Becky Herrick - LHA Kai-Shing Tao - Executive Chairman and Chief Executive Officer Douglas Osrow - Chief Financial Officer.

Darren Aftahi - Roth Capital Partners George Kafkarkou - Private Investor Ron Nash - Nash Partners, LLC. Denis Dowen - Private Investor.

Good day, and welcome to the Remark Holdings Second Quarter Financial Results Conference Call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Becky Herrick of LHA. Please go ahead, ma'am..

Thank you, Matt, and thank you all for joining us today for the Remark Holdings Second Quarter 2017 Financial Results Conference Call. On the call today are Chairman and CEO, Shing Tao; and CFO, Doug Osrow. After the prepared remarks, we'll open the call to questions. A webcast replay of today's call will be available at www.remarkholdings.com.

Some of the statements made today may be forward-looking statements. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements.

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

This disclaimer is only a summary of Remark Holdings' statutory forward-looking statements disclaimer, which is included in full in its filings with the SEC.

Also, please note that the company uses financial measures not in accordance with generally accepted accounting principles, commonly known as GAAP, to monitor the financial performance of operations.

Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the reported financial results as determined in accordance with GAAP.

To support the company's views of adjusted EBITDA later in this call, a reconciling table is provided at www.remarkholdings.com, and a similar reconciling table will be included in the company's Form 10-Q filed with the SEC. I would now like to turn the call over to CEO, Shing Tao. Please go ahead..

data, which is AI's most important and powerful ingredient. In the past, anything digital had to follow a form of code that established the rules on how each step is made. The countries with the best coders were ones that at that time were most successful.

Now, in the present and beyond, these rules are determined by deep learning algorithms that are based on patterns from huge amounts of data. The more data available, the better the algorithms can learn and the stronger and more relevant output from artificial intelligence will be.

China's enormity and diversity provides the oil for this transportation - transformation.

Every day there are approximately 1.4 billion people that go through their daily lives and generate more data than almost all other nations in the world combined, but what is the need for our AI? For a message to have the best chance of success, it must be delivered to the right person, at the right place and at the right time.

Data is more powerful in the presence of other data. Google, Alibaba, Facebook, Microsoft, obviously possess huge resources in brainpower. However, the data is limited to their own ecosystems, while we amass our data across all major platforms and are doing it on both sides of the Pacific.

With that, I'm very proud and excited to give an update on how we are progressing. As you know, we built KanKan on 3 pillars that all rely on the same technology. First, the capability to understand the business. That's analytics or business intelligence, being able to ask questions and analyze information and make better decisions.

Second, the capability to produce data science. That's building algorithms and systems based on machine learning and AI that actually improves the product. And lastly, R&D capability. Using our data to open up new products, new businesses and new revenue opportunities. It's our ability to innovate and create new products that really differentiates us.

We continue to massively upgrade our product offerings and subsequently our margins. On our previous call, we mentioned how we are in the midst of launching our FinTech products, as it relates to helping vendors with the way they assess credit scores. Our potential client base consisted of small-to-medium sized lenders.

Because of the success of the accuracy of our scoring system, and equally as important, the entry of the large financial institutions in China entering into the consumer loan business, our products have expanded into lead acquisitions, social credit and debt collection.

We are no longer offering just one product in FinTech, but a whole complete platform. This enabled the expansion of our revenue model to include a commission-based market, where we not only increased our sales, but also with a much greater margin.

We believe that as our product gets adopted, we will look to generate low single-digit commissions per loan extended from the leads that we generate. Clearly, this market opportunity is far greater than what we were looking earlier in the year, but is also one we are capturing as we speak.

We look forward to updating you in our next call about the progress of this effort. And as a side note, Forbes magazine recently did a profile on FinTech in China, and specifically, about KanKan's FinTech product. Now on to other key developments with KanKan.

As I mentioned before, our ability to innovate within AI has allowed KanKan's platform to not be a one-trick pony. I'm sure you know how popular augmented reality filters had been for both Snapchat and Facebook. In fact, Snapchat, as you know, has spent a few hundred million dollars to acquire companies that specialize in this.

Both Snap and Facebook have seen a massive increase in user engagement due to these filters. We took it a step further.

We not only created in-house a far superior facial tracking system, but created 3D filters that can be used not just for enjoyment with friends but it becomes a large business opportunity to work with companies, for example, in the cosmetic field. For example, imagine you're at a makeup stand with 100 different options of brands and colors.

With our technology, makeup companies can set up kiosks where you can do it yourself and quickly see how it looks on you. With that, we are pleased to announce the signed deal with one of the largest social media companies, not just in China but in the world, Sina Weibo.

By choosing us, Sina Weibo gets one of the world's best deep learning, AI-based 110 dot 3D facial tracking technology with which the best mobile 3D AR is made possible for Sina. As a point of reference, our other competitors' tracking technology are reportedly 40% less accurate than ours.

We have also signed a 3-year contract with a large government solution provider that we secured a $5 million for our open crawling platform backed by our AI technologies.

Open crawling platform is KanKan's service platform, where our KanKan robots can retrieve unstructured data from any publicly available sources, including the Internet, and format them into structured and ready-to-use business data with little or non-customization needed.

From a guidance perspective, in terms of growth opportunities, we are in the process of signing a partnership with one of the largest data companies globally, which will bring KanKan's data services to expand into more industries, including cosmetic, automobile, CRM and the retailing business, where KanKan not only provides the consumer insights to them, but also to build new marketing models using the data from both sides.

We are very excited about this partnership deal as it could lead to a game change in the data marketing business.

Among the many products that are being tested on the consumer sites, one of them we expect to have great potential to improve people's life is a safety enforcement system that is being installed in every kitchen of the restaurants in Shanghai.

The system captures any activities in live video streaming that violate the food safety procedures, from not wearing hats, masks, gloves, to recognizing unauthorized personnel and to catching rats.

This same safety enforcement system that is largely automated and eliminates human error, can be used in construction sites, for workplace safety, in hospitals to prevent a newborn from being stolen, in schools for children's safety and many other applications. Now turning to the review of Vegas.com. We continue to see strong results in this business.

In fact, Vegas.com's transactions were up 18% year-over-year in the second quarter. While conversion was up 23% over the same time frame, notably this is the largest percentage increase in conversion for any of the prior 4 quarters.

Desktop conversion improved 19% year-over-year in the second quarter, while mobile conversion increased 37% over the same period. While we do not provide the metrics for competitive reasons, it's worth noting that Vegas.com also generated strong growth in gross bookings as well as mobile transactions.

As far as technology updates go, while we continue to add functionality to the business, the biggest effort was getting LasVegas.com launched. On July 19, we took full control of LasVegas.com.

In the last few weeks, it has been important for us to learn about the traffic going to the site and the impact on traffic in conversion since exiting the agreement with the Las Vegas Convention and visitors' authority.

In our early days of LasVegas.com, we have moved slowly in acquiring traffic to the site, but now we expect to ramp up our marketing efforts, improve our understanding of LasVegas.com's traffic and conversion, and how to effectively use both sites together. Looking forward, we are continuing to drive strong results in this segment.

For instance, July 2017 was the highest gross booking month ever for Vegas.com and the best month ever for consumed show tickets. We are also generating strong transactions - transactional growth so far in the third quarter, and our ticket sales in August surpassed 6,000 tickets in a single day on multiple days.

With that, I'll turn the call over to Doug for a review of the financials..

Thank you, Shing. As a reminder, our financial results for the second quarter of 2017 includes FansTang, which we acquired in September 2016, and which were not part of our financial results for the second quarter of last year. Net revenue for the second quarter of 2017 was $17.3 million compared to $15 million in the same quarter last year.

Total cost and expense was $21.9 million for the second quarter of 2017 compared to $18.5 million in the prior year. Second quarter 2017 operating loss was $4.7 million, compared to $3.5 million in the prior year.

Net loss was $4.3 million - net loss was $4.3 million or $0.19 per diluted share for the second quarter of 2017, compared to $5.4 million or $0.27 per diluted share in the second quarter of last year. For the first 6 months of 2017 compared to the same period last year, net revenue was $32.6 million compared to $29.2 million.

Total cost and expense was $42.6 million compared to $37.9 million. Operating loss was $10.1 million compared to $8.7 million. And net loss was $4.3 million or $0.19 per diluted share compared to $7.8 million or $0.39 per diluted share in the year-ago period. Cash at June 30, 2017, was $7.2 million compared to $6.9 million on December 31, 2016.

Restricted cash at both June 30 of this year and the end of last year was $11.7 million. As such, our combined cash position at June 30, 2017 was $18.9 million compared to $18.5 million at December 31, 2016. Turning to our 2017 outlook. We continue to expect KanKan's revenues will grow to more than $5 million for the year.

As previously discussed, we also expect to increase Vegas.com - we also expect Vegas.com to continue to do well and are eagerly looking forward to further development of LasVegas.com.

As we mentioned in our press release, to give you a little insight into how the third quarter is going thus far, Vegas.com has achieved 15 of the top 20 show ticket sale days in its history since July 1. Said differently, over the last 40 days, 15 of the top days ever have occurred in the show ticketing business.

And with that, I'd like to turn it back to Shing..

Thanks, Doug. We're pleased with the continued progress of our business, including the revenue growth from Vegas.com and the growing contribution from our KanKan's artificial intelligence platform.

Overall, we expect to continue enhancing Vegas.com to support its ongoing strong performance, and we believe encouraging early-stage results from the rollout of our KanKan products will set the stage for continued growth in 2018. Operator, we are now ready to begin the Q&A session..

[Operator Instructions] At this time, we will take our first question from Darren Aftahi with Roth Capital Partners. Please go ahead..

Good afternoon, guys. Thanks for taking my questions. Just a few in regards to KanKan. It looks like based on the implied number you put in the release, it had a fairly significant ramp sequentially.

Just curious first on - any color on what products specifically are driving that? And then I guess secondarily, the commission-based FinTech product suite you mentioned in your remarks, how will that kind of work in terms of the number of marketplaces that will be plugged into? And then I guess, what's sort of the heavy lifting to get integration, and any kind of color around timing of potential revenue? And whether you would consider this kind of incremental to your $5 million guide Doug just mentioned, it would be helpful..

Yes. So I'll just address them by a couple parts, and anything I didn't answer, just remind me. The bulk of the ramp-up is driven by our FinTech product. We are just rolling out, as we have spoken about before, our live-streaming filtering product that is still at the end stages being tested by some of the largest live streaming companies.

We did sign our deal with Sina Weibo, which we look to launching that very soon. As it pertains to our expanded opportunity, we always thought that the - like, if we're not in the loan business, how do we capture that growth beyond just taking a fee for doing a credit check.

And with data and with AI, as more time progresses, it allows us to do more testing, do more - and also, to get the confidence of certain of the larger financial institutions. And we've been able to show that we've been very successful in how we generate leads.

And so the credit process is very important in that, because obviously, we are using those credit checks to be able to determine what makes a strong lead. And with that, we've been able to negotiate where we can get single-digit commissions on all the leads that we generate. So we're rolling that out.

One of these customers that begin to go live will certainly change the entire financial model in our guidance, obviously in a positive way, very positive way, as soon as that gets launched..

And if I could just add - Darren, if I could just add, when we first launched the Social Credit Score, that's all that it was. It's now a whole division which we call our FinTech Division, which is really 4 separate businesses within 1 group. It's lead generation. It's the Social Credit Score. It's then monitoring that loan.

And then lastly, it's the digital footprint of that loan. So there is really 4 businesses that originally started as 1. Like Shing has mentioned, many of these businesses and different products that we are launching will evolve into becoming their own platform..

Yes. Just to clarify, it's in case there's a - if somebody defaults on their loan because we have the positive best ways of keeping track of someone's digital footprint to be able to find out where they are..

Okay.

One point of clarification, so the Sina Weibo deal is for live streaming, correct?.

No. That's for the - working with Sina is - where we're starting off is, we provided this facial recognition technology for them that has - as they are looking for ways to expand the engagement of their own users to kind of - they set a challenge for us in the beginning of the year.

They said, look, we already have a company that creates these filters, and especially the way that you guys are doing it with that type of accuracy. And we were successful in kind of beating our competition. So that's kind of what has led to this deal, but we're providing a facial recognition and tracking technology to Sina.

The filters are just one product that's coming through this technology..

As it pertains to live streaming, so is that product out of sort of beta and pilot at this point? Or I think you said a 2Q or 3Q launch, perhaps in the last call?.

Yes. So it's already out. We've already been selling. Right now, it's been - what we feel is on the - at the finish line, in terms of the testing from the partners. So we expect to go live any time now..

And as it pertains to conglomerates, I mean, obviously, you are hitting at a Facebook and YouTube, video, video, video. Is your pipeline of potential customers still skew Asia-Pac in that regard? Or are there real tangible opportunities of larger companies in the U.S.

that have global footprints?.

Yes. I mean, we think this - everything that we've created within KanKan is something that we can scale globally. Certainly, we're targeting in China, because that's where our resources and relationships are. But I think we also have very strong relations outside of China, and those are our opportunities we are going after as we speak..

Great. And just last one from me, for Doug.

Do you have the entertainment and consolidated adjusted EBITDA number?.

Yes, I do. I can give that to you. It will be out in our 10-Q, but for the 3 months of June 30, 2017, it's $1.7 million - $1.763 million. For the 6 months of June 30, 2017, it's $2.367 million. And that compares to 2016, the adjusted EBITDA number for the 3 months was $2.418 million, and for the 6 months it was $3.063 million.

But just to keep in mind, as you're probably aware, the license fee to our partner last year for the first 6 months was classified as a liability, and this year it's classified as an expense. So that will be a $1.25 million difference..

Darren, can I just add something, if you are done with Doug?.

Sure..

Yes, I just want to add that, I think, a lot of people - as it relates to your question with the live streaming, particularly in China over the course of the last, like, 6 weeks, you've seen a bunch of news articles about the government coming down and shutting down live streaming companies.

And this is actually - we view this as a positive, because now the live streaming companies have to take what the government's regulations much more seriously. So in the past, they were just like kind of hope that the government wouldn't notice or they would just hope that the random checks wouldn't relate to them. But that's not happening anymore.

So in terms of, like, for example, how we use our filtering systems, as it relates to porn filtering, we believe we are #1 in the market right now in terms of accuracy. So that's something that we think will be very attractive till these - till the live streaming comes to get started sooner rather than later..

Just one - 2 follow-ups, I guess. One - and then I'll get back in the queue.

Doug, was that an entertainment or a consolidated EBITDA number that you're referencing?.

That was travel and entertainment..

Okay.

Do you have consolidated EBITDA for the 3 months?.

Sure, sure. Consolidated EBITDA for the 3 months ending June 30 was negative $1.482 million. And for the 6 months was negative $3.738 million.

You want last year's as well?.

No. I think we've got those. I just want to follow up. Shing, more and more, everything is live streaming, but the function within that is just there aren't filters on content, so your product plays very well to this. You talk about kind of infinitesimal opportunity.

I guess do you have the proper resources, not financially speaking, but human capital, right now, deployed to actually go after these opportunities? Or what are your hiring plans within kind of the AI group at Remark over the next 90 to 180 days?.

That's a great question. I mean human capital is still the most valuable, and we certainly added to our sales team. But we continue to be aggressive and adding to it more.

One of the, I think, synergistic opportunities, that with our acquisition of FansTang back at the end of last year, we were able to utilize their sales team to help us roll this product out faster. And that was kind of the original vision when we made that acquisition in the first place.

We just - as a positive surprise, we didn't - we were pleasantly surprised to see our own products being able to be put in a place where it could be monetized so quickly. So we've shifted the resources from FansTang, in the meantime, to help in our buildup in sales opportunity..

Great, thanks..

Sure..

We will now move to George Kafkarkou, private investor..

Hi Guys.

Can you hear me?.

Yes..

Thank you taking my call. Most of my questions are around KanKan. But can I ask one question on Vegas.com first? I was trying to get my head around this.

Shing, at the top of the call or early on in the call, in your prepared remarks, I think you said Vegas.com, obviously, things are going very well with doubled revenue, but I think you used the term 30% growth on the top and the bottom line.

Are you projecting - is this guidance to say EBITDA as well as revenue will grow 30% for the Vegas.com unit?.

So when Shing spoke, Shing was speaking specifically for Vegas.com. As everybody knows, Vegas.com has done quite well since Michael and his team have done a phenomenal job of growing Vegas.com.

LasVegas.com under the old partnership really was declining quite rapidly, and we look forward to Michael and his team - they just started on July 19, and they are busy at work trying to replicate what they have done at Vegas.com..

Okay. I have got some background noise. I apologize. Okay.

But Vegas.com as a unit is profitable, correct?.

Vegas.com, as a unit, is profitable, yes. And that's the same question that Darren asked earlier regarding the segment. The first number that I gave out is for adjusted EBITDA. Those were for that particular unit, everything travel related. So the excellent with Vegas.com and the opportunity with LasVegas.com..

Right. So we acquired Vegas.com for about $35 million. It was losing money and revenue was declining. Now....

It wasn't losing money. It was - there were lots of moving parts, but depending on how you want to view it, it was breakeven to slightly positive on an EBITDA basis..

Okay. Okay. But obviously, we now have tremendous momentum. Okay. Next question, before I get to KanKan, in your prepared remarks, we spoke about Sharecare and those reference to WebMD, which I got very clear.

What was the other company that was mentioned?.

It's called Outcome Health. They are based in Chicago. They are kind of one of the great tech stories out of Chicago. And that's the company that Goldman Sachs led the round at a $5 billion evaluation with a $500 million investment..

And Sharecare, I think I heard in the prepared remarks, is growing or bigger than both WebMD and Outcome Health?.

Both companies are - Outcome is private, so I'm not privy to their numbers, but what's been publicly stated, we believe, you noted when you compared both companies and their evaluations, Sharecare has a higher growth profile versus one - versus like a WebMD and a larger business as compared to Outcome..

Okay, all right. Onto KanKan. Fantastic. I'm just trying to keep up with all the announcements of KanKan. The Forbes article mentioned that Remark Holdings has done a deal with one of China's biggest banks with regards to KanKan.

We've got the Sina Weibo announcement, say, for the 3D facial recognition, which is - I mean, it's an understatement to say that's impressive, and I'm hoping there will be some news on that.

Then I heard in the prepared remarks, a large government contractor relationship, is that what I heard?.

Yes..

And then I heard a data partnership that's global.

What does that mean, a big data firm, are we working - are you guys close to a data partnership or data relationship?.

Yes. I mean we're close to a deal with a very large data company that just, obviously, expands our reach into many other industries that we might not have had data before in the past. I mean, we're always data hungry. So....

Is that company U.S.-headquartered or China-headquartered?.

I think - well, they're China-based, but they're a very - they're a global company..

Okay.

And is that where the reference to the kitchen and the hats and the rats came in?.

No, that's something else. So that is a whole new - because we've really been able to differentiate ourselves on the facial and image recognition, and I think people in the market are beginning to hear just how good it is and also the pricing that we offer, a lot of different groups have approached to see, hey, you know, we have this problem.

Can you solve it for us? So as it relates to - in the restaurant industry, I think it's no secret that, particularly in China, health sanitation and sort of the - there's a lot of issues there.

And using our technology allows - with so many restaurants and so many people working there, really allow us to help monitor to make sure that the points of contact are clean, right.

So we are in that testing phase, and if that works out, we see a huge opportunity where it gets expanded to all the restaurants in the city, and obviously, the next step after that is to expand this to other cities in China.

But it's also that same technology that we can use for, like, worker safety, in hospitals where you have a lot of issues where babies are stolen from people. So to be able to monitor that - only the parents can take away the child. Or even at schools, right, with people picking up their children at schools.

This is a technology that I think we've been able to differentiate, so that can be used in so many different cases..

Right. Okay. Okay. And I apologize I didn't understand it the first one, but now I do. Then we have another completely different live streaming product and opportunity.

So that's an additional one incrementally over the 5 got just mentioned, correct?.

Exactly, exactly. I mean one thing about that we've always stressed over the last couple of years is that the foundation comes from the data, right, and that we have a lot with. And the AI sits on top of this data and now it can find the correlations with all the different points.

It allows us to expand virtually into any industry that we kind of decide to get smart in. And then that really speaks to the versatility of the platform. And so that's really what we are doing. So it may sound like it's a lot, but all comes from the same underlying technology and data..

I - so - but essentially, it's three different products. We got the FinTech product, which is probably the basis for which you've done the deal with one of China's biggest banks as per the Forbes article.

I'm guessing the FinTech product is for the large government contractor, the kitchen, hats and rats?.

No, let me just clarify.

The FinTech product is - as we are talking about as it relates to the Social Credit and the lead gen, okay?.

Yes. I understand that..

The government - the large government solution provider is based on our open crawling platform, right.

So that's where our bots are able to take unstructured data from the Internet in different data sources and make it structured, all right? So then we got a - the third part is our facial and image recognition, which is what we're working with the restaurants in China..

Okay.

And also with Sina Weibo, right?.

Well, we actually separate that because we have an augmented reality and facial recognition. I mean, they are related; it's all related, right. Everything's all driven by AI, but we separate those..

George, why don't we follow up with this offline with...?.

I can, but if I could, just one question, then I'll hang up, and I'll go back to the queue, one question. In the release, you talk about cost of revenues of KanKan going down because of the data partnerships with AliCloud and TenCent.

Can you talk to that please? Can you explain that? And just generally describe the relationship and what's going on with Alibaba and TenCent?.

Yes. I think we're really keeping it simple. We spend a lot of time nurturing our relationship with both TenCent and Alibaba. And as our technology continues to prove itself, then they obviously become much more willing to help us out as a partner. So that speaks to the lower cost that we are getting..

Okay. Thank you..

[Operator Instructions] We will move now to Ron Nash with Nash Partners, LLC..

Yes. Hi..

Hi Ron..

How you doing, Shing. The question I have for you is that the company itself - if you look at the company, it appears to be a holding company with 4 separate divisions, and that's the way I think a lot of the people in the financial world looks at it.

How would you connect all this all together to make it feel like it's not just 4 separate companies?.

Ron, let me start with that, then I'll turn it - this is Doug. Let me start with that and then I'll turn it over to Shing. You are right. Some of the pieces don't fit together, but some of that is beyond our control, based upon what Shing stepped into in October 2012 when he took over as Chairman and CEO. So the pieces going forward fit together.

You take KanKan for example, the one thing that Vegas.com brings to KanKan is $700 million of travel data real time. So those pieces fit together. Some of the earlier pieces, like our stake in Sharecare, clearly do not. But we want to be prudent and monetize at the appropriate points. I don't know, Shing, if there's anything you want to add..

So I would say that, actually, our story moving forward over the last couple of years has always been around creating a strong foundation and using technology as our core platform. And the core platform, obviously, is KanKan and how the AI helps KanKan's own business, but also the other businesses that are under Remark.

And I think just to give you an example about how the Vegas.com asset and KanKan work together from Vegas.com's perspective, they are now able to use the AI's technology to improve their own efforts in doing - targeting and making - targeting new customers, old customers and just making their operations efficient.

From KanKan's standpoint, it's very hard to be able to - if you look at what's out there in the market, to own and control a business where you have so much first-party data. KanKan's, I think, biggest weakness is the fact that we don't have a lot of first-party data. And Vegas.com is a big kind of part of that foundation to that.

So there are a lot of ways that in terms of all the assets that kind of work together on how they all plug and feed into the AI platform, and they, frankly, just feed off of each other..

Okay. Great. And just wanted to get some insight, because it all comes together, you're saying.

One almost interfaces with the other along the way is what you're saying?.

Yes. Exactly..

Okay. Thank you very much..

Thanks Ron..

We will now move to Denis Dowen, Private Investor..

Hi guys. Can we just talk a little bit about the balance sheet? I guess it was a loan that we moved to current liabilities. It carries a pretty hefty interest rate.

Can you talk about your refinancing plans of that? When you can actually refinance it? And also, as the Vegas.com business continues to expand, that's going to continue to use a lot more restricted cash.

So can you just talk about the liability side a little bit? And how you plan to address that?.

Sure. Shing, I'll take the liability side. We can and have the ability to refinance the debt, as you are well aware, at any point in time. Given our - given the agreement we have in place, there are times where it's more beneficial for us to do so. And those days are quickly approaching where some of the fees fall off if we were to refinance early.

As you can imagine, when we originally put a loan agreement in place, it wasn't clear when some of our monetization opportunities would occur, and the lender wanted to have the loan out for a certain period of time. So it was rather expensive to refinance early.

That quickly - at the end of September, a big portion of that runs off at the end of this September. So we've got the ability to go out and refinance, really, at any point in time we want to.

And quite frankly, when we took Vegas.com over, we knew what the opportunity was, and again, Michael and his team have done a wonderful job of providing the cash flow that we look forward to seeing what we can do in the marketplace when the timing is right for us.

Does that answer your question, Denis?.

Yes, basically.

But what about the - what is your credit that you have to post through the show business?.

And Michael is with us here. If you want to step in, feel free. But as far as the letters of credit are concerned, yes, obviously our business is growing quite significantly with many of the vendors here in Las Vegas, and we have very good relationships with them.

So while there is a delicate balance, yes, they want more restricted cash, but at the same time, when you are a greater and greater percentage of the showroom and you are a good partner and willing to do things that they are looking for, there is some flexibility there.

So yes, as our business continues to grow, the suppliers would like larger letters of credit. But as our business continues to grow, we have a little bit more sway as well because we're doing well for our partners and they are doing well by us..

Okay. That makes sense. And one last question.

Can we just talk about some of the legacy business, like, the financial side and Bikini.com? Where does that fit into the whole equation?.

Sure. I'll pick on banks.com. There are 2 pieces of banks.com. There's banks.com and there's IRS.com. And with IRS.com, there's Filelater and TaxExtension.com. There's really 2 different groups. On the banks.com, we've had a - we've got a great url that we really haven't spent any time or focused on, that hasn't really done much of anything.

We've recently entered a joint venture with a group that we'll discuss more of. It has no financial risk to us, other than loading our URL, but we're - thus far, we are pleased with the progress. And we're not going to announce who the partnership is with yet, but at a later date, we will.

The second piece of that is IRS.com, which is where the bulk of the revenue and cash flow comes from. This business has seen tremendous growth and traffic. This year we will probably do north of 14 million sessions.

While this business has done quite well and cash flow is doing quite well for this business, it's - with the name IRS.com, a group that is primarily in the tax business would be - they're capitalizing or purposing IRS.com for obvious reasons. They want to - there is a delicate balance with the government and IRS.gov.

So we've really kept this site as a lead-gen site and as a - a lead-gen site as well as an advertising site, and the numbers are doing quite well. And while it's not core to our business, its EBITDA margins are well north of 70%.

There is only one full-time employee and a little bit of my time, and very little technology cost behind it, so it pretty much runs as its own and it's generating good cash flow..

And what about Bikini? Where does that fit?.

Great. So Denis, Bikini is another great example about how the whole story of Remark plays off of each other. With KanKan being the core, Bikini has spent the last couple of years building up their brand name in the U.S.

But as our original thesis in acquiring Bikini, it wasn't just the U.S., it was the fact that Bikini is Bikini in any language around the world. And we looked for the first opportunity in the one after building the brand in the U.S. to be able to expand it globally.

With KanKan, one of the things that we haven't mentioned yet is the very, very broad reach of distribution that it has in China. Through our own content that's been created by our artificial intelligence, we're generating over 25 million weekly views, unique viewership on our platforms.

And as we go out in China and meet with different vendors, they have been always looking at our assets, what can they take that's - what asset of ours can they take that's global and help partner us and then expand it into China, and Bikini is that one.

Bikini is - the whole swimwear market in China is almost - it's an understatement to say it's not explosive, especially with the growing middle class in China and understanding kind of what the world of beach lifestyle is. You take the island of - Hainan Island, which has over 50 million tourists a year and that's growing at a 20% growth rate.

This is a whole demographic where we talk to our partners, whether it's Alibaba, whether it's TenCent, whether it's Toutiao, they are seeing a very strong demand in this.

So we are taking the brand name that we've built in the U.S., taking it into China, and then we're going to be able to monetize that by capitalizing on the traffic that's being generated there..

Great. Thanks guys, good luck..

Thanks Denis..

And that will be end of the Q&A session. At this time, I'll turn it over to Shing Tao for closing remarks..

Thank you very much for your time. And Doug and I are always open to questions. Please feel free to reach out. And we look forward to updating you in November for our third quarter results. Thank you..

I think that does conclude today's conference call. Thank you all for your participation..