Cover page
Cover page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 29, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-33720 | ||
Entity Registrant Name | Remark Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 33-1135689 | ||
Entity Address, Address Line One | 800 S Commerce St. | ||
Entity Address, City or Town | Las Vegas | ||
Entity Address, State or Province | NV | ||
Entity Address, Postal Zip Code | 89106 | ||
City Area Code | 702 | ||
Local Phone Number | 701-9514 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Trading Symbol | MARK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 220.9 | ||
Entity Common Stock, Outstanding | 99,916,941 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001368365 | ||
Document Annual Report | true | ||
Document Transition Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents (includes VIE of $278 and $49, respectively) | $ 854 | $ 272 |
Trade accounts receivable, net (includes VIE of $4,850 and $1,862, respectively) | 5,027 | 1,964 |
Inventory (includes VIE of $112) | 874 | 0 |
Prepaid expense and other current assets (includes VIE of $248 and $4,159, respectively) | 2,043 | 4,623 |
Total current assets | 8,798 | 6,859 |
Property and equipment, net (includes VIE of $43 and $222, respectively) | 321 | 341 |
Operating lease assets (includes VIE of $281 and $189, respectively) | 492 | 4,359 |
Investments in unconsolidated affiliates | 1,030 | 1,935 |
Intangibles, net (includes VIE of $27, respectively) | 0 | 509 |
Other long-term assets (includes VIE of $68 and $29, respectively) | 670 | 824 |
Total assets | 11,311 | 14,827 |
Liabilities | ||
Accounts payable (includes VIE of $3,655 and $2,187, respectively) | 8,589 | 8,126 |
Accrued expense and other current liabilities (includes VIE of $3,782 and $8,821, respectively) | 6,660 | 14,326 |
Contract liability (includes VIE of $147 and $201, respectively) | 310 | 313 |
Note payable | 1,500 | 3,000 |
Current maturities of long-term debt, net of unamortized discount and debt issuance cost | 0 | 12,025 |
Total current liabilities | 17,059 | 37,790 |
Operating lease liabilities, long-term (includes VIE of $79 and $75, respectively) | 194 | 4,650 |
Warrant liability | 1,725 | 115 |
Long - term debt, net | 1,425 | 0 |
Total liabilities | 20,403 | 42,555 |
Commitments and contingencies | ||
Stockholders’ Deficit | ||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; zero issued | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 shares authorized: 99,505,041 and 51,055,159 shares issued and outstanding; each at December 31, 2020 and 2019, respectively | 100 | 51 |
Additional paid-in-capital | 351,546 | 319,275 |
Accumulated other comprehensive loss | (226) | (227) |
Accumulated deficit | (360,512) | (346,827) |
Total stockholders’ deficit | (9,092) | (27,728) |
Total liabilities and stockholders’ deficit | $ 11,311 | $ 14,827 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 854 | $ 272 |
Trade accounts receivable, net | 5,027 | 1,964 |
Inventory | 874 | 0 |
Prepaid expense and other current assets | 2,043 | 4,623 |
Property and equipment, net | 321 | 341 |
Operating lease assets | 492 | 4,359 |
Intangibles, net | 0 | 509 |
Other long-term assets | 670 | 824 |
Liabilities | ||
Accounts payable | 8,589 | 8,126 |
Accrued expense and other current liabilities | 6,660 | 14,326 |
Contract liability | 310 | 313 |
Operating lease liabilities, long-term | $ 194 | $ 4,650 |
Stockholders’ Deficit | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 99,505,041 | 51,055,159 |
Common stock, shares outstanding (in shares) | 99,505,041 | 51,055,159 |
Variable Interest Entity | ||
Assets | ||
Cash and cash equivalents | $ 278 | $ 49 |
Trade accounts receivable, net | 4,850 | 1,862 |
Inventory | 112 | |
Prepaid expense and other current assets | 248 | 4,159 |
Property and equipment, net | 43 | 222 |
Operating lease assets | 281 | 189 |
Intangibles, net | 27 | |
Other long-term assets | 68 | 29 |
Liabilities | ||
Accounts payable | 3,655 | 2,187 |
Accrued expense and other current liabilities | 3,782 | 8,821 |
Contract liability | 147 | 201 |
Operating lease liabilities, long-term | $ 79 | $ 75 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue, net | $ 10,145 | $ 5,020 |
Cost and Expense | ||
Cost of revenue (excluding depreciation and amortization) | 6,422 | 3,514 |
Sales and marketing | 3,378 | 3,003 |
Technology and development | 4,142 | 3,573 |
General and administrative | 9,368 | 14,174 |
Depreciation and amortization | 308 | 982 |
Impairments | 772 | 2,522 |
Other operating expense | 0 | 6 |
Total expense | 24,390 | 27,774 |
Operating loss from continuing operations | (14,245) | (22,754) |
Other income (expense) | ||
Interest expense | (1,342) | (1,876) |
Other income, net | 0 | 530 |
Gain on lease termination | 3,582 | 0 |
Change in fair value of warrant liability | (1,610) | 1,268 |
Other loss | (70) | (172) |
Total other income (expense), net | 560 | (250) |
Loss from continuing operations | (13,685) | (23,004) |
Loss from discontinued operations, net of tax | 0 | (2,610) |
Net loss | (13,685) | (25,614) |
Other comprehensive income (loss) | ||
Foreign currency translation adjustments | 1 | (259) |
Comprehensive loss | $ (13,684) | $ (25,873) |
Weighted-average shares outstanding, basic and diluted (in shares) | 85,578 | 44,432 |
Net loss per share, basic and diluted | ||
Continuing operations (in dollars per share) | $ (0.16) | $ (0.52) |
Discontinued operations (in dollars per share) | 0 | (0.06) |
Consolidated (in dollars per share) | $ (0.16) | $ (0.58) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders Deficit - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 39,053,312 | ||||
Beginning balance at Dec. 31, 2018 | $ (13,124) | $ 39 | $ 308,018 | $ 32 | $ (321,213) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (25,614) | (25,614) | |||
Share-based compensation | 425 | 425 | |||
Common stock sales (in shares) | 11,999,597 | ||||
Common stock issuances | 10,840 | $ 12 | 10,828 | ||
Equity instrument exercises (in shares) | 2,250 | ||||
Equity instrument exercises | 4 | 4 | |||
Other | $ (259) | (259) | |||
Ending balance (in shares) at Dec. 31, 2019 | 51,055,159 | 51,055,159 | |||
Ending balance at Dec. 31, 2019 | $ (27,728) | $ 51 | 319,275 | (227) | (346,827) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (13,685) | (13,685) | |||
Share-based compensation | 160 | 160 | |||
Common stock sales (in shares) | 48,298,893 | ||||
Common stock issuances | 32,030 | $ 48 | 31,982 | ||
Equity instrument exercises (in shares) | 150,989 | ||||
Equity instrument exercises | 130 | $ 1 | 129 | ||
Other | $ 1 | 1 | 0 | ||
Ending balance (in shares) at Dec. 31, 2020 | 99,505,041 | 99,505,041 | |||
Ending balance at Dec. 31, 2020 | $ (9,092) | $ 100 | $ 351,546 | $ (226) | $ (360,512) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (13,685) | $ (25,614) |
Loss from discontinued operations | 0 | 2,610 |
Loss from continuing operations | (13,685) | (23,004) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of warrant liability | 1,610 | (1,268) |
Depreciation and amortization | 308 | 982 |
Share-based compensation | 797 | 319 |
Amortization of debt issuance costs and discount | 0 | 1,436 |
Gain on lease termination | (3,582) | 0 |
Loss on disposal of long-lived assets | 77 | 150 |
Loss on impairment of intangible assets, including goodwill | 772 | 2,522 |
Other | 269 | 745 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,825) | 3,752 |
Prepaid expense and other assets | (779) | 1,604 |
Operating lease assets | 73 | 524 |
Accounts payable, accrued expense and other liabilities | (920) | (1,413) |
Contract liability | (27) | 209 |
Operating lease liabilities | (135) | 813 |
Net cash used in continuing operating activities | (18,047) | (12,629) |
Net cash used in discontinued operating activities | 0 | (7,159) |
Net cash used in operating activities | (18,047) | (19,788) |
Cash flows from investing activities: | ||
Purchases of property, equipment and software | (290) | (8) |
Payment of payroll costs capitalized to software in progress | 0 | (127) |
Proceeds from sale of business | 0 | 30,000 |
Net cash provided by (used in) continuing investing activities | (290) | 29,865 |
Net cash used in discontinued investing activities | 0 | (18,396) |
Net cash provided by (used in) investing activities | (290) | 11,469 |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net | 32,135 | 10,844 |
Proceeds from Issuance of Debt | 1,425 | 0 |
Payment of debt issuance cost | 0 | (2,275) |
Repayments of debt | (13,781) | (25,526) |
Payment of contingent consideration related to business acquisitions | (860) | 0 |
Net cash provided by (used in) financing activities | 18,919 | (16,957) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 582 | (25,276) |
Cash, cash equivalents and restricted cash: | ||
Beginning of period, including cash in disposal group | 272 | 25,548 |
End of period | 854 | 272 |
Supplemental cash flow information: | ||
Cash paid for interest | 965 | 2,211 |
Supplemental schedule of non-cash activities: | ||
Addition of interest to debt principal | 0 | 948 |
Increase in loan payable | 0 | 1,103 |
Offsetting of other receivables against other current liabilities | $ 3,060 | $ 0 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based compensation | $ 797 | $ 319 |
Sales and marketing | ||
Share-based compensation | 164 | 24 |
Technology and development | ||
Share-based compensation | 484 | 70 |
General and administrative | ||
Share-based compensation | $ 149 | $ 225 |
ORGANIZATION, BUSINESS AND OTHE
ORGANIZATION, BUSINESS AND OTHER ITEMS | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, BUSINESS AND OTHER ITEMS | NOTE 1. ORGANIZATION, BUSINESS AND OTHER ITEMS Organization and Business Remark Holdings, Inc. and subsidiaries (“Remark”, “we”, “us”, or “our”), which include its consolidated variable-interest entities (“VIEs”), are primarily technology-focused. Our KanKan data intelligence platform serves as the basis for our development and deployment of artificial-intelligence-based (“AI-based”) solutions for businesses in many industries and geographies. We also own and operate an e-commerce digital media property focused on a luxury beach lifestyle. Our common stock is listed on the Nasdaq Capital Market under the ticker symbol MARK. We recognize revenue primarily from sales of AI-based products and services in the U.S., under our Remark AI brand, and in China under the KanKan brand. Economic and political risks Our operations in China are subject to special considerations and significant risks not typically associated with companies in the United States, including risks associated with, among others, the political, economic and legal environment and foreign currency exchange. Our results may be adversely affected by changes in the political conditions in China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. COVID-19 Our consolidated financial statements for the year ended December 31, 2020 were impacted by the effects of the global outbreak of novel strains of coronavirus, or COVID-19, as national and local governmental authorities in China and the U.S., where we operate, placed significant restrictions on travel and other activities within their respective countries, leading to extended business closures. The restrictions and resulting business closures limited our operational capabilities, which could have a material adverse impact on our business and which have created significant uncertainties, such as the potential adverse effect of the pandemic on the economy, our vendors, our employees and customers and customer sentiment in general. The continuing impact of the pandemic on our business and financial results will depend largely on future developments, including how new COVID-19 variants affect the duration and severity of the outbreak, the length of any new or continuing travel restrictions and business closures imposed by domestic and foreign governments, the impact on capital and financial markets and the related impact on the financial circumstances of our customers, all of which are highly uncertain and cannot be predicted. The pandemic-related situation changes rapidly, and additional impacts of which we are not currently aware may arise, underscored by the somewhat recent surge in cases in the U.S and the newly-discovered COVID-19 variants. We are closely monitoring developments in the U.S. and in China and are continually assessing the potential impact on our business. To mitigate the potential material negative effects that COVID-19 may have on our business and to do our part to provide customers with the means to limit the spread of COVID-19, we have repurposed and improved our existing urban life cycle solution that we were selling to make schools in China “smart” schools to build a new product line of high-quality, highly-effective thermal imaging solutions that leverage our innovative software to provide customers with the ability to scan crowds and areas of high foot traffic for indications that certain persons may require secondary screening. We sell such products primarily in the U.S., as well as in other countries. Going Concern During the year ended December 31, 2020, and in each fiscal year since our inception, we have incurred net losses which have resulted in an accumulated deficit of $360.5 million as of December 31, 2020. Additionally, our operations have historically used more cash than they have provided. Net cash used in operating activities was $18.0 million during the year ended December 31, 2020. As of December 31, 2020, our cash and cash equivalents balance was $0.9 million, and we had a negative working capital balance of $8.3 million and total stockholders’ deficit of $9.1 million. Our history of recurring operating losses, working capital deficiencies and negative cash flows from operating activities give rise to substantial doubt regarding our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from our possible inability to continue as a going concern. We intend to fund our future operations and meet our financial obligations through revenue growth from our AI offerings, as well as through sales of our thermal-imaging products. We cannot, however, provide assurance that revenue, income and cash flows generated from our businesses will be sufficient to sustain our operations in the twelve months following the filing of this Form 10-K. As a result, we are actively evaluating strategic alternatives including debt and equity financings and potential sales of investment assets or operating businesses. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for its stockholders, in case of equity financing. Conditions in the debt and equity markets, as well as the volatility of investor sentiment regarding macroeconomic and microeconomic conditions (in particular, in response to the COVID-19 pandemic), will play primary roles in determining whether we can successfully obtain additional capital. We cannot be certain that we will be successful at raising additional capital. A variety of factors, many of which are outside of our control, affect our cash flow; those factors include the effects of the COVID-19 pandemic, regulatory issues, competition, financial markets and other general business conditions. Based on financial projections, we believe that we will be able to meet our ongoing requirements for at least the next 12 months with existing cash, cash equivalents and cash resources, and based on the probable success of one or more of the following plans: • develop and grow new product line(s) • monetize existing assets • obtain additional capital through debt and/or equity issuances. However, projections are inherently uncertain and the success of our plans is largely outside of our control. As a result, there is substantial doubt regarding our ability to continue as a going concern, and we may fully utilize our cash resources prior to March 31, 2022. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation We include all of our subsidiaries, including the VIEs for which we are the primary beneficiary, in our consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. To comply with China’s laws which restrict foreign ownership of entities that operate within industries deemed sensitive by the Chinese government, we employ what we believe is a commonly-used organizational structure consisting of a wholly-foreign owned enterprise (“WFOE”) and the VIEs to operate our KanKan business. We own 100% of the equity of the WFOE, while the VIEs are companies formed in China under local laws which are owned by members of our management team. We funded the registered capital and operating expenses of the VIEs by extending loans to the VIEs’ owners. We are the primary beneficiary of the VIEs because the relationships between the VIEs and our WFOE are governed by contractual agreements, including in each case an Exclusive Call Option Agreement, an Exclusive Business Cooperation Agreement, a Proxy Agreement and an Equity Pledge Agreement, which give us control over the operations of the VIEs. With regard to our investment in Sharecare, Inc. (“Sharecare”), GAAP allows us to continue to carry our investment at cost less impairment until such time as an observable price change in the underlying security occurs. Any gains or losses resulting from a change in fair value are recorded to the statement of operations. We use the equity method for equity investments in which we can exercise significant influence over the investee. Use of Estimates We prepare our consolidated financial statements in conformity with GAAP. While preparing our financial statements, we make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes. Accordingly, actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and long-term receivables, intangible assets, the useful lives of property and equipment, share-based compensation, the fair value of the warrant liability, deferred income taxes, and inventory reserve among other items. As of December 31, 2020, the impact of the COVID-19 pandemic continues to unfold. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. Cash and cash equivalents Our cash and cash equivalents consist of funds held in bank accounts. Cash equivalents are highly-liquid investments with original maturities of three months or less, including money market funds. We maintain cash balances in United States dollars (“USD”), Chinese Renminbi (“RMB”), and Hong Kong dollars (“HKD”). The following table, reported in USD, disaggregates our cash balances by currency denomination (in thousands): December 31, December 31, 2019 Cash denominated in: USD $ 563 $ 216 HKD 8 2 RMB 283 54 Total cash $ 854 $ 272 We maintain substantially all of our USD-denominated cash at a U.S financial institution where the balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, however, our cash balances may exceed the FDIC-insured limit. As of December 31, 2020, we do not believe we have any significant concentrations of credit risk, although approximately $0.3 million of our USD-denominated cash balance exceeded the FDIC-insured limit. Cash held by our non-U.S. subsidiaries is subject to foreign currency fluctuations against the USD, although such risk is somewhat mitigated because we transfer U.S. funds to China to fund local operations. If, however, the USD is devalued significantly against the RMB, our cost to further develop our business in China could exceed original estimates. Leases We adopted Accounting Standards Codification Topic 842, Leases (“ASC 842”), as of January 1, 2019. When adopting ASC 842 we elected several practical expedients permitted under the transition guidance within ASC 842, which, among other things, allowed us to carry forward the historical lease classification and to avoid recording leases that had expired prior to the date of adoption. We also elected to combine the lease and non-lease components of our leases for office space (which represent the largest portion of our operating lease assets and liabilities) and not to record leases with initial terms of 12 months or less (short-term leases) on the balance sheet. We amortize the cost of short-term leases on a straight-line basis over the lease term. Foreign Currency Translation We report all currency amounts in USD. Our China VIEs, however, maintain their books and records in their RMB functional currency, while we have other subsidiaries with minimal activity which maintain their books and records in their HKD functional currency. In general, when consolidating our subsidiaries or VIEs with non-USD functional currencies, we translate the amounts of assets and liabilities into USD using the exchange rate on the balance sheet date, and the amounts of revenue and expense are translated at the average exchange rate prevailing during the period. The gains and losses resulting from translation of financial statement amounts into USD are recorded as a separate component of accumulated other comprehensive loss within stockholders’ deficit. We used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted: 2020 2019 Exchange rates at December 31st: RMB:USD 0.153 0.140 HKD:USD 0.129 0.128 Average exchange rate during the twelve months ended December 31st: RMB:USD 0.143 0.146 Revenue Recognition We evaluate all of our agreements with customers to determine whether they qualify as contracts in scope of the current revenue guidance in GAAP. If an agreement qualifies as a contract in scope, we then identify the performance obligations in the contract, determine the transaction price of the contract, allocate such transaction price to the performance obligations in the contract and determine whether to recognize revenue when or as a performance obligation is satisfied. We regularly review our customers’ financial positions to ensure that collectability of amount due from them is reasonably assured. If there is uncertainty related to the timing of collections from our customer, we consider this to be uncertainty of the customer’s ability and intention to pay us when consideration is due. Accordingly, we recognize revenue only when we have transferred control of the goods or services and collectability is probable. We recognize revenue from warranty contracts on a straight-line basis over the period of the warranty. When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation. AI-Based Products We generate revenue by developing AI-based products, including fully-integrated AI solutions which combine our proprietary technology with third-party hardware and software products to meet end-user specifications. Under one type of contract for our AI-based products, we provide a single, continuous service to clients who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Under another type of contract, we have performance obligations to provide fully-integrated AI solutions to our customer and we recognize revenue at the point in time when each performance obligation is completed and delivered to, tested by and accepted by our customer. For our contracts with customers, we generally extend short-term credit policies to our customers, typically up to one year for large-scale projects. We record the incremental costs of obtaining contracts as an expense when incurred, because such costs would otherwise be amortized over a period of less than one year if capitalized. Other We generate revenue from other sources, such as from e-commerce activity in which we sell goods to our customers, or media production which involves the production of video or Internet-based content for our customers. We recognize the revenue from these contracts at the point in time when we transfer control of the good sold to the customer or when we deliver the promised media content. Substantially all of our contracts with customers that generate Other revenue are completed within one year or less. Share-Based Compensation For grants of restricted stock or restricted stock units, we measure fair value using the closing price of our stock on the measurement date, while we use the Black-Scholes-Merton option pricing model (the “BSM Model”) to estimate the fair value of stock options and similar instruments awarded. The BSM Model requires the following inputs: • Expected volatility of our stock price. We analyze the historical volatility of our stock price utilizing daily stock price returns, and we also review the stock price volatility of certain peers. Using the information developed from such analysis and our judgment, we estimate how volatile our stock price will be over the period we expect the stock options will remain outstanding. • Risk-free interest rate. We estimate the risk-free interest rate using data from the Federal Reserve Treasury Constant Maturity Instruments H.15 Release (a table of rates downloaded from the Federal Reserve website) as of the valuation date for a security with a remaining term that approximates the period over which we expect the stock options will remain outstanding. • Stock price, exercise price and expected term. We use an estimate of the fair value of our common stock on the measurement date, the exercise price of the option, and the period over which we expect the stock options will remain outstanding. We do not currently issue dividends, but if we did so, then we would also include an estimated dividend rate as an input to the BSM model. Generally speaking, the BSM model tends to be most sensitive to changes in stock price, volatility or expected term. We measure compensation expense as of the grant date for granted equity-classified instruments and as of the settlement date for granted liability-classified instruments (meaning that we re-measure compensation expense at each balance sheet date until the settlement date occurs). Once we measure compensation expense, we recognize it over the requisite service period (generally the vesting period) of the grant, net of forfeitures as they occur. Accounts Receivable We regularly evaluate the collectability of trade receivable balances based on a combination of factors such as customer credit-worthiness, past transaction history with the customer, current economic industry trends and changes in customer payment patterns. If we determine that a customer will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material events impacting its business, a specific reserve for bad debt will be recorded to reduce the related receivable to the amount expected to be recovered. Income Taxes We recognize deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) to account for the effects of temporary differences between the tax basis of an asset or liability and its amount as reported in our consolidated balance sheets, using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. Any effect on DTAs or DTLs resulting from a change in enacted tax rates is included in income during the period that includes the enactment date. We reduce the carrying amounts of DTAs by a valuation allowance if, based upon all available evidence (both positive and negative), we determine that it is more likely than not that such DTAs will not be realizable. Such assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, our forecasts of future profitability, tax planning strategies, the duration of statutory carryforward periods, and our experience with the utilization of operating loss and tax credit carryforwards before expiration. We apply a recognition threshold and measurement attribute related to uncertain tax positions taken or expected to be taken on our tax returns. We recognize a tax benefit for financial reporting of an uncertain income tax position when it has a greater than 50% likelihood of being sustained upon examination by the taxing authorities. We measure the tax benefit of an uncertain tax position based on the largest benefit that has a greater than 50% likelihood of being ultimately realized, including evaluation of settlements. Inventory We use the first-in first-out method to determine the cost of our inventory, then we report inventory at the lower of cost or net realizable value. We regularly review our inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated sales forecasts. Advertising Expense Advertising expense is recorded during the period in which it is incurred. We incurred advertising expense during the years ended December 31, 2020 and 2019 of $0.2 million and $0.3 million, respectively. Research and Development Engineering cost is recorded as technology and development expense during the period in which it is incurred. Product Warranties We offer extended warranties on our products for periods of one December 31, 2020 and 2019 . Property, Equipment and Software We state property and equipment at cost and depreciate such assets using the straight-line method over the estimated useful lives of each asset category. For leasehold improvements, we determine amortization using the straight-line method over the shorter of the lease term or estimated useful life of the asset. We expense repairs and maintenance costs as incurred, while capitalizing betterments and capital improvements and depreciating such costs over the remaining useful life of the related asset. We capitalize qualifying costs of computer software that we incur during the application development stage, as well as the cost of upgrades and enhancements that result in additional functionality, and we amortize such costs using the straight-line method over a period of three years, the expected period of the benefit. Net Loss per Share We calculate basic net loss per share using the weighted-average number of common stock shares outstanding during the period. For the calculation of diluted net loss per share, we give effect to all the shares of common stock that were outstanding during the period plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is anti-dilutive. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options and warrants. For the year ended December 31, 2020 and 2019, there were no reconciling items related to either the numerator or denominator of the loss per share calculation, as their effect would have been anti-dilutive. Securities which would have been anti-dilutive to a calculation of diluted earnings per share for the year ended December 31, 2020 and 2019 include 9,942,341 and 10,359,079 outstanding stock options, respectively, and 40,000 and 3,966,613 outstanding stock warrants, respectively. Segments Existing GAAP, which establishes a management approach to segment reporting, defines operating segments as components of an entity about which separate, discrete financial information is available for evaluation by the chief operating decision-maker. We have identified our Chief Executive Officer as our chief operating decision maker, who reviews operating results to make decisions about allocating resources and assessing performance based upon only one operating segment. Commitments and Contingencies We record a liability for a loss contingency when we determine that it is probable that we have incurred such liability and we can reasonably estimate the amount. Impairments Long-Lived Assets Other Than Indefinite-Lived Intangible Assets When events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable, we evaluate long-lived assets for potential impairment, basing our testing method upon whether the assets are held for sale or held for use. For assets classified as held for sale, we recognize the asset at the lower of carrying value or fair market value less costs of disposal, as estimated based on comparable asset sales, offers received, or a discounted cash flow model. For assets held and used, we estimate the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, we recognize an impairment loss for the difference between the carrying value of the asset and its fair value. Indefinite-Lived Intangible Assets In the fourth quarter of each fiscal year, we test indefinite-lived intangible assets for impairment. When testing for impairment, we first evaluate qualitative factors to determine whether events and circumstances indicate that, more likely than not, an indefinite-lived intangible asset is impaired. If, after evaluating the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, we determine that, more likely than not, an indefinite-lived intangible asset is impaired, we then quantitatively test for impairment. Investments We routinely perform an assessment of our investments in Sharecare and in AIO (see Note 7 ) to determine if they are other-than-temporarily impaired. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized cost of that investment. As part of our assessment process, we determine whether the impairment is temporary or other-than-temporary. We base our assessment on both quantitative criteria and qualitative information, considering a number of factors including, but not limited to how long the security has been impaired, the amount of the impairment, the financial condition and near-term prospects of the issuer, whether the issuer is current on contractually-obligated interest and principal payments, key corporate events pertaining to the issuer and whether the market decline was affected by macroeconomic conditions. If we determine that an investment has incurred an other-than-temporary impairment, we permanently reduce the cost of the equity security to fair value and recognize an impairment charge in our consolidated statements of operations. Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price). When reporting the fair values of our financial instruments, we prioritize those fair value measurements into one of three levels based on the nature of the inputs, as follows: Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities; Level 2: Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices in inactive markets and observable market data for similar, but not identical instruments; and Level 3: Valuations based on unobservable inputs, which are based upon the best available information when external market data is limited or unavailable. The fair value hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs may not be available. We believe the reported carrying amounts for cash and cash equivalents, receivables, prepaids and other current assets, accounts payable, accrued expenses and other current liabilities, approximate their fair values because of the short-term nature of these financial instruments. Liabilities Related to Warrants Issued We record certain common stock warrants we issued (see Note 5 for more detailed information) at fair value and recognize the change in the fair value of such warrants as a gain or loss which we report in the Other income (expense) section in our consolidated statement of operations. We report the warrants that we record at fair value as liabilities because they contain a conditional promise to issue a variable number of our common stock shares upon the warrants’ expiration, and the monetary amount of such obligation was fixed at the inception of the contract. We estimate the fair value of the warrants using an option pricing model. Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06 (“ASU 2020-06”), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . The ASU will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The ASU also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. With regard to our financial reporting, ASU 2020-06 will be effective January 1, 2024, and early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. We are currently evaluating what effect(s) the adoption of ASU 2020-06 may have on our consolidated financial statements, but we do not believe the impact of the ASU will be material to our financial position, results of operations and cash flows. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) . The ASU requires entities to use a forward-looking approach based on current expected credit losses to estimate credit losses on certain types of financial instruments, including trade receivables, which may result in the earlier recognition of allowances for losses. With regard to our financial reporting, ASU 2016-13 will be effective beginning January 1, 2023, and early adoption is permitted. We do not believe the impact of the ASU will be material to our financial position, results of operations and cash flows. We have reviewed all accounting pronouncements recently issued by the FASB and the Securities and Exchange Commission. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof. |
CONCENTRATIONS OF RISK
CONCENTRATIONS OF RISK | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISK | NOTE 3. CONCENTRATIONS OF RISK Revenue and Accounts Receivable The disaggregation of revenue tables in Note 4 demonstrate the concentration in our revenue from certain products and the geographic concentration of our business. We also have a concentration in the volume of business we transacted with customers, as during the year ended December 31, 2020, customer A represented about 31% of our revenue and customer B represented about 11% of our revenue, while during year ended December 31, 2019, customer C accounted for about 27% of our revenue. At December 31, 2020, customer A represented approximately 38% of our gross accounts receivable, while at December 31, 2019, customer D represented about 31% of our gross accounts receivable and customer E represented about 17% of our gross accounts receivable. Cost of Sales and Accounts Payable |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 4. REVENUE We sell AI-based products that include our Remark AI Thermal Kits and rPads in the U.S., as well as the various customized products we sell in China based upon computer vision and other technologies. We do not include disclosures related to remaining performance obligations because substantially all our contracts with customers have an original expected duration of one year or less or, with regard to our stand-ready obligations, the amounts involved are not material. Disaggregation of Revenue The following table presents a disaggregation of our revenue by major category (in thousands): Year Ended December 31, Revenue by category 2020 2019 AI-based products 9,596 3,595 Other 549 1,425 Revenue $ 10,145 $ 5,020 The following table presents a disaggregation of our revenue by country (in thousands): Year Ended December 31, Revenue by country 2020 2019 China 7,876 3,595 United States 2,269 1,425 Revenue $ 10,145 $ 5,020 Significant Judgments When accounting for revenue we make certain judgments, such as whether we act as a principal or as an agent in transactions or whether our contracts with customers fall within the scope of current GAAP regarding revenue, that affect the determination of the amount and timing of our revenue from contracts with customers. Based on the current facts and circumstances related to our contracts with customers, none of the judgments we make involve an elevated degree of qualitative significance or complexity such that further disclosure is warranted in terms of their potential impact on the amount and timing of our revenue. Contract Assets and Contract Liabilities We do not currently generate material contract assets. During the year ended December 31, 2020, we recognized approximately $0.3 million of revenue which was included in the beginning balance of Contract liability at January 1, 2020, while during the comparable period of 2019, we did not recognize a material amount of revenue which was included in the beginning balance of Contract liability at January 1, 2019. Certain Agreements Related to AI-Based Product Sales In December 2018, we completed two fully-integrated AI solutions for which we fully performed under the agreement and title to the product passed to our customer, so we recognized cost of revenue of $4.0 million; however, we did not recognize the $4.6 million of revenue from such projects due to uncertainty regarding the timing of collection of amounts payable to us under the agreement. The uncertainty regarding the timing of collection prevented us from determining that collectibility of all amounts payable to us under the agreements was probable, resulting in a timing difference between recognition of cost and recognition of revenue. Though we could not recognize the revenue until collectability was deemed probable, we expected to fully collect the amounts payable to us under our legally-enforceable agreements and, therefore, we recorded a receivable of $4.6 million in Prepaid expense and other current assets, and a liability of the same amount in Accrued expense and other current liabilities i n December 2018 . During the years ended December 31, 2020 and 2019, we recognized revenue of approximately $0.5 million and $1.1 million, respectively, on the noted projects, resulting in the balances of Prepaid expense and other current assets and Accrued expense and other current liabilities each containing approximately $3.5 million related to such projects as of December 31, 2019, As of December 31, 2020, we could no longer ascertain the probability of collecting the remaining amounts receivable, and as a result, we offset the remaining asset balance of $3.1 million against the related liability. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 5. FAIR VALUE MEASUREMENTS Liabilities Related to Warrants to Purchase Common Stock At the end of each reporting period, until expiry, we use an option pricing model to estimate and report the fair value of liabilities related to certain outstanding warrants to purchase common stock. As of December 31, 2020, our outstanding liability-classified warrants include the warrants we issued or that we are obligated to issue as part of the consideration for our acquisition (the “CBG Acquisition”) of assets of China Branding Group Limited (“CBG”) in September 2016 (the “CBG Acquisition Warrants”). The warrants we issued in connection with the financing we obtained for the CBG Acquisition (referred to in our prior reports as the CBG Financing Warrants) expired on September 24, 2020 without being exercised; therefore, the balance of $1.7 million as of December 31, 2020 represents the liability associated with the CBG Acquisition Warrants. The following table presents the quantitative inputs, which we classify in Level 3 of the fair value hierarchy, used in estimating the fair value of the warrants: December 31, 2020 2019 CBG Financing Warrants 85.00 % Expected volatility 1.60 % Risk-free interest rate 0.73 Expected remaining term (years) CBG Acquisition Warrants Expected volatility 85.00 % 75.00 % Risk-free interest rate 0.18 % 1.65 % Expected remaining term (years) 2.73 3.72 The following table presents the change in the liability balance associated with our liability-classified warrants (in thousands): Year Ended December 31, 2020 2019 Balance at beginning of period $ 115 $ 1,383 Expiration of warrants (115) — Increase (decrease) in fair value 1,725 (1,268) Balance at end of period $ 1,725 $ 115 As of December 31, 2020 and 2019, warrants outstanding included CBG Acquisition Warrants which may be exercised to purchase 40,000 shares of our common stock at a per-share exercise price of $10.00 (we are also committed to the future issuance of additional CBG Acquisition Warrants to purchase up to 5,710,000 of our common shares at the same per-share exercise price as the CBG Acquisition Warrant that has already been issued (see additional information in Note 16 )) and, as of December 31, 2019, the CBG Financing Warrants, which could have been exercised to purchase 3,966,613 shares of our common stock at an exercise price of $3.70 per share. Contingent Consideration Issued in Business Acquisition We used the discounted cash flow valuation technique to estimate the fair value of the liability related to certain cash payments that we were obligated make related to our acquisition of Vegas.com, LLC (“Vegas.com”) in September 2015 that were contingent upon the performance of Vegas.com in the years ended December 31, 2016, 2017, and 2018 (the “Earnout Payments”). The significant unobservable inputs that we used, which we classify in Level 3 of the fair value hierarchy, were projected earnings before interest, taxes, depreciation and amortization (“EBITDA”), the probability of achieving certain amounts of EBITDA, and the rate used to discount the liability. On August 19, 2020, we paid all amounts that had remained outstanding related to the Earnout Payments and extinguished this liability. The following table presents the change during the years ended December 31, 2020 and 2019 in the balance of the liability associated with the Earnout Payments (in thousands): December 31, 2020 2019 Balance at beginning of period $ 1,086 $ 990 Payments (1,132) (8) Change in fair value of contingent consideration — 10 Interest accrued on unpaid balance 46 94 Balance at end of period $ — $ 1,086 On the Consolidated Balance Sheets, we included the liability for contingent consideration as a component of Accrued expense and other liabilities. |
TRADE ACCOUNTS RECEIVABLE
TRADE ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE | NOTE 6. TRADE ACCOUNTS RECEIVABLE The following table presents details regarding our net trade accounts receivable: Year Ended December 31, 2020 2019 Gross accounts receivable balance $ 5,988 $ 4,171 Allowance for bad debt (961) (2,207) Accounts receivable, net $ 5,027 $ 1,964 Generally, it is not unusual for Chinese entities to pay their vendors on longer timelines than the timelines typically observed in U.S. commerce. As of December 31, 2020 and 2019, the gross accounts receivable balances included $5.8 million and $4.1 million, respectively, related to our China-based business, while the allowance for bad debt related to such balances on such dates were $0.9 million and $2.2 million, respectively. |
INVESTMENT IN UNCONSOLIDATED AF
INVESTMENT IN UNCONSOLIDATED AFFILIATE | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
INVESTMENT IN UNCONSOLIDATED AFFILIATES | NOTE 7. INVESTMENTS IN UNCONSOLIDATED AFFILIATES In 2009, we co-founded a U.S.-based venture, Sharecare, to build a web-based platform that simplifies the search for health and wellness information. The other co-founders of Sharecare were Dr. Mehmet Oz, HARPO Productions, Discovery Communications, Jeff Arnold and Sony Pictures Television. As of December 31, 2020 and 2019, we owned approximately 4.4% of Sharecare’s issued capital stock and maintained representation on its Board of Directors. The value of the investment in Sharecare in accordance with GAAP was approximately $1.0 million as of December 31, 2020 and 2019. During June 2018, one of our consolidated VIEs acquired a 20% interest in AIO, a Chinese technology company which provides consulting and data services to the Chinese film industry, in exchange for $1.0 million, of which $500,000 was paid by December 31, 2020, and a license to use our proprietary KanKan data intelligence platform in China. Based on our evaluation of the facts and circumstances related to the transaction, we accounted for the investment resulting from such transaction using the equity method of accounting. From our acquisition of the investment in AIO through December 31, 2020, the amount of our equity in AIO’s net losses from the date we acquired our interest in AIO until December 31, 2020 was approximately $0.1 million. Based on additional information we obtained during 2020, we determined that the COVID-19 outbreak in China had permanently ended AIO's ability to conduct its business and we wrote off our remaining investment of $0.9 million in that entity, which, when netted against the remaining $0.5 million we owed to AIO for the equity interest, resulted in a loss on impairment of $0.4 million. |
PREPAID EXPENSE AND OTHER CURRE
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSE AND OTHER CURRENT ASSETS | NOTE 8. PREPAID EXPENSE AND OTHER CURRENT ASSETS The following table presents the components of prepaid expense and other current assets (in thousands): December 31, 2020 2019 Other receivables $ 8 $ 3,712 Prepaid expense 1,877 633 Deposits 50 7 Other current assets 108 271 Total $ 2,043 $ 4,623 Most of the Other receivables balance at December 31, 2019 represented amounts receivable under certain agreements related to AI-based product sales (see Note 4 for more information). |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 9. PROPERTY AND EQUIPMENT Property and equipment consist of the following (in thousands, except estimated lives): December 31, Estimated Life 2020 2019 Computers and equipment 3 1,097 989 Furniture and fixtures 3 42 23 Software 3 5,006 4,896 Leasehold improvements 3 174 114 Total property, equipment and software $ 6,319 $ 6,022 Less accumulated depreciation and amortization (5,998) (5,681) Total property, equipment and software, net $ 321 $ 341 For the years ended December 31, 2020 and 2019, depreciation (and amortization of software) expense was $0.2 million and $0.7 million, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 10. LEASES We lease office space and a vehicle under contracts we classify as operating leases. None of our leases are financing leases. The following table presents the detail of our lease expense (we did not receive sublease income during the year ended December 31, 2020) which is reported in General and administrative expense (in thousands): Operating lease expense $ 640 Short-term lease expense 291 Lease expense $ 931 We reported within continuing operating cash flows for the year ended December 31, 2020, $0.6 million of cash paid for amounts included in the measurement of operating lease liabilities. As of December 31, 2020, our operating leases had a weighted-average remaining lease term of approximately twenty months, and we used a weighted-average discount rate of approximately 13% to measure our operating lease liabilities. Maturity of Lease Liabilities The following table presents information regarding the maturities of our undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented in our December 31, 2020 Consolidated Balance Sheet (in thousands). Operating lease liabilities maturing during the next: One year $ 412 Two years 210 Three years 25 Total undiscounted cash flows $ 647 Present value of cash flows $ 576 Lease liabilities on balance sheet: Short-term $ 382 Long-term 194 Total lease liabilities $ 576 Termination of Lease and Related Landlord Actions Beginning approximately July 2019, we were not able to pay our obligations under the office lease for our former office located at 3960 Howard Hughes Parkway in Las Vegas, Nevada. On March 5, 2020, our former landlord, BRE/HC Las Vegas Property Holdings, L.L.C (the “Hughes Center Landlord”), exercised its right to terminate the lease as of such date as a result of the ongoing payment default. When we derecognized the right-of-use asset and the portion of the operating lease liability related to the original schedule of future amounts due to the Hughes Center Landlord in March 2020, we recognized a gain on lease termination of slightly more than $1.5 million. On April 9, 2020, the Hughes Center Landlord filed suit against us in Nevada to recover the approximately $1.1 million of rent owed through March 5, 2020, plus damages resulting from the early termination of the lease. As of December 31, 2019, we had accrued approximately $2.3 million for settlement of the legal action filed by the Hughes Center Landlord. During the first quarter of 2020, prior to the Hughes Center Landlord’s termination of the lease agreement, we accrued an additional $0.3 million, resulting in total liabilities related to this matter of $2.6 million. On August 3, 2020, we entered into a settlement agreement with the Hughes Center Landlord (the “Hughes Center Lease Settlement”), pursuant to which we paid only $0.6 million to the Hughes Center Landlord in full settlement of our obligations with respect to such office lease. On November 5, 2020, the Hughes Center Landlord filed a Notice of Voluntary Dismissal with Prejudice with the District Court of Clark County, Nevada dismissing their legal action against us. The slightly more than $2.0 million gain related to the Hughes Center Lease Settlement, in addition to the slightly more than $1.5 million gain on lease termination we recorded in March 2020, resulted in a total gain on lease termination of approximately $3.6 million. Other As of December 31, 2020, approximately $0.1 million remained in the balance of Prepaid expense and other current assets related to a short-term lease on a property we rented in the Los Angeles, California area. Significant Judgments When accounting for our leases, we make certain judgments, such as whether a contract contains a lease or what discount rate to use, that affect the determination of the amount of our lease assets and liabilities. Based on the current facts and circumstances related to our contracts, none of the judgments we make involve an elevated degree of qualitative significance or complexity such that further disclosure is warranted. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 11. INTANGIBLE ASSETS Intangible Assets The following table summarizes intangible assets by category (in thousands): December 31, 2020 December 31, 2019 Gross Amount Accumulated Net Amount Gross Amount Accumulated Net Amount Finite-lived intangible assets Domain names $ — $ — $ — $ 1,256 $ (874) $ 382 Other intangible assets — — — 68 (68) — $ — $ — $ — $ 1,324 $ (942) $ 382 Indefinite-lived intangible assets License to operate in China — — 127 127 Total intangible assets $ — $ — $ 1,451 $ 509 For the year ended December 31, 2020 and 2019, total amortization expense was $0.2 million and $0.3 million, respectively. During the fourth quarter of 2020, we determined that the remaining portion of the intangible asset representing the bikini.com domain name was impaired based on revised cash flow estimates, so we recorded an impairment loss of approximately $0.3 million. Additionally, we determined that a legacy business license in China was no longer necessary to our continuing operations and we, therefore, recorded a loss on impairment of approximately $0.1 million. During the fourth quarter of 2019, we decided that we would no longer create content that could make use of the intangible asset related to media content and broadcast rights. As a result, we determined that the remaining portion of such intangible asset was impaired based on revised cash flow estimates, so we recognized an impairment loss of approximately $0.2 million. |
STOCKHOLDERS' EQUITY, SHARE-BAS
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE | NOTE 12. STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE Common Shares Authorized Our Amended and Restated Certificate of Incorporation authorizes us to issue up to 100,000,000 shares of our common stock, of which 99,916,941 shares were outstanding as of March 29, 2021. In addition, as of March 29, 2021, we had outstanding stock options allowing for the purchase of as many as approximately 15.3 million shares of common stock and we had outstanding warrants to purchase 40,000 shares of common stock. If all of our outstanding stock options and warrants were exercised, the total number of shares of our common stock that we would be required to issue would greatly exceed the number of our remaining authorized but unissued shares of common stock. As a result of such potential shortfall in the number of our authorized shares of common stock, we will have insufficient shares of common stock available to issue in connection with the exercise of our outstanding stock options and warrants or any future equity financing transaction we may seek to undertake. Accordingly, we intend to seek approval of an increase in the number of our authorized shares of common stock at a 2021 special meeting of stockholders. Equity Issuances On March 29, 2019, we entered into the 2019 Aspire Purchase Agreement with Aspire Capital. In consideration for entering into the 2019 Aspire Purchase Agreement, we issued 629,370 shares of our common stock to Aspire Capital. As of December 31, 2019, we had issued to Aspire Capital a total of 4,129,370 shares of our common stock under the 2019 Aspire Purchase Agreement. During the year ended December 31, 2019, we issued a total of 11,999,597 shares of our common stock to private investors and to Aspire Capital in exchange for $10.8 million plus Aspire Capital’s commitment to participate in the 2019 Aspire Purchase Agreement. On March 3, 2020, we entered into the 2020 Aspire Purchase Agreement with Aspire Capital which provided that, upon the terms and subject to the conditions and limitations set forth therein, we had the right to direct Aspire Capital to purchase up to an aggregate of $30.0 million of shares of our common stock over the 30-month term of the 2020 Aspire Purchase Agreement. The 2020 Aspire Purchase Agreement replaced the 2019 Aspire Purchase Agreement, which terminated under the terms of the 2020 Aspire Purchase Agreement. In consideration for entering into the 2020 Aspire Purchase Agreement, we issued to Aspire Capital 2,374,545 shares of our common stock. As of December 31, 2020, we had issued to Aspire Capital a total of 44,227,890 shares of our common stock under the 2020 Aspire Purchase Agreement. During the year ended December 31, 2020, we issued a total of 48,238,893 shares of our common stock to Aspire Capital under the 2019 Aspire Purchase Agreement and the 2020 Aspire Purchase Agreement in exchange for $32.0 million plus Aspire Capital’s commitment to participate in the 2020 Aspire Purchase Agreement. Share-Based Compensation We are authorized to issue equity-based awards under our 2014 Incentive Plan and our 2017 Incentive Plan, each of which our stockholders have approved. We also award cash bonuses (“China Cash Bonuses”) to our employees in China, which grants are not subject to a formal incentive plan and which can only be settled in cash. We grant such awards to attract, retain and motivate eligible officers, directors, employees and consultants. Under each of the plans, we have granted shares of restricted stock and options to purchase common stock to our officers and employees with exercise prices equal to or greater than the fair value of the underlying shares on the grant date. Stock options and China Cash Bonuses generally expire 10 years from the grant date. All forms of equity awards and China Cash Bonuses vest upon the passage of time, the attainment of performance criteria, or both. When participants exercise stock options, we issue any shares of our common stock resulting from such exercise from new authorized and unallocated shares available at the time of exercise. We estimate the fair value of stock option awards using the BSM Model. During the year ended December 31, 2019 (we did not grant any stock options during the year ended December 31, 2020), we applied the following weighted-average assumptions: Expected term in years 6.0 Expected volatility 70 % Expected dividends — % Risk-free interest rate 1.86 % We estimated the expected term based upon historical data. The risk-free interest rate is based on the U.S. Treasury yield curve appropriate for the expected term on the date of grant, and we estimate the expected volatility primarily using the historical volatility of our common stock. Actual compensation, if any, ultimately realized may differ significantly from the amount estimated using an option-pricing model. The following table summarizes activity under our equity incentive plans related to equity-classified stock option grants as of December 31, 2020, and changes during the twelve months ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2020 10,359,079 $ 4.20 Granted — — Exercised (150,989) 0.87 Forfeited, cancelled or expired (265,749) 2.77 Outstanding at December 31, 2020 9,942,341 $ 4.29 5.7 $ 709 Options exercisable at December 31, 2020 9,781,466 $ 4.35 5.7 $ 509 The following table summarizes the status of non-vested stock options as of December 31, 2020, and changes during the year then ended: Shares Weighted-Average Non-vested at January 1, 2020 610,187 $ 241 Granted — — Vested (399,188) 168 Forfeited (50,124) 53 Non-vested at December 31, 2020 160,875 $ 68 For the year ended December 31, 2019, the weighted-average grant-date fair value of options granted was $0.3 million. We received proceeds from stock option exercises during the year ended December 31, 2020 totaling approximately $0.1 million, while the total intrinsic value on such stock option exercises was $0.1 million. We did not experience material stock option exercises during the year ended December 31, 2019. On July 27, 2020, we granted to employees and directors, excluding our CEO, options to purchase approximately 5.4 million shares of our common stock. The option agreements governing the grants contain a stipulation that, regardless of vesting, such options do not become exercisable unless and until stockholders approve an amendment to our Amended and Restated Certificate of Incorporation to increase in the number of authorized shares of our common stock in an amount sufficient to allow for the exercise of the options and we have filed a corresponding Certificate of Amendment to our Amended and Restated Certificate of Incorporation reflecting such increase in the number of authorized shares of our common stock. As a result of such stipulation, we determined that a grant date, as defined in GAAP, has not yet occurred regarding the stock options awarded on July 27, 2020 given the requirement for stockholder approval of additional authorized shares to make the stock options exercisable. We have neither measured the fair value of such stock options, recorded stock compensation expense related to such stock options nor reflected them as granted in the table above. The following table summarizes activity under our equity incentive plans related to the China Cash Bonuses as of December 31, 2020, and changes during the twelve months then ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2020 1,098,750 $ 5.20 Granted 300,000 1.37 Forfeited, cancelled or expired (343,750) 5.52 Outstanding at December 31, 2020 1,055,000 $ 4.01 6.4 $ 200 Cash awards exercisable at December 31, 2020 775,000 $ 4.97 5.3 $ 51 We account for the China Cash Bonuses as liabilities because they are settled in cash upon exercise. The following table presents the change in the liability balance associated with the China Cash Bonuses (in thousands): Year Ended December 31, 2020 2019 Balance at beginning of period $ 43 $ 149 Increase (decrease) in share-based compensation cost 637 (106) Balance at end of period $ 680 $ 43 The following table presents a breakdown of share-based compensation cost included in operating expense (in thousands): Year Ended December 31, 2020 2019 Stock options $ 160 $ 425 China Cash Bonuses 637 (106) Total $ 797 $ 319 We record share-based compensation expense in the books of the subsidiary that incurs the expense, while for equity-classified stock options we record the change in additional paid-in capital on the corporate entity because the corporate entity’s equity underlies such stock options. The following table presents information regarding unrecognized share-based compensation cost associated with stock options and China Cash Bonuses: December 31, 2020 Unrecognized share-based compensation cost for non-vested awards (in thousands): Stock options 28 China Cash Bonuses 374 Weighted-average years over which unrecognized share-based compensation expense will be recognized: Stock options 0.3 China Cash Bonuses 5.0 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 13. INCOME TAX For the year ended December 31, 2020, and 2019, we did not have a tax provision or a tax benefit to report. The following table presents a reconciliation between the income tax benefit computed by applying the federal statutory rate and our actual income tax expense: Year Ended December 31, 2020 2019 Income tax benefit at federal statutory rate $ (2,874) $ (4,831) Change in deferred tax asset valuation allowance 1,670 2,561 Tax impact of warrants 338 (266) Tax effects of: Statutory differences 1,014 942 R&D expense (202) (236) Foreign tax rates different than U.S. federal statutory rate (96) (350) Other permanent items 155 6 Deferred adjustments 86 1,716 Other (91) 458 Income tax provision (benefit) as reported $ — $ — Our 2020 and 2019 effective tax rates were significantly impacted by maintaining a valuation allowance against net deferred tax asset in all jurisdictions, both domestic and foreign, as well as permanent book-tax adjustments in foreign jurisdictions and the fact that our earnings are generated in jurisdictions with rates that differ from the US federal statutory rate. The following table presents loss before income tax attributable to domestic and to foreign operations (in thousands): Year Ended December 31, 2020 2019 Domestic $ (11,289) $ (14,266) Foreign (2,396) (8,738) Loss before income taxes $ (13,685) $ (23,004) Deferred Tax Assets and Liabilities We assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing DTAs in each jurisdiction. A significant piece of objective negative evidence, in each jurisdiction, that we evaluated was the cumulative loss incurred over the three-year period ended December 31, 2020. Such objective evidence limits our ability to consider other subjective evidence. On the basis of our evaluation, as of December 31, 2020, we continued to maintain the valuation allowance noted in the table below. The amount of the DTAs that we do not consider realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth. The following table presents the components of our DTAs and DTLs (in thousands): December 31, 2020 2019 Deferred Tax Assets Net operating loss carryforwards $ 41,061 $ 38,008 Deferred income and reserves — — Amortization of intangibles 2,167 2,535 Share-based compensation expense 6,876 6,929 Other 3,000 4,000 Gross deferred tax assets $ 53,104 $ 51,472 Valuation allowance (53,117) (51,455) Deferred tax assets, net of valuation allowance $ (13) $ 17 Deferred Tax Liabilities Depreciation of fixed assets 13 (17) Gross deferred tax liabilities 13 (17) Net deferred tax liability $ — $ — Net operating losses available at December 31, 2020 to offset future taxable income in the U.S. federal, U.S. state, Hong Kong and China jurisdictions are $172.8 million, $31.9 million, $1.7 million and $11.4 million, respectively. The statutory income tax rates in Hong Kong and China are 16.5% and 25%, respectively. The U.S. net operating losses generated prior to 2018 expire between 2020 and 2038. The US net operating losses generated in 2018 to 2020 have no expiration date and carry forward indefinitely. The net operating losses generated in Hong Kong have no expiration date and carry forward indefinitely, while the net operating losses generated in China have a five-year carryforward period. We file income tax returns in various domestic and foreign tax jurisdictions with varying statutes of limitation. We are generally not subject to examinations in the U.S. for periods prior to 2017. However, as we utilize our net operating losses prior periods can be subject to examination. In significant foreign jurisdictions, we are generally not subject to examination for periods prior to 2017. Under the Internal Revenue Code of 1986, as amended (the “Code”), if an ownership change (as defined for income tax purposes) occurs, §382 of the Code imposes an annual limitation on the amount of a corporation’s taxable income that can be offset by net operating loss carryforwards. During our 2014 tax year, we analyzed recent acquisitions and ownership changes and determined that certain of such transactions qualified as an ownership change under §382. As a result, we will likely not be able to use a portion of our net operating loss carryforwards. For the years ended December 31, 2020 and 2019, we have no unrecognized tax benefits, and we have not taken any tax positions which we expect might significantly change unrecognized tax benefits during the 12 months following December 31, 2020. We comply with tax legislation and rules that apply in jurisdictions in which we operate around the globe, to the best of our ability. In China, we incur certain business expenses subject to jurisdictionally-specific requirements. While we have adhered to such rules, circumstances exist outside of our control that create uncertainty relative to our ability to sustain certain deductions. We believe, at more likely than not level, we will sustain such deductions; however, taxing authorities in China may take an alternative position. |
ACCRUED EXPENSE AND OTHER CURRE
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES | NOTE 14. ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES The following table presents the components of Accrued expense and other current liabilities (in thousands): December 31, 2020 2019 Accrued compensation and benefit-related expense $ 1,151 $ 1,168 Accrued interest 485 302 Other accrued expense 721 1,171 Other payables 3,048 3,656 Operating lease liability - current 382 2,877 Other current liabilities 873 5,152 Total $ 6,660 $ 14,326 The balance in Other current liabilities in the year ended December 31, 2019 primarily represented potential revenue related to projects we describe in Note 4 under the subheader Certain Agreements Related to AI-Based Product Sales . |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 15. DEBT Short-Term Debt On April 12, 2017, we issued a short-term note payable in the principal amount of $3.0 million to a private lender in exchange for cash in the same amount. The agreement, which does not have a stated interest rate, required us to repay the note plus a fee of $115 thousand on the maturity date of June 30, 2017. The note is accruing interest at $500 per day on the unpaid principal until we repay the note in full. As of December 31, 2020, the note was past due and we owed $1.5 million in principal and $0.4 million in accrued interest on such note, after making principal payments totaling $1.5 million during 2020. Other Debt The following table presents debt (in thousands) as of: December 31, 2020 December 31, 2019 MGG loan $ — $ 12,025 Loans payable, current — 12,025 Private lender loan due December 2023 1,000 — PPP loan due April 2022 425 — Loans payable, long-term $ 1,425 $ — MGG Loan We were a party to a financing agreement dated as of September 24, 2015 (as amended, the “Financing Agreement”) with certain of our subsidiaries as borrowers (together with Remark, the “Borrowers”), certain of our subsidiaries as guarantors, the lenders from time to time party thereto (the “MGG Lenders”) and MGG Investment Group LP, in its capacity as collateral agent and administrative agent for the MGG Lenders (“MGG”), pursuant to which the MGG Lenders extended credit to the Borrowers consisting of a term loan in the aggregate principal amount of $35.5 million (the “MGG Loan”). On May 15, 2019, we completed the sale of all of the issued and outstanding membership interests of Vegas.com (the “VDC Transaction”) and used the cash proceeds of $30 million to pay amounts due under the Financing Agreement, of which approximately $10 million remained outstanding after giving effect to the application of such cash proceeds. On May 28, 2020, we repaid in full all outstanding obligations under, and terminated, the Financing Agreement. Loan due April 2022 On April 15, 2020, we entered into a loan agreement (the “PPP Loan”) with our bank under the U.S. Small Business Administration’s Paycheck Protection Program. Under the PPP Loan, we borrowed $0.4 million with a stated interest rate of one percent for a term of two years from the initial disbursement date of April 15, 2020. The PPP Loan is eligible for forgiveness as part of the CARES Act if certain requirements are met. We continue to evaluate and monitor the requirements of the CARES Act that allow for forgiveness. As of December 31, 2020, the SBA loan had an outstanding principal balance of $0.4 million included in loans payable. Loan due December 2023 On December 30, 2020, we executed a promissory note with a private lender (the “Private Lender Loan”) under which we borrowed $1.0 million. The Private Lender Loan bears interest at 10% per annum. The entire principal balance, as well as any interest accrued thereon, is due and payable in full on December 30, 2023, or such earlier date as the principal may become due and payable pursuant to the terms of the Private Lender Loan. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 16. COMMITMENTS AND CONTINGENCIES At December 31, 2020, we had no material commitments outside the normal course of business, other than as described below. During 2020, we advanced $1.5 million to an unrelated entity (our “China Business Partner”) pursuant to an agreement we entered into with the China Business Partner. We are in the process of negotiating a separate contract with the China Business Partner setting out the terms pursuant to which the China Business Partner will assist us in obtaining contracts from some of the largest companies in China. Under the executed agreement with the China Business Partner, upon receipt of a borrowing request from the China Business Partner, we have an obligation to advance up to an aggregate amount of $5.1 million over the loan term of five years, though we do have the option to terminate the loan agreement at any time prior to converting the outstanding principal and accrued interest into equity interests of our China Business Partner. The business purpose for the loan was to allow our China Business Partner to purchase and modify hardware to integrate with our software and market such integrated product to potential customers. We are currently in the process of formalizing a more formal business relationship with our China Business Partner. We determined that advances under the loan agreement were effectively marketing costs because realizability of the loan was uncertain given the lack of a formalized business relationship with our China Business Partner and the nature of the use of funds. Any advances we make under the executed agreement with the China Business Partner will bear a simple interest rate of 10% per annum, payable before each December 31st during the term of the agreement, and will be convertible at our election into equity of the China Business Partner upon any equity financing our China Business Partner undertakes during the term of the agreement. Contingencies CBG Litigation As of December 31, 2020, we were neither a defendant in any material pending legal proceeding nor are we aware of any material threatened claims against us and, therefore, we have not accrued any contingent liabilities. On February 21, 2018, we initiated a legal proceeding (the “CBG Litigation”) against CBG, Adam Roseman, and CBG’s Joint Official Liquidators (the “JOLs”) arising from the CBG Acquisition. The CBG Litigation was filed in the United States District Court for the District of Nevada and is captioned as Remark Holdings, Inc., et al. v. China Branding Group, Limited (In Official Liquidation), et al. , Case No. 2:18-cv-00322. In the CBG Litigation, we sought a declaration from the court that we are entitled to rescission of the purchase agreement relating to the CBG Acquisition and all transactions related to the CBG Acquisition, a declaration that such purchase agreement and the transactions consummated pursuant thereto be rescinded and void ab initio, a declaration that we are not required to deliver the remaining CBG Acquisition Warrants allowing for the purchase of 5,710,000 shares of common stock at a per-share exercise price of $10.00, an order directing release to us of any consideration held in escrow in connection with the CBG Acquisition, and disgorgement of all consideration paid by us in connection with the CBG Acquisition. We alleged that the defendants fraudulently mispresented and concealed material information regarding the companies we acquired in the CBG Acquisition. We entered into a settlement agreement with Mr. Roseman to settle all claims against him, and we dismissed those claims on May 13, 2019. We entered into a Stipulation for Settlement dated January 15, 2019 with CBG and the JOLs, which sets forth the binding terms of their settlement agreement (the “Stipulation for Settlement”). Pursuant to the Stipulation for Settlement, we will issue fully-transferable warrants on a non-diluted basis allowing for the purchase of 5,710,000 shares of our common stock at a per-share exercise price of $6.00, which warrants are exercisable for a period of 5 years from the date of the Stipulation for Settlement, and which we have the right to cause the warrant holders to exercise if the closing price of our common stock is $8.00 or greater on any 5 non-consecutive days in any consecutive 30-day trading window. The parties to the Stipulation for Settlement also agreed to negotiate anti-dilution provisions for the warrants. In exchange for the foregoing consideration, the parties to the Stipulation for Settlement agreed to release their claims against each other and enter into a written definitive settlement agreement. After entering into the Stipulation for Settlement, the JOLs demanded the warrants also include an exchange right. We rejected this request and filed a motion to enforce the Stipulation for Settlement on March 12, 2019. The Nevada court issued a report and recommendation on August 2, 2019, which was affirmed on September 24, 2019, requiring the JOLs to submit the written definitive settlement agreement (without an exchange right) to the Grand Court of the Cayman Islands overseeing CBG’s liquidation for approval. An application for sanction to enter the settlement agreement was filed with the Grand Court on December 3, 2019. One month later, on or about January 2, 2020, the Grand Court approved the application, authorizing CBG and the JOLs to enter into the settlement. Counsel for the parties are currently finalizing the settlement agreement. Other We are also regularly subject to claims, suits, regulatory and government investigations, and other proceedings. Such claims, suits, regulatory and government investigations, and other proceedings could result in substantial fines and penalties, injunctive relief, ongoing auditing and monitoring obligations, changes to our products and services, alterations to our business models and operations, and collateral related civil litigation or other adverse consequences, all of which could harm our business, reputation, financial condition, and operating results. With respect to our outstanding matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17. RELATED PARTY TRANSACTIONS On July 27, 2020, we collected approximately $0.5 million of receivables from related parties. The receivables represented cash advances in excess of expense reimbursements to senior management. The cash received from these receivables was subsequently injected as additional capital into our VIEs in China. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS Note Payable On February 10, 2021, we entered into a senior secured promissory note (the “Note”) with certain of our subsidiaries as guarantors (the “Guarantors”) and Jefferson Remark Funding LLC (the “Lender”), pursuant to which the Lender extended credit to us consisting of a one-year term loan in the principal amount of $5.0 million. The Note bears interest at 15% per annum, which shall be payable on the last business day of each calendar quarter commencing on March 31, 2021. The entire principal balance, as well as any unpaid accrued interest thereon, is due and payable in full on February 10, 2022. To secure the payment and performance of the obligations under the Note, we, together with the Guarantors, have granted to the Lender a first-priority lien on, and security interest in, all assets of Remark and the Guarantors, subject to certain customary exceptions. The Note contains representations, warranties, events of default, indemnifications and other provisions customary for financings of this type. The occurrence of any event of default under the Note may result in the principal amount outstanding and unpaid interest thereon becoming immediately due and payable. Common Stock Issuances From February 3, 2021 through February 5, 2021, we issued approximately 0.4 million shares of our common stock as a result of stock option exercises. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation We include all of our subsidiaries, including the VIEs for which we are the primary beneficiary, in our consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. To comply with China’s laws which restrict foreign ownership of entities that operate within industries deemed sensitive by the Chinese government, we employ what we believe is a commonly-used organizational structure consisting of a wholly-foreign owned enterprise (“WFOE”) and the VIEs to operate our KanKan business. We own 100% of the equity of the WFOE, while the VIEs are companies formed in China under local laws which are owned by members of our management team. We funded the registered capital and operating expenses of the VIEs by extending loans to the VIEs’ owners. We are the primary beneficiary of the VIEs because the relationships between the VIEs and our WFOE are governed by contractual agreements, including in each case an Exclusive Call Option Agreement, an Exclusive Business Cooperation Agreement, a Proxy Agreement and an Equity Pledge Agreement, which give us control over the operations of the VIEs. With regard to our investment in Sharecare, Inc. (“Sharecare”), GAAP allows us to continue to carry our investment at cost less impairment until such time as an observable price change in the underlying security occurs. Any gains or losses resulting from a change in fair value are recorded to the statement of operations. We use the equity method for equity investments in which we can exercise significant influence over the investee. |
Use of Estimates | Use of Estimates We prepare our consolidated financial statements in conformity with GAAP. While preparing our financial statements, we make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes. Accordingly, actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable and long-term receivables, intangible assets, the useful lives of property and equipment, share-based compensation, the fair value of the warrant liability, deferred income taxes, and inventory reserve among other items. As of December 31, 2020, the impact of the COVID-19 pandemic continues to unfold. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. |
Cash and Cash Equivalents | Cash and cash equivalents Our cash and cash equivalents consist of funds held in bank accounts. Cash equivalents are highly-liquid investments with original maturities of three months or less, including money market funds. |
Leases | Leases We adopted Accounting Standards Codification Topic 842, Leases (“ASC 842”), as of January 1, 2019. When adopting ASC 842 we elected several practical expedients permitted under the transition guidance within ASC 842, which, among other things, allowed us to carry forward the historical lease classification and to avoid recording leases that had expired prior to the date of adoption. We also elected to combine the lease and non-lease components of our leases for office space (which represent the largest portion of our operating lease assets and liabilities) and not to record leases with initial terms of 12 months or less (short-term leases) on the balance sheet. We amortize the cost of short-term leases on a straight-line basis over the lease term. |
Foreign Currency Translation | Foreign Currency Translation We report all currency amounts in USD. Our China VIEs, however, maintain their books and records in their RMB functional currency, while we have other subsidiaries with minimal activity which maintain their books and records in their HKD functional currency. In general, when consolidating our subsidiaries or VIEs with non-USD functional currencies, we translate the amounts of assets and liabilities into USD using the exchange rate on the balance sheet date, and the amounts of revenue and expense are translated at the average exchange rate prevailing during the period. The gains and losses resulting from translation of financial statement amounts into USD are recorded as a separate component of accumulated other comprehensive loss within stockholders’ deficit. |
Revenue Recognition | Revenue Recognition We evaluate all of our agreements with customers to determine whether they qualify as contracts in scope of the current revenue guidance in GAAP. If an agreement qualifies as a contract in scope, we then identify the performance obligations in the contract, determine the transaction price of the contract, allocate such transaction price to the performance obligations in the contract and determine whether to recognize revenue when or as a performance obligation is satisfied. We regularly review our customers’ financial positions to ensure that collectability of amount due from them is reasonably assured. If there is uncertainty related to the timing of collections from our customer, we consider this to be uncertainty of the customer’s ability and intention to pay us when consideration is due. Accordingly, we recognize revenue only when we have transferred control of the goods or services and collectability is probable. We recognize revenue from warranty contracts on a straight-line basis over the period of the warranty. When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation. AI-Based Products We generate revenue by developing AI-based products, including fully-integrated AI solutions which combine our proprietary technology with third-party hardware and software products to meet end-user specifications. Under one type of contract for our AI-based products, we provide a single, continuous service to clients who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Under another type of contract, we have performance obligations to provide fully-integrated AI solutions to our customer and we recognize revenue at the point in time when each performance obligation is completed and delivered to, tested by and accepted by our customer. For our contracts with customers, we generally extend short-term credit policies to our customers, typically up to one year for large-scale projects. We record the incremental costs of obtaining contracts as an expense when incurred, because such costs would otherwise be amortized over a period of less than one year if capitalized. Other We generate revenue from other sources, such as from e-commerce activity in which we sell goods to our customers, or media production which involves the production of video or Internet-based content for our customers. We recognize the revenue from these contracts at the point in time when we transfer control of the good sold to the customer or when we deliver the promised media content. Substantially all of our contracts with customers that generate Other revenue are completed within one year or less. |
Share-Based Compensation | Share-Based Compensation For grants of restricted stock or restricted stock units, we measure fair value using the closing price of our stock on the measurement date, while we use the Black-Scholes-Merton option pricing model (the “BSM Model”) to estimate the fair value of stock options and similar instruments awarded. The BSM Model requires the following inputs: • Expected volatility of our stock price. We analyze the historical volatility of our stock price utilizing daily stock price returns, and we also review the stock price volatility of certain peers. Using the information developed from such analysis and our judgment, we estimate how volatile our stock price will be over the period we expect the stock options will remain outstanding. • Risk-free interest rate. We estimate the risk-free interest rate using data from the Federal Reserve Treasury Constant Maturity Instruments H.15 Release (a table of rates downloaded from the Federal Reserve website) as of the valuation date for a security with a remaining term that approximates the period over which we expect the stock options will remain outstanding. • Stock price, exercise price and expected term. We use an estimate of the fair value of our common stock on the measurement date, the exercise price of the option, and the period over which we expect the stock options will remain outstanding. We do not currently issue dividends, but if we did so, then we would also include an estimated dividend rate as an input to the BSM model. Generally speaking, the BSM model tends to be most sensitive to changes in stock price, volatility or expected term. We measure compensation expense as of the grant date for granted equity-classified instruments and as of the settlement date for granted liability-classified instruments (meaning that we re-measure compensation expense at each balance sheet date until the settlement date occurs). Once we measure compensation expense, we recognize it over the requisite service period (generally the vesting period) of the grant, net of forfeitures as they occur. |
Accounts Receivable | Accounts Receivable We regularly evaluate the collectability of trade receivable balances based on a combination of factors such as customer credit-worthiness, past transaction history with the customer, current economic industry trends and changes in customer payment patterns. If we determine that a customer will be unable to fully meet its financial obligation, such as in the case of a bankruptcy filing or other material events impacting its business, a specific reserve for bad debt will be recorded to reduce the related receivable to the amount expected to be recovered. |
Income Taxes | Income Taxes We recognize deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) to account for the effects of temporary differences between the tax basis of an asset or liability and its amount as reported in our consolidated balance sheets, using enacted tax rates expected to apply to taxable income in the years in which we expect those temporary differences to be recovered or settled. Any effect on DTAs or DTLs resulting from a change in enacted tax rates is included in income during the period that includes the enactment date. We reduce the carrying amounts of DTAs by a valuation allowance if, based upon all available evidence (both positive and negative), we determine that it is more likely than not that such DTAs will not be realizable. Such assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, our forecasts of future profitability, tax planning strategies, the duration of statutory carryforward periods, and our experience with the utilization of operating loss and tax credit carryforwards before expiration. We apply a recognition threshold and measurement attribute related to uncertain tax positions taken or expected to be taken on our tax returns. We recognize a tax benefit for financial reporting of an uncertain income tax position when it has a greater than 50% likelihood of being sustained upon examination by the taxing authorities. We measure the tax benefit of an uncertain tax position based on the largest benefit that has a greater than 50% likelihood of being ultimately realized, including evaluation of settlements. |
Inventory | Inventory We use the first-in first-out method to determine the cost of our inventory, then we report inventory at the lower of cost or net realizable value. We regularly review our inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated sales forecasts. |
Advertising Expense | Advertising Expense Advertising expense is recorded during the period in which it is incurred. We incurred advertising expense during the years ended December 31, 2020 and 2019 of $0.2 million and $0.3 million, respectively. |
Research and Development | Research and Development Engineering cost is recorded as technology and development expense during the period in which it is incurred. |
Product Warranties | Product Warranties We offer extended warranties on our products for periods of one December 31, 2020 and 2019 . |
Property, Equipment and Software | Property, Equipment and Software We state property and equipment at cost and depreciate such assets using the straight-line method over the estimated useful lives of each asset category. For leasehold improvements, we determine amortization using the straight-line method over the shorter of the lease term or estimated useful life of the asset. We expense repairs and maintenance costs as incurred, while capitalizing betterments and capital improvements and depreciating such costs over the remaining useful life of the related asset. We capitalize qualifying costs of computer software that we incur during the application development stage, as well as the cost of upgrades and enhancements that result in additional functionality, and we amortize such costs using the straight-line method over a period of three years, the expected period of the benefit. |
Net Loss per Share | Net Loss per Share We calculate basic net loss per share using the weighted-average number of common stock shares outstanding during the period. For the calculation of diluted net loss per share, we give effect to all the shares of common stock that were outstanding during the period plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is anti-dilutive. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options and warrants. |
Segments | Segments Existing GAAP, which establishes a management approach to segment reporting, defines operating segments as components of an entity about which separate, discrete financial information is available for evaluation by the chief operating decision-maker. We have identified our Chief Executive Officer as our chief operating decision maker, who reviews operating results to make decisions about allocating resources and assessing performance based upon only one operating segment. |
Commitments and Contingencies | Commitments and Contingencies We record a liability for a loss contingency when we determine that it is probable that we have incurred such liability and we can reasonably estimate the amount. |
Impairments | Impairments Long-Lived Assets Other Than Indefinite-Lived Intangible Assets When events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable, we evaluate long-lived assets for potential impairment, basing our testing method upon whether the assets are held for sale or held for use. For assets classified as held for sale, we recognize the asset at the lower of carrying value or fair market value less costs of disposal, as estimated based on comparable asset sales, offers received, or a discounted cash flow model. For assets held and used, we estimate the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, we recognize an impairment loss for the difference between the carrying value of the asset and its fair value. Indefinite-Lived Intangible Assets In the fourth quarter of each fiscal year, we test indefinite-lived intangible assets for impairment. When testing for impairment, we first evaluate qualitative factors to determine whether events and circumstances indicate that, more likely than not, an indefinite-lived intangible asset is impaired. If, after evaluating the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, we determine that, more likely than not, an indefinite-lived intangible asset is impaired, we then quantitatively test for impairment. |
Investments | Investments We routinely perform an assessment of our investments in Sharecare and in AIO (see Note 7 ) to determine if they are other-than-temporarily impaired. An investment is impaired when the fair value of the investment declines to an amount less than the cost or amortized cost of that investment. As part of our assessment process, we determine whether the impairment is temporary or other-than-temporary. We base our assessment on both quantitative criteria and qualitative information, considering a number of factors including, but not limited to how long the security has been impaired, the amount of the impairment, the financial condition and near-term prospects of the issuer, whether the issuer is current on contractually-obligated interest and principal payments, key corporate events pertaining to the issuer and whether the market decline was affected by macroeconomic conditions. If we determine that an investment has incurred an other-than-temporary impairment, we permanently reduce the cost of the equity security to fair value and recognize an impairment charge in our consolidated statements of operations. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (an exit price). When reporting the fair values of our financial instruments, we prioritize those fair value measurements into one of three levels based on the nature of the inputs, as follows: Level 1: Valuations based on quoted prices in active markets for identical assets and liabilities; Level 2: Valuations based on observable inputs that do not meet the criteria for Level 1, including quoted prices in inactive markets and observable market data for similar, but not identical instruments; and Level 3: Valuations based on unobservable inputs, which are based upon the best available information when external market data is limited or unavailable. The fair value hierarchy requires us to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. For some products or in certain market conditions, observable inputs may not be available. We believe the reported carrying amounts for cash and cash equivalents, receivables, prepaids and other current assets, accounts payable, accrued expenses and other current liabilities, approximate their fair values because of the short-term nature of these financial instruments. |
Liabilities Related to Warrants Issued | Liabilities Related to Warrants Issued We record certain common stock warrants we issued (see Note 5 for more detailed information) at fair value and recognize the change in the fair value of such warrants as a gain or loss which we report in the Other income (expense) section in our consolidated statement of operations. We report the warrants that we record at fair value as liabilities because they contain a conditional promise to issue a variable number of our common stock shares upon the warrants’ expiration, and the monetary amount of such obligation was fixed at the inception of the contract. We estimate the fair value of the warrants using an option pricing model. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06 (“ASU 2020-06”), Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . The ASU will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models will result in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The ASU also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. With regard to our financial reporting, ASU 2020-06 will be effective January 1, 2024, and early adoption is permitted, but no earlier than January 1, 2021, including interim periods within that year. We are currently evaluating what effect(s) the adoption of ASU 2020-06 may have on our consolidated financial statements, but we do not believe the impact of the ASU will be material to our financial position, results of operations and cash flows. The effect will largely depend on the composition and terms of the financial instruments at the time of adoption. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) . The ASU requires entities to use a forward-looking approach based on current expected credit losses to estimate credit losses on certain types of financial instruments, including trade receivables, which may result in the earlier recognition of allowances for losses. With regard to our financial reporting, ASU 2016-13 will be effective beginning January 1, 2023, and early adoption is permitted. We do not believe the impact of the ASU will be material to our financial position, results of operations and cash flows. We have reviewed all accounting pronouncements recently issued by the FASB and the Securities and Exchange Commission. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table, reported in USD, disaggregates our cash balances by currency denomination (in thousands): December 31, December 31, 2019 Cash denominated in: USD $ 563 $ 216 HKD 8 2 RMB 283 54 Total cash $ 854 $ 272 |
Schedule of Differences between Reported Amount and Reporting Currency Denominated Amount | We used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted: 2020 2019 Exchange rates at December 31st: RMB:USD 0.153 0.140 HKD:USD 0.129 0.128 Average exchange rate during the twelve months ended December 31st: RMB:USD 0.143 0.146 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents a disaggregation of our revenue by major category (in thousands): Year Ended December 31, Revenue by category 2020 2019 AI-based products 9,596 3,595 Other 549 1,425 Revenue $ 10,145 $ 5,020 |
Schedule of Disaggregation of Revenue by Country | The following table presents a disaggregation of our revenue by country (in thousands): Year Ended December 31, Revenue by country 2020 2019 China 7,876 3,595 United States 2,269 1,425 Revenue $ 10,145 $ 5,020 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Summary of Quantitative Inputs | The following table presents the quantitative inputs, which we classify in Level 3 of the fair value hierarchy, used in estimating the fair value of the warrants: December 31, 2020 2019 CBG Financing Warrants 85.00 % Expected volatility 1.60 % Risk-free interest rate 0.73 Expected remaining term (years) CBG Acquisition Warrants Expected volatility 85.00 % 75.00 % Risk-free interest rate 0.18 % 1.65 % Expected remaining term (years) 2.73 3.72 |
Summary of Change in Liability Balance Associated with Liability-Classified Warrants | The following table presents the change in the liability balance associated with our liability-classified warrants (in thousands): Year Ended December 31, 2020 2019 Balance at beginning of period $ 115 $ 1,383 Expiration of warrants (115) — Increase (decrease) in fair value 1,725 (1,268) Balance at end of period $ 1,725 $ 115 |
Summary of Change in Balance of Liability Associated with Earnout Payments | The following table presents the change during the years ended December 31, 2020 and 2019 in the balance of the liability associated with the Earnout Payments (in thousands): December 31, 2020 2019 Balance at beginning of period $ 1,086 $ 990 Payments (1,132) (8) Change in fair value of contingent consideration — 10 Interest accrued on unpaid balance 46 94 Balance at end of period $ — $ 1,086 |
TRADE ACCOUNTS RECEIVABLE (Tabl
TRADE ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Trade Accounts Receivable | The following table presents details regarding our net trade accounts receivable: Year Ended December 31, 2020 2019 Gross accounts receivable balance $ 5,988 $ 4,171 Allowance for bad debt (961) (2,207) Accounts receivable, net $ 5,027 $ 1,964 |
PREPAID EXPENSE AND OTHER CUR_2
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of Components of Prepaid Expense and Other Current Assets | The following table presents the components of prepaid expense and other current assets (in thousands): December 31, 2020 2019 Other receivables $ 8 $ 3,712 Prepaid expense 1,877 633 Deposits 50 7 Other current assets 108 271 Total $ 2,043 $ 4,623 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following (in thousands, except estimated lives): December 31, Estimated Life 2020 2019 Computers and equipment 3 1,097 989 Furniture and fixtures 3 42 23 Software 3 5,006 4,896 Leasehold improvements 3 174 114 Total property, equipment and software $ 6,319 $ 6,022 Less accumulated depreciation and amortization (5,998) (5,681) Total property, equipment and software, net $ 321 $ 341 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease Expense, Net of Sublease Income | The following table presents the detail of our lease expense (we did not receive sublease income during the year ended December 31, 2020) which is reported in General and administrative expense (in thousands): Operating lease expense $ 640 Short-term lease expense 291 Lease expense $ 931 |
Maturity of Lease Liabilities | The following table presents information regarding the maturities of our undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented in our December 31, 2020 Consolidated Balance Sheet (in thousands). Operating lease liabilities maturing during the next: One year $ 412 Two years 210 Three years 25 Total undiscounted cash flows $ 647 Present value of cash flows $ 576 Lease liabilities on balance sheet: Short-term $ 382 Long-term 194 Total lease liabilities $ 576 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Finite-lived Intangible Assets | The following table summarizes intangible assets by category (in thousands): December 31, 2020 December 31, 2019 Gross Amount Accumulated Net Amount Gross Amount Accumulated Net Amount Finite-lived intangible assets Domain names $ — $ — $ — $ 1,256 $ (874) $ 382 Other intangible assets — — — 68 (68) — $ — $ — $ — $ 1,324 $ (942) $ 382 Indefinite-lived intangible assets License to operate in China — — 127 127 Total intangible assets $ — $ — $ 1,451 $ 509 |
Summary of Indefinite-lived Intangible Assets | The following table summarizes intangible assets by category (in thousands): December 31, 2020 December 31, 2019 Gross Amount Accumulated Net Amount Gross Amount Accumulated Net Amount Finite-lived intangible assets Domain names $ — $ — $ — $ 1,256 $ (874) $ 382 Other intangible assets — — — 68 (68) — $ — $ — $ — $ 1,324 $ (942) $ 382 Indefinite-lived intangible assets License to operate in China — — 127 127 Total intangible assets $ — $ — $ 1,451 $ 509 |
STOCKHOLDERS' EQUITY, SHARE-B_2
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Summary of Fair Value of Stock Option Awards | We estimate the fair value of stock option awards using the BSM Model. During the year ended December 31, 2019 (we did not grant any stock options during the year ended December 31, 2020), we applied the following weighted-average assumptions: Expected term in years 6.0 Expected volatility 70 % Expected dividends — % Risk-free interest rate 1.86 % |
Summary of Activity Under Equity Incentive Plans | The following table summarizes activity under our equity incentive plans related to equity-classified stock option grants as of December 31, 2020, and changes during the twelve months ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2020 10,359,079 $ 4.20 Granted — — Exercised (150,989) 0.87 Forfeited, cancelled or expired (265,749) 2.77 Outstanding at December 31, 2020 9,942,341 $ 4.29 5.7 $ 709 Options exercisable at December 31, 2020 9,781,466 $ 4.35 5.7 $ 509 The following table summarizes the status of non-vested stock options as of December 31, 2020, and changes during the year then ended: Shares Weighted-Average Non-vested at January 1, 2020 610,187 $ 241 Granted — — Vested (399,188) 168 Forfeited (50,124) 53 Non-vested at December 31, 2020 160,875 $ 68 The following table summarizes activity under our equity incentive plans related to the China Cash Bonuses as of December 31, 2020, and changes during the twelve months then ended: Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at January 1, 2020 1,098,750 $ 5.20 Granted 300,000 1.37 Forfeited, cancelled or expired (343,750) 5.52 Outstanding at December 31, 2020 1,055,000 $ 4.01 6.4 $ 200 Cash awards exercisable at December 31, 2020 775,000 $ 4.97 5.3 $ 51 |
Summary of Share-based Payment Arrangement By Share-based Payment Award, Liability Activity | The following table presents the change in the liability balance associated with the China Cash Bonuses (in thousands): Year Ended December 31, 2020 2019 Balance at beginning of period $ 43 $ 149 Increase (decrease) in share-based compensation cost 637 (106) Balance at end of period $ 680 $ 43 |
Summary of Share-based Compensation Cost | The following table presents a breakdown of share-based compensation cost included in operating expense (in thousands): Year Ended December 31, 2020 2019 Stock options $ 160 $ 425 China Cash Bonuses 637 (106) Total $ 797 $ 319 |
Summary of Unrecognized Share-based Compensation Cost | The following table presents information regarding unrecognized share-based compensation cost associated with stock options and China Cash Bonuses: December 31, 2020 Unrecognized share-based compensation cost for non-vested awards (in thousands): Stock options 28 China Cash Bonuses 374 Weighted-average years over which unrecognized share-based compensation expense will be recognized: Stock options 0.3 China Cash Bonuses 5.0 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Reconciliation Between Income Tax Benefit Computed by Applying Federal Statutory Rate and Actual Income Tax Expense | The following table presents a reconciliation between the income tax benefit computed by applying the federal statutory rate and our actual income tax expense: Year Ended December 31, 2020 2019 Income tax benefit at federal statutory rate $ (2,874) $ (4,831) Change in deferred tax asset valuation allowance 1,670 2,561 Tax impact of warrants 338 (266) Tax effects of: Statutory differences 1,014 942 R&D expense (202) (236) Foreign tax rates different than U.S. federal statutory rate (96) (350) Other permanent items 155 6 Deferred adjustments 86 1,716 Other (91) 458 Income tax provision (benefit) as reported $ — $ — |
Loss Before Income Tax Attributable to Domestic and Foreign Operations | The following table presents loss before income tax attributable to domestic and to foreign operations (in thousands): Year Ended December 31, 2020 2019 Domestic $ (11,289) $ (14,266) Foreign (2,396) (8,738) Loss before income taxes $ (13,685) $ (23,004) |
Components of Deferred Tax Assets and Liabilities | The following table presents the components of our DTAs and DTLs (in thousands): December 31, 2020 2019 Deferred Tax Assets Net operating loss carryforwards $ 41,061 $ 38,008 Deferred income and reserves — — Amortization of intangibles 2,167 2,535 Share-based compensation expense 6,876 6,929 Other 3,000 4,000 Gross deferred tax assets $ 53,104 $ 51,472 Valuation allowance (53,117) (51,455) Deferred tax assets, net of valuation allowance $ (13) $ 17 Deferred Tax Liabilities Depreciation of fixed assets 13 (17) Gross deferred tax liabilities 13 (17) Net deferred tax liability $ — $ — |
ACCRUED EXPENSE AND OTHER CUR_2
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Accrued Expense and Other Current Liabilities | The following table presents the components of Accrued expense and other current liabilities (in thousands): December 31, 2020 2019 Accrued compensation and benefit-related expense $ 1,151 $ 1,168 Accrued interest 485 302 Other accrued expense 721 1,171 Other payables 3,048 3,656 Operating lease liability - current 382 2,877 Other current liabilities 873 5,152 Total $ 6,660 $ 14,326 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table presents debt (in thousands) as of: December 31, 2020 December 31, 2019 MGG loan $ — $ 12,025 Loans payable, current — 12,025 Private lender loan due December 2023 1,000 — PPP loan due April 2022 425 — Loans payable, long-term $ 1,425 $ — |
ORGANIZATION, BUSINESS AND OT_2
ORGANIZATION, BUSINESS AND OTHER ITEMS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 360,512 | $ 346,827 | |
Net cash used in operating activities | 18,047 | 12,629 | |
Cash and cash equivalents | 854 | 272 | |
Negative working capital | 8,300 | ||
Total stockholders' deficit | $ 9,092 | $ 27,728 | $ 13,124 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Concentration Risk [Line Items] | ||
Cash and cash equivalents | $ 854 | $ 272 |
USD | ||
Concentration Risk [Line Items] | ||
Cash and cash equivalents | 563 | 216 |
HKD | ||
Concentration Risk [Line Items] | ||
Cash and cash equivalents | 8 | 2 |
RMB | ||
Concentration Risk [Line Items] | ||
Cash and cash equivalents | $ 283 | $ 54 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020USD ($)segmentshares | Dec. 31, 2019USD ($)shares | |
Concentration Risk [Line Items] | ||
Cash, uninsured amount | $ | $ 0.3 | |
Advertising expense | $ | $ 0.2 | $ 0.3 |
Number of operating segments | segment | 1 | |
Minimum | ||
Concentration Risk [Line Items] | ||
Extended warranty period | 1 year | |
Maximum | ||
Concentration Risk [Line Items] | ||
Extended warranty period | 3 years | |
Computers and equipment | ||
Concentration Risk [Line Items] | ||
Amortization period | 3 years | |
Stock Options | ||
Concentration Risk [Line Items] | ||
Anti-dilutive securities (in shares) | shares | 9,942,341 | 10,359,079 |
Warrant | ||
Concentration Risk [Line Items] | ||
Anti-dilutive securities (in shares) | shares | 40,000 | 3,966,613 |
Other | ||
Concentration Risk [Line Items] | ||
Performance period for substantially all obligations | 1 year | |
KanKan | ||
Concentration Risk [Line Items] | ||
Term of contract | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Weighted Average | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 0.143 | 0.146 |
RMB | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 0.153 | 0.140 |
HKD | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 0.129 | 0.128 |
CONCENTRATIONS OF RISK (Details
CONCENTRATIONS OF RISK (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | Customer A | ||
Concentration Risk [Line Items] | ||
Percentage of cash | 31.00% | |
Revenue | Customer B | ||
Concentration Risk [Line Items] | ||
Percentage of cash | 11.00% | |
Revenue | Customer C | ||
Concentration Risk [Line Items] | ||
Percentage of cash | 27.00% | |
Gross Accounts Receivable | Customer A | ||
Concentration Risk [Line Items] | ||
Percentage of cash | 38.00% | |
Gross Accounts Receivable | Customer D | ||
Concentration Risk [Line Items] | ||
Percentage of cash | 31.00% | |
Gross Accounts Receivable | Customer E | ||
Concentration Risk [Line Items] | ||
Percentage of cash | 17.00% |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 10,145 | $ 5,020 |
China | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 7,876 | 3,595 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 2,269 | 1,425 |
AI-based products | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 9,596 | 3,595 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 549 | $ 1,425 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2018USD ($)contract | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Revenue recognized | $ 300 | $ 0 | |
Revenue not yet recognized, recorded as receivable | 5,027 | 1,964 | |
Revenue | 10,145 | 5,020 | |
Accrued expense and other current liabilities | 6,660 | 14,326 | |
Prepaid expense and other current assets | 2,043 | 4,623 | |
Allowance for credit loss | 3,100 | ||
AI Solutions | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Number of contracts completed | contract | 2 | ||
Cost of revenue | $ 4,000 | ||
Revenue not yet recognized, recorded as receivable | 4,600 | ||
Revenue | $ 500 | 1,100 | |
Accrued expense and other current liabilities | 4,600 | 3,500 | |
Prepaid expense and other current assets | $ 4,600 | $ 3,500 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 15, 2019 | Dec. 31, 2018 | Feb. 21, 2018 |
Warrant Liability | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liability for warrants | $ 1,725 | $ 115 | $ 1,383 | ||
CBG Acquisition Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Liability for warrants | $ 1,700 | ||||
CBG Acquisition Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Warrants to purchase shares outstanding (in shares) | 40,000 | 40,000 | |||
Exercise price (in dollars per share) | $ 10 | $ 6 | |||
Number of shares represented by warrants exercised (in shares) | 5,710,000 | 5,710,000 | 5,710,000 | ||
CBG Financing Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Warrants to purchase shares outstanding (in shares) | 3,966,613 | ||||
Exercise price (in dollars per share) | $ 3.70 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Quantitative Inputs (Details) - Fair Value, Inputs, Level 3 | Dec. 31, 2020 | Dec. 31, 2019 |
Expected volatility | CBG Financing Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.8500 | |
Expected volatility | CBG Acquisition Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.8500 | 0.7500 |
Risk-free interest rate | CBG Financing Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0160 | |
Risk-free interest rate | CBG Acquisition Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.0018 | 0.0165 |
Expected remaining term (years) | CBG Financing Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 0.73 | |
Expected remaining term (years) | CBG Acquisition Warrants | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants, measurement input | 2.73 | 3.72 |
FAIR VALUE MEASUREMENTS - Sum_2
FAIR VALUE MEASUREMENTS - Summary of Change in Liability Balance Associated with Liability-Classified Warrants (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Change in the Fair Value of Warrants | ||
Expiration of warrants | $ (115) | $ 0 |
Warrant Liability | ||
Change in the Fair Value of Warrants | ||
Balance at beginning of period | 115 | 1,383 |
Increase (decrease) in fair value | 1,725 | (1,268) |
Balance at end of period | 1,725 | 115 |
Vegas.com LLC | Earnout Payment Liabilities | ||
Contingent Consideration | ||
Balance at beginning of period | 1,086 | 990 |
Payments | (1,132) | (8) |
Change in fair value of contingent consideration | 0 | 10 |
Interest accrued on unpaid balance | 46 | 94 |
Balance at end of period | $ 0 | $ 1,086 |
TRADE ACCOUNTS RECEIVABLE (Deta
TRADE ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Gross accounts receivable balance | $ 5,988 | $ 4,171 |
Allowance for bad debt | (961) | (2,207) |
Accounts receivable, net | $ 5,027 | $ 1,964 |
TRADE ACCOUNTS RECEIVABLE - Nar
TRADE ACCOUNTS RECEIVABLE - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable balance | $ 5,988 | $ 4,171 |
Allowance for bad debt | 961 | 2,207 |
China | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable balance | 5,800 | 4,100 |
Allowance for bad debt | $ 900 | $ 2,200 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED AFFILIATES (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 31 Months Ended | |
Jun. 30, 2018USD ($)entity | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Noncontrolling Interest [Line Items] | |||||
Number of consolidated VIEs | entity | 1 | ||||
Net losses from date of acquisition | $ 100 | ||||
Sharecare | |||||
Noncontrolling Interest [Line Items] | |||||
Ownership percentage in unconsolidated affiliate | 4.40% | 4.40% | 4.40% | ||
All-in-one Cloud Net Technology, Co | |||||
Noncontrolling Interest [Line Items] | |||||
Percentage of investment acquired | 20.00% | ||||
Payments to acquire investment | $ 1,000 | $ 500 | |||
Remaining investment | $ 900 | 900 | $ 900 | ||
Equity interest payable | 500 | 500 | 500 | ||
Loss on impairment | 400 | ||||
Sharecare | |||||
Noncontrolling Interest [Line Items] | |||||
Other Noncontrolling Interests | $ 1,000 | $ 1,000 | $ 1,000 | $ 1,000 |
PREPAID EXPENSE AND OTHER CUR_3
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Current Assets | ||
Other receivables | $ 8 | $ 3,712 |
Prepaid expense | 1,877 | 633 |
Deposits | 50 | 7 |
Other current assets | 108 | 271 |
Total | $ 2,043 | $ 4,623 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 6,319 | $ 6,022 |
Less accumulated depreciation and amortization | (5,998) | (5,681) |
Total property, equipment and software, net | 321 | 341 |
Depreciation and amortization | 200 | 700 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 1,097 | 989 |
Estimated Life (Years) | 3 years | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 42 | 23 |
Estimated Life (Years) | 3 years | |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 5,006 | 4,896 |
Estimated Life (Years) | 3 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 174 | $ 114 |
Estimated Life (Years) | 3 years |
LEASES - Lease Expense, Net of
LEASES - Lease Expense, Net of Sublease Income (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 640 |
Short-term lease expense | 291 |
Lease expense | $ 931 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | Aug. 03, 2020 | Apr. 09, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | |||||
Cash paid for operating lease liabilities | $ 600 | ||||
Weighted-average remaining lease term | 20 months | ||||
Weighted-average discount rate | 13.00% | ||||
Gain on lease termination | $ 3,582 | $ 0 | |||
Monetary damages | $ 1,100 | ||||
Prepaid expense related to lease on property | 100 | ||||
Office Building | |||||
Lessee, Lease, Description [Line Items] | |||||
Gain on lease termination | $ 2,000 | $ 1,500 | 3,600 | ||
Hughes Center Lease Settlement | |||||
Lessee, Lease, Description [Line Items] | |||||
Accrual for legal settlement | $ 300 | $ 2,600 | $ 2,300 | ||
Payment for legal settlement | $ 600 |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating lease liabilities maturing during the next: | ||
One year | $ 412 | |
Two years | 210 | |
Three years | 25 | |
Total undiscounted cash flows | 647 | |
Lease liabilities on balance sheet: | ||
Short-term | 382 | $ 2,877 |
Long-term | 194 | $ 4,650 |
Total lease liabilities | $ 576 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us_gaap:AccruedLiabilitiesCurrent | us_gaap:AccruedLiabilitiesCurrent |
INTANGIBLE ASSETS - Summary of
INTANGIBLE ASSETS - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-lived intangible assets | ||
Gross Amount | $ 0 | $ 1,324 |
Accumulated Amortization | 0 | (942) |
Net Amount | 0 | 382 |
Indefinite-lived intangible assets | ||
Total intangible assets, Gross Amount | 0 | 1,451 |
Total intangible assets, Net Amount | 0 | 509 |
License to operate in China | ||
Indefinite-lived intangible assets | ||
Indefinite lived intangible assets | 0 | 127 |
Domain names | ||
Finite-lived intangible assets | ||
Gross Amount | 0 | 1,256 |
Accumulated Amortization | 0 | (874) |
Net Amount | 0 | 382 |
Other intangible assets | ||
Finite-lived intangible assets | ||
Gross Amount | 0 | 68 |
Accumulated Amortization | 0 | (68) |
Net Amount | $ 0 | $ 0 |
INTANGIBLE ASSETS - Narrative (
INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 0.2 | $ 0.3 | ||
Impairment of intangible assets | $ 0.2 | |||
License to operate in China | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | $ 0.1 | |||
Domain names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | $ 0.3 |
STOCKHOLDERS' EQUITY, SHARE-B_3
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Narrative (Details) - USD ($) $ in Thousands | Mar. 03, 2020 | Mar. 29, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 29, 2021 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||||
Common stock, shares outstanding (in shares) | 99,505,041 | 51,055,159 | ||||
Stock options outstanding (in shares) | 9,942,341 | 10,359,079 | ||||
Weighted average grant date fair value of options granted | $ 0 | $ 300 | ||||
Proceeds from stock options exercised | 100 | |||||
Intrinsic value of options exercised | $ 100 | |||||
Granted (in shares) | 0 | |||||
Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 99,916,941 | |||||
Stock options outstanding (in shares) | 15,300,000 | |||||
Warrants to purchase shares outstanding (in shares) | 40,000 | |||||
Aspire Capital Fund, LLC | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares issued (in shares) | 48,238,893 | 11,999,597 | ||||
Consideration received | $ 32,000 | $ 10,800 | ||||
Private Placement | Aspire Capital Fund, LLC | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized for purchase | $ 30,000 | |||||
Number of shares issued as consideration (in shares) | 2,374,545 | |||||
Shares issued (in shares) | 629,370 | 44,227,890 | 4,129,370 | |||
Common Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 99,505,041 | 51,055,159 | 39,053,312 | |||
Option award expiration period | 10 years | |||||
Common Stock | Private Placement | Aspire Capital Fund, LLC | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Period of purchase | 30 months |
STOCKHOLDERS' EQUITY, SHARE-B_4
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Valuation Assumptions (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Expected term in years | 6 years |
Expected volatility | 70.00% |
Expected dividends | 0.00% |
Risk-free interest rate | 1.86% |
STOCKHOLDERS' EQUITY, SHARE-B_5
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Summary of Activity Under Equity Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 27, 2020 | Dec. 31, 2020 |
Shares | ||
Outstanding at beginning of period (in shares) | 10,359,079 | |
Granted (in shares) | 0 | |
Exercised (in shares) | (150,989) | |
Forfeited, cancelled or expired (in shares) | (265,749) | |
Outstanding at end of period (in shares) | 9,942,341 | |
Options exercisable at end of period (in shares) | 9,781,466 | |
Weighted-Average Exercise Price (in dollars per share) | ||
Outstanding at beginning of period (in dollars per share) | $ 4.20 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0.87 | |
Forfeited, cancelled or expired (in dollars per share) | 2.77 | |
Outstanding at end of period (in dollars per share) | 4.29 | |
Options exercisable at end of period (in dollars per share) | $ 4.35 | |
Weighted-Average Remaining Contractual Term (in years) | ||
Outstanding at end of period | 5 years 8 months 12 days | |
Options exercisable at end of period | 5 years 8 months 12 days | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding at end of period | $ 709 | |
Options exercisable at end of period | $ 509 | |
China Cash Bonus Awards | ||
Shares | ||
Outstanding at beginning of period (in shares) | 1,098,750 | |
Granted (in shares) | 5,400,000 | 300,000 |
Forfeited, cancelled or expired (in shares) | (343,750) | |
Outstanding at end of period (in shares) | 1,055,000 | |
Options exercisable at end of period (in shares) | 775,000 | |
Weighted-Average Exercise Price (in dollars per share) | ||
Outstanding at beginning of period (in dollars per share) | $ 5.20 | |
Granted (in dollars per share) | 1.37 | |
Forfeited, cancelled or expired (in dollars per share) | 5.52 | |
Outstanding at end of period (in dollars per share) | 4.01 | |
Options exercisable at end of period (in dollars per share) | $ 4.97 | |
Weighted-Average Remaining Contractual Term (in years) | ||
Outstanding at end of period | 6 years 4 months 24 days | |
Options exercisable at end of period | 5 years 3 months 18 days | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding at end of period | $ 200 | |
Options exercisable at end of period | $ 51 |
STOCKHOLDERS' EQUITY, SHARE-B_6
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Nonvested Options Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | ||
Non-vested, beginning of period (in shares) | 610,187 | |
Granted (in shares) | 0 | |
Vested (in shares) | (399,188) | |
Forfeited (in shares) | (50,124) | |
Non-vested, end of period (in shares) | 160,875 | 610,187 |
Weighted-Average Grant-Date Fair Value | ||
Non-vested, beginning of period | $ 241 | |
Granted | 0 | $ 300 |
Vested | 168 | |
Forfeited | 53 | |
Non-vested, end of period | $ 68 | $ 241 |
STOCKHOLDERS' EQUITY, SHARE-B_7
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Liability Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Award Liability [Roll Forward] | ||
Increase (decrease) in share-based compensation cost | $ 797 | $ 319 |
China Cash Bonus Awards | ||
Share-based Payment Award Liability [Roll Forward] | ||
Balance at beginning of period | 43 | 149 |
Increase (decrease) in share-based compensation cost | 637 | (106) |
Balance at end of period | $ 680 | $ 43 |
STOCKHOLDERS' EQUITY, SHARE-B_8
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 797 | $ 319 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | 160 | 425 |
China Cash Bonus Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 637 | $ (106) |
STOCKHOLDERS' EQUITY, SHARE-B_9
STOCKHOLDERS' EQUITY, SHARE-BASED COMPENSATION AND NET LOSS PER SHARE - Unrecognized Compensation Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation cost for non-vested awards (in thousands): | $ 28 |
Weighted-average years over which unrecognized share-based compensation expense will be recognized: | 3 months 18 days |
China Cash Bonus Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation cost for non-vested awards (in thousands): | $ 374 |
Weighted-average years over which unrecognized share-based compensation expense will be recognized: | 5 years |
INCOME TAX - Reconciliation Bet
INCOME TAX - Reconciliation Between Income Tax Benefit Computed by Applying Federal Statutory Rate and Actual Income Tax Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit at federal statutory rate | $ (2,874) | $ (4,831) |
Change in deferred tax asset valuation allowance | 1,670 | 2,561 |
Tax impact of warrants | 338 | (266) |
Tax effects of: | ||
Statutory differences | 1,014 | 942 |
R&D expense | (202) | (236) |
Foreign tax rates different than U.S. federal statutory rate | (96) | (350) |
Other permanent items | 155 | 6 |
Deferred adjustments | 86 | 1,716 |
Other | (91) | 458 |
Income tax provision (benefit) as reported | $ 0 | $ 0 |
INCOME TAX - Loss Before Income
INCOME TAX - Loss Before Income Tax Attributable to Domestic and Foreign Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (11,289) | $ (14,266) |
Foreign | (2,396) | (8,738) |
Loss from continuing operations before income tax | $ (13,685) | $ (23,004) |
INCOME TAX - Components of Defe
INCOME TAX - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Tax Assets | ||
Net operating loss carryforwards | $ 41,061 | $ 38,008 |
Deferred income and reserves | 0 | 0 |
Amortization of intangibles | 2,167 | 2,535 |
Share-based compensation expense | 6,876 | 6,929 |
Other | 3,000 | 4,000 |
Gross deferred tax assets | 53,104 | 51,472 |
Valuation allowance | (53,117) | (51,455) |
Deferred tax assets, net of valuation allowance | (13) | 17 |
Deferred Tax Liabilities | ||
Depreciation of fixed assets | 13 | (17) |
Gross deferred tax liabilities | 13 | (17) |
Net deferred tax liability | $ 0 | $ 0 |
INCOME TAX - Narrative (Details
INCOME TAX - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
U.S. Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 172,800,000 | |
U.S. State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 31,900,000 | |
Hong Kong | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 1,700,000 | |
Federal income tax rate | 16.50% | |
China | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 11,400,000 | |
Federal income tax rate | 25.00% | |
Carryover period | 5 years |
ACCRUED EXPENSE AND OTHER CUR_3
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities Disclosure [Abstract] | ||
Accrued compensation and benefit-related expense | $ 1,151 | $ 1,168 |
Accrued interest | 485 | 302 |
Other accrued expense | 721 | 1,171 |
Other payables | 3,048 | 3,656 |
Operating lease liability - current | 382 | 2,877 |
Other current liabilities | 873 | 5,152 |
Total | $ 6,660 | $ 14,326 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us_gaap:AccruedLiabilitiesCurrent | us_gaap:AccruedLiabilitiesCurrent |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | Apr. 15, 2020 | Dec. 31, 2020 | Dec. 30, 2020 | Dec. 31, 2019 | May 15, 2019 | Apr. 12, 2017 | Sep. 24, 2015 |
Debt Instrument [Line Items] | |||||||
Short-term note payable | $ 1,500,000 | $ 3,000,000 | |||||
Accrued interest | 485,000 | $ 302,000 | |||||
Principal payments on debt | 1,500,000 | ||||||
Loans Payable | |||||||
Debt Instrument [Line Items] | |||||||
Original principal amount | $ 35,500,000 | ||||||
Financing Agreement Amendment | Loans Payable | |||||||
Debt Instrument [Line Items] | |||||||
Debt outstanding | $ 10,000,000 | ||||||
Paycheck Protection Program, CARES Act | Loans Payable | |||||||
Debt Instrument [Line Items] | |||||||
Original principal amount | $ 400,000 | ||||||
Debt outstanding | 400,000 | ||||||
Interest rate | 1.00% | ||||||
Term of debt | 2 years | ||||||
Private Lender Loan | Loans Payable | |||||||
Debt Instrument [Line Items] | |||||||
Original principal amount | $ 1,000,000 | ||||||
Interest rate | 10.00% | ||||||
Notes Payable, Other Payables | |||||||
Debt Instrument [Line Items] | |||||||
Short-term note payable | 1,500,000 | $ 3,000,000 | |||||
Fee payable in relation to short-term note payable | 115,000 | ||||||
Daily interest accrued on unpaid balance after maturity | $ 500 | ||||||
Accrued interest | $ 400,000 | ||||||
Vegas.com LLC | Discontinued Operations, Disposed of by Sale | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate purchase price | $ 30,000,000 |
DEBT - Schedule of Debt (Detail
DEBT - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Loans payable, current | $ 0 | $ 12,025 |
Loans payable, long-term | 1,425 | 0 |
Loans Payable | ||
Debt Instrument [Line Items] | ||
Loans payable, current | 0 | 12,025 |
Loans Payable | Private lender loan due December 2023 | ||
Debt Instrument [Line Items] | ||
Loans payable, long-term | 1,000 | 0 |
Loans Payable | PPP loan due April 2022 | ||
Debt Instrument [Line Items] | ||
Loans payable, long-term | $ 425 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 15, 2019 | Dec. 31, 2020 | Feb. 21, 2018 |
Loss Contingencies [Line Items] | |||
Advance to unrelated entity | $ 1.5 | ||
Obligated amount to advance, up to | $ 5.1 | ||
Advance obligation period | 5 years | ||
Advance agreement interest rate | 10.00% | ||
CBG Acquisition Warrants | |||
Loss Contingencies [Line Items] | |||
Number of shares represented by warrants exercised (in shares) | 5,710,000 | 5,710,000 | 5,710,000 |
Exercise price (in dollars per share) | $ 6 | $ 10 | |
Expected remaining term (years) | 5 years | ||
Stock price trigger (in dollars per share) | $ 8 | ||
Non-consecutive days | 5 days | ||
Trading day window | 30 days |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Millions | Jul. 27, 2020USD ($) |
Advances To Senior Management | Management | |
Related Party Transaction [Line Items] | |
Receivables collected from related parties | $ 0.5 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - USD ($) shares in Millions, $ in Millions | Feb. 10, 2021 | Feb. 05, 2021 |
Subsequent Event [Line Items] | ||
Shares issued (in shares) | 0.4 | |
Term Loan | ||
Subsequent Event [Line Items] | ||
Term of debt | 1 year | |
Principal amount of loan | $ 5 | |
Interest rate | 15.00% |