|
Delaware
|
|
33-1135689
|
|
|
State of Incorporation
|
|
IRS Employer Identification Number
|
|
Title of each class
|
|
Trading Symbol
|
|
Name of each exchange on which registered
|
Common Stock, $0.001 par value per share
|
|
MARK
|
|
The NASDAQ Stock Market LLC
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☑
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☑
|
|
|
|
Emerging growth company
|
☐
|
PART I
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
|
(Unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
656
|
|
|
$
|
1,410
|
|
Trade accounts receivable, net
|
3,792
|
|
|
5,762
|
|
||
Prepaid expense and other current assets
|
6,233
|
|
|
7,907
|
|
||
Notes receivable, current
|
—
|
|
|
100
|
|
||
Assets of disposal group, current
|
—
|
|
|
28,966
|
|
||
Total current assets
|
10,681
|
|
|
44,145
|
|
||
Property and equipment, net
|
1,591
|
|
|
2,075
|
|
||
Operating lease assets
|
5,294
|
|
|
—
|
|
||
Investment in unconsolidated affiliates
|
1,920
|
|
|
2,005
|
|
||
Intangibles, net
|
752
|
|
|
1,010
|
|
||
Other long-term assets
|
1,245
|
|
|
450
|
|
||
Assets of disposal group, long-term
|
—
|
|
|
44,123
|
|
||
Total assets
|
$
|
21,483
|
|
|
$
|
93,808
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
||||
Accounts payable
|
$
|
7,585
|
|
|
$
|
5,675
|
|
Accrued expense and other current liabilities
|
12,861
|
|
|
16,812
|
|
||
Contract liability
|
312
|
|
|
132
|
|
||
Note payable
|
3,000
|
|
|
3,000
|
|
||
Loans payable, current, net of unamortized discount and debt issuance cost
|
11,632
|
|
|
35,314
|
|
||
Liabilities of disposal group, current
|
—
|
|
|
41,648
|
|
||
Total current liabilities
|
35,390
|
|
|
102,581
|
|
||
Operating lease liabilities, long-term
|
5,436
|
|
|
—
|
|
||
Warrant liability
|
881
|
|
|
1,383
|
|
||
Other liabilities
|
—
|
|
|
2,934
|
|
||
Liabilities of disposal group, long-term
|
—
|
|
|
34
|
|
||
Total liabilities
|
41,707
|
|
|
106,932
|
|
||
|
|
|
|
||||
|
|
|
|
|
|||
|
|
|
|
||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 100,000,000 shares authorized; 48,430,159 and 39,053,312 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
|
48
|
|
|
39
|
|
||
Additional paid-in-capital
|
317,732
|
|
|
308,018
|
|
||
Accumulated other comprehensive income
|
(224
|
)
|
|
32
|
|
||
Accumulated deficit
|
(337,780
|
)
|
|
(321,213
|
)
|
||
Total stockholders’ deficit
|
(20,224
|
)
|
|
(13,124
|
)
|
||
Total liabilities and stockholders’ deficit
|
$
|
21,483
|
|
|
$
|
93,808
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue
|
$
|
686
|
|
|
$
|
1,755
|
|
|
$
|
4,760
|
|
|
$
|
7,468
|
|
Cost and expense
|
|
|
|
|
|
|
|
||||||||
Cost of revenue (excluding depreciation and amortization)
|
189
|
|
|
1,231
|
|
|
3,323
|
|
|
5,778
|
|
||||
Sales and marketing
|
736
|
|
|
1,108
|
|
|
2,282
|
|
|
3,165
|
|
||||
Technology and development
|
752
|
|
|
1,459
|
|
|
2,910
|
|
|
3,550
|
|
||||
General and administrative
|
3,052
|
|
|
3,760
|
|
|
8,483
|
|
|
25,410
|
|
||||
Depreciation and amortization
|
229
|
|
|
520
|
|
|
814
|
|
|
1,657
|
|
||||
Other operating expense
|
—
|
|
|
47
|
|
|
6
|
|
|
93
|
|
||||
Total cost and expense
|
4,958
|
|
|
8,125
|
|
|
17,818
|
|
|
39,653
|
|
||||
Operating loss
|
(4,272
|
)
|
|
(6,370
|
)
|
|
(13,058
|
)
|
|
(32,185
|
)
|
||||
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(457
|
)
|
|
(345
|
)
|
|
(1,397
|
)
|
|
(1,017
|
)
|
||||
Other income (expense), net
|
(24
|
)
|
|
—
|
|
|
23
|
|
|
44
|
|
||||
Change in fair value of warrant liability
|
(160
|
)
|
|
3,525
|
|
|
502
|
|
|
22,190
|
|
||||
Other gain (loss), net
|
(28
|
)
|
|
(16
|
)
|
|
(27
|
)
|
|
507
|
|
||||
Total other income (expense), net
|
(669
|
)
|
|
3,164
|
|
|
(899
|
)
|
|
21,724
|
|
||||
Loss from continuing operations before income taxes
|
(4,941
|
)
|
|
(3,206
|
)
|
|
(13,957
|
)
|
|
(10,461
|
)
|
||||
Benefit from income taxes
|
—
|
|
|
442
|
|
|
—
|
|
|
1,437
|
|
||||
Loss from continuing operations
|
$
|
(4,941
|
)
|
|
$
|
(2,764
|
)
|
|
$
|
(13,957
|
)
|
|
$
|
(9,024
|
)
|
—
|
|
|
(1,001
|
)
|
|
(2,610
|
)
|
|
(5,415
|
)
|
|||||
Net loss
|
$
|
(4,941
|
)
|
|
$
|
(3,765
|
)
|
|
$
|
(16,567
|
)
|
|
$
|
(14,439
|
)
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(289
|
)
|
|
(82
|
)
|
|
(256
|
)
|
|
(67
|
)
|
||||
Comprehensive loss
|
$
|
(5,230
|
)
|
|
$
|
(3,847
|
)
|
|
$
|
(16,823
|
)
|
|
$
|
(14,506
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding, basic and diluted
|
46,282
|
|
|
35,463
|
|
|
43,085
|
|
|
33,608
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share, basic and diluted
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.11
|
)
|
|
$
|
(0.08
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.27
|
)
|
Discontinued operations
|
—
|
|
|
(0.03
|
)
|
|
(0.06
|
)
|
|
(0.16
|
)
|
||||
Consolidated
|
$
|
(0.11
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.38
|
)
|
|
$
|
(0.43
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2019
|
|||||||||||||||||||||
|
Common Stock Shares
|
|
Common Stock Par Value
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
|
|||||||||||
Balance at June 30, 2019
|
46,130,159
|
|
|
$
|
46
|
|
|
$
|
315,829
|
|
|
$
|
65
|
|
|
$
|
(332,839
|
)
|
|
$
|
(16,899
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,941
|
)
|
|
(4,941
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
Common stock sales
|
2,300,000
|
|
|
2
|
|
|
1,838
|
|
|
—
|
|
|
—
|
|
|
1,840
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(289
|
)
|
|
—
|
|
|
(289
|
)
|
|||||
Balance at September 30, 2019
|
48,430,159
|
|
|
$
|
48
|
|
|
$
|
317,732
|
|
|
$
|
(224
|
)
|
|
$
|
(337,780
|
)
|
|
$
|
(20,224
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Three Months Ended September 30, 2018
|
|||||||||||||||||||||
|
Common Stock Shares
|
|
Common Stock Par Value
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
|
|||||||||||
Balance at June 30, 2018
|
33,145,199
|
|
|
$
|
33
|
|
|
$
|
293,164
|
|
|
$
|
130
|
|
|
$
|
(310,329
|
)
|
|
$
|
(17,002
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,765
|
)
|
|
(3,765
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
844
|
|
|
—
|
|
|
—
|
|
|
844
|
|
|||||
Common stock sales
|
3,308,812
|
|
|
3
|
|
|
9,965
|
|
|
—
|
|
|
—
|
|
|
9,968
|
|
|||||
Equity instrument exercises
|
14,685
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
|||||
Balance at September 30, 2018
|
36,468,696
|
|
|
$
|
36
|
|
|
$
|
304,006
|
|
|
$
|
48
|
|
|
$
|
(314,094
|
)
|
|
$
|
(10,004
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Nine Months Ended September 30, 2019
|
|||||||||||||||||||||
|
Common Stock Shares
|
|
Common Stock Par Value
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
|
|||||||||||
Balance at December 31, 2018
|
39,053,312
|
|
|
$
|
39
|
|
|
$
|
308,018
|
|
|
$
|
32
|
|
|
$
|
(321,213
|
)
|
|
$
|
(13,124
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,567
|
)
|
|
(16,567
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
379
|
|
|
—
|
|
|
—
|
|
|
379
|
|
|||||
Common stock sales
|
9,374,597
|
|
|
9
|
|
|
9,331
|
|
|
—
|
|
|
—
|
|
|
9,340
|
|
|||||
Equity instrument exercises
|
2,250
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(256
|
)
|
|
—
|
|
|
(256
|
)
|
|||||
Balance at September 30, 2019
|
48,430,159
|
|
|
$
|
48
|
|
|
$
|
317,732
|
|
|
$
|
(224
|
)
|
|
$
|
(337,780
|
)
|
|
$
|
(20,224
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Nine Months Ended September 30, 2018
|
|||||||||||||||||||||
|
Common Stock Shares
|
|
Common Stock Par Value
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total
|
|||||||||||
Balance at December 31, 2017
|
28,406,026
|
|
|
$
|
28
|
|
|
$
|
220,117
|
|
|
$
|
115
|
|
|
$
|
(299,848
|
)
|
|
$
|
(79,588
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,439
|
)
|
|
(14,439
|
)
|
|||||
Effect of adopting new revenue recognition policy
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|
193
|
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
13,079
|
|
|
—
|
|
|
—
|
|
|
13,079
|
|
|||||
Common stock sales
|
3,308,812
|
|
|
3
|
|
|
9,965
|
|
|
—
|
|
|
—
|
|
|
9,968
|
|
|||||
Equity instrument exercises
|
4,753,858
|
|
|
5
|
|
|
60,887
|
|
|
—
|
|
|
—
|
|
|
60,892
|
|
|||||
Reclassification of liability-classified stock-based compensation
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|||||
Other
|
—
|
|
|
—
|
|
|
(30
|
)
|
|
(67
|
)
|
|
—
|
|
|
(97
|
)
|
|||||
Balance at September 30, 2018
|
36,468,696
|
|
|
$
|
36
|
|
|
$
|
304,006
|
|
|
$
|
48
|
|
|
$
|
(314,094
|
)
|
|
$
|
(10,004
|
)
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Net cash used in continuing operating activities
|
$
|
(10,748
|
)
|
|
$
|
(16,963
|
)
|
Net cash used in discontinued operating activities
|
(7,159
|
)
|
|
(1,728
|
)
|
||
Net cash used in operating activities
|
(17,907
|
)
|
|
(18,691
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from sale of business
|
30,000
|
|
|
—
|
|
||
Proceeds from disposition of assets
|
—
|
|
|
629
|
|
||
Purchases of property, equipment and software
|
(5
|
)
|
|
(396
|
)
|
||
Payment of payroll costs capitalized to software in progress
|
(127
|
)
|
|
(346
|
)
|
||
Acquisition of unconsolidated affiliate
|
—
|
|
|
(480
|
)
|
||
Net cash provided by (used in) continuing investing activities
|
29,868
|
|
|
(593
|
)
|
||
Net cash used in discontinued investing activities
|
(18,396
|
)
|
|
(1,986
|
)
|
||
Net cash provided by (used in) investing activities
|
11,472
|
|
|
(2,579
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock, net
|
9,344
|
|
|
10,951
|
|
||
Payment of loan fees and debt issuance cost
|
(2,275
|
)
|
|
(1,526
|
)
|
||
Repayments of debt
|
(25,526
|
)
|
|
—
|
|
||
Payment of contingent consideration in business acquisitions
|
—
|
|
|
(900
|
)
|
||
Net cash provided by (used in) financing activities
|
(18,457
|
)
|
|
8,525
|
|
||
Net change in cash, cash equivalents and restricted cash
|
(24,892
|
)
|
|
(12,745
|
)
|
||
Cash, cash equivalents and restricted cash:
|
|
|
|
|
|||
Beginning of period, including cash in disposal group
|
25,548
|
|
|
34,302
|
|
||
End of period
|
$
|
656
|
|
|
$
|
21,557
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
2,211
|
|
|
$
|
3,426
|
|
|
|
|
|
||||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
||||
Issuance of common stock upon warrant exercise
|
$
|
—
|
|
|
$
|
59,907
|
|
Capitalization of interest to debt principal
|
$
|
555
|
|
|
$
|
—
|
|
Common stock subscription payable
|
$
|
—
|
|
|
$
|
520
|
|
Increase in loan payable
|
$
|
1,103
|
|
|
$
|
—
|
|
•
|
monetize existing assets
|
•
|
refinance our debt
|
•
|
obtain additional capital through equity issuances, including but not limited to equity issuances to Aspire Capital under its existing purchase commitment (which equity issuances may dilute existing stockholders)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Data platform services:
|
|
|
|
|
|
|
|
||||||||
FinTech services
|
$
|
—
|
|
|
$
|
363
|
|
|
$
|
—
|
|
|
$
|
3,739
|
|
AI-based products and services
|
549
|
|
|
676
|
|
|
3,439
|
|
|
1,852
|
|
||||
Advertising and other
|
137
|
|
|
716
|
|
|
1,321
|
|
|
1,877
|
|
||||
Revenue
|
$
|
686
|
|
|
$
|
1,755
|
|
|
$
|
4,760
|
|
|
$
|
7,468
|
|
|
September 30,
|
|
December 31,
|
||
|
2019
|
|
2018
|
||
CBG Financing Warrants
|
|
|
|
||
Expected volatility
|
85.00
|
%
|
|
70.00
|
%
|
Risk-free interest rate
|
1.75
|
%
|
|
2.52
|
%
|
Expected remaining term (years)
|
0.98
|
|
|
1.73
|
|
CBG Acquisition Warrants
|
|
|
|
||
Expected volatility
|
75.00
|
%
|
|
70.00
|
%
|
Risk-free interest rate
|
1.56
|
%
|
|
2.46
|
%
|
Expected remaining term (years)
|
3.97
|
|
|
4.72
|
|
Change in volatility
|
Increase
|
|
Decrease
|
||||
CBG Financing Warrants
|
$
|
40
|
|
|
$
|
40
|
|
CBG Acquisition Warrants
|
230
|
|
|
175
|
|
||
|
|
|
|
||||
Change in stock price
|
|
|
|
||||
CBG Financing Warrants
|
$
|
40
|
|
|
$
|
40
|
|
CBG Acquisition Warrants
|
60
|
|
|
60
|
|
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
||||
|
2019
|
|
2018
|
||||
Balance at beginning of period
|
$
|
1,383
|
|
|
$
|
89,169
|
|
Warrant exercises
|
—
|
|
|
(59,907
|
)
|
||
Decrease in fair value
|
(502
|
)
|
|
(27,879
|
)
|
||
Balance at end of period
|
$
|
881
|
|
|
$
|
1,383
|
|
Balance at beginning of period
|
$
|
990
|
|
Payments
|
(8
|
)
|
|
Change in fair value of contingent consideration (included in Other loss)
|
10
|
|
|
Interest accrued on unpaid balance
|
75
|
|
|
Balance at end of period
|
$
|
1,067
|
|
|
September 30,
2019 |
|
December 31, 2018
|
||||
Gross accounts receivable balance
|
$
|
4,666
|
|
|
$
|
5,891
|
|
Allowance for bad debt
|
(874
|
)
|
|
(129
|
)
|
||
Accounts receivable, net
|
$
|
3,792
|
|
|
$
|
5,762
|
|
|
September 30,
2019 |
|
December 31, 2018
|
||||
Other receivables
|
$
|
3,625
|
|
|
$
|
4,607
|
|
Prepaid expense
|
840
|
|
|
1,076
|
|
||
Deposits
|
1,282
|
|
|
1,395
|
|
||
Inventory, net
|
225
|
|
|
587
|
|
||
Other current assets
|
261
|
|
|
242
|
|
||
Total
|
$
|
6,233
|
|
|
$
|
7,907
|
|
|
|
|
|
|
Estimated Life
(Years) |
|
September 30,
2019 |
|
December 31, 2018
|
||||
Computers and equipment
|
3
|
|
999
|
|
|
1,004
|
|
||
Furniture and fixtures
|
3
|
|
23
|
|
|
20
|
|
||
Software
|
3
|
|
4,856
|
|
|
4,918
|
|
||
Software development in progress
|
|
|
1,010
|
|
|
924
|
|
||
Leasehold improvements
|
10
|
|
303
|
|
|
310
|
|
||
Total property, equipment and software
|
|
|
$
|
7,191
|
|
|
$
|
7,176
|
|
Less accumulated depreciation
|
|
|
(5,600
|
)
|
|
(5,101
|
)
|
||
Total property, equipment and software, net
|
|
|
$
|
1,591
|
|
|
$
|
2,075
|
|
|
Three Months Ended September 30, 2019
|
|
Nine Months Ended September 30, 2019
|
||||
Operating lease expense
|
$
|
492
|
|
|
$
|
1,195
|
|
Short-term lease expense
|
67
|
|
|
231
|
|
||
Less: Sublease income
|
(94
|
)
|
|
(172
|
)
|
||
Lease expense
|
$
|
465
|
|
|
$
|
1,254
|
|
Operating lease liabilities maturing during the next:
|
|
||
One year
|
$
|
2,319
|
|
Two years
|
2,183
|
|
|
Three years
|
1,976
|
|
|
Four years
|
1,780
|
|
|
Five years
|
752
|
|
|
Thereafter
|
—
|
|
|
Total undiscounted cash flows
|
$
|
9,010
|
|
Present value of cash flows
|
$
|
6,941
|
|
|
|
||
Lease liabilities on balance sheet:
|
|
||
Short-term
|
$
|
1,505
|
|
Long-term
|
5,436
|
|
|
Total lease liabilities
|
$
|
6,941
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross Amount
|
|
Accumulated
Amortization |
|
Net Amount
|
|
Gross Amount
|
|
Accumulated
Amortization |
|
Net Amount
|
||||||||||||
Finite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domain names
|
$
|
1,256
|
|
|
$
|
(856
|
)
|
|
$
|
400
|
|
|
$
|
1,256
|
|
|
$
|
(801
|
)
|
|
$
|
455
|
|
Media content and broadcast rights
|
1,350
|
|
|
(1,125
|
)
|
|
225
|
|
|
1,350
|
|
|
(923
|
)
|
|
427
|
|
||||||
Other intangible assets
|
68
|
|
|
(68
|
)
|
|
—
|
|
|
68
|
|
|
(68
|
)
|
|
—
|
|
||||||
|
$
|
2,674
|
|
|
$
|
(2,049
|
)
|
|
$
|
625
|
|
|
$
|
2,674
|
|
|
$
|
(1,792
|
)
|
|
$
|
882
|
|
Indefinite-lived intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
License to operate in China
|
127
|
|
|
|
|
127
|
|
|
128
|
|
|
|
|
128
|
|
||||||||
Total intangible assets
|
$
|
2,801
|
|
|
|
|
$
|
752
|
|
|
$
|
2,802
|
|
|
|
|
$
|
1,010
|
|
|
September 30,
2019 |
|
December 31, 2018
|
||||
Loan payable to MGG
|
$
|
11,632
|
|
|
$
|
35,500
|
|
Unamortized original issue discount
|
—
|
|
|
(1,418
|
)
|
||
Unamortized debt issuance cost
|
—
|
|
|
(18
|
)
|
||
Carrying value of Loan
|
11,632
|
|
|
34,064
|
|
||
Exit fee payable in relation to Loan
|
—
|
|
|
1,250
|
|
||
Total long-term debt
|
$
|
—
|
|
|
$
|
35,314
|
|
Less: current portion
|
—
|
|
|
(35,314
|
)
|
||
Long-term debt, less current portion and net of debt issuance cost
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2018
|
||
Deferred rent
|
$
|
1,583
|
|
Accrued early lease termination liability
|
1,137
|
|
|
Deferred tax liability, net
|
214
|
|
|
Total
|
$
|
2,934
|
|
|
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2019
|
10,874,849
|
|
|
$
|
4.36
|
|
|
|
|
|
||
Granted
|
755,250
|
|
|
0.69
|
|
|
|
|
|
|||
Exercised
|
(2,250
|
)
|
|
1.99
|
|
|
|
|
|
|||
Forfeited, cancelled or expired
|
(158,117
|
)
|
|
3.70
|
|
|
|
|
|
|||
Outstanding at September 30, 2019
|
11,469,732
|
|
|
$
|
4.12
|
|
|
6.3
|
|
$
|
285
|
|
Options exercisable at September 30, 2019
|
10,853,295
|
|
|
$
|
4.32
|
|
|
6.1
|
|
$
|
44
|
|
|
Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Remaining Contractual Term
(in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2019
|
1,464,750
|
|
|
$
|
5.60
|
|
|
|
|
|
||
Granted
|
152,000
|
|
|
1.56
|
|
|
|
|
|
|||
Forfeited, cancelled or expired
|
(723,250
|
)
|
|
4.94
|
|
|
|
|
|
|||
Outstanding at September 30, 2019
|
893,500
|
|
|
$
|
5.36
|
|
|
8.2
|
|
$
|
—
|
|
Bonuses exercisable at September 30, 2019
|
496,250
|
|
|
$
|
5.39
|
|
|
7.8
|
|
$
|
—
|
|
|
Technology & Data Intelligence
|
|
Corporate Entity and Other
|
|
Consolidated
|
||||||
Three Months Ended September 30, 2019
|
|
|
|
|
|
||||||
Revenue
|
$
|
549
|
|
|
$
|
137
|
|
|
$
|
686
|
|
Adjusted EBITDA
|
$
|
(1,556
|
)
|
|
$
|
(2,445
|
)
|
|
$
|
(4,001
|
)
|
Three Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Revenue
|
$
|
1,039
|
|
|
$
|
716
|
|
|
$
|
1,755
|
|
Adjusted EBITDA
|
$
|
(1,674
|
)
|
|
$
|
(3,428
|
)
|
|
$
|
(5,102
|
)
|
|
|
|
|
|
|
||||||
Nine Months Ended September 30, 2019
|
|
|
|
|
|
||||||
Revenue
|
$
|
3,439
|
|
|
$
|
1,321
|
|
|
$
|
4,760
|
|
Adjusted EBITDA
|
$
|
(4,559
|
)
|
|
$
|
(7,372
|
)
|
|
$
|
(11,931
|
)
|
Nine Months Ended September 30, 2018
|
|
|
|
|
|
||||||
Revenue
|
$
|
5,591
|
|
|
$
|
1,877
|
|
|
$
|
7,468
|
|
Adjusted EBITDA
|
$
|
(5,166
|
)
|
|
$
|
(12,292
|
)
|
|
$
|
(17,458
|
)
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Adjusted EBITDA
|
$
|
(4,001
|
)
|
|
$
|
(5,102
|
)
|
|
$
|
(11,931
|
)
|
|
$
|
(17,458
|
)
|
Depreciation and amortization
|
(229
|
)
|
|
(520
|
)
|
|
(814
|
)
|
|
(1,657
|
)
|
||||
Share-based compensation expense
|
(94
|
)
|
|
(764
|
)
|
|
(317
|
)
|
|
(12,519
|
)
|
||||
Other expense (income), net
|
24
|
|
|
—
|
|
|
(23
|
)
|
|
(44
|
)
|
||||
Other loss (gain)
|
28
|
|
|
16
|
|
|
27
|
|
|
(507
|
)
|
||||
Operating loss
|
$
|
(4,272
|
)
|
|
$
|
(6,370
|
)
|
|
$
|
(13,058
|
)
|
|
$
|
(32,185
|
)
|
Other income (expense)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(457
|
)
|
|
(345
|
)
|
|
(1,397
|
)
|
|
(1,017
|
)
|
||||
Other income (expense), net
|
(24
|
)
|
|
—
|
|
|
23
|
|
|
44
|
|
||||
Change in fair value of warrant liability
|
(160
|
)
|
|
3,525
|
|
|
502
|
|
|
22,190
|
|
||||
Other gain (loss), net
|
(28
|
)
|
|
(16
|
)
|
|
(27
|
)
|
|
507
|
|
||||
Total other income (expense), net
|
$
|
(669
|
)
|
|
$
|
3,164
|
|
|
$
|
(899
|
)
|
|
$
|
21,724
|
|
Loss from continuing operations before income taxes
|
$
|
(4,941
|
)
|
|
$
|
(3,206
|
)
|
|
$
|
(13,957
|
)
|
|
$
|
(10,461
|
)
|
|
September 30,
2019 |
|
December 31, 2018
|
||||
Technology & Data Intelligence segment
|
$
|
12,905
|
|
|
$
|
15,563
|
|
Corporate entity and other business units
|
8,578
|
|
|
5,156
|
|
||
Consolidated
|
$
|
21,483
|
|
|
$
|
20,719
|
|
|
May 15, 2019
|
|
December 31, 2018
|
||||
Cash and cash equivalents (including restricted cash)
|
$
|
18,011
|
|
|
$
|
24,138
|
|
Other current assets
|
4,753
|
|
|
4,828
|
|
||
Current assets
|
$
|
22,764
|
|
|
$
|
28,966
|
|
Property and equipment, net
|
7,331
|
|
|
8,495
|
|
||
Goodwill and other intangibles, net
|
28,977
|
|
|
35,434
|
|
||
Other assets
|
1,856
|
|
|
194
|
|
||
Total assets
|
$
|
60,928
|
|
|
$
|
73,089
|
|
|
|
|
|
||||
Accounts payable, accrued expense and other current liabilities
|
$
|
22,749
|
|
|
$
|
33,053
|
|
Deferred merchant booking
|
7,358
|
|
|
4,664
|
|
||
Contract liability
|
5,381
|
|
|
3,931
|
|
||
Current liabilities
|
$
|
35,488
|
|
|
$
|
41,648
|
|
Other liabilities
|
1,938
|
|
|
34
|
|
||
Total liabilities
|
$
|
37,426
|
|
|
$
|
41,682
|
|
|
Three Months Ended September 30,
|
|
January 1, 2019 through
May 15, 2019
|
|
Nine Months Ended September 30, 2018
|
||||||||||
|
2019
|
|
2018
|
|
|
||||||||||
Revenue
|
$
|
—
|
|
|
$
|
17,596
|
|
|
$
|
27,432
|
|
|
$
|
49,320
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of revenue (excluding depreciation and amortization)
|
—
|
|
|
3,162
|
|
|
4,016
|
|
|
8,779
|
|
||||
Selling, general and administrative
|
—
|
|
|
9,793
|
|
|
18,383
|
|
|
29,107
|
|
||||
Technology and development
|
—
|
|
|
2,185
|
|
|
3,280
|
|
|
6,640
|
|
||||
Depreciation, amortization and impairments
|
—
|
|
|
2,236
|
|
|
8,007
|
|
|
6,563
|
|
||||
Other operating expense
|
—
|
|
|
264
|
|
|
384
|
|
|
711
|
|
||||
Other expense (income) and loss (gain), net
|
—
|
|
|
957
|
|
|
(3,814
|
)
|
|
2,935
|
|
||||
Loss from discontinued operations before income taxes
|
—
|
|
|
(1,001
|
)
|
|
(2,824
|
)
|
|
(5,415
|
)
|
||||
Benefit from income taxes
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
||||
Loss from discontinued operations
|
$
|
—
|
|
|
$
|
(1,001
|
)
|
|
$
|
(2,610
|
)
|
|
$
|
(5,415
|
)
|
|
|
|
|
|
|
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Data platform services:
|
|
|
|
|
|
|
|
||||
FinTech services
|
—
|
%
|
|
39
|
%
|
|
—
|
%
|
|
50
|
%
|
AI-based products and services
|
80
|
%
|
|
20
|
%
|
|
72
|
%
|
|
25
|
%
|
Advertising and other
|
20
|
%
|
|
41
|
%
|
|
28
|
%
|
|
25
|
%
|
(dollars in thousands)
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue
|
|
$
|
549
|
|
|
$
|
1,039
|
|
|
$
|
(490
|
)
|
|
(47
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
|
62
|
|
|
612
|
|
|
(550
|
)
|
|
(90
|
)%
|
|||
Sales and marketing
|
|
170
|
|
|
306
|
|
|
(136
|
)
|
|
(44
|
)%
|
|||
Technology and development
|
|
686
|
|
|
1,363
|
|
|
(677
|
)
|
|
(50
|
)%
|
|||
General and administrative
|
|
1,168
|
|
|
468
|
|
|
700
|
|
|
150
|
%
|
|||
Depreciation and amortization
|
|
119
|
|
|
169
|
|
|
(50
|
)
|
|
(30
|
)%
|
|||
Other operating expense
|
|
—
|
|
|
47
|
|
|
(47
|
)
|
|
(100
|
)%
|
(dollars in thousands)
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue
|
|
$
|
3,439
|
|
|
$
|
5,591
|
|
|
$
|
(2,152
|
)
|
|
(38
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
|
2,666
|
|
|
5,004
|
|
|
(2,338
|
)
|
|
(47
|
)%
|
|||
Sales and marketing
|
|
615
|
|
|
706
|
|
|
(91
|
)
|
|
(13
|
)%
|
|||
Technology and development
|
|
2,688
|
|
|
3,210
|
|
|
(522
|
)
|
|
(16
|
)%
|
|||
General and administrative
|
|
2,022
|
|
|
1,658
|
|
|
364
|
|
|
22
|
%
|
|||
Depreciation and amortization
|
|
424
|
|
|
486
|
|
|
(62
|
)
|
|
(13
|
)%
|
|||
Other operating expense
|
|
6
|
|
|
93
|
|
|
(87
|
)
|
|
(94
|
)%
|
(dollars in thousands)
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue
|
|
$
|
686
|
|
|
$
|
1,755
|
|
|
$
|
(1,069
|
)
|
|
(61
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
|
189
|
|
|
1,231
|
|
|
(1,042
|
)
|
|
(85
|
)%
|
|||
Sales and marketing
|
|
736
|
|
|
1,108
|
|
|
(372
|
)
|
|
(34
|
)%
|
|||
Technology and development
|
|
752
|
|
|
1,459
|
|
|
(707
|
)
|
|
(48
|
)%
|
|||
General and administrative
|
|
3,052
|
|
|
3,760
|
|
|
(708
|
)
|
|
(19
|
)%
|
|||
Depreciation and amortization
|
|
229
|
|
|
520
|
|
|
(291
|
)
|
|
(56
|
)%
|
|||
Other operating expense
|
|
—
|
|
|
47
|
|
|
(47
|
)
|
|
(100
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(457
|
)
|
|
(345
|
)
|
|
(112
|
)
|
|
32
|
%
|
|||
Other expense
|
|
(24
|
)
|
|
—
|
|
|
(24
|
)
|
|
|
||||
Change in FV of warrant liability
|
|
(160
|
)
|
|
3,525
|
|
|
(3,685
|
)
|
|
(105
|
)%
|
|||
Other loss
|
|
(28
|
)
|
|
(16
|
)
|
|
(12
|
)
|
|
75
|
%
|
|||
Benefit from income taxes
|
|
—
|
|
|
442
|
|
|
(442
|
)
|
|
(100
|
)%
|
(dollars in thousands)
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||
|
|
2019
|
|
2018
|
|
Dollars
|
|
Percentage
|
|||||||
Revenue
|
|
$
|
4,760
|
|
|
$
|
7,468
|
|
|
$
|
(2,708
|
)
|
|
(36
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of revenue
|
|
3,323
|
|
|
5,778
|
|
|
(2,455
|
)
|
|
(42
|
)%
|
|||
Sales and marketing
|
|
2,282
|
|
|
3,165
|
|
|
(883
|
)
|
|
(28
|
)%
|
|||
Technology and development
|
|
2,910
|
|
|
3,550
|
|
|
(640
|
)
|
|
(18
|
)%
|
|||
General and administrative
|
|
8,483
|
|
|
25,410
|
|
|
(16,927
|
)
|
|
(67
|
)%
|
|||
Depreciation and amortization
|
|
814
|
|
|
1,657
|
|
|
(843
|
)
|
|
(51
|
)%
|
|||
Other operating expense
|
|
6
|
|
|
93
|
|
|
(87
|
)
|
|
(94
|
)%
|
|||
|
|
|
|
|
|
|
|
|
|||||||
Interest expense
|
|
(1,397
|
)
|
|
(1,017
|
)
|
|
(380
|
)
|
|
37
|
%
|
|||
Other income
|
|
23
|
|
|
44
|
|
|
(21
|
)
|
|
(48
|
)%
|
|||
Change in FV of warrant liability
|
|
502
|
|
|
22,190
|
|
|
(21,688
|
)
|
|
(98
|
)%
|
|||
Other gain (loss)
|
|
(27
|
)
|
|
507
|
|
|
(534
|
)
|
|
(105
|
)%
|
|||
Benefit from income taxes
|
|
—
|
|
|
1,437
|
|
|
(1,437
|
)
|
|
(100
|
)%
|
•
|
Stock-based compensation decreased approximately $0.6 million because all awards outstanding vested in full during the second quarter of 2019. Also, prior to 2019, our most recent company-wide grant of stock options (which vest over a two-year period) had occurred in 2017 and contributed nine months of expense to the 2018 year-to-date period, but only six months of expense to the 2019 year-to-date period.
|
•
|
Consulting fees decreased approximately $0.3 million, primarily as a result of decreased use of temporary external consultants.
|
•
|
Individual immaterial decreases in several other expense categories that were not representative of any significant trends.
|
•
|
Stock-based compensation expense decreased approximately $12.4 million primarily because in January 2018, we immediately recognized $11.6 million of expense related to a grant of an option to purchase 1.3 million shares of our common stock at an exercise price of $7.81 per share to our Chief Executive Officer. We did not make a similar grant in the current year. Also, prior to 2019, our most recent company-wide grant of stock options (which vest over a two-year period) had occurred in 2017 and contributed nine months of expense to the 2018 year-to-date period, but only six months of expense to the 2019 year-to-date period.
|
•
|
Rent expense decreased $2.3 million almost exclusively because, in March 2018, we recognized a liability on the early abandonment of a lease. No similar transactions occurred during the first half of the current year-to-date period.
|
•
|
Consulting fees decreased approximately $0.9 million, primarily as a result of decreased use of temporary external consultants.
|
•
|
Payroll and related costs, excluding bonuses, decreased approximately $0.5 million as a result of headcount reductions in finance and administration.
|
•
|
We reduced business travel in 2019, resulting in a decrease of approximately $0.5 million in travel expense.
|
•
|
Approximately $0.3 million of one-time bonuses were paid in 2018 that were not repeated during 2019.
|
•
|
monetize existing assets
|
•
|
refinance our debt
|
•
|
obtain additional capital through equity issuances, including but not limited to under the 2019 Aspire Purchase Agreement (which issuances may dilute existing stockholders)
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
|
|
Incorporated Herein
By Reference To
|
||||
Exhibit Number
|
|
Description
|
|
Document
|
|
Filed On
|
|
Exhibit Number
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
|
REMARK HOLDINGS, INC.
|
|
|
|
|
|
Date:
|
November 12, 2019
|
By:
|
|
/s/ Kai-Shing Tao
|
|
|
|
|
Kai-Shing Tao
|
|
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
(principal executive, financial and accounting officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Remark Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Kai-Shing Tao
|
|
|
Kai-Shing Tao
|
|
|
Chief Executive Officer and Chairman
|
|
1.
|
the accompanying Quarterly Report on Form 10-Q for the period ended September 30, 2019 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Remark Holdings, Inc. at the dates and for the periods indicated.
|
|
/s/ Kai-Shing Tao
|
|
Kai-Shing Tao
|
|
Chief Executive Officer and Chairman
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Remark Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By
|
/s/ Kai-Shing Tao
|
|
|
Kai-Shing Tao
|
|
|
Chief Executive Officer and Chairman
|
|