platform.

Kaixin Tao: With Oracle, we'll be one of the companies featured in the Oracle AI Pavilion along in partnership with NVIDIA at the upcoming Oracle Cloud World, taking place in our town of Las Vegas, in early September as one of Oracle's key innovation partners. This will be the second event we'll be presenting together. The first happened this past May at the New York City Smart City Expo in conjunction with Oracle and NVIDIA, highlighting the broad capabilities of our AI Smart City platform.

Speaker Change: With Oracle, we'll be one of the companies featured in the Oracle AI Pavilion, along in partnership with NVIDIA, at the upcoming Oracle Cloud World

Speaker Change: taking place in our town of Las Vegas.

Speaker Change: in early September as one of Oracle's key innovation partners.

Speaker Change: This will be the second event we'll be presenting together. The first happened this past May at the New York City Smart City Expo in conjunction with Oracle and NVIDIA highlighting the broad capabilities of our AI Smart City platform.

Kai Xing-Tao: As we go into the last quarter of a couple quarters of a year, we're excited to bring remark AI into the hotel hospitality industry. In the near future, we'll announce our partnership with a global hotel hospitality brand that combines music, art, and culture as its preferred vendor on all AI-related initiatives. This strategic partnership aims to revolutionize the guest experience and operational efficiency across its properties worldwide. Remark AI will provide its innovative AI-powered solutions to enhance various aspects of the hotel operations, including personalized guest services, experiences through AI-driven recommendations and tailored services. 2. Intelligent chatbots for seamless guests interactions and support 3.

Kaixin Tao: As we go into the last couple quarters of the year, we're excited to bring Remark AI into the hotel hospitality industry.

Kai-Hsing Tsao: As we go into the last couple of quarters of the year, we're excited to bring Remark AI into the hotel hospitality industry.

Speaker Change: As we go into the last couple quarters of the year, we're excited to bring Remark AI into the hotel hospitality industry.

Kaixin Tao: In the near future, we will announce our partnership with a global hotel hospitality brand that combines music, art, and culture as its preferred vendor on all AI-related initiatives. This strategic partnership aims to revolutionize the guest experience and operational efficiency across its properties worldwide. Remark AI will provide its innovative AI-powered solutions to enhance various aspects of the hotel operation, including. One, personalized guest services, experiences through AI-driven recommendations and tailored services, to intelligent chatbots for seamless guest interactions and support.

Kai-Hsing Tsao: In the near future, we'll announce our partnership with a global hotel hospitality brand that combines music, art, and culture as its preferred vendor on all AI-related initiatives. This strategic partnership aims to revolutionize the guest experience and operational efficiency across its properties worldwide. Remark AI will provide its innovative AI-powered solutions to enhance various aspects of the hotel operations, including, one, personalized guest services 2. Intelligent chatbots for seamless guest interactions and support, 3.

Speaker Change: In the near future, we will announce our partnership with a global hotel hospitality brand that combines music, art, and culture as its preferred vendor on all AI-related initiatives.

Speaker Change: This strategic partnership aims to revolutionize the guest experience and operational efficiency across its properties worldwide.

Speaker Change: Remark AI will provide its innovative AI-powered solutions to enhance various aspects of the hotel operations.

Speaker Change: including

Speaker Change: One, personalized guest services experiences through AI driven recommendations and tailored services.

Kai-Hsing Tsao: Predictive analytics for optimized room allocation, pricing, and revenue management 4.

Speaker Change: 2. Intelligent chatbots for seamless guest interactions and support.

Kaixin Tao: Three, predictive analytics for optimized room allocation, pricing, and revenue management.

Kai Xing-Tao: Predictive Analytics for Optimized Room Allocation, Pricing and Revenue Management and 4. Automated Workflows and Process Optimization for Improved Operational Efficiency. Remark AI's proprietary AI platform will be integrated with its existing systems to provide a unified and intuitive interface for staff and guests alike. The partnership will also facilitate the development of new AI-powered application and services for the solidifying their position, as it's a fertilized, solidifying our position as a pioneer in the hospitality sector.

Speaker Change: Three, predictive analytics for optimized room allocation, pricing, and revenue management. And four, automated workflows and process optimization for improved operational efficiency.

Kai-Hsing Tsao: Automated workflows and process optimization for improved operational efficiency, Remark AI's proprietary AI platform will be integrated with its existing systems to provide a unified and intuitive interface for staff and guests alike.

Kaixin Tao: And four, automated workflows and process optimization for improved operations.

Kaixin Tao: Remark AI's proprietary AI platform will be integrated with its existing systems to provide a unified and intuitive interface for staff and guests alike.

Speaker Change: Remark AI's proprietary AI platform will be integrated with its existing systems to provide a unified and intuitive interface for staff and guests alike.

Kai-Hsing Tsao: The partnership will also facilitate the development of new AI-powered applications and services, further solidifying our position

Kaixin Tao: The partnership will also facilitate the development of new AI-powered applications and services, further solidifying their position, solidifying our position as a pioneer in the hospitality sector.

Speaker Change: The partnership will also facilitate the development of new AI-powered applications and services, further solidifying their position as a global leader in AI.

Todd Brown: Todd?

Kai-Hsing Tsao: as a pioneer in the hospitality sector.

Speaker Change: solidifying our position as a pioneer in the hospitality sector.

Todd Brown: Todd? Thank you, Shane, and thank you to everybody for joining us on today's call. As we have previously noted, we have been working to expand our business in the US, and during the second quarter of 2024, we were able to complete the first Clark County School District project, which resulted in $3.7 million of revenue for the second quarter of 2024. As Shane noted earlier, this has already led to an additional order and other opportunities for us in the US. Our operating loss of $3.2 million during the second quarter of 2024 reflected a decrease of about $0.8 million from an operating loss of $4 million during the second quarter of 2023.

Todd Brown: Thank you, Sheng, and thank you to everybody for joining us on today's call. As we have previously noted, we have been working to expand our business in the U.S. And during the second quarter of 2024, we were able to complete the first Clark County School District project, which resulted in $3.7 million of revenue for the second quarter of 2024.

Todd Brown: Todd?

Speaker Change: Todd

Speaker Change: Thank you, Sheng, and thank you to everybody for joining us on today's call.

Speaker Change: As we have previously noted, we have been working to expand our business in the U.S. And during the second quarter of 2024,

Speaker Change: We were able to complete the first Clark County School District project, which resulted in $3.7 million of revenue for the second quarter of 2024.

Todd Brown: As Xing noted earlier, this has already led to an additional order and other opportunities for us in the U.S.

Speaker Change: As Xing noted earlier, this has already led to an additional order and other opportunities for us in the U.S.

Todd Brown: Our operating loss of $3.2 million during the second quarter of 2024 reflected a decrease of about $0.8 million from an operating loss of $4 million during the second quarter of 2023. During that second quarter of 2023, we had recorded an impairment of approximately $0.4 million related to certain prepaid expense amounts that were deemed unrecoverable. The absence of any impairments during the second quarter of 2024 contributed to the decrease in operating loss, as did the $0.2 million decrease in payroll related expenses reported as part of tech.

Xing: Our operating loss of $3.2 million during the second quarter of 2024 reflected a decrease of about $0.8 million from an operating loss of $4 million during the second quarter of 2023.

Todd Brown: During that second quarter of 2023, we had recorded an impairment of approximately 0.4 million related to certain prepaid expense amounts that were deemed unrecoverable. The absence of any impairments during the second quarter of 2024 contributed to the decrease in operating loss. As did the $0.2 million decrease in payroll-related expenses reported as part of Tech.

Xing: During that second quarter of 2023, we had recorded an impairment of approximately $0.4 million related to certain prepaid expense amounts that were deemed unrecoverable.

Xing: The absence of any impairments during the second quarter of 2024 contributed to the decrease in operating loss, as did the $0.2 million decrease in payroll-related expenses reported as part of TEC.

Todd Brown: For the second quarter of 2024, we are reporting a net loss of $5.3 million, or 12 cents per diluted share, compared to a net loss of $5.9 million, or 42 cents per diluted share, during the same quarter of 2023. Interest expense during the second quarter of 2024 did not significantly change from the amount that we reported during the same period of 2023, while finance costs also remained relatively flat. Finance costs is related to the establishment of and remeasurement of our obligations to issue common stock, which arise as a result of our transactions with Ionic Ventures LLC, which consists of draws on an equity line of credit.

Todd Brown: For the second quarter of 2024, we are reporting a net loss of $5.3 million, or $0.12 per diluted share compared to a net loss of $5.9 million or $0.42 per diluted share during the same quarter of 2023. Interest expense during the second quarter of 2024 did not significantly change from the amount that we reported during the same period of 2023, while finance costs also remained relatively flat. Finance costs is related to the establishment of and remeasurement of our obligations to issue common stock, which arise as a result of our transactions with Ionic Ventures, LLC, which consists of draws on an equity line of credit.

Xing: For the second quarter of 2024, we are reporting a net loss of $5.3 million.

Xing: or $0.12 per diluted share compared to a net loss of $5.9 million or $0.42 per diluted share during the same quarter of 2023.

Xing: Interest expense during the second quarter of 2024 did not significantly change from the amount that we reported during the same period of 2023, while finance costs also remained relatively flat.

Xing: Finance cost is related to the establishment of and remeasurement of our obligations to issue common stock which arise as a result of our transactions with Ionic Ventures LLC which consists of draws on an equity line of credit.

Todd Brown: At June 30, 2024, our cash balance totaled $0.4 million, which compares to a cash balance of $0.1 million on December 31, 2023. We used $6.1 million of cash in operating activities during this second quarter of 2024. Lastly, in August of 2024, we were able to resolve all outstanding events of default regarding our debt agreement with Mudrick Capital Management by entering into an agreement with Mudrick to exchange the existing non-convertible notes we had issued to them for convertible debentures.

Xing: At June 30, 2024, our cash balance totaled $0.4 million, which compares to a cash balance of $0.1 million on December 31, 2023.

Xing: We used $6.1 million of cash in operating activities during this second quarter of 2024.

Todd Brown: Lastly, in August of 2024, we were able to resolve all outstanding events of default regarding our debt agreement with Mudrick Capital Management by entering into an agreement with Mudrick to exchange the existing non-convertible notes we had issued to them for convertible dimensions.

Xing: Lastly, in August of 2024, we were able to resolve all outstanding events of default regarding our debt agreement with Mudrick Capital Management by entering into an agreement with Mudrick to exchange the existing non-convertible notes we had issued to them for convertible debentures.

Todd Brown: Thank you, Sheng, and thank you to everybody

Operator: And with that, I will turn the call over to the moderator to begin the question-and-answer portion of this call. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your questions, please press star, then two.

Todd Brown: And with that, I will turn the call over to the moderator to begin the question and answer portion of this call.

Xing: And with that, I will turn the call over to the moderator to begin the question and answer portion of this call.

Todd Brown: for joining us on today's call.

Operator: We will now begin the question and answer session.

Todd Brown: As we have previously noted, we have been working to expand our business in the U.S., and during the second quarter of 2024, we were able to complete the first Clark County School District project, which resulted in $3.7 million of revenue for the second quarter of 2024.

Operator: To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

Operator: At this time, we will pause momentarily to assemble our roster. Again, if you have a question, please press star, then one.

Operator: At this time, we will pause momentarily to assemble our roster.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Operator: Again, if you have a question, please press star then 1.

Speaker Change: Again, if you have a question, please press star then 1.

Operator: Seeing no questions at this time, this will conclude our question-and-answer session.

Operator: Seeing no questions at this time, this will conclude our question and answer session.

Fay Tian: I would like to turn the conference back over to Fay Tian for any closing remarks. Thank you, Nick. Thank you everyone for participating in Remark Holdings, second quarter 2024, physical financial results conference call. A replay will be available in approximately four hours through the same link issued in our August 19 press release. Have a good afternoon. Thank you.

Fay Tian: I would like to turn the conference back over to Fay Tian for any closing remarks.

Speaker Change: Seeing no questions at this time, this will conclude our question and answer session. I would like to turn the conference back over to Fay Tian for any closing remarks.

Fay Tian: Thank you, Nick.

Todd Brown: As Sheng noted earlier, this has already led to an additional order and other opportunities for us in the U.S. Our operating loss of $3.2 million during the second quarter of 2024 reflected a decrease of about $0.8 million from an operating loss of $4 million during the second quarter of 2023. During that second quarter of 2023, we had recorded an impairment of approximately $0.4 million related to certain prepaid expense amounts that were deemed unrecoverable. The absence of any impairments during the second quarter of 2024 contributed to the decrease in operating loss, as did the $0.2 million decrease in payroll-related expenses reported as part of TEC.

Fay Tian: Thank you, everyone, for participating in Remark Holdings' second quarter 2024 physical financial results conference call.

Fay Tian: Thank you, Nick. Thank you, everyone, for participating in Remarks Holdings' second quarter 2024 Physical Financial Results.

Todd Brown: For the second quarter of 2024, we are reporting a net loss of $5.3 million or $0.12 per diluted share, compared to a net loss of $5.9 million or $0.42 per diluted share during the same quarter of 2023. Interest expense during the second quarter of 2024 did not significantly change from the amount that we reported during the same period of 2023, while finance costs also remained relatively flat. Finance cost is related to the establishment of and remeasurement of our obligations to issue common stock, which arise as a result of our transactions with Ionic Ventures LLC, which consists of draws on an equity line of credit.

Todd Brown: At June 30, 2024, our cash balance totaled $0.4 million, which compares to a cash balance, of $0.1 million on December 31, 2023. We used $6.1 million of cash in operating activities during this second quarter of 2024.

Operator: To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Todd Brown: And with that, I will turn the call over to the moderator to begin the question-and-answer

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star, then 2.

Operator: portion of this call.

Fay Tian: A replay will be available in approximately four hours through the same link issued in our August 19 press release.

Operator: At this time, we will pause momentarily to assemble our roster.

Operator: We will now begin the question-and-answer session.

Operator: Again, if you have a question, please press star, then 1.

Speaker Change: conference call. A replay will be available in approximately four hours through the same link issued in our August 19th press release. Have a good afternoon. Thank you.

Operator: Seeing no questions at this time, this will conclude our question-and-answer session.

Fay Tian: I would like to turn the conference back over to Fay Tian for any closing remarks.

Fay Tian: Have a good afternoon.

Fay Tian: Thank you, Nick.

Fay Tian: Thank you, everyone, for participating in Remark Holdings' second quarter 2024 Physical, Financial Results conference call.

Fay Tian: A replay will be available in approximately four hours through the same link issued in, our August 19 press release.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: The conference is now concluded.

Fay Tian: Have a good afternoon.

Operator: Thank you.

Operator: The conference is now concluded.

Operator: Thank you for attending today's presentation.

Operator: You may now disconnect.

Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: All participants will be in a listen only mode.

Operator: All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone telephone. To withdraw your question, please press star then two.

Operator: Please note this event is being recorded.

Operator: I would now like to turn the conference over to Fay Tian. Please go ahead. Thank you, Nick.

Operator: After today's presentation, there will be an opportunity to ask questions.

Fay Tian: Good afternoon, everyone, and welcome to Remark Holdings 2nd quarter 2024 financial results conference call. I am Fay Tian, Vice President of Investor Relations for Remark. On the call with me this afternoon is Kai Xing-Tao, Remark's Chairman and Chief Executive Officer and Mr. Todd Brown, Vice President of Finance.

Operator: To ask a question, you may press star then one on a touch-tone telephone.

Operator: To withdraw your question, please press star then two.

Operator: Please note this event is being recorded.

Fay Tian: In just a moment, Mr. Todd will provide an update on our businesses and Mrs. Brown will recap our 2nd quarter 2024 financial results following these remarks will open the call to questions.

Fay Tian: But before I turn the call over to Mr. Tau, I would like to take this opportunity to remind you that some of the statements made today may be for looking statements. These statements involve risk on certain things and other factors that could cause actual results to differ materially from those expressed or implied by these for looking statements. Any for looking statements reflect Remark Holdings' current views and Remark Holdings expressly disclaims any obligation to update or revise any for looking statements after the date to hear off.

Fay Tian: This disclaimer is only a summary of Remark Holdings' statutory for looking statements, which is included in full in its filings with the FCC.

Operator: I would now like to turn the conference over to Fay Tian.

Operator: Please go ahead.

Fay Tian: Thank you, Nick.

Fay Tian: Good afternoon, everyone, and welcome to Remark Holdings 2nd quarter 2024 financial results conference call.

Kai Xing-Tao: It's been no secret about our intention to transition our revenue base from Asia to the US, especially due to the political conflicts between the US and China. While it's taken us some time to do so as most government contracts do, we are proud to see the successful fruits of our labor begin to show with our recent contract win with the Clark County School District, which is the fifth largest school district in the United States.

Fay Tian: I am Fay Tian, Vice President of Investor Relations for Remark.

Kai Xing-Tao: Our recent contract win for implementing weapon detection technology in the Clark County School District is a significant milestone that will likely lead to a multitude of future opportunities both within Clark County and other school districts of similar size. We are optimistic that the contract value will meet or exceed its proposed $45 million value over nine years as we expand and introduce the value added functionality of our Smart Safety Platform. By successfully deploying weapon detection technology in a large school district, Remark AI demonstrates its capabilities building trust with potential clients.

Kai Xing-Tao: The Clark County School District serves as a high profile reference, enabling Remark AI to showcase its expertise and technology in a large real-world setting. This contract win attracts attention from other educational institutions, law enforcement agencies, and government organizations, potentially leading to new partnerships. Remark AI can leverage the success to enter adjacent markets, such as other school districts and educational institutions, public venues, government facilities and buildings, and private enterprises. Remark AI can offer complementary solutions like facial recognition, fight detection, unattended object detection, and advanced analytics to existing and new clients.

Kai Xing-Tao: We have already started our POC with one of the largest subway systems in the U.S., and we look forward to updating you on our progress.

Kai Xing-Tao: Other highlights for Remark AI this past quarter. We showcased our AI fire and smoke, our AI fire and smoke, smart city, and smart agent solutions at the New York City, smart city expo, in conjunction with Oracle and Nvidia. The success and uniqueness of our AI products has led to additional POCs to help the top 100 U.S, cities turn into modern 21st century smart city.

Kai Xing-Tao: We completed the POC at the headquarters train station for one of the largest European railway systems with over 600 stations deploying our AI-powered passenger counting, fare evasion, fire and smoke detection, and unattended baggage detection. The success of this POC has led to current contract negotiations to close the deal in the second half of 2024.

Kai Xing-Tao: Another highlight is that we have completed a successful POC for the migrant centers in one of the largest sanctuary cities in the U.S., where we deployed our AI-powered facial recognition, fight warnings, fire and smoke detection, as well as weapons detection modules. The success of this POC has led to preparations to deploy our technology across multiple city agencies as we negotiate the close of contract also for the second half of 2024.

Kai Xing-Tao: As far as the new platform and product introductions going into the second half of 2024, we are introducing our remarked FAST AI training platform. The FAST AI is a FAST product that can train and tune up general and specific computer vision models, for example, fire and smoke detection, unattended bags, unauthorized personnel and vehicles. As a FAST program platform, it provides AI training infrastructures, i.e. GPU optimization, GPU resource management, tensorflow framework, clip framework and SAM framework.

Kai Xing-Tao: To ease the training and testing of computer vision and multi-modal models, it also offers the zero shot sample annotation which can annotate training samples by AI itself without a large amount of human labeling. FAST AI license is a permanent license and fixed cost for individual AI models. With training testing hardware provided in the cloud, there is no extra cost for AI model retraining, upgrades or tune-ups for customization.

Kai Xing-Tao: The IP of the training data and the train tune models belongs to our Why do we think this is a winning proposition in the U.S.? I'm sure you have read about how our businesses are looking for smaller models, ones that solve real business problems with precision, while those large language models solve creativity problems with bearable errors. Bearable errors for them, but unbearable for business solutions. Let alone the cost, data privacy, and IP problems that are unsolvable, yet with large language models like ChatGbT.

Kai Xing-Tao: During the second quarter, we've continued our alignment with both the Microsoft and Oracle sales team. Remark AI completed its migration to the Microsoft Azure platform, preparing remarks Smart Safety Platform, otherwise known as the SSP, to be marketplace ready, allowing Microsoft's global sale force to begin selling remarks SSP across multiple industry verticals and through established systems integrators. Integrating with leading cloud providers like Microsoft Azure and Oracle Cloud is crucial for success, especially as we are now able to tap into their vast customer base and expand our market presence.

Kai Xing-Tao: Our focus with Microsoft Azure marketplace is simple and straightforward. Based upon our mutual analysis of the potential for Microsoft and remark to jointly capture $400 million of business together in the next five years, we've committed to consume 80 million of services on the Azure platform, which incentivizes Microsoft sales force to evangelize and wildly deploy our AI products. We are conducting regular teaching sessions to their sales force by specific industry expertise. Microsoft sales force is tracked and paid commission based upon how much remarks software is consumed and priced by the annual recurring revenue SaaS model.

Kai Xing-Tao: This will be the second event we'll be presenting together. The first happened this past May at the New York City Smart City Expo in conjunction with Oracle and NVIDIA highlighting the broad capabilities of our AI Smart City platform.

Kai Xing-Tao: As we go into the last quarter of a couple quarters of a year, we're excited to bring remark AI into the hotel hospitality industry.

Kai Xing-Tao: In the near future, we'll announce our partnership with a global hotel hospitality brand that combines music, art, and culture as its preferred vendor on all AI-related initiatives. This strategic partnership aims to revolutionize the guest experience and operational efficiency across its properties worldwide. Remark AI will provide its innovative AI-powered solutions to enhance various aspects of the hotel operations, including one personalized guest services, experiences through AI-driven recommendations and tailored services. 2. Intelligent Chatbots for Seamless Guests Interactions and Support 3.

Kai Xing-Tao: The partnership will also facilitate the development of new AI-powered application and services for the solidifying their position, as it's a fertilized, solidifying our position as a pioneer in the hospitality sector.

Fay Tian: On the call with me this afternoon is Kai Xing-Tao, Remark's Chairman and Chief Executive Officer and Mr. Todd Brown, Vice President of Finance.

Todd Brown: Todd? Thank you, Shane, and thank you to everybody for joining us on today's call. As we have previously noted, we have been working to expand our business in the US, and during the second quarter of 2024, we were able to complete the first Clark County School District Project, which resulted in $3.7 million of revenue for the second quarter of 2024. As Shane noted earlier, this has already led to an additional order and other opportunities for us in the US.

Fay Tian: But before I turn the call over to Mr. Tau, I would like to take this opportunity to remind you that some of the statements made today may be for looking statements.

Fay Tian: These statements involve risk on certain things and other factors that could cause actual results to differ materially from those expressed or implied by these for looking statements.

Fay Tian: Any for looking statements reflect Remark Holdings' current views and Remark Holdings expressly disclaims any obligation to update or revise any for looking statements after the date to hear off.

Todd Brown: Our operating loss of $3.2 million during the second quarter of 2024 reflected a decrease of about $0.8 million from an operating loss of $4 million during the second quarter of 2023. During that second quarter of 2023, we had recorded an impairment of approximately 0.4 million related to certain prepaid expense amounts that were deemed unrecoverable. The absence of any impairments during the second quarter of 2024 contributed to the decrease in operating loss.

Fay Tian: This disclaimer is only a summary of Remark Holdings' statutory for looking statements, which is included in full in its filings with the FCC.

Fay Tian: I will now turn the call over to Remark's Chairman and Chief Executive Officer, Mrs. Tau, so he can provide additional information to Remark's businesses and recent developments.

Todd Brown: As did the $0.2 million decrease in payroll-related expenses reported as part of tech. For the second quarter of 2024, we are reporting a net loss of $5.3 million or 12 cents per diluted share compared to a net loss of $5.9 million or 42 cents per diluted share during the same quarter of 2023. Interest expense during the second quarter of 2024 did not significantly change from the amount that we reported during the same period of 2023, while finance costs also remained relatively flat.

Kai Xing-Tao: Please go ahead, Qing.

Kai Xing-Tao: Thank you.

Kai Xing-Tao: It's been no secret about our intention to transition our revenue base from Asia to the US, especially due to the political conflicts between the US and China.

Todd Brown: Finance costs is related to the establishment of and remeasurement of our obligations to issue common stock which arise as a result of our transactions with Ionic Ventures LLC which consists of draws on an equity line of credit. At June 30, 2024, our cash balance totaled $0.4 million which compares to a cash balance of $0.1 million on December 31, 2023. We used $6.1 million of cash in operating activities during this second quarter of 2024.

Kai Xing-Tao: While it's taken us some time to do so as most government contracts do, we are proud to see the successful fruits of our labor begin to show with our recent contract win with the Clark County School District, which is the fifth largest school district in the United States. Our recent contract win for implementing weapon detection technology in the Clark County School District is a significant milestone that will likely lead to a multitude of future opportunities both within Clark County and other school districts of similar size.

Kai Xing-Tao: We are optimistic that the contract value will meet or exceed its proposed $45 million value over nine years as we expand and introduce the value added functionality of our Smart Safety Platform.

Operator: and with that, I will turn the call over to the moderator to begin the question and answer a portion of this call. We will now begin the question and answer session. To ask a question, you may press star, then one, on your touch-tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your questions, please press star then two.

Operator: At this time, we will pause momentarily to assemble our roster. Again, if you have a question, please press star then one.

Kai Xing-Tao: By successfully deploying weapon detection technology in a large school district, Remark AI demonstrates its capabilities building trust with potential clients. The Clark County School District serves as a high profile reference, enabling Remark AI to showcase its expertise and technology in a large real-world setting. This contract win attracts attention from other educational institutions, law enforcement agencies, and government organizations, potentially leading to new partnerships.

Operator: Seeing no questions at this time, this will conclude our question and answer session.

Kai Xing-Tao: Remark AI can leverage the success to enter adjacent markets, such as other school districts and educational institutions, public venues, government facilities and buildings, and private enterprises. Remark AI can offer complementary solutions like facial recognition, fight detection, unattended object detection, and advanced analytics to existing and new clients.

Operator: A replay will be available in approximately four hours through the same link issued in our August 19 press release. Have a good afternoon. Thank you.

Kai Xing-Tao: We have already started our POC with one of the largest subway systems in the U.S., and we look forward to updating you on our progress.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.

Kai Xing-Tao: The success and uniqueness of our AI products has led to additional POCs to help the top 100 U.S, cities turn into modern 21st century smart city.

Kai Xing-Tao: The success of this POC has led to preparations to deploy our technology across multiple city agencies as we negotiate the close of contract also for the second half of 2024.

Kai Xing-Tao: As a FAST program platform, it provides AI training infrastructures, i.e. GPU optimization, GPU resource management, tensorflow framework, clip framework and SAM framework. To ease the training and testing of computer vision and multi-modal models, it also offers the zero shot sample annotation which can annotate training samples by AI itself without a large amount of human labeling.

Kai Xing-Tao: FAST AI license is a permanent license and fixed cost for individual AI models.

Kai Xing-Tao: With training testing hardware provided in the cloud, there is no extra cost for AI model retraining, upgrades or tune-ups for customization.

Kai Xing-Tao: The IP of the training data and the train tune models belongs to our Why do we think this is a winning proposition in the U.S.?

Kai Xing-Tao: I'm sure you have read about how our businesses are looking for smaller models, ones that solve real business problems with precision, while those large language models solve creativity problems with bearable errors.

Kai Xing-Tao: Bearable errors for them, but unbearable for business solutions.

Kai Xing-Tao: Let alone the cost, data privacy, and IP problems that are unsolvable, yet with large language models like ChatGbT.

Kai Xing-Tao: Integrating with leading cloud providers like Microsoft Azure and Oracle Cloud is crucial for success, especially as we are now able to tap into their vast customer base and expand our market presence.

Kai Xing-Tao: We are conducting regular teaching sessions to their sales force by specific industry expertise.

Kai Xing-Tao: Microsoft sales force is tracked and paid commission based upon how much remarks software is consumed and priced by the annual recurring revenue SaaS model.

Kai Xing-Tao: With Oracle, we'll be one of the companies featured in the Oracle AI Pavilion along in partnership with NVIDIA at the upcoming Oracle Cloud World taking place in our town of Las Vegas in early September as one of Oracle's key innovation partners. This will be the second event we'll be presenting together. The first happened this past May at the New York City Smart City Expo in conjunction with Oracle and NVIDIA highlighting the broad capabilities of our AI Smart City platform.

Kai Xing-Tao: As we go into the last quarter of a couple quarters of a year, we're excited to bring remark AI into the hotel hospitality industry.

Kai Xing-Tao: 2.

Kai Xing-Tao: Intelligent Chatbots for Seamless Guests Interactions and Support 3.

Kai Xing-Tao: Predictive Analytics for Optimized Room Allocation, Pricing and Revenue Management and 4.

Kai Xing-Tao: Automated Workflows and Process Optimization for Improved Operational Efficiency Remark AI's proprietary AI platform will be integrated with its existing systems to provide a unified and intuitive interface for staff and guests alike.

Todd Brown: Todd?

Todd Brown: Thank you, Shane, and thank you to everybody for joining us on today's call.

Todd Brown: As we have previously noted, we have been working to expand our business in the US, and during the second quarter of 2024, we were able to complete the first Clark County School District Project, which resulted in $3.7 million of revenue for the second quarter of 2024.

Todd Brown: As Shane noted earlier, this has already led to an additional order and other opportunities for us in the US.

Todd Brown: Our operating loss of $3.2 million during the second quarter of 2024 reflected a decrease of about $0.8 million from an operating loss of $4 million during the second quarter of 2023. During that second quarter of 2023, we had recorded an impairment of approximately 0.4 million related to certain prepaid expense amounts that were deemed unrecoverable. The absence of any impairments during the second quarter of 2024 contributed to the decrease in operating loss.

Todd Brown: As did the $0.2 million decrease in payroll-related expenses reported as part of tech.

Todd Brown: For the second quarter of 2024, we are reporting a net loss of $5.3 million or 12 cents per diluted share compared to a net loss of $5.9 million or 42 cents per diluted share during the same quarter of 2023. Interest expense during the second quarter of 2024 did not significantly change from the amount that we reported during the same period of 2023, while finance costs also remained relatively flat. Finance costs is related to the establishment of and remeasurement of our obligations to issue common stock which arise as a result of our transactions with Ionic Ventures LLC which consists of draws on an equity line of credit.

Todd Brown: At June 30, 2024, our cash balance totaled $0.4 million which compares to a cash balance of $0.1 million on December 31, 2023. We used $6.1 million of cash in operating activities during this second quarter of 2024.

Todd Brown: and with that, I will turn the call over to the moderator to begin the question and answer a portion of this call.

Operator: We will now begin the question and answer session.

Operator: To ask a question, you may press star, then one, on your touch-tone phone. If you are using a speaker phone, please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your questions, please press star then two.

Operator: At this time, we will pause momentarily to assemble our roster.

Operator: Again, if you have a question, please press star then one.

Operator: Seeing no questions at this time, this will conclude our question and answer session.

Fay Tian: I would like to turn the conference back over to Fay Tian for any closing remarks.

Fay Tian: Thank you, Nick.

Fay Tian: Thank you everyone for participating in Remark Holdings, second quarter 2024, physical financial results conference call.

Fay Tian: A replay will be available in approximately four hours through the same link issued in our August 19 press release.

Fay Tian: Have a good afternoon.

Fay Tian: Thank you.

Operator: The conference has now concluded.

Operator: Thank you for attending today's presentation.

Operator: You may now disconnect.

Q2 2024 Remark Holdings Inc Earnings Call

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