Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Apr. 12, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
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 | ||
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 | ||
Document Financial Statement Error Correction Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15.7 | ||
Entity Common Stock, Shares Outstanding | 42,559,701 | ||
Documents Incorporated by Reference | Portions of the registrant’s preliminary proxy statement relating to the 2024 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the registrant’s fiscal year ended December 31, 2023. | ||
Entity Central Index Key | 0001368365 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 572 |
Auditor Name | Weinberg & Company, P.A. |
Auditor Location | Los Angeles, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash | $ 145 | $ 52 |
Trade accounts receivable, net | 1,287 | 3,091 |
Inventory, net | 750 | 308 |
Deferred cost of revenue | 6,644 | 7,463 |
Prepaid expense and other current assets | 614 | 1,374 |
Total current assets | 9,440 | 12,288 |
Property and equipment, net | 189 | 1,699 |
Operating lease assets | 517 | 180 |
Other long-term assets | 90 | 269 |
Total assets | 10,236 | 14,436 |
Liabilities | ||
Obligations to issue common stock | 10,033 | 1,892 |
Accrued expense and other current liabilities (including $495 of delinquent payroll taxes) | 11,921 | 7,222 |
Contract liability | 570 | 308 |
Notes payable (past due) | 16,463 | 14,607 |
Total current liabilities | 49,540 | 34,805 |
Operating lease liabilities, long-term | 286 | 56 |
Total liabilities | 49,826 | 34,861 |
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; 175,000,000 shares authorized; 22,038,855 and 11,539,564 shares issued and outstanding at December 31, 2023 and 2022, respectively | 22 | 12 |
Additional paid-in-capital | 379,244 | 368,945 |
Accumulated other comprehensive loss | (1,186) | (859) |
Accumulated deficit | (417,670) | (388,523) |
Total stockholders’ deficit | (39,590) | (20,425) |
Total liabilities and stockholders’ deficit | 10,236 | 14,436 |
Nonrelated Party | ||
Liabilities | ||
Accounts payable | 9,348 | 9,602 |
Related Party | ||
Liabilities | ||
Accounts payable | $ 1,205 | $ 1,174 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Delinquent payroll taxes | $ 495 | $ 0 |
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) | 175,000,000 | 175,000,000 |
Common stock, shares, issued (in shares) | 22,038,855 | 11,539,564 |
Common stock, shares, outstanding (in shares) | 22,038,855 | 11,539,564 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue, including amounts from China Business Partner (See Note 18) | $ 4,402 | $ 11,666 |
Cost and expense | ||
Cost of revenue (excluding depreciation and amortization) | 3,323 | 11,331 |
Sales and marketing | 1,408 | 971 |
Technology and development | 1,893 | 2,101 |
General and administrative | 13,374 | 18,399 |
Depreciation and amortization | 285 | 166 |
Impairment of assets | 1,280 | 0 |
Total cost and expense | 21,563 | 32,968 |
Operating loss | (17,161) | (21,302) |
Other expense | ||
Interest expense | (4,294) | (6,073) |
Finance cost related to obligations to issue common stock | (7,672) | (1,422) |
Loss on investment | 0 | (26,356) |
Other loss, net | (20) | (339) |
Total other expense, net | (11,986) | (34,190) |
Loss from before income taxes | (29,147) | (55,492) |
Benefit from income taxes | 0 | 9 |
Net loss | (29,147) | (55,483) |
Other comprehensive loss | ||
Foreign currency translation adjustments | (327) | (589) |
Comprehensive loss | $ (29,474) | $ (56,072) |
Weighted-average shares outstanding, basic (in shares) | 16,741,677 | 10,630,771 |
Weighted-average shares outstanding, diluted (in shares) | 16,741,677 | 10,630,771 |
Net loss per share, basic (in dollars per share) | $ (1.74) | $ (5.22) |
Net loss per share, diluted (in dollars per share) | $ (1.74) | $ (5.22) |
Share-based compensation expense | $ 157 | $ 1,697 |
Sales and marketing | ||
Other comprehensive loss | ||
Share-based compensation expense | 3 | 3 |
Technology and development | ||
Other comprehensive loss | ||
Share-based compensation expense | (3) | (267) |
General and administrative | ||
Other comprehensive loss | ||
Share-based compensation expense | $ 157 | $ 1,961 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (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, 2021 | 10,515,777 | ||||
Beginning balance at Dec. 31, 2021 | $ 31,034 | $ 11 | $ 364,333 | $ (270) | $ (333,040) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adjustments for reverse stock split (in shares) | (67) | ||||
Adjustment for reverse stock split | 5 | 5 | |||
Net loss | (55,483) | (55,483) | |||
Share-based compensation | 2,104 | 2,104 | |||
Common stock and stock warrants issued for cash (in shares) | 125,000 | ||||
Common stock issued as service compensation | 500 | 500 | |||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | 898,854 | ||||
Common stock issued pursuant to agreements with Ionic (Note 14) | 2,004 | $ 1 | 2,003 | ||
Foreign currency translation | $ (589) | (589) | |||
Ending balance (in shares) at Dec. 31, 2022 | 11,539,564 | 11,539,564 | |||
Ending balance at Dec. 31, 2022 | $ (20,425) | $ 12 | 368,945 | (859) | (388,523) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (29,147) | (29,147) | |||
Share-based compensation | 178 | 178 | |||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | 10,499,291 | ||||
Common stock issued pursuant to agreements with Ionic (Note 14) | 10,131 | $ 10 | 10,121 | ||
Foreign currency translation | $ (327) | (327) | |||
Ending balance (in shares) at Dec. 31, 2023 | 22,038,855 | 22,038,855 | |||
Ending balance at Dec. 31, 2023 | $ (39,590) | $ 22 | $ 379,244 | $ (1,186) | $ (417,670) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (29,147) | $ (55,483) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 285 | 166 |
Share-based compensation | 157 | 1,697 |
Amortization of debt issuance costs and discount | 0 | 2,189 |
Cost of extending note payable | 750 | 283 |
Finance cost related to obligations to issue common stock | 7,672 | 1,422 |
Accrued interest included in note payable | 1,139 | 0 |
Stock issuances for services performed | 0 | 500 |
Loss on investment | 0 | 26,356 |
Impairment of assets | 1,280 | 0 |
Provision for doubtful accounts | 1,729 | 2,882 |
Other | 193 | (182) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (319) | 3,650 |
Inventory | (260) | 1,033 |
Deferred cost of revenue | 818 | (6,874) |
Prepaid expense and other assets | 501 | 4,213 |
Operating lease assets | (340) | 1 |
Accounts payable, accrued expense and other liabilities | 4,575 | 1,745 |
Contract liability | 281 | (251) |
Operating lease liabilities | 231 | 37 |
Net cash used in operating activities | (10,455) | (16,616) |
Cash flows from investing activities: | ||
Proceeds from investment | 0 | 6,332 |
Purchases of property, equipment and software | (51) | (448) |
Payment of amounts capitalized to software in progress | 0 | (1,063) |
Net cash provided by (used in) investing activities | (51) | 4,821 |
Cash flows from financing activities: | ||
Proceeds from obligations to issue common stock - Ionic ELOC (Note 14) | 8,100 | 0 |
Proceeds from obligations to issue common stock - Ionic Debentures (Note 14) | 2,500 | 2,500 |
Proceeds from debt issuance | 0 | 203 |
Advances from related parties | 1,437 | 3,256 |
Repayments of debt | (33) | (6,217) |
Repayment of advances from related parties | (1,405) | (2,082) |
Net cash provided by (used in) financing activities | 10,599 | (2,340) |
Net change in cash | 93 | (14,135) |
Cash: | ||
Beginning of period | 52 | 14,187 |
End of period | 145 | 52 |
Supplemental cash flow information: | ||
Cash paid for interest | 1,579 | 3,238 |
Supplemental schedule of non-cash investing and financing activities: | ||
Issuance of common stock upon note payable conversion | 0 | 2,804 |
Issuance of common stock - Ionic ELOC and Debentures (Note 14) | 10,131 | 0 |
Transfer of marketable securities to partially settle debt | 0 | 9,662 |
Transfer of software to inventory | $ 233 | $ 0 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | NOTE 1. ORGANIZATION AND BUSINESS Organization and Business Remark Holdings, Inc. and its subsidiaries (“Remark”, “we”, “us”, or “our”) constitute a diversified global technology business with leading artificial intelligence (“AI”) and data-analytics solutions. The common stock of Remark Holdings, Inc. is traded in the OTCQX Best market under the ticker symbol MARK. We primarily sell AI-based products and services. We currently recognize substantially all of our revenue from China, with additional revenue from sales in the U.S. and the U.K. On December 21, 2022, we effected a 1-for-10 reverse split of our common stock (the “Reverse Split”). All references made to share or per share amounts in these financial statements have been retroactively adjusted to reflect the effects of the Reverse Split. Corporate Structure We are a holding company incorporated in Delaware and not a Chinese operating company. As a holding company, we conduct most of our operations through our subsidiaries, each of which is wholly owned. Until September 2022, we had historically conducted a significant part of our operations through contractual arrangements between our wholly-foreign-owned enterprise (“WFOE”) and certain variable interest entities (“VIEs”) based in China to address challenges resulting from laws, policies and practices that may disfavor foreign-owned entities that operate within industries deemed sensitive by the Chinese government. We were the primary beneficiary of the VIEs because the contractual arrangements governing the relationship between the VIEs and our WFOE, which included an exclusive call option agreement, exclusive business cooperation agreement, a proxy agreement and an equity pledge agreement, enabled us to (i) exercise effective control over the VIEs, (ii) receive substantially all of the economic benefits of the VIEs, and (iii) have an exclusive call option to purchase, at any time, all or part of the equity interests in and/or assets of the VIEs to the extent permitted by Chinese laws. Because we were the primary beneficiary of the VIEs, we consolidated the financial results of the VIEs in our consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”). We terminated all of the contractual arrangements between the WFOE and the VIEs and exercised our rights under the exclusive call option agreements between the WFOE and the VIEs such that, effective as of September 19, 2022, we obtained 100% of the equity ownership of the entities we formerly consolidated as VIEs and which we now consolidate as wholly-owned subsidiaries. The following diagram illustrates our corporate structure, including our significant subsidiaries, as of the date of this Form 10-K. The diagram omits certain entities which are immaterial to our results of operations and financial condition. We are subject to certain legal and operational risks associated with having a significant portion of our operations in China. Chinese laws and regulations governing our current business operations, including the enforcement of such laws and regulations, are sometimes vague and uncertain and can change quickly with little advance notice. The Chinese government may intervene in or influence the operations of our China-based subsidiaries at any time and may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our securities. In addition, any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or become worthless. In recent years, the Chinese government adopted a series of regulatory actions and issued statements to regulate business operations in China, including those related to the use of variable interest entities, cybersecurity, data security, export control and anti-monopoly concerns. As of the date of this Form 10-K, we have neither been involved in any investigations on cybersecurity review initiated by any Chinese regulatory authority, nor received any inquiry, notice or sanction. As of the date of this Form 10-K, no relevant laws or regulations in China explicitly require us to seek approval from the China Securities Regulatory Commission (“CSRC”) for any securities listing. As of the date of this Form 10-K, we have not received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other Chinese governmental authorities relating to securities listings. However, since these statements and regulatory actions are newly published, official guidance and related implementation rules have not all been issued. It is highly uncertain what potential impact such modified or new laws and regulations will have on our ability to conduct our business, accept investments or list or maintain a listing on a U.S. or foreign exchange. As of the date of this Form 10-K, we are not required to seek permissions from the CSRC, the Cyberspace Administration of China (the “CAC”), or any other entity that is required to approve our operations in China. Nevertheless, Chinese regulatory authorities may in the future promulgate laws, regulations or implement rules that require us or our subsidiaries to obtain permissions from such regulatory authorities to approve our operations or any securities listing. Transfer of Cash or Assets Dividend Distributions As of the date of this Form 10-K, none of our subsidiaries have made any dividends or distributions to Remark. We have never declared or paid dividends or distributions on our common equity. We currently intend to retain all available funds and any future consolidated earnings to fund our operations and continue the development and growth of our business; therefore, we do not anticipate paying any cash dividends. Under Delaware law, a Delaware corporation’s ability to pay cash dividends on its capital stock requires the corporation to have either net profits or positive net assets (total assets less total liabilities) over its capital. If we determine to pay dividends on any of our common stock in the future, as a holding company, we may rely on dividends and other distributions on equity from our subsidiaries for cash requirements, including the funds necessary to pay dividends and other cash contributions to our stockholders. Our WFOE’s ability to distribute dividends is based upon its distributable earnings. Current Chinese regulations permit our WFOE to pay dividends to its shareholder only out of its registered capital amount, if any, as determined in accordance with Chinese accounting standards and regulations, and then only after meeting the requirement regarding statutory reserve. If our WFOE incurs debt in the future, the instruments governing the debt may restrict its ability to pay dividends or make other payments to us. Any limitation on the ability of our WFOE to distribute dividends or other payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business. In addition, any cash dividends or distributions of assets by our WFOE to its stockholder are subject to a Chinese withholding tax of as much as 10%. The Chinese government also imposes controls on the conversion of Chinese Renminbi (“RMB”) into foreign currencies and the remittance of currencies out of China. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. If we are unable to receive all of the revenues from our operations through our China-based subsidiaries, we may be unable to pay dividends on our common stock. Going Concern During the year ended December 31, 2023, and in each fiscal year since our inception, we have incurred operating losses which have resulted in a stockholders’ deficit of $(39.6) million as of December 31, 2023. Additionally, our operations have historically used more cash than they have provided. Net cash used in operating activities was $10.5 million during the year ended December 31, 2023. As of December 31, 2023, our cash balance was $0.1 million. Also, we did not make required repayments of the outstanding loans under the New Mudrick Loan Agreement when due (see Note 13 for more information) and we have accrued approximately $0.5 million of delinquent payroll taxes. Our history of recurring operating losses, working capital deficiencies and negative cash flows from operating activities give rise to, and management has concluded that there is, substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2023, has also expressed substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. We intend to fund our future operations and meet our financial obligations through revenue growth from our AI and data analytics offerings. We cannot, however, provide assurance that revenue, income and cash flows generated from our businesses will be sufficient to sustain our operations in the twelve months following the filing of this Form 10-K. As a result, we are actively evaluating strategic alternatives including debt and equity financings. Conditions in the debt and equity markets, as well as the volatility of investor sentiment regarding macroeconomic and microeconomic conditions (in particular, as a result of the COVID-19 pandemic, global supply chain disruptions, inflation and other cost increases, and the geopolitical conflict in Ukraine), will play primary roles in determining whether we can successfully obtain additional capital. We cannot be certain that we will be successful at raising additional capital. A variety of factors, many of which are outside of our control, 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 and based on the probable success of one or more of the following plans: • develop and grow new product line(s) • 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 June 30, 2024. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation We include all of our subsidiaries in our consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. Use of Estimates We prepare our consolidated financial statements in conformity with GAAP. While preparing our financial statements, we make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes. Accordingly, actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to accounts receivable, deferred cost of revenue, share-based compensation, deferred income taxes, and inventory reserve, among other items. 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 Our cash consists of funds held in bank accounts. We maintain cash balances in United States dollars (“USD”) and British pounds (“GBP”), while the VIEs maintain cash balances in 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, 2023 2022 Cash denominated in: USD $ 31 $ 11 RMB 109 19 GBP 1 17 HKD 4 5 Total cash $ 145 $ 52 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, 2023, we do not believe we have any significant concentrations of credit risk. Cash held by our non-U.S. subsidiaries subject to foreign currency fluctuations against the USD, although such risk is somewhat mitigated because we transfer U.S. funds to our non-U.S. subsidiaries to fund local operations. If, however, the USD is devalued significantly against the RMB, our cost to further expand 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. 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, marketable securities, receivables, prepaids and other current assets, accounts payable, accrued expense and other current liabilities, and short-term debt approximate their fair values because of the short-term nature of these financial instruments. Foreign Currency Translation We report all currency amounts in USD. Our China subsidiaries, however, maintain their books and records in their functional currency, which is RMB. In general, when consolidating our subsidiaries with non-USD functional currencies, we translate the amounts of assets and liabilities into USD using the exchange rate on the balance sheet date, and the amounts of revenue and expense are translated at the average exchange rate prevailing during the period. The gains and losses resulting from translation of financial statement amounts into USD are recorded as a separate component of accumulated other comprehensive loss within stockholders’ deficit. We used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted: 2023 2022 Exchange rates at December 31st: GBP:USD 1.273 1.209 RMB:USD 0.141 0.145 HKD:USD 0.128 0.128 Average exchange rate during the twelve months ended December 31st: RMB:USD 0.141 0.149 GBP:USD 1.241 1.237 Revenue Recognition AI-Based Products We generate revenue by developing AI-based products, including fully-integrated AI solutions which combine our proprietary technology with third-party hardware and software products to meet end-user specifications. Under one type of contract for our AI-based products, we provide a single, continuous service to customers who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Under another type of contract, we have performance obligations to provide fully-integrated AI solutions to our customer and we recognize revenue at the point in time when each performance obligation is completed and delivered to, tested by and accepted by our customer. We recognize revenue when we transfer control of the promised goods or services to our customers, and we recognize an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. If there is uncertainty related to the timing of collections from our customer, which may be the case if our customer is not the ultimate end user of our goods, we consider this to be uncertainty of the customer’s ability and intention to pay us when consideration is due. Accordingly, we recognize revenue only when we have transferred control of the goods or services and collectability of consideration from the customer is probable. When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation. For our contracts with customers, we generally extend short-term credit policies to our customers, typically up to one year for large-scale projects. We record the incremental costs of obtaining contracts as an expense when incurred. We offer extended warranties on our products for periods of one Other We generate revenue from other sources, such as from advertising and marketing services, 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 goods sold to the customer or when we deliver the promised promotional materials or media content. Substantially all of our contracts with customers that generate Other revenue are completed within one year or less. 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 When we record trade receivables arising from revenue transactions with customers, we record an allowance for credit losses for the current expected credit losses inherent in such assets over their expected lives. The allowance for credit losses is a valuation account deducted from the amortized cost basis of the assets to present their net carrying value at the amount expected to be collected. Each period, the allowance for credit losses is adjusted through earnings to reflect expected credit losses over the remaining lives of the assets. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. When measuring expected credit losses, we pool assets with similar country risk and credit risk characteristics. Changes in the relevant information may significantly affect the estimates of expected credit losses. 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. At each of December 31, 2023 and 2022, reserve for inventory was $2.2 million. Advertising Expense Advertising expense is recorded during the period in which it is incurred. We did not incur a material amount of advertising expense during the years ended December 31, 2023 or 2022. 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 and 2022 . 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 Income (Loss) per Share We calculate basic net income (loss) per share using the weighted-average number of common stock shares outstanding during the period. For the calculation of diluted net income (loss) per share, we give effect to all the shares of common stock that were outstanding during the period plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is anti-dilutive. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options and warrants. For the years ended December 31, 2023 and 2022, there were no reconciling items related to the numerators or denominators of the net income (loss) per share calculations. Securities which may have affected the calculation of diluted earnings per share for the years ended December 31, 2023 and 2022 if their effect had been dilutive include 1,618,851 and 1,626,631 stock options outstanding, respectively, and 1,007,441 and 1,011,441 outstanding stock warrants, respectively. All of the stock options outstanding as of December 31, 2023, and 1,435,471 of the stock options outstanding as of December 31, 2022 were out-of-the-money stock options. Our obligations to issue as many as 20,260,601 common stock shares (see Note 14 ) may have affected the calculation of diluted earnings per share for the years ended December 31, 2023 and 2022 if their effect had been dilutive. 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. 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 November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. For us, ASU 2023-07 will be effective on January 1, 2024 and interim periods beginning in fiscal year 2025, with early adoption permitted. The updates required by ASU 2023-07 should be applied retrospectively to all periods presented in the financial statements. We do not expect this standard to have a material impact on our results of operations, financial position or cash flows. We have reviewed all accounting pronouncements recently issued by the FASB and the SEC. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof. |
CONCENTRATIONS OF RISK
CONCENTRATIONS OF RISK | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023, two of our customers represented 35% and 30%, respectively, of our revenue, while during the year ended December 31, 2022, two of our customers represented about 46%, and 20%, respectively, of our revenue. At December 31, 2023, net accounts receivable from three of our customers represented about 37%, 34%, and 12%, respectively, of total net accounts receivable, while at December 31, 2022, net accounts receivable from one of our customers represented about 36% of the total. Deferred Cost of Revenue See Note 7 for a discussion of a risk concentration regarding our deferred cost of revenue. Cost of Sales and Accounts Payable The various hardware we purchase to fulfill our contracts with customers is not especially unique in nature. Based on our analysis, we believe that should any disruption in our current supply chain occur, a sufficient number of alternative vendors is available to us, at reasonably comparable specifications and price, such that we would not experience a material negative impact on our ability to procure the hardware we need to operate our business. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 4. REVENUE We primarily sell AI-based products and services. In the U.S., that has included our Remark AI Thermal Kits and rPads, while in China we sell various customized products based upon computer vision and other technologies. We do not include disclosures related to remaining performance obligations because substantially all our contracts with customers have an original expected duration of one year or less or, with regard to our stand-ready obligations, the amounts involved are not material. Disaggregation of Revenue The following table presents a disaggregation of our revenue by category of products and services (in thousands): Year Ended December 31, 2023 2022 AI-based products and services, including $0.1 million and $5.4 million, respectively, from China Business Partner (See Note 18 ) $ 4,124 $ 10,964 Other 278 702 Revenue $ 4,402 $ 11,666 The following table presents a disaggregation of our revenue by country (in thousands): Year Ended December 31, 2023 2022 China $ 4,138 $ 11,402 United States and United Kingdom 264 264 Revenue $ 4,402 $ 11,666 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, 2023, our contract liability changed only as a result of routine business activity. During the years ended December 31, 2023 and 2022, the amount of revenue we recognized that was included in the beginning balance of Contract liability was not material. During the years ended December 31, 2023 and 2022, we did not recognize revenue from performance obligations that were satisfied in previous periods. Certain Agreements Related to AI-Based Product Sales in China We completed certain projects in China during the year ended December 31, 2023 worth approximately $1.4 million, but the agreement did not meet the criteria for revenue recognition on an accrual basis. We will recognize the revenue from such agreement as we receive the cash. We recognized approximately $0.1 million of such amount during the year ended December 31, 2023. NOTE 7. DEFERRED COST OF REVENUE Deferred cost of revenue during the years ended December 31, 2023 and 2022 of $6.6 million and $7.5 million, respectively, represents amounts we have paid in advance to vendors providing services to us in relation to various projects in China. Specifically, the deferred cost of revenue balance at December 31, 2023, a large percentage of which was paid to a single vendor for project installations we expect will be provided to us through our China Business Partner (described in more detail in Note 18 ), will be utilized as the vendors install our software solutions and/or hardware at numerous sites across various regions of China for our customers and as the vendors perform other services for us pursuant to customer requirements. Because most of the projects for which we have engaged the vendors require purchases of hardware, equipment and/or supplies in advance of site visits, we made the prepayments in anticipation of several large batches of project installations. We neither made any additional advance payments to vendors in 2023 related to projects provided to us through our China Business Partner, nor were we able to complete a material amount of such projects during 2023. We were able to complete installations of other projects that reduced by $2.7 million the deferred cost of revenue balance associated with the vendor which performs the project installations provided to us through our China Business Partner, as well as for other of our clients. During the year ended December 31, 2023, we also paid an additional $2.5 million to other vendors in anticipation of projects to be completed. |
TRADE ACCOUNTS RECEIVABLE
TRADE ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE | NOTE 5. TRADE ACCOUNTS RECEIVABLE December 31, 2023 2022 Gross accounts receivable balance $ 7,063 $ 7,213 Allowance for credit losses (5,776) (4,122) Accounts receivable, net $ 1,287 $ 3,091 Generally, it is not unusual for Chinese entities to pay their vendors on longer timelines than the timelines typically observed in U.S. commerce. Trade receivables related to our China AI projects in the years ended December 31, 2023 and 2022; including $0.7 million and $1.1 million, respectively, of trade receivables from projects related to work with our China Business Partner (see Note 18 for more information regarding our China Business Partner and related accounting); represented essentially all our gross trade receivables in each such period. During the year ended December 31, 2023, when evaluating for current expected credit losses, we took into account our historical experience as well as our expectations based upon how we believe the COVID-19 pandemic has caused lingering effects on us and our customers, and as a result, we recorded approximately $1.7 million of additional reserve for bad debt. Despite the longer collection timelines normally observed with Chinese entities, we noted that the COVID-19-related lockdowns that persisted in China for most of 2022 caused further delay in our ability to collect all balances due from some of our customers in China and, as a result of our inability to assure collection of all amounts due from such customers, we recorded a reserve for credit losses during 2022 of approximately $2.8 million for all accounts receivable from China customers that were more than one year past due. |
INVESTMENT
INVESTMENT | 12 Months Ended |
Dec. 31, 2023 | |
Noncontrolling Interest [Abstract] | |
INVESTMENT | NOTE 6. INVESTMENT In 2009, we co-founded a U.S.-based venture, Sharecare, Inc. (“Legacy Sharecare”), to build a web-based platform that simplifies the search for health and wellness information. The other co-founders of Legacy Sharecare were Dr. Mehmet Oz, HARPO Productions, Discovery Communications, Jeff Arnold and Sony Pictures Television. On July 1, 2021, Legacy Sharecare completed a business combination with Falcon Capital Acquisition Corp., a special purpose acquisition company, as a result of which the common stock of the surviving entity of such business combination (“New Sharecare”) became listed on the Nasdaq Stock Market LLC. As of December 31, 2021, we held 9,431,920 shares of common stock of New Sharecare. We sold 3,181,920 shares of New Sharecare during the year ended December 31, 2022 for cash of $6.3 million. On July 2, 2022, we received a Notice of Trigger Event and Mandatory Payment from our senior lenders, which required that we make a prepayment of our senior secured loans (which are described in Note 13 ) by delivering to each lender shares of common stock of New Sharecare in the fair market amount applicable to each such lender to prepay our senior secured loans. On July 11, 2022, we delivered our remaining 6,250,000 shares of New Sharecare, which reduced the outstanding principal amount on our senior secured loans by approximately $9.7 million, and as a result, we no longer owned any equity interests in New Sharecare subsequent to such date. We incurred a total net loss on investment during the year ended December 31, 2022 of $26.4 million, all of which was related to the decline in value of our investment in New Sharecare. |
DEFERRED COST OF REVENUE
DEFERRED COST OF REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
DEFERRED COST OF REVENUE | NOTE 4. REVENUE We primarily sell AI-based products and services. In the U.S., that has included our Remark AI Thermal Kits and rPads, while in China we sell various customized products based upon computer vision and other technologies. We do not include disclosures related to remaining performance obligations because substantially all our contracts with customers have an original expected duration of one year or less or, with regard to our stand-ready obligations, the amounts involved are not material. Disaggregation of Revenue The following table presents a disaggregation of our revenue by category of products and services (in thousands): Year Ended December 31, 2023 2022 AI-based products and services, including $0.1 million and $5.4 million, respectively, from China Business Partner (See Note 18 ) $ 4,124 $ 10,964 Other 278 702 Revenue $ 4,402 $ 11,666 The following table presents a disaggregation of our revenue by country (in thousands): Year Ended December 31, 2023 2022 China $ 4,138 $ 11,402 United States and United Kingdom 264 264 Revenue $ 4,402 $ 11,666 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, 2023, our contract liability changed only as a result of routine business activity. During the years ended December 31, 2023 and 2022, the amount of revenue we recognized that was included in the beginning balance of Contract liability was not material. During the years ended December 31, 2023 and 2022, we did not recognize revenue from performance obligations that were satisfied in previous periods. Certain Agreements Related to AI-Based Product Sales in China We completed certain projects in China during the year ended December 31, 2023 worth approximately $1.4 million, but the agreement did not meet the criteria for revenue recognition on an accrual basis. We will recognize the revenue from such agreement as we receive the cash. We recognized approximately $0.1 million of such amount during the year ended December 31, 2023. NOTE 7. DEFERRED COST OF REVENUE Deferred cost of revenue during the years ended December 31, 2023 and 2022 of $6.6 million and $7.5 million, respectively, represents amounts we have paid in advance to vendors providing services to us in relation to various projects in China. Specifically, the deferred cost of revenue balance at December 31, 2023, a large percentage of which was paid to a single vendor for project installations we expect will be provided to us through our China Business Partner (described in more detail in Note 18 ), will be utilized as the vendors install our software solutions and/or hardware at numerous sites across various regions of China for our customers and as the vendors perform other services for us pursuant to customer requirements. Because most of the projects for which we have engaged the vendors require purchases of hardware, equipment and/or supplies in advance of site visits, we made the prepayments in anticipation of several large batches of project installations. We neither made any additional advance payments to vendors in 2023 related to projects provided to us through our China Business Partner, nor were we able to complete a material amount of such projects during 2023. We were able to complete installations of other projects that reduced by $2.7 million the deferred cost of revenue balance associated with the vendor which performs the project installations provided to us through our China Business Partner, as well as for other of our clients. During the year ended December 31, 2023, we also paid an additional $2.5 million to other vendors in anticipation of projects to be completed. |
PREPAID EXPENSE AND OTHER CURRE
PREPAID EXPENSE AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 2022 Other receivables 147 23 Prepaid expense 339 1,144 Deposits 128 201 Other current assets — 6 Total $ 614 $ 1,374 During the year ended December 31, 2023, we deemed a certain prepaid expense amount unrecoverable because the amount related to certain items a vendor had already begun to custom build for us but which we had to cancel, so we recorded an impairment of approximately $0.2 million. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 2022 Vehicles 3 153 153 Computers and equipment 3 1,217 1,170 Furniture and fixtures 3 42 42 Software 3 4,082 5,160 Leasehold improvements 3 204 204 Software development in progress — 1,199 Total property, equipment and software $ 5,698 $ 7,928 Less accumulated depreciation (5,509) (6,229) Total property, equipment and software, net $ 189 $ 1,699 For the years ended December 31, 2023 and 2022, depreciation (and amortization of software) expense was $0.3 million and $0.2 million, respectively. Additionally, fully-depreciated assets totaling approximately $0.8 million were written off during 2023. During the year ended December 31, 2023, we recorded an impairment of approximately $0.8 million related to a software asset for which we no longer had established cash flows to support continued recognition of such asset, and we also determined that certain costs that we had capitalized to software development in progress would no longer be recoverable and we recorded an impairment of approximately $0.2 million. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 10. LEASES We lease office space under contracts we classify as operating leases. None of our leases are financing leases. The following table presents the detail of our lease expense, which is reported in General and administrative expense (in thousands): Year Ended December 31, 2023 2022 Operating lease expense $ 394 $ 287 Short-term lease expense 631 1,343 Lease expense $ 1,025 $ 1,630 We reported within operating cash flows for the years ended December 31, 2023 and 2022, $0.4 million and $0.2 million, respectively, of cash paid for amounts included in the measurement of operating lease liabilities. As of December 31, 2023, our operating leases had a weighted-average remaining lease term of approximately 2.3 years, and we used a weighted-average discount rate of approximately 13%, which approximates our incremental borrowing rate, to measure our operating lease liabilities. Maturity of Lease Liabilities The following table presents information regarding the maturities of undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented in our December 31, 2023 Consolidated Balance Sheet (in thousands): Operating lease liabilities maturing during the next: One year $ 340 Two years 249 Three years 63 Total undiscounted cash flows $ 652 Present value of cash flows $ 574 Lease liabilities on balance sheet: Short-term (included in accrued expenses $ 288 Long-term 286 Total lease liabilities $ 574 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. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11. INCOME TAX For the years ended December 31, 2023 and 2022, we did not have a material tax provision or a tax benefit to report, as we only had a de minimis foreign income tax expense for the year ended December 31, 2021, which amount was refunded to us during the year ended December 31, 2022. 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, 2023 2022 Income tax benefit (provision) at federal statutory rate $ (6,121) $ (11,653) Change in deferred tax asset valuation allowance 5,459 10,611 Finance cost of equity line of credit 1,612 — Tax effects of: Statutory differences 27 883 R&D expense (61) (280) Foreign tax rates different than U.S. federal statutory rate (90) (123) Other permanent items 70 (42) Deferred adjustments (476) 404 Other (420) 209 Income tax benefit (provision) as reported $ — $ 9 Our 2023 and 2022 effective tax rates were significantly impacted by maintaining a valuation allowance against net deferred tax assets in all jurisdictions, both domestic and foreign, as well as a permanent book-tax adjustment for the finance cost associated with the Amended ELOC Purchase Agreement (see Note 14 ). The following table presents loss before income tax attributable to domestic and to foreign operations (in thousands): Year Ended December 31, 2023 2022 Domestic $ (24,202) $ (49,297) Foreign (4,945) (6,195) Loss before income taxes $ (29,147) $ (55,492) 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. The realization of DTAs is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of existing deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment, and we evaluated both positive and negative evidence in determining the need for a valuation allowance. We continue to assess the realizability of DTAs and concluded that in each jurisdiction, we have not met the “more likely than not” threshold. As of December 31, 2023, we continue to maintain a valuation allowance against its DTAs that cannot be offset by existing deferred tax liabilities. In accordance with ASC Topic 740, this assessment has taken into consideration the jurisdictions in which these DTAs reside. The following table presents the components of our DTAs and DTLs (in thousands): December 31, 2023 2022 Deferred Tax Assets Net operating loss carryforwards $ 48,666 $ 42,744 Amortization of intangibles 2,731 2,371 Share-based compensation expense 7,879 7,865 Depreciation of fixed assets 46 33 Section 163(j) interest limitation 3,036 4,294 Other 1,994 1,133 Gross deferred tax assets $ 64,352 $ 58,440 Valuation allowance (64,352) (58,440) Deferred tax assets, net of valuation allowance $ — $ — Net operating losses available at December 31, 2023 to offset future taxable income in the U.S. federal, U.S. state, Hong Kong, and China jurisdictions are $194.1 million, $41.7 million, $1.7 million, and $8.3 million, respectively. The statutory income tax rates in Hong Kong and China are 8.25% and 25.00%, respectively. The U.S. net operating losses generated prior to 2019 expire between 2026 and 2038. The US net operating losses generated in 2019 to 2023 have no expiration date and can be carried forward indefinitely. The net operating losses generated in Hong Kong and United Kingdom have no expiration date and can be carried 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 2020. 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 2020. 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, 2023 and 2022, 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, 2023. |
ACCRUED EXPENSE AND OTHER CURRE
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES | NOTE 12. ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES The following table presents the components of Accrued expense and other current liabilities (in thousands): December 31, 2023 2022 Accrued compensation and benefit-related expense $ 3,221 $ 1,448 Accrued delinquent payroll taxes 495 — Accrued interest 1,570 769 Other accrued expense 3,577 2,393 Other payables 2,138 2,234 Operating lease liability - current 288 138 China Cash Bonuses 11 32 Other current liabilities 621 208 Total $ 11,921 $ 7,222 |
NOTES PAYABLE (PAST DUE)
NOTES PAYABLE (PAST DUE) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE (PAST DUE) | NOTE 13. NOTES PAYABLE (PAST DUE) The following table presents our notes payable (in thousands) as of: December 31, 2023 2022 Principal balance of New Mudrick Notes (September 30, 2023) and Original Mudrick Loans (December 31, 2022) $ 16,307 $ 14,418 Other notes payable 156 189 Notes payable $ 16,463 $ 14,607 On December 3, 2021, we entered into senior secured loan agreements (the “Original Mudrick Loan Agreements”) with certain of our subsidiaries as guarantors (the “Guarantors”) and certain institutional lenders affiliated with Mudrick Capital Management, LP (collectively, “Mudrick”), pursuant to which Mudrick extended credit to us consisting of term loans in the aggregate principal amount of $30.0 million (the “Original Mudrick Loans”). The Original Mudrick Loans bore interest at 16.5% per annum until the original maturity date of July 31, 2022 and, following an amendment we entered into with Mudrick in August 2022, bore interest at 18.5% per annum. The amendment also extended the maturity date of the Original Mudrick Loans from July 31, 2022 to October 31, 2022. However, we did not make the required repayment of the Original Mudrick Loans by October 31, 2022, which constituted an event of default under the Original Mudrick Loans and triggered an increase in the interest rate under the Original Mudrick Loans to 20.5%. In connection with our entry into the Original Mudrick Loan Agreements, we paid to Mudrick an upfront fee equal to 5.0% of the amount of the Original Mudrick Loans, which amount was netted against the drawdown of the Original Mudrick Loans. We recorded the upfront fee as a debt discount of $1.5 million, and recorded debt issuance cost totaling $1.1 million. We amortized the discount on the Original Mudrick Loans and the debt issuance cost over the life of the Original Mudrick Loans and, during the year ended December 31, 2022, we amortized $2.2 million of such discount and debt issuance cost. In consideration for the amendment we entered into with Mudrick in August 2022, we paid Mudrick an amendment and extension payment in the amount of 2.0% of the then unpaid principal balance of the Original Mudrick Loans, or approximately $0.3 million, by adding such amount to the principal balance of the Original Mudrick Loans. During the year ended December 31, 2022, we repaid $6.2 million of the principal amount of the Original Mudrick Loans in cash and delivered all of our shares in Sharecare, Inc. to Mudrick on July 11, 2022, in partial settlement of the Original Mudrick Loans, resulting in a further repayment of approximately $9.7 million of the principal amount of the Original Mudrick Loans. As of December 31, 2022, the outstanding balance of the Original Mudrick Loans was $14.4 million, and approximately $0.8 million of accrued interest was included in Accrued expense and other current liabilities. During the year ended December 31, 2023, prior to the New Mudrick Loan Agreement (defined below) canceling the Original Mudrick Loans, we accrued approximately $0.6 million additional interest expense on the Original Mudrick Loans. On March 14, 2023, we entered into a Note Purchase Agreement (the “New Mudrick Loan Agreement”) with Mudrick, pursuant to which all of the Original Mudrick Loans were cancelled in exchange for new notes payable to Mudrick (the “New Mudrick Notes”) in the aggregate principal amount of approximately $16.3 million. The principal balance of the New Mudrick Notes included the $14.4 million outstanding balance of the Original Mudrick Loans, plus $1.1 million of accrued interest on the Original Mudrick Loans, plus a fee of approximately $0.8 million payable to Mudrick as consideration for cancelling the Original Mudrick Loans and converting all amounts outstanding thereunder into the New Mudrick Notes. We recorded the $0.8 million as interest expense during the three months ended March 31, 2023. The New Mudrick Notes bear interest at a rate of 20.5% per annum, which is payable on the last business day of each month commencing on May 31, 2023. The interest rate will increase by 2% and the principal amount outstanding under the New Mudrick Notes and any unpaid interest thereon may become immediately due and payable upon the occurrence of any event of default under the New Mudrick Loan Agreement. All amounts outstanding under the New Mudrick Notes, including all accrued and unpaid interest, became due and payable in full on October 31, 2023. We incurred approximately $4.3 million of interest during the year ended December 31, 2023, related to our obligations to Mudrick. At December 31, 2023, accrued interest related to the New Mudrick Notes was approximately $1.6 million. To secure the payment and performance of the obligations under the Original Mudrick Loan Agreements and the New Mudrick Loan Agreement, we, together with certain of our subsidiaries (the “Guarantors”), have granted to TMI Trust Company, as the collateral agent for the benefit of Mudrick, a first priority lien on, and security interest in, all assets of Remark and the Guarantors, subject to certain customary exceptions. We did not make required repayments of the outstanding loans under the New Mudrick Loan Agreement that were due beginning on June 30, 2023, which constitute events of default for which we have not received a waiver as of the date of this Form 10-K. While we are actively engaged in discussions with Mudrick regarding a resolution of the events of default and have made progress in such discussions, we cannot provide any assurance that we will be successful in obtaining a waiver or that Mudrick will continue to forebear from taking any enforcement actions against us. Other Notes Payable The Other notes payable in the table above represent individually immaterial notes payable issued for the purchase of operating assets. Such notes payable bear interest at a weighted-average interest rate of approximately 6.2% and have a weighted-average remaining term of approximately 4.2 years. NOTE 14. OBLIGATIONS TO ISSUE COMMON STOCK Convertible Debentures On October 6, 2022, we entered into a debenture purchase agreement (the “2022 Debenture Purchase Agreement”) with Ionic Ventures LLC (“Ionic”) and a purchase agreement (the “Original ELOC Purchase Agreement”) with Ionic. Pursuant to the 2022 Debenture Purchase Agreement, we issued a convertible subordinated debenture in the original principal amount of approximately $2.8 million (the “2022 Debenture”) to Ionic for a purchase price of $2.5 million. The 2022 Debenture automatically converted into shares of our common stock (the “2022 Debenture Settlement Shares”) on November 17, 2022 upon the effectiveness of a registration statement we filed pursuant to a registration rights agreement we entered into with Ionic. Upon issuance of the 2022 Debenture, we initially estimated the obligation to issue common stock at approximately $3.6 million. As of December 31, 2022, we estimated such obligation to have a fair value of $1.9 million, representing an additional 1,720,349 shares to be issued pursuant to the 2022 Debenture. When the measurement period for determining the conversion price of the 2022 Debenture was completed, we determined that the final number of 2022 Debenture Settlement Shares would be 3,129,668 (inclusive of 898,854 shares that were issued during 2022), resulting in the issuance of an additional 2,230,814 shares during 2023 with a fair value of $3.1 million. On March 14, 2023, we entered into a new debenture purchase agreement (the “2023 Debenture Purchase Agreement”) with Ionic pursuant to which we authorized the issuance and sale of two convertible subordinated debentures in the aggregate principal amount of approximately $2.8 million for an aggregate purchase price of $2.5 million. The first debenture is in the original principal amount of approximately $1.7 million for a purchase price of $1.5 million (the “First 2023 Debenture”), which was issued on March 14, 2023, and the second debenture is in the original principal amount of approximately $1.1 million for a purchase price of $1.0 million (the “Second 2023 Debenture” and collectively with the First Debenture, the “2023 Debentures”), which was issued on April 12, 2023. Upon issuance of the First 2023 Debenture and the Second 2023 Debenture, we initially estimated the obligations to issue common stock at an aggregate of approximately $4.1 million, or equivalent estimated issuable shares of 3,669,228. During 2023, we issued 657,000 shares with a fair value of $(0.4) million in partial settlement of the 2023 Debentures. As of December 31, 2023, we estimated that an aggregate total of 9,383,966 shares remained to be issued upon conversion in full of the 2023 Debentures, representing obligations with an aggregate fair value of $4.6 million. The 2023 Debentures accrue interest at a rate of 10% per annum, of which two years of interest is guaranteed and deemed earned in full on the first day following the issuance date. The interest rate on the 2023 Debentures increases to a rate of 15% per annum if the 2023 Debentures are not fully paid, converted or redeemed by the second anniversary of each debenture (each, a “Maturity Date”) or upon the occurrence of certain trigger events, including, but not limited to, the suspension from trading or the delisting of our common stock from Nasdaq for three consecutive trading days. If the 2023 Debentures are not fully paid or converted by their respective Maturity Dates, the original aggregate principal amount of the 2023 Debentures will be deemed to have been approximately $3.3 million from their issuance dates. The 2023 Debentures automatically convert into shares of common stock at the earlier of (i) the effectiveness of the initial registration statement registering the resale of certain Registrable Securities as such term is defined in the Registration Rights Agreement (as defined below) including, without limitation, the shares issuable upon conversion of the 2023 Debentures (the “Conversion Shares”) (such registration statement, the “Resale Registration Statement”), and (ii) 181 days after the issuance date of each 2023 Debenture. The number of shares of common stock issuable upon conversion of each 2023 Debenture shall be determined by dividing the outstanding balance under each 2023 Debenture (including all accrued and unpaid interest and accrued and unpaid late charges, if any) by a conversion price that is the lower of (x) 80% (or 70% if our common stock is not then trading on Nasdaq) of the average of the two lowest VWAPs over a specified measurement period following the conversion date (the “Variable Conversion Price”), and (y) $1.40 (the “Fixed Conversion Price”), subject to full ratchet anti-dilution protection in the event we issue certain equity securities at a price below the then Fixed Conversion Price. The 2023 Debentures are unsecured and expressly junior to any of our existing or future debt obligations. Notwithstanding anything to the contrary, under no circumstances shall the Variable Conversion Price be less than the floor price of $0.20 as specified in the 2023 Debentures. Additionally, in the event of a bankruptcy, we are required to redeem the 2023 Debentures in cash in an amount equal to the then outstanding balance of the 2023 Debentures multiplied by 120%. The 2023 Debentures further provide that we will not effect the conversion of any portion of the 2023 Debentures, and the holder thereof will not have the right to a conversion of any portion of the 2023 Debentures, to the extent that after giving effect to such conversion, the holder together with its affiliates would beneficially own more than 4.99% of the outstanding shares of our common stock immediately after giving effect to such conversion. Furthermore, we may not issue shares of common stock underlying the 2023 Debentures if such issuance would require us to obtain stockholder approval under the Nasdaq rules or until such stockholder approval has been obtained. Concurrently with entering into the 2023 Debenture Purchase Agreement, we also entered into a registration rights agreement with Ionic (the “2023 Registration Rights Agreement”), pursuant to which we agreed to file with the SEC one or more registration statements, as necessary, and to the extent permissible and subject to certain exceptions, to register under the Securities Act of 1933, as amended, the resale of the shares of our common stock issuable upon conversion of the 2023 Debentures and the shares of common stock that may be issued to Ionic if we fail to comply with our obligations in the 2023 Registration Rights Agreement. Because we did not meet the filing and effectiveness deadlines specified in the 2023 Registration Rights Agreement, we issued 300,000 shares of our common stock shares, with a fair value of $(0.3) million, to Ionic in July 2023. Equity Line of Credit The Original ELOC Purchase Agreement, as amended by those certain letter agreements by and between Remark and Ionic, dated as of January 5, 2023; July 12, 2023; August 10, 2023; and September 15, 2023 (as amended, the “Amended ELOC Purchase Agreement”), provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Ionic to purchase up to an aggregate of $50.0 million of shares of our common stock over the 36-month term of the Amended ELOC Purchase Agreement. Under the Amended ELOC Purchase Agreement, after the satisfaction of certain commencement conditions, including, without limitation, the effectiveness of a resale registration statement filed with the SEC registering such shares and that the 2022 Debenture shall have been fully converted into shares of common stock or shall otherwise have been fully redeemed and settled in all respects in accordance with the terms of the 2022 Debenture, we have the right to present Ionic with a purchase notice (each, a “Purchase Notice”) directing Ionic to purchase any amount up to $3.0 million of our common stock per trading day, at a per share price equal to 80% (or 70% if our common stock is not then trading on Nasdaq) of the average of the two lowest volume-weighted average prices (“VWAPs”) over a specified measurement period. With each purchase under the Amended ELOC Purchase Agreement, we are required to deliver to Ionic an additional number of shares equal to 2.5% of the number of shares of common stock deliverable upon such purchase. The number of shares that we can issue to Ionic from time to time under the Amended ELOC Purchase Agreement shall be subject to the condition that we will not sell shares to Ionic to the extent that Ionic, together with its affiliates, would beneficially own more than 4.99% of the outstanding shares of our common stock immediately after giving effect to such sale (the “Beneficial Ownership Limitation”). In addition, Ionic will not be required to buy any shares of our common stock pursuant to a Purchase Notice on any trading day on which the closing trade price of our common stock is below $0.20 (as amended by the Letter Agreement, as defined below). We will control the timing and amount of sales of our common stock to Ionic. Ionic has no right to require any sales by us, and is obligated to make purchases from us as directed solely by us in accordance with the Amended ELOC Purchase Agreement. The Amended ELOC Purchase Agreement provides that we will not be required or permitted to issue, and Ionic will not be required to purchase, any shares under the Amended ELOC Purchase Agreement if such issuance would violate Nasdaq rules, and we may, in our sole discretion, determine whether to obtain stockholder approval to issue shares in excess of 19.99% of our outstanding shares of common stock if such issuance would require stockholder approval under Nasdaq rules. Ionic has agreed that neither it nor any of its agents, representatives and affiliates will engage in any direct or indirect short-selling or hedging our common stock during any time prior to the termination of the Amended ELOC Purchase Agreement. The Amended ELOC Purchase Agreement may be terminated by us at any time after commencement, at our discretion; provided, however, that if we sold less than $25.0 million to Ionic (other than as a result of our inability to sell shares to Ionic as a result of the Beneficial Ownership Limitation, our failure to have sufficient shares authorized or our failure to obtain stockholder approval to issue more than 19.99% of our outstanding shares), we will pay to Ionic a termination fee of $0.5 million, which is payable, at our option, in cash or in shares of common stock at a price equal to the closing price on the day immediately preceding the date of receipt of the termination notice. Further, the Amended ELOC Purchase Agreement will automatically terminate on the date that we sell, and Ionic purchases, the full $50.0 million amount under the agreement or, if the full amount has not been purchased, on the expiration of the 36-month term of the Amended ELOC Purchase Agreement. (See Note 19 for additional detail regarding certain amendments to the Amended ELOC Purchase Agreement.) On January 5, 2023, we and Ionic entered into a letter agreement (the “Letter Agreement”) which amended the Original ELOC Purchase Agreement. Under the Letter Agreement, the parties agreed, among other things, to (i) amend the floor price below which Ionic will not be required to buy any shares of our common stock under the Amended ELOC Purchase Agreement from $0.25 to $0.20, determined on a post-reverse split basis, (ii) amend the per share purchase price for purchases under the Amended ELOC Purchase Agreement to 90% of the average of the two lowest daily VWAPs over a specified measurement period, which will commence at the conclusion of the applicable measurement period related to the 2022 Debenture and (iii) waive certain requirements in the Amended ELOC Purchase Agreement to allow for a one-time $0.5 million purchase under the Amended ELOC Purchase Agreement. As partial consideration for the waiver to allow for the $0.5 million purchase by Ionic, we agreed to issue to Ionic that number of shares (the “Letter Agreement Shares”) equal to the difference between (x) the variable conversion price in the 2022 Debenture, and (y) the calculation achieved as a result of the following formula: 80% (or 70% if our common stock is not then trading on Nasdaq) of the lowest VWAP starting on the trading day immediately following the receipt of pre-settlement conversion shares following the date on which the 2022 Debenture automatically converts or other relevant date of determination and ending the later of (a) 10 consecutive trading days after (and not including) the Automatic Conversion Date (as defined in the Amended ELOC Purchase Agreement) or such other relevant date of determination and (b) the trading day immediately after shares of our common stock in the aggregate amount of at least $13.9 million shall have traded on Nasdaq. As of March 31, 2023, we estimated the obligation to issue the Letter Agreement Shares at approximately $0.2 million. As of June 30, 2023, we had issued all of the 200,715 Letter Agreement Shares at a fair value of $(0.2) million. On September 15, 2023, we and Ionic entered into a letter agreement (the “September 2023 Letter Agreement”) which amends the Amended ELOC Purchase Agreement. Under the September 2023 Letter Agreement, which repeated changes made in earlier letter agreements between Remark and Ionic dated July 12, 2023 and August 10, 2023, the parties agreed, among other things, to (i) allow Remark to deliver one or more irrevocable written notices (“Exemption Purchase Notices”) to Ionic in a total aggregate amount not to exceed $20.0 million, which total aggregate amount shall be reduced by the aggregate amount of previous Exemption Purchase Notices, (ii) amend the per share purchase price for purchases under an Exemption Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices (“VWAPs”) over a specified measurement period, (iii) amend the definition of the specified measurement period to stipulate that, for purposes of calculating the final purchase price, such measurement period begins the trading day after Ionic pays Remark the amount requested in the purchase notice, while the calculation of the dollar volume of Remark common stock traded on the principal market to determine the length of the measurement period shall begin on the trading day after the previous measurement period ends, iv) that any additional Exemption Purchase Notices that are not in accordance with the terms and provisions of the Purchase Agreement shall be subject to Ionic’s approval, v) to amend section 11(c) of the Amended ELOC Purchase Agreement to increase the Additional Commitment Fee from $0.5 million to $3.0 million and vi) that by September 29, 2023, the parties will amend the Debenture Transaction Documents to include a so-called Most Favored Nation provision that will provide Ionic with necessary protection against any future financing, settlement, exchange or other transaction whether with an existing or new lender, investor or counterparty, and that, if such amendment is not made by September 29, 2023, the Additional Commitment Fee shall be further increased to approximately $3.8 million. During the year ended December 31, 2023, Ionic advanced to us an aggregate of $8.1 million (the "ELOC Advances") pursuant to the Amended ELOC Purchase Agreement. Upon issuance of the ELOC Advances, we initially estimated the obligations to issue common stock at approximately $12.1 million, or equivalent estimated issuable shares of 14,523,432. In partial settlement of our obligation to issue common stock under the ELOC Advances, we issued 7,110,762 shares of our common stock during the year ended December 31, 2023 at aggregate fair value of approximately $6.1 million. As of December 31, 2023, we estimated that an additional 10,876,635 shares would be issued in settlement of our obligation to issue common stock under the ELOC Advances, representing an obligation with an aggregate fair value of $5.4 million. Accounting for the Debentures and the ELOC Using the guidance in ASC Topic 480, Distinguishing Liabilities from Equity , we evaluated the 2022 Debenture Purchase Agreement and its associated 2022 Debenture, the 2023 Debenture Purchase Agreement and its associated 2023 Debentures, and the Amended ELOC Purchase Agreement and its associated Letter Agreement and ELOC Advances, and determined that all represented obligations that must or may be settled with a variable number of shares, the monetary value of which was based solely or predominantly on a fixed monetary amount known at inception. Using a Level 3 input, we estimated the number of shares of our common stock that we would have to issue for each obligation and multiplied the estimated number of shares by the closing market price of our common stock on the measurement date to determine the fair value of the obligation. We then recorded the amount of the initial obligation in excess of the purchase price as finance cost. We remeasure each obligation at every balance sheet date until all shares representing the obligation have been issued, with the change in the amount of the obligation being recorded as finance cost. The following table shows the changes in our obligations to issue common stock (dollars in thousands): 2022 Debenture 2023 Debentures Filing & Effectiveness Default Letter Agreement ELOC Advances Total Obligations to Issue Common Stock Balance at December 31, 2022 $ 1,892 $ — $ — $ — $ — $ 1,892 Establishment of new obligation to issue shares — 4,109 332 249 12,140 16,830 Issuance of Shares (3,138) (368) (294) (227) (6,106) (10,133) Change in measurement of liability 1,246 906 (38) (22) (648) 1,444 Balance at December 31, 2023 $ — $ 4,647 $ — $ — $ 5,386 $ 10,033 Estimated Number of Shares Issuable Balance at December 31, 2022 1,720,349 — — — — 1,720,349 Establishment of new obligation to issue shares — 3,669,228 300,000 200,715 14,523,432 18,693,375 Issuance of Shares (2,230,814) (657,000) (300,000) (200,715) (7,110,762) (10,499,291) Change in estimated number of shares issuable 510,465 6,371,738 — — 3,463,965 10,346,168 Balance at December 31, 2023 — 9,383,966 — — 10,876,635 20,260,601 The following table shows the composition of finance cost during the year ended December 31, 2023 associated with our obligations to issue common stock (dollars in thousands): 2022 Debenture 2023 Debentures Filing & Effectiveness Default Letter Agreement ELOC Advances Total Initial obligation in excess of purchase price $ — $ 1,609 $ 332 $ 249 $ 4,038 $ 6,228 Change in measurement of liability 1,246 906 (38) (22) (648) 1,444 Total $ 1,246 $ 2,515 $ 294 $ 227 $ 3,390 $ 7,672 Finance cost during the year ended December 31, 2022 was approximately $1.4 million, which was related to the 2022 Debenture. |
OBLIGATIONS TO ISSUE COMMON STO
OBLIGATIONS TO ISSUE COMMON STOCK | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
OBLIGATIONS TO ISSUE COMMON STOCK | NOTE 13. NOTES PAYABLE (PAST DUE) The following table presents our notes payable (in thousands) as of: December 31, 2023 2022 Principal balance of New Mudrick Notes (September 30, 2023) and Original Mudrick Loans (December 31, 2022) $ 16,307 $ 14,418 Other notes payable 156 189 Notes payable $ 16,463 $ 14,607 On December 3, 2021, we entered into senior secured loan agreements (the “Original Mudrick Loan Agreements”) with certain of our subsidiaries as guarantors (the “Guarantors”) and certain institutional lenders affiliated with Mudrick Capital Management, LP (collectively, “Mudrick”), pursuant to which Mudrick extended credit to us consisting of term loans in the aggregate principal amount of $30.0 million (the “Original Mudrick Loans”). The Original Mudrick Loans bore interest at 16.5% per annum until the original maturity date of July 31, 2022 and, following an amendment we entered into with Mudrick in August 2022, bore interest at 18.5% per annum. The amendment also extended the maturity date of the Original Mudrick Loans from July 31, 2022 to October 31, 2022. However, we did not make the required repayment of the Original Mudrick Loans by October 31, 2022, which constituted an event of default under the Original Mudrick Loans and triggered an increase in the interest rate under the Original Mudrick Loans to 20.5%. In connection with our entry into the Original Mudrick Loan Agreements, we paid to Mudrick an upfront fee equal to 5.0% of the amount of the Original Mudrick Loans, which amount was netted against the drawdown of the Original Mudrick Loans. We recorded the upfront fee as a debt discount of $1.5 million, and recorded debt issuance cost totaling $1.1 million. We amortized the discount on the Original Mudrick Loans and the debt issuance cost over the life of the Original Mudrick Loans and, during the year ended December 31, 2022, we amortized $2.2 million of such discount and debt issuance cost. In consideration for the amendment we entered into with Mudrick in August 2022, we paid Mudrick an amendment and extension payment in the amount of 2.0% of the then unpaid principal balance of the Original Mudrick Loans, or approximately $0.3 million, by adding such amount to the principal balance of the Original Mudrick Loans. During the year ended December 31, 2022, we repaid $6.2 million of the principal amount of the Original Mudrick Loans in cash and delivered all of our shares in Sharecare, Inc. to Mudrick on July 11, 2022, in partial settlement of the Original Mudrick Loans, resulting in a further repayment of approximately $9.7 million of the principal amount of the Original Mudrick Loans. As of December 31, 2022, the outstanding balance of the Original Mudrick Loans was $14.4 million, and approximately $0.8 million of accrued interest was included in Accrued expense and other current liabilities. During the year ended December 31, 2023, prior to the New Mudrick Loan Agreement (defined below) canceling the Original Mudrick Loans, we accrued approximately $0.6 million additional interest expense on the Original Mudrick Loans. On March 14, 2023, we entered into a Note Purchase Agreement (the “New Mudrick Loan Agreement”) with Mudrick, pursuant to which all of the Original Mudrick Loans were cancelled in exchange for new notes payable to Mudrick (the “New Mudrick Notes”) in the aggregate principal amount of approximately $16.3 million. The principal balance of the New Mudrick Notes included the $14.4 million outstanding balance of the Original Mudrick Loans, plus $1.1 million of accrued interest on the Original Mudrick Loans, plus a fee of approximately $0.8 million payable to Mudrick as consideration for cancelling the Original Mudrick Loans and converting all amounts outstanding thereunder into the New Mudrick Notes. We recorded the $0.8 million as interest expense during the three months ended March 31, 2023. The New Mudrick Notes bear interest at a rate of 20.5% per annum, which is payable on the last business day of each month commencing on May 31, 2023. The interest rate will increase by 2% and the principal amount outstanding under the New Mudrick Notes and any unpaid interest thereon may become immediately due and payable upon the occurrence of any event of default under the New Mudrick Loan Agreement. All amounts outstanding under the New Mudrick Notes, including all accrued and unpaid interest, became due and payable in full on October 31, 2023. We incurred approximately $4.3 million of interest during the year ended December 31, 2023, related to our obligations to Mudrick. At December 31, 2023, accrued interest related to the New Mudrick Notes was approximately $1.6 million. To secure the payment and performance of the obligations under the Original Mudrick Loan Agreements and the New Mudrick Loan Agreement, we, together with certain of our subsidiaries (the “Guarantors”), have granted to TMI Trust Company, as the collateral agent for the benefit of Mudrick, a first priority lien on, and security interest in, all assets of Remark and the Guarantors, subject to certain customary exceptions. We did not make required repayments of the outstanding loans under the New Mudrick Loan Agreement that were due beginning on June 30, 2023, which constitute events of default for which we have not received a waiver as of the date of this Form 10-K. While we are actively engaged in discussions with Mudrick regarding a resolution of the events of default and have made progress in such discussions, we cannot provide any assurance that we will be successful in obtaining a waiver or that Mudrick will continue to forebear from taking any enforcement actions against us. Other Notes Payable The Other notes payable in the table above represent individually immaterial notes payable issued for the purchase of operating assets. Such notes payable bear interest at a weighted-average interest rate of approximately 6.2% and have a weighted-average remaining term of approximately 4.2 years. NOTE 14. OBLIGATIONS TO ISSUE COMMON STOCK Convertible Debentures On October 6, 2022, we entered into a debenture purchase agreement (the “2022 Debenture Purchase Agreement”) with Ionic Ventures LLC (“Ionic”) and a purchase agreement (the “Original ELOC Purchase Agreement”) with Ionic. Pursuant to the 2022 Debenture Purchase Agreement, we issued a convertible subordinated debenture in the original principal amount of approximately $2.8 million (the “2022 Debenture”) to Ionic for a purchase price of $2.5 million. The 2022 Debenture automatically converted into shares of our common stock (the “2022 Debenture Settlement Shares”) on November 17, 2022 upon the effectiveness of a registration statement we filed pursuant to a registration rights agreement we entered into with Ionic. Upon issuance of the 2022 Debenture, we initially estimated the obligation to issue common stock at approximately $3.6 million. As of December 31, 2022, we estimated such obligation to have a fair value of $1.9 million, representing an additional 1,720,349 shares to be issued pursuant to the 2022 Debenture. When the measurement period for determining the conversion price of the 2022 Debenture was completed, we determined that the final number of 2022 Debenture Settlement Shares would be 3,129,668 (inclusive of 898,854 shares that were issued during 2022), resulting in the issuance of an additional 2,230,814 shares during 2023 with a fair value of $3.1 million. On March 14, 2023, we entered into a new debenture purchase agreement (the “2023 Debenture Purchase Agreement”) with Ionic pursuant to which we authorized the issuance and sale of two convertible subordinated debentures in the aggregate principal amount of approximately $2.8 million for an aggregate purchase price of $2.5 million. The first debenture is in the original principal amount of approximately $1.7 million for a purchase price of $1.5 million (the “First 2023 Debenture”), which was issued on March 14, 2023, and the second debenture is in the original principal amount of approximately $1.1 million for a purchase price of $1.0 million (the “Second 2023 Debenture” and collectively with the First Debenture, the “2023 Debentures”), which was issued on April 12, 2023. Upon issuance of the First 2023 Debenture and the Second 2023 Debenture, we initially estimated the obligations to issue common stock at an aggregate of approximately $4.1 million, or equivalent estimated issuable shares of 3,669,228. During 2023, we issued 657,000 shares with a fair value of $(0.4) million in partial settlement of the 2023 Debentures. As of December 31, 2023, we estimated that an aggregate total of 9,383,966 shares remained to be issued upon conversion in full of the 2023 Debentures, representing obligations with an aggregate fair value of $4.6 million. The 2023 Debentures accrue interest at a rate of 10% per annum, of which two years of interest is guaranteed and deemed earned in full on the first day following the issuance date. The interest rate on the 2023 Debentures increases to a rate of 15% per annum if the 2023 Debentures are not fully paid, converted or redeemed by the second anniversary of each debenture (each, a “Maturity Date”) or upon the occurrence of certain trigger events, including, but not limited to, the suspension from trading or the delisting of our common stock from Nasdaq for three consecutive trading days. If the 2023 Debentures are not fully paid or converted by their respective Maturity Dates, the original aggregate principal amount of the 2023 Debentures will be deemed to have been approximately $3.3 million from their issuance dates. The 2023 Debentures automatically convert into shares of common stock at the earlier of (i) the effectiveness of the initial registration statement registering the resale of certain Registrable Securities as such term is defined in the Registration Rights Agreement (as defined below) including, without limitation, the shares issuable upon conversion of the 2023 Debentures (the “Conversion Shares”) (such registration statement, the “Resale Registration Statement”), and (ii) 181 days after the issuance date of each 2023 Debenture. The number of shares of common stock issuable upon conversion of each 2023 Debenture shall be determined by dividing the outstanding balance under each 2023 Debenture (including all accrued and unpaid interest and accrued and unpaid late charges, if any) by a conversion price that is the lower of (x) 80% (or 70% if our common stock is not then trading on Nasdaq) of the average of the two lowest VWAPs over a specified measurement period following the conversion date (the “Variable Conversion Price”), and (y) $1.40 (the “Fixed Conversion Price”), subject to full ratchet anti-dilution protection in the event we issue certain equity securities at a price below the then Fixed Conversion Price. The 2023 Debentures are unsecured and expressly junior to any of our existing or future debt obligations. Notwithstanding anything to the contrary, under no circumstances shall the Variable Conversion Price be less than the floor price of $0.20 as specified in the 2023 Debentures. Additionally, in the event of a bankruptcy, we are required to redeem the 2023 Debentures in cash in an amount equal to the then outstanding balance of the 2023 Debentures multiplied by 120%. The 2023 Debentures further provide that we will not effect the conversion of any portion of the 2023 Debentures, and the holder thereof will not have the right to a conversion of any portion of the 2023 Debentures, to the extent that after giving effect to such conversion, the holder together with its affiliates would beneficially own more than 4.99% of the outstanding shares of our common stock immediately after giving effect to such conversion. Furthermore, we may not issue shares of common stock underlying the 2023 Debentures if such issuance would require us to obtain stockholder approval under the Nasdaq rules or until such stockholder approval has been obtained. Concurrently with entering into the 2023 Debenture Purchase Agreement, we also entered into a registration rights agreement with Ionic (the “2023 Registration Rights Agreement”), pursuant to which we agreed to file with the SEC one or more registration statements, as necessary, and to the extent permissible and subject to certain exceptions, to register under the Securities Act of 1933, as amended, the resale of the shares of our common stock issuable upon conversion of the 2023 Debentures and the shares of common stock that may be issued to Ionic if we fail to comply with our obligations in the 2023 Registration Rights Agreement. Because we did not meet the filing and effectiveness deadlines specified in the 2023 Registration Rights Agreement, we issued 300,000 shares of our common stock shares, with a fair value of $(0.3) million, to Ionic in July 2023. Equity Line of Credit The Original ELOC Purchase Agreement, as amended by those certain letter agreements by and between Remark and Ionic, dated as of January 5, 2023; July 12, 2023; August 10, 2023; and September 15, 2023 (as amended, the “Amended ELOC Purchase Agreement”), provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Ionic to purchase up to an aggregate of $50.0 million of shares of our common stock over the 36-month term of the Amended ELOC Purchase Agreement. Under the Amended ELOC Purchase Agreement, after the satisfaction of certain commencement conditions, including, without limitation, the effectiveness of a resale registration statement filed with the SEC registering such shares and that the 2022 Debenture shall have been fully converted into shares of common stock or shall otherwise have been fully redeemed and settled in all respects in accordance with the terms of the 2022 Debenture, we have the right to present Ionic with a purchase notice (each, a “Purchase Notice”) directing Ionic to purchase any amount up to $3.0 million of our common stock per trading day, at a per share price equal to 80% (or 70% if our common stock is not then trading on Nasdaq) of the average of the two lowest volume-weighted average prices (“VWAPs”) over a specified measurement period. With each purchase under the Amended ELOC Purchase Agreement, we are required to deliver to Ionic an additional number of shares equal to 2.5% of the number of shares of common stock deliverable upon such purchase. The number of shares that we can issue to Ionic from time to time under the Amended ELOC Purchase Agreement shall be subject to the condition that we will not sell shares to Ionic to the extent that Ionic, together with its affiliates, would beneficially own more than 4.99% of the outstanding shares of our common stock immediately after giving effect to such sale (the “Beneficial Ownership Limitation”). In addition, Ionic will not be required to buy any shares of our common stock pursuant to a Purchase Notice on any trading day on which the closing trade price of our common stock is below $0.20 (as amended by the Letter Agreement, as defined below). We will control the timing and amount of sales of our common stock to Ionic. Ionic has no right to require any sales by us, and is obligated to make purchases from us as directed solely by us in accordance with the Amended ELOC Purchase Agreement. The Amended ELOC Purchase Agreement provides that we will not be required or permitted to issue, and Ionic will not be required to purchase, any shares under the Amended ELOC Purchase Agreement if such issuance would violate Nasdaq rules, and we may, in our sole discretion, determine whether to obtain stockholder approval to issue shares in excess of 19.99% of our outstanding shares of common stock if such issuance would require stockholder approval under Nasdaq rules. Ionic has agreed that neither it nor any of its agents, representatives and affiliates will engage in any direct or indirect short-selling or hedging our common stock during any time prior to the termination of the Amended ELOC Purchase Agreement. The Amended ELOC Purchase Agreement may be terminated by us at any time after commencement, at our discretion; provided, however, that if we sold less than $25.0 million to Ionic (other than as a result of our inability to sell shares to Ionic as a result of the Beneficial Ownership Limitation, our failure to have sufficient shares authorized or our failure to obtain stockholder approval to issue more than 19.99% of our outstanding shares), we will pay to Ionic a termination fee of $0.5 million, which is payable, at our option, in cash or in shares of common stock at a price equal to the closing price on the day immediately preceding the date of receipt of the termination notice. Further, the Amended ELOC Purchase Agreement will automatically terminate on the date that we sell, and Ionic purchases, the full $50.0 million amount under the agreement or, if the full amount has not been purchased, on the expiration of the 36-month term of the Amended ELOC Purchase Agreement. (See Note 19 for additional detail regarding certain amendments to the Amended ELOC Purchase Agreement.) On January 5, 2023, we and Ionic entered into a letter agreement (the “Letter Agreement”) which amended the Original ELOC Purchase Agreement. Under the Letter Agreement, the parties agreed, among other things, to (i) amend the floor price below which Ionic will not be required to buy any shares of our common stock under the Amended ELOC Purchase Agreement from $0.25 to $0.20, determined on a post-reverse split basis, (ii) amend the per share purchase price for purchases under the Amended ELOC Purchase Agreement to 90% of the average of the two lowest daily VWAPs over a specified measurement period, which will commence at the conclusion of the applicable measurement period related to the 2022 Debenture and (iii) waive certain requirements in the Amended ELOC Purchase Agreement to allow for a one-time $0.5 million purchase under the Amended ELOC Purchase Agreement. As partial consideration for the waiver to allow for the $0.5 million purchase by Ionic, we agreed to issue to Ionic that number of shares (the “Letter Agreement Shares”) equal to the difference between (x) the variable conversion price in the 2022 Debenture, and (y) the calculation achieved as a result of the following formula: 80% (or 70% if our common stock is not then trading on Nasdaq) of the lowest VWAP starting on the trading day immediately following the receipt of pre-settlement conversion shares following the date on which the 2022 Debenture automatically converts or other relevant date of determination and ending the later of (a) 10 consecutive trading days after (and not including) the Automatic Conversion Date (as defined in the Amended ELOC Purchase Agreement) or such other relevant date of determination and (b) the trading day immediately after shares of our common stock in the aggregate amount of at least $13.9 million shall have traded on Nasdaq. As of March 31, 2023, we estimated the obligation to issue the Letter Agreement Shares at approximately $0.2 million. As of June 30, 2023, we had issued all of the 200,715 Letter Agreement Shares at a fair value of $(0.2) million. On September 15, 2023, we and Ionic entered into a letter agreement (the “September 2023 Letter Agreement”) which amends the Amended ELOC Purchase Agreement. Under the September 2023 Letter Agreement, which repeated changes made in earlier letter agreements between Remark and Ionic dated July 12, 2023 and August 10, 2023, the parties agreed, among other things, to (i) allow Remark to deliver one or more irrevocable written notices (“Exemption Purchase Notices”) to Ionic in a total aggregate amount not to exceed $20.0 million, which total aggregate amount shall be reduced by the aggregate amount of previous Exemption Purchase Notices, (ii) amend the per share purchase price for purchases under an Exemption Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices (“VWAPs”) over a specified measurement period, (iii) amend the definition of the specified measurement period to stipulate that, for purposes of calculating the final purchase price, such measurement period begins the trading day after Ionic pays Remark the amount requested in the purchase notice, while the calculation of the dollar volume of Remark common stock traded on the principal market to determine the length of the measurement period shall begin on the trading day after the previous measurement period ends, iv) that any additional Exemption Purchase Notices that are not in accordance with the terms and provisions of the Purchase Agreement shall be subject to Ionic’s approval, v) to amend section 11(c) of the Amended ELOC Purchase Agreement to increase the Additional Commitment Fee from $0.5 million to $3.0 million and vi) that by September 29, 2023, the parties will amend the Debenture Transaction Documents to include a so-called Most Favored Nation provision that will provide Ionic with necessary protection against any future financing, settlement, exchange or other transaction whether with an existing or new lender, investor or counterparty, and that, if such amendment is not made by September 29, 2023, the Additional Commitment Fee shall be further increased to approximately $3.8 million. During the year ended December 31, 2023, Ionic advanced to us an aggregate of $8.1 million (the "ELOC Advances") pursuant to the Amended ELOC Purchase Agreement. Upon issuance of the ELOC Advances, we initially estimated the obligations to issue common stock at approximately $12.1 million, or equivalent estimated issuable shares of 14,523,432. In partial settlement of our obligation to issue common stock under the ELOC Advances, we issued 7,110,762 shares of our common stock during the year ended December 31, 2023 at aggregate fair value of approximately $6.1 million. As of December 31, 2023, we estimated that an additional 10,876,635 shares would be issued in settlement of our obligation to issue common stock under the ELOC Advances, representing an obligation with an aggregate fair value of $5.4 million. Accounting for the Debentures and the ELOC Using the guidance in ASC Topic 480, Distinguishing Liabilities from Equity , we evaluated the 2022 Debenture Purchase Agreement and its associated 2022 Debenture, the 2023 Debenture Purchase Agreement and its associated 2023 Debentures, and the Amended ELOC Purchase Agreement and its associated Letter Agreement and ELOC Advances, and determined that all represented obligations that must or may be settled with a variable number of shares, the monetary value of which was based solely or predominantly on a fixed monetary amount known at inception. Using a Level 3 input, we estimated the number of shares of our common stock that we would have to issue for each obligation and multiplied the estimated number of shares by the closing market price of our common stock on the measurement date to determine the fair value of the obligation. We then recorded the amount of the initial obligation in excess of the purchase price as finance cost. We remeasure each obligation at every balance sheet date until all shares representing the obligation have been issued, with the change in the amount of the obligation being recorded as finance cost. The following table shows the changes in our obligations to issue common stock (dollars in thousands): 2022 Debenture 2023 Debentures Filing & Effectiveness Default Letter Agreement ELOC Advances Total Obligations to Issue Common Stock Balance at December 31, 2022 $ 1,892 $ — $ — $ — $ — $ 1,892 Establishment of new obligation to issue shares — 4,109 332 249 12,140 16,830 Issuance of Shares (3,138) (368) (294) (227) (6,106) (10,133) Change in measurement of liability 1,246 906 (38) (22) (648) 1,444 Balance at December 31, 2023 $ — $ 4,647 $ — $ — $ 5,386 $ 10,033 Estimated Number of Shares Issuable Balance at December 31, 2022 1,720,349 — — — — 1,720,349 Establishment of new obligation to issue shares — 3,669,228 300,000 200,715 14,523,432 18,693,375 Issuance of Shares (2,230,814) (657,000) (300,000) (200,715) (7,110,762) (10,499,291) Change in estimated number of shares issuable 510,465 6,371,738 — — 3,463,965 10,346,168 Balance at December 31, 2023 — 9,383,966 — — 10,876,635 20,260,601 The following table shows the composition of finance cost during the year ended December 31, 2023 associated with our obligations to issue common stock (dollars in thousands): 2022 Debenture 2023 Debentures Filing & Effectiveness Default Letter Agreement ELOC Advances Total Initial obligation in excess of purchase price $ — $ 1,609 $ 332 $ 249 $ 4,038 $ 6,228 Change in measurement of liability 1,246 906 (38) (22) (648) 1,444 Total $ 1,246 $ 2,515 $ 294 $ 227 $ 3,390 $ 7,672 Finance cost during the year ended December 31, 2022 was approximately $1.4 million, which was related to the 2022 Debenture. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15. COMMITMENTS AND CONTINGENCIES At December 31, 2023, we had no material commitments outside the normal course of business. Contingencies As of December 31, 2023, 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. Registration Rights Agreement On September 27, 2021, we entered into a securities purchase agreement (the “Armistice Purchase Agreement”) with Armistice Capital Master Fund Ltd. (“Armistice Capital”) pursuant to which we issued shares of our common stock together with warrants to purchase our common stock, subject to certain customary anti-dilution adjustments (the “Armistice Warrants”). In connection with our entry into the Armistice Purchase Agreement, we also entered into a registration rights agreement with Armistice Capital, pursuant to which we were obligated to file one or more registration statements, as necessary, to register under the Securities Act of 1933, as amended, the resale of the shares we issued to Armistice Capital and the shares underlying the Armistice Warrants (collectively, the “Armistice Registrable Securities”) and to obtain effectiveness of such registration statement no later than 90 days following September 27, 2021. The registration rights agreement provided that if we failed to satisfy our obligation to timely obtain effectiveness, we would incur a penalty of as much as $0.1 million The registration statement to register the resale of the Armistice Registrable Securities was declared effective on October 31, 2022. We had accrued the maximum penalty and, as of December 31, 2023, paid $0.2 million of this amount, resulting in an unpaid amount of $0.8 million included in other accrued expense at December 31, 2023. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | NOTE 16. STOCKHOLDERS' DEFICIT Equity Issuances During the year ended December 31, 2023, we issued a total of 10,499,291 shares to Ionic in full or partial settlement of ELOC Advances and convertible debentures pursuant to transactions with Ionic (see Note 14 ). Warrants The following table summarizes information related to our equity-classified stock warrant issuances as of and for the dates and periods noted: Shares Weighted Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 1,011,441 $ 40.10 Granted — — Exercised — — Forfeited, cancelled or expired — Outstanding at December 31, 2022 1,011,441 $ 40.10 3.7 $ — Granted — — Exercised — — Forfeited, cancelled or expired (4,000) 100.00 Outstanding at December 31, 2023 1,007,441 $ 39.90 2.7 $ — Share-Based Compensation On September 2, 2022, we issued 125,000 shares of our common stock with a fair value of $0.5 million to a vendor in exchange for services performed. We are authorized to issue equity-based awards under our 2014 Incentive Plan, our 2017 Incentive Plan and our 2022 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 our stock option awards and China Cash Bonuses using the BSM Model. During the year ended December 31, 2022, we applied the following weighted-average inputs, which we classify in Level 3 of the fair value hierarchy, to the BSM Model for our stock option awards: Year Ended December 31, 2022 Expected term in years 6.0 Expected volatility 101.27 % Expected dividends — % Risk-free interest rate 3.56 % We did not issue stock options or China Cash Bonuses during the year ended December 31, 2023. 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 and for the dates and periods noted: Shares Weighted Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 1,483,902 $ 33.00 Granted 152,731 2.66 Exercised — — Forfeited, cancelled or expired (10,002) 14.11 Outstanding at December 31, 2022 1,626,631 $ 30.31 5.5 $ 1 Granted — — Exercised — — Forfeited, cancelled or expired (7,780) 29.67 Outstanding at December 31, 2023 1,618,851 $ 30.31 4.5 $ 1 Exercisable at December 31, 2022 1,549,681 31.41 5.3 $ 1 Exercisable at December 31, 2023 1,598,754 30.67 4.4 $ — The following table summarizes the status of non-vested stock options as of and for the dates and periods noted: Shares Weighted-Average Non-vested at December 31, 2021 206,250 $ 2,063 Vested (160,100) 1,852 Forfeited, cancelled or expired (6,200) 72 Non-vested at December 31, 2022 76,950 529 Granted — — Vested (56,853) 490 Forfeited, cancelled or expired — — Non-vested at December 31, 2023 20,097 $ 31 No stock options were exercised during the years ended December 31, 2023 and 2022. The following table summarizes activity related to our liability-classified China Cash Bonuses as of and for the dates and periods noted: Shares Weighted Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 103,600 $ 39.70 Granted — — Forfeited, cancelled or expired (32,150) 47.99 Outstanding at December 31, 2022 71,450 $ 35.99 6.1 $ — Forfeited, cancelled or expired (14,700) Outstanding at December 31, 2023 56,750 $ 30.86 5.1 $ — Exercisable at December 31, 2022 68,450 36.97 6.1 $ — Exercisable at December 31, 2023 56,750 30.86 5.1 $ — The following table presents the change in the liability associated with our China Cash Bonuses included in Accrued expense and other current liabilities (in thousands): Year Ended December 31, 2023 2022 Balance at beginning of period $ 32 $ 439 Share-based compensation expense related to China Cash Bonuses (21) (407) Balance at end of period $ 11 $ 32 On July 27, 2020, the compensation committee of our board of directors approved grants to employees, directors and other service providers, excluding our CEO, of 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. On July 8, 2021, our stockholders approved an amendment to our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our common stock to 175,000,000, and we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation (the “Charter Amendment”) with the Secretary of State of the State of Delaware on July 9, 2021 to reflect this amendment, which became effective immediately upon filing. As a result of the increase in the number of authorized shares of our common stock, we determined that July 8, 2021 was the grant date for accounting purposes of the stock options we originally issued on July 27, 2020. The grant date fair value of the options granted on July 27, 2020 was approximately $6.3 million. To estimate the fair value of the options with an accounting grant date of July 8, 2021, we used the Black-Scholes-Merton option pricing model with an expected volatility of 85%, a risk-free interest rate of 0.34%, and expected term of six years and no expected dividends. The following table presents a breakdown of share-based compensation cost included in operating expense (in thousands): Year Ended December 31, 2023 2022 Stock options $ 178 $ 2,104 China Cash Bonuses (21) (407) Total $ 157 $ 1,697 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, 2023 Unrecognized share-based compensation cost for non-vested awards (in thousands): Stock options 21 China Cash Bonuses — Weighted-average years over which unrecognized share-based compensation expense will be recognized: Stock options 0.8 China Cash Bonuses 0 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17. RELATED PARTY TRANSACTIONS As of December 31, 2023 and 2022, we owed approximately $1.2 million and $1.2 million, respectively, to members of management representing various operating expense payments made on our behalf. The amounts due are unsecured and non-interest-bearing, with no formal terms of repayment. |
CHINA BUSINESS PARTNER
CHINA BUSINESS PARTNER | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
CHINA BUSINESS PARTNER | NOTE 18. CHINA BUSINESS PARTNER We interact with an unrelated entity (the “China Business Partner”) in more than one capacity. First, since 2020, we have been working with the China Business Partner to earn revenue by obtaining business from some of the largest companies in China. Secondly, our artificial intelligence business in the U.S. purchased substantially all of its inventory from a subsidiary of the China Business Partner which manufactures certain equipment to our specifications; though, during the year ended December 31, 2023, we did not make any such purchases. In addition, a member of our senior leadership team maintains a role in the senior management structure of the China Business Partner. Also, for the years ended December 31, 2023 and 2022, we recognized approximately $0.1 million and $5.4 million of revenue from the relationship with the China Business Partner. At December 31, 2023 and 2022, in addition to the outstanding accounts receivable balances from the China Business Partner described in Note 5 , we had outstanding accounts payable to the China Business Partner of $0.7 million and $0.8 million, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 19. SUBSEQUENT EVENTS Trading of Our Common Stock On February 14, 2024, trading of our common stock on The Nasdaq Stock Market LLC (“Nasdaq”) was suspended and Nasdaq notified us that it would file a Form 25-NSE with the SEC to formally delist our common stock. Concurrent with the suspension of trading of our stock on Nasdaq, our stock began trading on the OTC Pink Market and then, beginning on March 8, 2024, our stock began trading on the OTCQX market. On April 9, 2024, Nasdaq filed a Form 25-NSE as official notification that our common stock had been delisted. Ionic Transactions On January 9, 2024, we and Ionic entered into an amendment (the “First Amendment”) to the Amended ELOC Purchase Agreement. Under the First Amendment, the parties agreed, among other things, (i) to clarify that the Floor Price per the agreement is $0.25, (ii) to amend the per share purchase price for purchases under a Regular Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices (“VWAPs”) over a specified measurement period, (iii) to increase the frequency at which we can submit purchase notices, within limits, and (iv) to amend section 11(c) of the ELOC Purchase Agreement to increase the Additional Commitment Fee from $500,000 to approximately $3.8 million. On February 14, 2024, we and Ionic entered into a letter agreement (the “January 2024 Letter Agreement”) which amends the Amended ELOC Purchase Agreement. Under the January 2024 Letter Agreement, the parties agreed, among other things, (i) to redefine the definition of Principal Market to include markets in addition to the Nasdaq Capital Market and the OTC Bulletin Board, (ii) that Ionic will forbear from enforcing any noncompliance with the covenants in the Amended ELOC Purchase Agreement as a result of Remark’s delisting from Nasdaq and any related suspension of trading on Nasdaq, and (iii) to clarify that we can still issue Regular Purchase Notices despite the delisting from Nasdaq and any related suspension of trading on Nasdaq so long as the Principal Market is either the OTCQX, OTCQB, or OTCBB and each Regular Purchase does not exceed $500,000. During the first quarter of 2024, Ionic advanced to us a total of $4.0 million pursuant to the Amended ELOC Purchase Agreement. From January 8, 2024 through April 9, 2024, we issued a total of 20,520,846 shares of our common stock to Ionic in full settlement of the 2023 Convertible Debentures and in partial settlement of ELOC Advances. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net income (loss) | $ (29,147) | $ (55,483) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation We include all of our subsidiaries in our consolidated financial statements, eliminating all significant intercompany balances and transactions during consolidation. |
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, deferred cost of revenue, share-based compensation, deferred income taxes, and inventory reserve, among other items. 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 | Cash Our cash consists of funds held in bank accounts. |
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. |
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, marketable securities, receivables, prepaids and other current assets, accounts payable, accrued expense and other current liabilities, and short-term debt approximate their fair values because of the short-term nature of these financial instruments. |
Foreign Currency Translation | Foreign Currency Translation We report all currency amounts in USD. Our China subsidiaries, however, maintain their books and records in their functional currency, which is RMB. In general, when consolidating our subsidiaries with non-USD functional currencies, we translate the amounts of assets and liabilities into USD using the exchange rate on the balance sheet date, and the amounts of revenue and expense are translated at the average exchange rate prevailing during the period. The gains and losses resulting from translation of financial statement amounts into USD are recorded as a separate component of accumulated other comprehensive loss within stockholders’ deficit. |
Revenue Recognition | Revenue Recognition AI-Based Products We generate revenue by developing AI-based products, including fully-integrated AI solutions which combine our proprietary technology with third-party hardware and software products to meet end-user specifications. Under one type of contract for our AI-based products, we provide a single, continuous service to customers who control the assets as we create them. Accordingly, we recognize the revenue over the period of time during which we provide the service. Under another type of contract, we have performance obligations to provide fully-integrated AI solutions to our customer and we recognize revenue at the point in time when each performance obligation is completed and delivered to, tested by and accepted by our customer. We recognize revenue when we transfer control of the promised goods or services to our customers, and we recognize an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. If there is uncertainty related to the timing of collections from our customer, which may be the case if our customer is not the ultimate end user of our goods, we consider this to be uncertainty of the customer’s ability and intention to pay us when consideration is due. Accordingly, we recognize revenue only when we have transferred control of the goods or services and collectability of consideration from the customer is probable. When customers pay us prior to when we satisfy our obligation to transfer control of promised goods or services, we record the amount that reflects the consideration to which we expect to be entitled as a contract liability until such time as we satisfy our performance obligation. For our contracts with customers, we generally extend short-term credit policies to our customers, typically up to one year for large-scale projects. We record the incremental costs of obtaining contracts as an expense when incurred. We offer extended warranties on our products for periods of one Other We generate revenue from other sources, such as from advertising and marketing services, 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 goods sold to the customer or when we deliver the promised promotional materials or media content. Substantially all of our contracts with customers that generate Other revenue are completed within one year or less. |
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 When we record trade receivables arising from revenue transactions with customers, we record an allowance for credit losses for the current expected credit losses inherent in such assets over their expected lives. The allowance for credit losses is a valuation account deducted from the amortized cost basis of the assets to present their net carrying value at the amount expected to be collected. Each period, the allowance for credit losses is adjusted through earnings to reflect expected credit losses over the remaining lives of the assets. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. When measuring expected credit losses, we pool assets with similar country risk and credit risk characteristics. Changes in the relevant information may significantly affect the estimates of expected credit losses. |
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 |
Advertising Expense | Advertising Expense Advertising expense is recorded during the period in which it is incurred. We did not incur a material amount of advertising expense during the years ended December 31, 2023 or 2022. |
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 and 2022 . |
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 Income (Loss) per Share | Net Income (Loss) per Share We calculate basic net income (loss) per share using the weighted-average number of common stock shares outstanding during the period. For the calculation of diluted net income (loss) per share, we give effect to all the shares of common stock that were outstanding during the period plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Potential common shares are excluded from the computation when their effect is anti-dilutive. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options and warrants. |
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. |
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 November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. The update also requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods and for entities with a single reportable segment to provide all the disclosures required by ASC 280, Segment Reporting, including the significant segment expense disclosures. For us, ASU 2023-07 will be effective on January 1, 2024 and interim periods beginning in fiscal year 2025, with early adoption permitted. The updates required by ASU 2023-07 should be applied retrospectively to all periods presented in the financial statements. We do not expect this standard to have a material impact on our results of operations, financial position or cash flows. We have reviewed all accounting pronouncements recently issued by the FASB and the SEC. The authoritative pronouncements that we have already adopted did not have a material effect on our financial condition, results of operations, cash flows or reporting thereof, and except as otherwise noted above, we do not believe that any of the authoritative pronouncements that we have not yet adopted will have a material effect upon our financial condition, results of operations, cash flows or reporting thereof. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 2022 Cash denominated in: USD $ 31 $ 11 RMB 109 19 GBP 1 17 HKD 4 5 Total cash $ 145 $ 52 |
Schedule of Exchange Rates | We used the exchange rates in the following table to translate amounts denominated in non-USD currencies as of and for the periods noted: 2023 2022 Exchange rates at December 31st: GBP:USD 1.273 1.209 RMB:USD 0.141 0.145 HKD:USD 0.128 0.128 Average exchange rate during the twelve months ended December 31st: RMB:USD 0.141 0.149 GBP:USD 1.241 1.237 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Major Category | The following table presents a disaggregation of our revenue by category of products and services (in thousands): Year Ended December 31, 2023 2022 AI-based products and services, including $0.1 million and $5.4 million, respectively, from China Business Partner (See Note 18 ) $ 4,124 $ 10,964 Other 278 702 Revenue $ 4,402 $ 11,666 |
Schedule of Disaggregation of Revenue by Country | The following table presents a disaggregation of our revenue by country (in thousands): Year Ended December 31, 2023 2022 China $ 4,138 $ 11,402 United States and United Kingdom 264 264 Revenue $ 4,402 $ 11,666 |
TRADE ACCOUNTS RECEIVABLE (Tabl
TRADE ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Trade Accounts Receivable | December 31, 2023 2022 Gross accounts receivable balance $ 7,063 $ 7,213 Allowance for credit losses (5,776) (4,122) Accounts receivable, net $ 1,287 $ 3,091 |
PREPAID EXPENSE AND OTHER CUR_2
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expense and Other Current Assets | The following table presents the components of prepaid expense and other current assets (in thousands): December 31, 2023 2022 Other receivables 147 23 Prepaid expense 339 1,144 Deposits 128 201 Other current assets — 6 Total $ 614 $ 1,374 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 2022 Vehicles 3 153 153 Computers and equipment 3 1,217 1,170 Furniture and fixtures 3 42 42 Software 3 4,082 5,160 Leasehold improvements 3 204 204 Software development in progress — 1,199 Total property, equipment and software $ 5,698 $ 7,928 Less accumulated depreciation (5,509) (6,229) Total property, equipment and software, net $ 189 $ 1,699 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Expense, Net of Sublease Income | The following table presents the detail of our lease expense, which is reported in General and administrative expense (in thousands): Year Ended December 31, 2023 2022 Operating lease expense $ 394 $ 287 Short-term lease expense 631 1,343 Lease expense $ 1,025 $ 1,630 |
Schedule of Maturity of Lease Liabilities | The following table presents information regarding the maturities of undiscounted remaining operating lease payments, with a reconciliation to the amount of the liabilities representing such payments as presented in our December 31, 2023 Consolidated Balance Sheet (in thousands): Operating lease liabilities maturing during the next: One year $ 340 Two years 249 Three years 63 Total undiscounted cash flows $ 652 Present value of cash flows $ 574 Lease liabilities on balance sheet: Short-term (included in accrued expenses $ 288 Long-term 286 Total lease liabilities $ 574 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of 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, 2023 2022 Income tax benefit (provision) at federal statutory rate $ (6,121) $ (11,653) Change in deferred tax asset valuation allowance 5,459 10,611 Finance cost of equity line of credit 1,612 — Tax effects of: Statutory differences 27 883 R&D expense (61) (280) Foreign tax rates different than U.S. federal statutory rate (90) (123) Other permanent items 70 (42) Deferred adjustments (476) 404 Other (420) 209 Income tax benefit (provision) as reported $ — $ 9 |
Schedule of 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, 2023 2022 Domestic $ (24,202) $ (49,297) Foreign (4,945) (6,195) Loss before income taxes $ (29,147) $ (55,492) |
Schedule of Components of Deferred Tax Assets and Liabilities | The following table presents the components of our DTAs and DTLs (in thousands): December 31, 2023 2022 Deferred Tax Assets Net operating loss carryforwards $ 48,666 $ 42,744 Amortization of intangibles 2,731 2,371 Share-based compensation expense 7,879 7,865 Depreciation of fixed assets 46 33 Section 163(j) interest limitation 3,036 4,294 Other 1,994 1,133 Gross deferred tax assets $ 64,352 $ 58,440 Valuation allowance (64,352) (58,440) Deferred tax assets, net of valuation allowance $ — $ — |
ACCRUED EXPENSE AND OTHER CUR_2
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 2022 Accrued compensation and benefit-related expense $ 3,221 $ 1,448 Accrued delinquent payroll taxes 495 — Accrued interest 1,570 769 Other accrued expense 3,577 2,393 Other payables 2,138 2,234 Operating lease liability - current 288 138 China Cash Bonuses 11 32 Other current liabilities 621 208 Total $ 11,921 $ 7,222 |
NOTES PAYABLE (PAST DUE) (Table
NOTES PAYABLE (PAST DUE) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | The following table presents our notes payable (in thousands) as of: December 31, 2023 2022 Principal balance of New Mudrick Notes (September 30, 2023) and Original Mudrick Loans (December 31, 2022) $ 16,307 $ 14,418 Other notes payable 156 189 Notes payable $ 16,463 $ 14,607 |
OBLIGATIONS TO ISSUE COMMON S_2
OBLIGATIONS TO ISSUE COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Debentures, Number Of Shares Issuable And Related Finance Cost | The following table shows the changes in our obligations to issue common stock (dollars in thousands): 2022 Debenture 2023 Debentures Filing & Effectiveness Default Letter Agreement ELOC Advances Total Obligations to Issue Common Stock Balance at December 31, 2022 $ 1,892 $ — $ — $ — $ — $ 1,892 Establishment of new obligation to issue shares — 4,109 332 249 12,140 16,830 Issuance of Shares (3,138) (368) (294) (227) (6,106) (10,133) Change in measurement of liability 1,246 906 (38) (22) (648) 1,444 Balance at December 31, 2023 $ — $ 4,647 $ — $ — $ 5,386 $ 10,033 Estimated Number of Shares Issuable Balance at December 31, 2022 1,720,349 — — — — 1,720,349 Establishment of new obligation to issue shares — 3,669,228 300,000 200,715 14,523,432 18,693,375 Issuance of Shares (2,230,814) (657,000) (300,000) (200,715) (7,110,762) (10,499,291) Change in estimated number of shares issuable 510,465 6,371,738 — — 3,463,965 10,346,168 Balance at December 31, 2023 — 9,383,966 — — 10,876,635 20,260,601 The following table shows the composition of finance cost during the year ended December 31, 2023 associated with our obligations to issue common stock (dollars in thousands): 2022 Debenture 2023 Debentures Filing & Effectiveness Default Letter Agreement ELOC Advances Total Initial obligation in excess of purchase price $ — $ 1,609 $ 332 $ 249 $ 4,038 $ 6,228 Change in measurement of liability 1,246 906 (38) (22) (648) 1,444 Total $ 1,246 $ 2,515 $ 294 $ 227 $ 3,390 $ 7,672 |
STOCKHOLDERS' DEFICIT (Tables)
STOCKHOLDERS' DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Equity Stock Warrant Issuances | The following table summarizes information related to our equity-classified stock warrant issuances as of and for the dates and periods noted: Shares Weighted Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 1,011,441 $ 40.10 Granted — — Exercised — — Forfeited, cancelled or expired — Outstanding at December 31, 2022 1,011,441 $ 40.10 3.7 $ — Granted — — Exercised — — Forfeited, cancelled or expired (4,000) 100.00 Outstanding at December 31, 2023 1,007,441 $ 39.90 2.7 $ — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | We estimate the fair value of our stock option awards and China Cash Bonuses using the BSM Model. During the year ended December 31, 2022, we applied the following weighted-average inputs, which we classify in Level 3 of the fair value hierarchy, to the BSM Model for our stock option awards: Year Ended December 31, 2022 Expected term in years 6.0 Expected volatility 101.27 % Expected dividends — % Risk-free interest rate 3.56 % |
Schedule of Stock Option Activity Under Equity Incentive Plans | The following table summarizes activity under our equity incentive plans related to equity-classified stock option grants as of and for the dates and periods noted: Shares Weighted Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 1,483,902 $ 33.00 Granted 152,731 2.66 Exercised — — Forfeited, cancelled or expired (10,002) 14.11 Outstanding at December 31, 2022 1,626,631 $ 30.31 5.5 $ 1 Granted — — Exercised — — Forfeited, cancelled or expired (7,780) 29.67 Outstanding at December 31, 2023 1,618,851 $ 30.31 4.5 $ 1 Exercisable at December 31, 2022 1,549,681 31.41 5.3 $ 1 Exercisable at December 31, 2023 1,598,754 30.67 4.4 $ — The following table summarizes the status of non-vested stock options as of and for the dates and periods noted: Shares Weighted-Average Non-vested at December 31, 2021 206,250 $ 2,063 Vested (160,100) 1,852 Forfeited, cancelled or expired (6,200) 72 Non-vested at December 31, 2022 76,950 529 Granted — — Vested (56,853) 490 Forfeited, cancelled or expired — — Non-vested at December 31, 2023 20,097 $ 31 The following table summarizes activity related to our liability-classified China Cash Bonuses as of and for the dates and periods noted: Shares Weighted Average Exercise Price Per Share Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2021 103,600 $ 39.70 Granted — — Forfeited, cancelled or expired (32,150) 47.99 Outstanding at December 31, 2022 71,450 $ 35.99 6.1 $ — Forfeited, cancelled or expired (14,700) Outstanding at December 31, 2023 56,750 $ 30.86 5.1 $ — Exercisable at December 31, 2022 68,450 36.97 6.1 $ — Exercisable at December 31, 2023 56,750 30.86 5.1 $ — |
Schedule of Change in Liability Balance Associated with China Cash Bonuses | The following table presents the change in the liability associated with our China Cash Bonuses included in Accrued expense and other current liabilities (in thousands): Year Ended December 31, 2023 2022 Balance at beginning of period $ 32 $ 439 Share-based compensation expense related to China Cash Bonuses (21) (407) Balance at end of period $ 11 $ 32 |
Schedule 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, 2023 2022 Stock options $ 178 $ 2,104 China Cash Bonuses (21) (407) Total $ 157 $ 1,697 |
Schedule 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, 2023 Unrecognized share-based compensation cost for non-vested awards (in thousands): Stock options 21 China Cash Bonuses — Weighted-average years over which unrecognized share-based compensation expense will be recognized: Stock options 0.8 China Cash Bonuses 0 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) $ in Thousands | 12 Months Ended | |||
Dec. 21, 2022 | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Reverse stock split ratio | 0.1 | |||
Stockholders' deficit | $ 39,590 | $ 20,425 | $ (31,034) | |
Net cash used in operating activities | 10,500 | |||
Cash and cash equivalents | 145 | 52 | ||
Delinquent payroll taxes | $ 495 | $ 0 | ||
WFOE | ||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||
Ownership percentage by parent | 100% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash and cash equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Total cash | $ 145 | $ 52 |
USD | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Total cash | 31 | 11 |
RMB | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Total cash | 109 | 19 |
GBP | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Total cash | 1 | 17 |
HKD | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Total cash | $ 4 | $ 5 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) segment shares | Dec. 31, 2022 USD ($) shares | |
Disaggregation of Revenue [Line Items] | ||
Term of contract | 1 year | |
Reserve for inventory | $ | $ 2.2 | $ 2.2 |
Number of reportable segments | segment | 1 | |
Computers and equipment | ||
Disaggregation of Revenue [Line Items] | ||
Estimated Life (Years) | 3 years | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Extended warranty period | 1 year | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Extended warranty period | 3 years | |
Stock options | ||
Disaggregation of Revenue [Line Items] | ||
Anti-dilutive securities (in shares) | 1,435,471 | |
Warrant | ||
Disaggregation of Revenue [Line Items] | ||
Anti-dilutive securities (in shares) | 1,007,441 | 1,011,441 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Performance period (or less) | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted Average | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 0.141 | 0.149 |
GBP | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 1.273 | 1.209 |
GBP | Weighted Average | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 1.241 | 1.237 |
RMB | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 0.141 | 0.145 |
HKD | ||
Financial Statement Line Items with Differences in Reported Amount and Reporting Currency Denominated Amounts [Line Items] | ||
Foreign currency exchange rate | 0.128 | 0.128 |
CONCENTRATIONS OF RISK (Details
CONCENTRATIONS OF RISK (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer A | Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 35% | 46% |
Customer A | Gross Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 37% | 36% |
Customer B | Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 30% | 20% |
Customer B | Gross Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 34% | |
Customer C | Gross Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 12% |
REVENUE - Disaggregated by Majo
REVENUE - Disaggregated by Major Category (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 4,402 | $ 11,666 |
VIEs | China Branding Group Limited | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 100 | 5,400 |
AI-based products and services, including amounts from China Business Partner | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,124 | 10,964 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 278 | $ 702 |
REVENUE - Disaggregation by Cou
REVENUE - Disaggregation by Country (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 4,402 | $ 11,666 |
China | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 4,138 | 11,402 |
United States and United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 264 | $ 264 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenue recognized on liability balances | $ 2,700,000 | $ 0 | $ 0 |
Revenue recognized from performance obligations satisfied in previous periods | 0 | $ 0 | |
AI-based products and services, including amounts from China Business Partner | |||
Disaggregation of Revenue [Line Items] | |||
Revenue recognized on liability balances | 100,000 | ||
Completed projects value | $ 1,400,000 | $ 1,400,000 |
TRADE ACCOUNTS RECEIVABLE (Deta
TRADE ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross accounts receivable balance | $ 7,063 | $ 7,213 |
Allowance for credit losses | (5,776) | (4,122) |
Accounts receivable, net | 1,287 | 3,091 |
Provision for doubtful accounts | 1,729 | 2,882 |
China | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Provision for doubtful accounts | 1,700 | $ 2,800 |
Accounts receivable, past due | 1 year | |
China | AI-based products and services, including amounts from China Business Partner | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 700 | $ 1,100 |
INVESTMENT (Details)
INVESTMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jul. 11, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Noncontrolling Interest [Line Items] | ||||
Proceeds from investment | $ 0 | $ 6,332 | ||
Loss on investment in marketable securities | $ 0 | $ 26,356 | ||
Mudrick Loan | ||||
Noncontrolling Interest [Line Items] | ||||
Original principal amount | $ 9,700 | |||
Sharecare | ||||
Noncontrolling Interest [Line Items] | ||||
Common stock owned upon conversion (in shares) | 9,431,920 | |||
Sale of New Sharecare (in shares) | 3,181,920 | |||
Proceeds from investment | $ 6,300 | |||
Loss on investment in marketable securities | $ 26,400 | |||
Sharecare | Mudrick Loan | ||||
Noncontrolling Interest [Line Items] | ||||
Stock Issued | $ 6,250 |
DEFERRED COST OF REVENUE (Detai
DEFERRED COST OF REVENUE (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Deferred cost of revenue | $ 6,644,000 | $ 6,644,000 | $ 7,463,000 |
Revenue recognized on liability balances | $ 2,700,000 | 0 | $ 0 |
Repayments to other vendors | $ 2,500,000 |
PREPAID EXPENSE AND OTHER CUR_3
PREPAID EXPENSE AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Prepaid Expense and Other Current Assets | ||
Other receivables | $ 147 | $ 23 |
Prepaid expense | 339 | 1,144 |
Deposits | 128 | 201 |
Other current assets | 0 | 6 |
Total | 614 | $ 1,374 |
Impairments | $ 200 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 5,698 | $ 7,928 |
Less accumulated depreciation | (5,509) | (6,229) |
Total property, equipment and software, net | 189 | 1,699 |
Depreciation and amortization of software | 300 | 200 |
Fully-depreciated assets written off | 800 | |
Impairments | $ 200 | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (Years) | 3 years | |
Total property, equipment and software | $ 153 | 153 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (Years) | 3 years | |
Total property, equipment and software | $ 1,217 | 1,170 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (Years) | 3 years | |
Total property, equipment and software | $ 42 | 42 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (Years) | 3 years | |
Total property, equipment and software | $ 4,082 | 5,160 |
Impairments | $ 800 | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (Years) | 3 years | |
Total property, equipment and software | $ 204 | 204 |
Software development in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software | $ 0 | $ 1,199 |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease expense | $ 394 | $ 287 |
Short-term lease expense | 631 | 1,343 |
Lease expense | $ 1,025 | $ 1,630 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Cash paid for operating lease liabilities | $ 0.4 | $ 0.2 |
Weighted-average remaining lease term (in months) | 2 years 3 months 18 days | |
Weighted-average discount rate (as percent) | 13% |
LEASES - Maturity of Lease Liab
LEASES - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating lease liabilities maturing during the next: | ||
One year | $ 340 | |
Two years | 249 | |
Three years | 63 | |
Total undiscounted cash flows | 652 | |
Present value of cash flows | $ 574 | |
Lease liabilities on balance sheet: | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Short-term (included in accrued expenses) | $ 288 | $ 138 |
Long-term | 286 | $ 56 |
Total lease liabilities | $ 574 |
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, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit (provision) at federal statutory rate | $ (6,121) | $ (11,653) |
Change in deferred tax asset valuation allowance | 5,459 | 10,611 |
Finance cost of equity line of credit | 1,612 | 0 |
Tax effects of: | ||
Statutory differences | 27 | 883 |
R&D expense | (61) | (280) |
Foreign tax rates different than U.S. federal statutory rate | (90) | (123) |
Other permanent items | 70 | (42) |
Deferred adjustments | (476) | 404 |
Other | (420) | 209 |
Income tax benefit (provision) as reported | $ 0 | $ 9 |
INCOME TAXES - Loss Before Inco
INCOME TAXES - Loss Before Income Tax Attributable to Domestic and Foreign Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic | $ (24,202) | $ (49,297) |
Foreign | (4,945) | (6,195) |
Loss from before income taxes | $ (29,147) | $ (55,492) |
INCOME TAXES - Components of De
INCOME TAXES - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Tax Assets | ||
Net operating loss carryforwards | $ 48,666 | $ 42,744 |
Amortization of intangibles | 2,731 | 2,371 |
Share-based compensation expense | 7,879 | 7,865 |
Depreciation of fixed assets | 46 | 33 |
Section 163(j) interest limitation | 3,036 | 4,294 |
Other | 1,994 | 1,133 |
Gross deferred tax assets | 64,352 | 58,440 |
Valuation allowance | (64,352) | (58,440) |
Deferred tax assets, net of valuation allowance | $ 0 | $ 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
U.S. Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 194,100,000 | |
U.S. State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 41,700,000 | |
Hong Kong | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 1,700,000 | |
Federal income tax rate (as a percent) | 8.25% | |
China | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 8,300,000 | |
Federal income tax rate (as a percent) | 25% | |
Carryover period (in years) | 5 years |
ACCRUED EXPENSE AND OTHER CUR_3
ACCRUED EXPENSE AND OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Accrued compensation and benefit-related expense | $ 3,221 | $ 1,448 |
Delinquent payroll taxes | 495 | 0 |
Accrued interest | 1,570 | 769 |
Other accrued expense | 3,577 | 2,393 |
Other payables | 2,138 | 2,234 |
Operating lease liability - current | $ 288 | $ 138 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Total | Total |
China Cash Bonuses | $ 11 | $ 32 |
Other current liabilities | 621 | 208 |
Total | $ 11,921 | $ 7,222 |
NOTES PAYABLE (PAST DUE) - Note
NOTES PAYABLE (PAST DUE) - Notes Payable (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Short-term Debt [Line Items] | ||
Other notes payable | $ 156 | $ 189 |
Notes payable | 16,463 | 14,607 |
Principal balance of New Mudrick Notes (September 30, 2023) and Original Mudrick Loans (December 31, 2022) | Notes Payable | ||
Short-term Debt [Line Items] | ||
Principal balance of New Mudrick Notes (September 30, 2023) and Original Mudrick Loans (December 31, 2022) | $ 16,307 | $ 14,418 |
NOTES PAYABLE (PAST DUE) - Narr
NOTES PAYABLE (PAST DUE) - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||
Mar. 14, 2023 | Dec. 03, 2021 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 31, 2022 | Aug. 03, 2022 | Jul. 11, 2022 | |
Debt Instrument [Line Items] | ||||||||
Amortization of debt issuance costs and discount | $ 0 | $ 2,189,000 | ||||||
Interest expense | 4,294,000 | 6,073,000 | ||||||
Accrued interest | $ 1,570,000 | 769,000 | ||||||
Short-term note payable to private lender | ||||||||
Debt Instrument [Line Items] | ||||||||
Note repayment of debt | 6,200,000 | |||||||
Weighted-average interest rate (in percent) | 6.20% | |||||||
Weighted-average remaining term | 4 years 2 months 12 days | |||||||
Mudrick Lenders | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 300,000 | |||||||
Debt interest rate percentage | 2% | |||||||
Mudrick Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 9,700,000 | |||||||
Mudrick Loan | Short-term note payable to private lender | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 14,400,000 | 14,400,000 | ||||||
Accrued interest on loan | $ 600,000 | |||||||
Mudrick Loan | Short-term note payable to private lender | Accrued Expense and Other Current Liabilities | ||||||||
Debt Instrument [Line Items] | ||||||||
Accrued interest on loan | 800,000 | |||||||
Mudrick Loan | Loans Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 30,000,000 | |||||||
Debt interest rate percentage | 20.50% | 16.50% | 18.50% | |||||
Increase, interest rate | 2% | 20.50% | ||||||
Upfront fee (in percent) | 5% | |||||||
Debt instrument, unamortized discount | $ 1,500,000 | |||||||
Additional closing cost | $ 1,100,000 | |||||||
Amortization of debt issuance costs and discount | $ 2,200,000 | |||||||
Interest expense | $ 4,300,000 | |||||||
Mudrick Note Purchase Agreement | Mudrick Lenders | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 16,300,000 | |||||||
Accrued interest on loan | 1,100,000 | |||||||
Interest expense | $ 800,000 | $ 800,000 |
OBLIGATIONS TO ISSUE COMMON S_3
OBLIGATIONS TO ISSUE COMMON STOCK - Narrative (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Sep. 29, 2023 USD ($) | Sep. 15, 2023 USD ($) | Jun. 30, 2023 USD ($) shares | Mar. 14, 2023 USD ($) price debenture day $ / shares | Jan. 05, 2023 USD ($) day $ / shares | Oct. 06, 2022 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | |
Debt Instrument [Line Items] | ||||||||
Obligations to issue common stock | $ 10,033 | $ 1,892 | ||||||
Common stock issued pursuant to agreements with Ionic (Note 14) | 10,131 | 2,004 | ||||||
Finance cost related to obligations to issue common stock | $ 7,672 | $ 1,422 | ||||||
Letter Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Obligations to issue common stock | $ 200 | |||||||
Establishment of new obligation to issue shares (in shares) | shares | 200,715 | |||||||
2022 Debenture | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional shares to issue (in shares) | shares | 2,230,814 | |||||||
Obligations to issue common stock | $ 3,100 | |||||||
Ionic Ventures, LLC | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional shares to issue (in shares) | shares | 20,260,601 | 1,720,349 | ||||||
Settlement shares (in shares) | shares | 3,129,668 | 898,854 | ||||||
Establishment of new obligation to issue shares (in shares) | shares | 18,693,375 | |||||||
Establishment of new obligation to issue shares | $ 16,830 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | shares | 10,499,291 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 14) | $ 10,133 | |||||||
Aggregate fair value of obligation | $ 10,033 | $ 1,892 | ||||||
Ionic Ventures, LLC | ELOC Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Sale of stock, amount authorized in transaction | $ 50,000 | |||||||
Stock purchase obligation, period of purchase | 36 months | |||||||
Consideration received | $ 3,000 | |||||||
Sale of stock, additional number of shares issued in percentage | 2.50% | |||||||
Required minimum closing trading price (in usd per share) | $ / shares | $ 0.20 | $ 0.20 | ||||||
Stockholder approval, outstanding percentage of common stock percentage | 19.99% | |||||||
Payable termination fee | $ 500 | |||||||
Ionic Ventures, LLC | Maximum | ELOC Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Sale of stock, purchase price, percentage | 90% | 80% | ||||||
Ionic Ventures, LLC | Minimum | ELOC Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Sale of stock, amount authorized in transaction | $ 25,000 | |||||||
Sale of stock, purchase price, percentage | 70% | |||||||
Ionic Ventures, LLC | Letter Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional shares to issue (in shares) | shares | 0 | 0 | ||||||
Establishment of new obligation to issue shares (in shares) | shares | 200,715 | |||||||
Establishment of new obligation to issue shares | $ 249 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | shares | 200,715 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 14) | $ 227 | |||||||
Aggregate fair value of obligation | $ 0 | $ 0 | ||||||
Ionic Ventures, LLC | Letter Agreement | Convertible Subordinated Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 2,800 | |||||||
Repurchase amount | $ 2,500 | |||||||
Number of convertible subordinated debentures | debenture | 2 | |||||||
Debt interest rate percentage | 10% | |||||||
Interest guaranteed period | 2 years | |||||||
Increase, interest rate | 15% | |||||||
Consecutive trading days | day | 3 | |||||||
Covenant, conversion period | day | 181 | |||||||
Number of lowest volume-weighted average prices | price | 2 | |||||||
Conversion price (in usd per share) | $ / shares | $ 1.40 | |||||||
Conversion percentage, bankruptcy multiplier | 120% | |||||||
Beneficial ownership limitation percentage | 4.99% | |||||||
Ionic Ventures, LLC | Letter Agreement | Convertible Subordinated Debt | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion percentage | 80% | |||||||
Ionic Ventures, LLC | Letter Agreement | Convertible Subordinated Debt | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion percentage | 70% | |||||||
Conversion price (in usd per share) | $ / shares | $ 0.20 | |||||||
Ionic Ventures, LLC | Letter Agreement | Convertible Subordinated Debt | Debt Instrument, Redemption, Period One | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 3,300 | |||||||
Ionic Ventures, LLC | 2022 Debenture | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional shares to issue (in shares) | shares | 0 | 1,720,349 | ||||||
Establishment of new obligation to issue shares (in shares) | shares | 0 | |||||||
Establishment of new obligation to issue shares | $ 0 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | shares | 2,230,814 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 14) | $ 3,138 | |||||||
Aggregate fair value of obligation | $ 0 | $ 1,892 | ||||||
Ionic Ventures, LLC | First Debenture Purchase Agreement | Convertible Subordinated Debt | First Debenture | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | 1,700 | |||||||
Repurchase amount | 1,500 | |||||||
Ionic Ventures, LLC | Second Debenture Purchase Agreement | Convertible Subordinated Debt | Second Debenture | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | 1,100 | |||||||
Repurchase amount | $ 1,000 | |||||||
Ionic Ventures, LLC | 2023 Debentures | ||||||||
Debt Instrument [Line Items] | ||||||||
Additional shares to issue (in shares) | shares | 9,383,966 | 0 | ||||||
Establishment of new obligation to issue shares (in shares) | shares | 3,669,228 | |||||||
Establishment of new obligation to issue shares | $ 4,109 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | shares | 657,000 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 14) | $ 368 | |||||||
Aggregate fair value of obligation | 4,647 | $ 0 | ||||||
Ionic Ventures, LLC | Debenture Purchase Agreement Amendment | Convertible Subordinated Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Beneficial ownership limitation percentage | 4.99% | |||||||
Ionic Ventures, LLC | Letter Agreement with Ionic | ELOC Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Consecutive trading days | day | 10 | |||||||
Debt conversion percentage | 80% | |||||||
Consideration received | $ 500 | |||||||
Automatic conversion date, minimum trading amount | $ 13,900 | |||||||
Sale of stock, maximum trading amount | $ 20,000 | |||||||
Commitment fee | $ 3,800 | |||||||
Ionic Ventures, LLC | Letter Agreement with Ionic | Maximum | ELOC Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion percentage | 80% | |||||||
Conversion price (in usd per share) | $ / shares | $ 0.25 | |||||||
Commitment fee | 3,000 | |||||||
Ionic Ventures, LLC | Letter Agreement with Ionic | Minimum | ELOC Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt conversion percentage | 70% | |||||||
Commitment fee | $ 500 | |||||||
Ionic Ventures, LLC | ELOC Advances | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | $ 8,100 | |||||||
Additional shares to issue (in shares) | shares | 10,876,635 | 0 | ||||||
Establishment of new obligation to issue shares (in shares) | shares | 14,523,432 | |||||||
Establishment of new obligation to issue shares | $ 12,140 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 12) (in shares) | shares | 7,110,762 | |||||||
Common stock issued pursuant to agreements with Ionic (Note 14) | $ 6,106 | |||||||
Aggregate fair value of obligation | $ 5,386 | $ 0 | ||||||
Ionic Ventures, LLC | Debenture Purchase Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Initial liability amount | $ 3,600 | |||||||
Ionic Ventures, LLC | Debenture Purchase Agreement | Convertible Subordinated Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Original principal amount | 2,800 | |||||||
Repurchase amount | $ 2,500 |
OBLIGATIONS TO ISSUE COMMON S_4
OBLIGATIONS TO ISSUE COMMON STOCK - Schedule of Activity Related to All Obligations to Issue Shares (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Obligations to Issue Common Stock | |||
Issuance of Shares | $ (10,131) | $ (2,004) | |
Ionic Ventures, LLC | |||
Obligations to Issue Common Stock | |||
Beginning balance of convertible debenture, current | 1,892 | ||
Establishment of new obligation to issue shares | 16,830 | ||
Issuance of Shares | (10,133) | ||
Change in measurement of liability | 1,444 | ||
Ending balance of convertible debenture, current | $ 10,033 | $ 1,892 | |
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Beginning (in shares) | 1,720,349 | ||
Establishment of new obligation to issue shares (in shares) | 18,693,375 | ||
Issuance of Shares (in shares) | (10,499,291) | ||
Change in estimated number of shares issuable (in shares) | 10,346,168 | ||
Estimated Number of Shares Issuable, Ending (in shares) | 20,260,601 | 1,720,349 | |
Initial obligation in excess of purchase price | $ 6,228 | ||
Change in measurement of liability | 1,444 | ||
Total | $ 7,672 | ||
2022 Debenture | |||
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Ending (in shares) | 2,230,814 | ||
2022 Debenture | Ionic Ventures, LLC | |||
Obligations to Issue Common Stock | |||
Beginning balance of convertible debenture, current | $ 1,892 | ||
Establishment of new obligation to issue shares | 0 | ||
Issuance of Shares | (3,138) | ||
Change in measurement of liability | 1,246 | ||
Ending balance of convertible debenture, current | $ 0 | $ 1,892 | |
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Beginning (in shares) | 1,720,349 | ||
Establishment of new obligation to issue shares (in shares) | 0 | ||
Issuance of Shares (in shares) | (2,230,814) | ||
Change in estimated number of shares issuable (in shares) | 510,465 | ||
Estimated Number of Shares Issuable, Ending (in shares) | 0 | 1,720,349 | |
Initial obligation in excess of purchase price | $ 0 | ||
Change in measurement of liability | 1,246 | ||
Total | 1,246 | ||
2023 Debentures | Ionic Ventures, LLC | |||
Obligations to Issue Common Stock | |||
Beginning balance of convertible debenture, current | 0 | ||
Establishment of new obligation to issue shares | 4,109 | ||
Issuance of Shares | (368) | ||
Change in measurement of liability | 906 | ||
Ending balance of convertible debenture, current | $ 4,647 | $ 0 | |
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Beginning (in shares) | 0 | ||
Establishment of new obligation to issue shares (in shares) | 3,669,228 | ||
Issuance of Shares (in shares) | (657,000) | ||
Change in estimated number of shares issuable (in shares) | 6,371,738 | ||
Estimated Number of Shares Issuable, Ending (in shares) | 9,383,966 | 0 | |
Initial obligation in excess of purchase price | $ 1,609 | ||
Change in measurement of liability | 906 | ||
Total | 2,515 | ||
Filing & Effectiveness Default | Ionic Ventures, LLC | |||
Obligations to Issue Common Stock | |||
Beginning balance of convertible debenture, current | 0 | ||
Establishment of new obligation to issue shares | 332 | ||
Issuance of Shares | (294) | ||
Change in measurement of liability | (38) | ||
Ending balance of convertible debenture, current | $ 0 | $ 0 | |
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Beginning (in shares) | 0 | ||
Establishment of new obligation to issue shares (in shares) | 300,000 | ||
Issuance of Shares (in shares) | (300,000) | ||
Change in estimated number of shares issuable (in shares) | 0 | ||
Estimated Number of Shares Issuable, Ending (in shares) | 0 | 0 | |
Initial obligation in excess of purchase price | $ 332 | ||
Change in measurement of liability | (38) | ||
Total | 294 | ||
Letter Agreement | |||
Convertible Debenture Rollforward [Roll Forward] | |||
Establishment of new obligation to issue shares (in shares) | 200,715 | ||
Letter Agreement | Ionic Ventures, LLC | |||
Obligations to Issue Common Stock | |||
Beginning balance of convertible debenture, current | 0 | ||
Establishment of new obligation to issue shares | 249 | ||
Issuance of Shares | (227) | ||
Change in measurement of liability | (22) | ||
Ending balance of convertible debenture, current | $ 0 | $ 0 | |
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Beginning (in shares) | 0 | ||
Establishment of new obligation to issue shares (in shares) | 200,715 | ||
Issuance of Shares (in shares) | (200,715) | ||
Change in estimated number of shares issuable (in shares) | 0 | ||
Estimated Number of Shares Issuable, Ending (in shares) | 0 | 0 | |
Initial obligation in excess of purchase price | $ 249 | ||
Change in measurement of liability | (22) | ||
Total | 227 | ||
ELOC Advances | Ionic Ventures, LLC | |||
Obligations to Issue Common Stock | |||
Beginning balance of convertible debenture, current | 0 | ||
Establishment of new obligation to issue shares | 12,140 | ||
Issuance of Shares | (6,106) | ||
Change in measurement of liability | (648) | ||
Ending balance of convertible debenture, current | $ 5,386 | $ 0 | |
Convertible Debenture Rollforward [Roll Forward] | |||
Estimated Number of Shares Issuable, Beginning (in shares) | 0 | ||
Establishment of new obligation to issue shares (in shares) | 14,523,432 | ||
Issuance of Shares (in shares) | (7,110,762) | ||
Change in estimated number of shares issuable (in shares) | 3,463,965 | ||
Estimated Number of Shares Issuable, Ending (in shares) | 10,876,635 | 0 | |
Initial obligation in excess of purchase price | $ 4,038 | ||
Change in measurement of liability | (648) | ||
Total | $ 3,390 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Accrued penalty | $ 0.1 |
Payment of registration rights agreement penalty | 0.2 |
Unpaid amount included in other accrued expense | $ 0.8 |
STOCKHOLDERS' DEFICIT - Narrati
STOCKHOLDERS' DEFICIT - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Sep. 02, 2022 | Jul. 08, 2021 | Jul. 27, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Exercised (in shares) | 0 | 0 | |||
Shares granted in period (in shares) | 0 | ||||
Common stock, shares authorized (in shares) | 175,000,000 | 175,000,000 | 175,000,000 | ||
Granted, fair value | $ 6.3 | ||||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued (in shares) | 125,000 | ||||
Common stock with fair value | $ 0.5 | ||||
Option award expiration period (in years) | 10 years | ||||
Exercised (in shares) | 0 | 0 | |||
Shares granted in period (in shares) | 0 | 152,731 | |||
Expected volatility | 85% | 101.27% | |||
Risk-free interest rate | 0.34% | 3.56% | |||
Expected term in years | 6 years | 6 years | |||
China Cash Bonuses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares granted in period (in shares) | 5,400,000 | 0 | |||
Registration Rights Agreement, 2023 | Ionic Ventures, LLC | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares issued (in shares) | 10,499,291 |
STOCKHOLDERS' DEFICIT - Equity
STOCKHOLDERS' DEFICIT - Equity Stock Warrant Issuances (Details) - Warrant - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shares | ||
Outstanding at beginning of period (in dollars per share) | 1,011,441 | 1,011,441 |
Granted (in shares) | 0 | 0 |
Exercised (in shares) | 0 | 0 |
Forfeited, cancelled or expired (in shares) | (4,000) | 0 |
Outstanding at end of period (in shares) | 1,007,441 | 1,011,441 |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of period (in dollars per share) | $ 40.10 | $ 40.10 |
Granted (in dollars per share) | 0 | 0 |
Exercised (in dollars per share) | 0 | 0 |
Forfeited, cancelled or expired (in dollars per share) | 100 | |
Outstanding at end of period (in dollars per share) | $ 39.90 | $ 40.10 |
Weighted-Average Remaining Contractual Term | ||
Outstanding (term) | 2 years 8 months 12 days | 3 years 8 months 12 days |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding | $ 0 | $ 0 |
STOCKHOLDERS' DEFICIT - Valuati
STOCKHOLDERS' DEFICIT - Valuation Assumptions (Details) - Stock options | 12 Months Ended | |
Jul. 08, 2021 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term in years | 6 years | 6 years |
Expected volatility | 85% | 101.27% |
Expected dividends | 0% | |
Risk-free interest rate | 0.34% | 3.56% |
STOCKHOLDERS' DEFICIT - Stock O
STOCKHOLDERS' DEFICIT - Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 27, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
Shares | |||
Granted (in shares) | 0 | ||
Exercised (in shares) | 0 | 0 | |
Stock options | |||
Shares | |||
Outstanding at beginning of period (in shares) | 1,626,631 | 1,483,902 | |
Granted (in shares) | 0 | 152,731 | |
Exercised (in shares) | 0 | 0 | |
Forfeited, cancelled or expired (in shares) | (7,780) | (10,002) | |
Outstanding at end of period (in shares) | 1,618,851 | 1,626,631 | |
Options exercisable (in shares) | 1,598,754 | 1,549,681 | |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of period (in dollars per share) | $ 30.31 | $ 33 | |
Granted (in dollars per share) | 0 | 2.66 | |
Exercised (in dollars per share) | 0 | 0 | |
Forfeited, cancelled or expired (in dollars per share) | 29.67 | 14.11 | |
Outstanding at end of period (in dollars per share) | 30.31 | 30.31 | |
Options exercisable (in dollars per share) | $ 30.67 | $ 31.41 | |
Weighted-Average Remaining Contractual Term | |||
Outstanding (term) | 4 years 6 months | 5 years 6 months | |
Options exercisable (term) | 4 years 4 months 24 days | 5 years 3 months 18 days | |
Aggregate Intrinsic Value (in thousands) | |||
Outstanding | $ 1 | $ 1 | |
Options exercisable | $ 0 | $ 1 | |
China Cash Bonuses | |||
Shares | |||
Outstanding at beginning of period (in shares) | 71,450 | 103,600 | |
Granted (in shares) | 5,400,000 | 0 | |
Forfeited, cancelled or expired (in shares) | (14,700) | (32,150) | |
Outstanding at end of period (in shares) | 56,750 | 71,450 | |
Options exercisable (in shares) | 56,750 | 68,450 | |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of period (in dollars per share) | $ 35.99 | $ 39.70 | |
Granted (in dollars per share) | 0 | ||
Forfeited, cancelled or expired (in dollars per share) | 47.99 | ||
Outstanding at end of period (in dollars per share) | 30.86 | 35.99 | |
Options exercisable (in dollars per share) | $ 30.86 | $ 36.97 | |
Weighted-Average Remaining Contractual Term | |||
Outstanding (term) | 5 years 1 month 6 days | 6 years 1 month 6 days | |
Options exercisable (term) | 5 years 1 month 6 days | 6 years 1 month 6 days | |
Aggregate Intrinsic Value (in thousands) | |||
Outstanding | $ 0 | $ 0 | |
Options exercisable | $ 0 | $ 0 |
STOCKHOLDERS' DEFICIT - Nonvest
STOCKHOLDERS' DEFICIT - Nonvested Options Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shares | ||
Non-vested, beginning of period (in shares) | 76,950 | 206,250 |
Granted (in shares) | 0 | |
Vested (in shares) | (56,853) | (160,100) |
Forfeited, cancelled or expired (in shares) | 0 | (6,200) |
Non-vested, end of period (in shares) | 20,097 | 76,950 |
Weighted-Average Grant-Date Fair Value | ||
Non-vested, beginning of period | $ 529 | $ 2,063 |
Granted (in dollar per share) | 0 | |
Exercised (in dollars per share) | 490 | 1,852 |
Forfeited, cancelled or expired (in dollars per share) | 0 | 72 |
Non-vested, end of period | $ 31 | $ 529 |
STOCKHOLDERS' DEFICIT - Liabili
STOCKHOLDERS' DEFICIT - Liability Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Payment Award Liability [Roll Forward] | |||
Balance at beginning of period | $ 32 | $ 32 | |
Share-based compensation expense related to China Cash Bonuses | 157 | $ 1,697 | |
Balance at end of period | 11 | 32 | |
China Cash Bonuses | |||
Share-based Payment Award Liability [Roll Forward] | |||
Balance at beginning of period | 32 | 32 | 439 |
Share-based compensation expense related to China Cash Bonuses | $ (407) | (21) | (407) |
Balance at end of period | $ 11 | $ 32 |
STOCKHOLDERS' DEFICIT - Compens
STOCKHOLDERS' DEFICIT - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 157 | $ 1,697 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 178 | 2,104 | |
China Cash Bonuses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ (407) | $ (21) | $ (407) |
STOCKHOLDERS' DEFICIT - Unrecog
STOCKHOLDERS' DEFICIT - Unrecognized Compensation Cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation cost for non-vested awards (in thousands): | $ 21 |
Weighted-average years over which unrecognized share-based compensation expense will be recognized: | 9 months 18 days |
China Cash Bonuses | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized share-based compensation cost for non-vested awards (in thousands): | $ 0 |
Weighted-average years over which unrecognized share-based compensation expense will be recognized: | 0 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Management | Advances To Senior Management | ||
Related Party Transaction [Line Items] | ||
Outstanding accounts payable | $ 1.2 | $ 1.2 |
CHINA BUSINESS PARTNER (Details
CHINA BUSINESS PARTNER (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Trade accounts receivable, net | $ 1,287 | $ 3,091 |
China Branding Group Limited | VIEs | ||
Business Acquisition [Line Items] | ||
Revenues | 100 | 5,400 |
Trade accounts receivable, net | $ 700 | $ 800 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Ionic Ventures, LLC - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Jan. 09, 2024 | Jan. 08, 2024 | Sep. 29, 2023 | Sep. 15, 2023 | Jan. 05, 2023 | Oct. 06, 2022 | Apr. 08, 2024 | Dec. 31, 2023 | Mar. 31, 2024 | |
Registration Rights Agreement, 2023 | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued (in shares) | 10,499,291 | ||||||||
Subsequent Event | Registration Rights Agreement, 2023 | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares issued (in shares) | 20,520,846 | ||||||||
Letter Agreement with Ionic | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Commitment fee | $ 3,800 | ||||||||
ELOC Advances | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate principal amount | $ 8,100 | ||||||||
ELOC Advances | Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate principal amount | $ 4,000 | ||||||||
Maximum | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Sale of stock, purchase price, percentage | 90% | 80% | |||||||
Maximum | Subsequent Event | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Sale of stock, purchase price, percentage | 80% | ||||||||
Maximum | Letter Agreement with Ionic | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Conversion price (in usd per share) | $ 0.25 | ||||||||
Commitment fee | $ 3,000 | ||||||||
Maximum | Letter Agreement with Ionic | Subsequent Event | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Conversion price (in usd per share) | $ 0.25 | ||||||||
Minimum | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Sale of stock, purchase price, percentage | 70% | ||||||||
Minimum | Letter Agreement with Ionic | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Commitment fee | $ 500 | ||||||||
Minimum | Letter Agreement with Ionic | Subsequent Event | ELOC Purchase Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Commitment fee | $ 3,800 | $ 500 |