REMARK HOLDINGS INC (OTC:MARK)

Item 1.01 Entry into a Material Definitive Agreement.

On July 6, 2016, Remark Media, Inc. (“we”, “us” or “our”), together with our wholly-owned subsidiary KanKan Limited, entered into an Amended and Restated Asset and Securities Purchase Agreement, dated effective as of July 5, 2016 (the “Amended and Restated Purchase Agreement”), with China Branding Group Limited (“CBG”) and the other parties specified therein, amending and restating the Asset and Securities Purchase Agreement, dated as of May 16, 2016 (the “Original Agreement”), previously described in our Current Report on Form 8-K filed with the Securities and Exchange Commission on May 18, 2016. The amendments to the Original Agreement reflected in the Amended and Restated Purchase Agreement include, among other things, (i) changes related to the placement of CBG into provisional liquidation and the appointment of joint provisional liquidators over CBG, (ii) changes to the indemnification provisions providing that we are indemnified by specified creditors of CBG signing a joinder to the Amended and Restated Purchase Agreement, and that CBG and its joint provisional liquidators will not incur any liability after completion of the transaction and (iii) a change in the outside termination date, after which the Amended and Restated Purchase Agreement may be terminated by any party at any time, to August 8, 2016.

The foregoing description of the Amended and Restated Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended and Restated Purchase Agreement, which is filed herewith as Exhibit 2.1 and is incorporated herein by reference. We have included the Amended and Restated Purchase Agreement to provide investors and stockholders with information regarding its terms, but not to provide any other factual information about us or any of the other parties. The Amended and Restated Purchase Agreement contains representations and warranties that the parties to the Amended and Restated Purchase Agreement made to and solely for the benefit of each other, and the assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Amended and Restated Purchase Agreement. Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Amended and Restated Purchase Agreement and are modified in important part by the underlying disclosure schedules.

Management Discussion and Analysis

During the year ended December 31, 2015, revenue was primarily affected by:

• the operating results of Vegas.com after the Vegas.com Acquisition, which added net revenue of $12.0 million, and

• our decision to increase the selection of merchandise that we offer through Bikini.com’s sales channels, resulting in an increase in sales revenue of $0.3 million.

During the year ended December 31, 2015, our operation of Vegas.com after the Vegas.com Acquisition resulted in a $1.7 million increase in our cost of sales.

Item 1.01 Entry into a Material Definitive Agreement.

 
Completion of Acquisition of Vegas.com, LLC
 
On September 24, 2015, Remark Media, Inc. (“Remark,” “we,” “us,” or “our”) completed the purchase (the “Vegas.com Acquisition”) of all of the outstanding equity interests in Vegas.com, LLC (“Vegas.com”) pursuant to the terms of that certain Unit Purchase Agreement dated as of August 18, 2015 (as amended, the “Purchase Agreement”) by and among Remark, Vegas.com and the equity owners of Vegas.com listed on the signature page thereto (“Sellers”). We described the terms of the Purchase Agreement in our Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on August 19, 2015. The aggregate consideration for the Vegas.com Acquisition included (i) approximately $15.3 million of cash; (ii) 2,271,126 shares of our common stock valued at approximately $9.7 million, calculated based on a per share price equal to the volume weighted average price of our common stock during the 30 trading days ending on the third trading day prior to the closing date (the “Equity Payment”); (iii) five-year warrants to purchase 8,601,410 shares of our common stock at an exercise price of $9.00 per share valued at $10 million, calculated based on specified valuation principles (the “Acquisition Warrants”), and (iv) up to a total of $3 million in earnout payments based on the performance of Vegas.com in the years ending December 31, 2016, 2017 and 2018 (collectively, the “Purchase Price”). To secure certain obligations of Sellers under the Purchase Agreement, the parties deposited into escrow at closing 616,197 of the shares of our common stock comprising the Equity Payment, valued at approximately $2.6 million.
 
On September 24, 2015, the parties to the Purchase Agreement entered into a Letter Agreement amending certain provisions of the Purchase Agreement (the “Letter Agreement”), including but not limited to (i) the allocation of the Purchase Price between cash and shares of our common stock, (ii) the elimination of the Specified Escrow as a result of the resolution of the Specified Dispute (each as defined in the Purchase Agreement), and (iii) certain indemnification provisions. The foregoing description of the Letter Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter Agreement, which is attached as Exhibit 2.1 hereto and is incorporated herein by reference. The form of Acquisition Warrants issued to Sellers at the closing also is attached as Exhibit 4.1 hereto and is incorporated herein by reference.
 
On September 24, 2015, as a condition to closing the Purchase Agreement, we also entered into an Investors Rights Agreement with Sellers (the “Investors Rights Agreement”) providing them with registration rights for the shares of our common stock issuable under the Purchase Agreement (including under the Acquisition Warrants and shares issuable under anti-dilution adjustments) and for certain transfer restrictions on the shares held by Sellers.
 
In accordance with our obligations under Nasdaq Listing Rule 5635, we are not permitted to issue any additional shares under the Purchase Agreement and in related transactions (including under the Acquisition Warrants) to the extent that the issuance of such shares, when aggregated together in accordance with Nasdaq rules, would exceed 19.9% of the shares outstanding, unless we obtain the approval of our stockholders for issuances in excess of such amount (the “Stockholder Approval”). As a condition to closing the Purchase Agreement, we entered into Voting Agreements with stockholders who together hold at least 50.1% of our voting securities outstanding immediately prior to closing, providing for their agreement to vote in favor of the Stockholder Approval. We intend to hold a special meeting of stockholders to seek the Stockholder Approval within 90 days after the closing of the Vegas.com Acquisition (the “Special Meeting”).
 
Acquisition Financing
 
On September 24, 2015, concurrently with the closing of the Vegas.com Acquisition, we entered into a Financing Agreement dated as of September 24, 2015 (the “Financing Agreement”) with certain of our subsidiaries as borrowers (together with Remark, the “Borrowers”), certain of our subsidiaries as guarantors (the “Guarantors”), the lenders from time to time party thereto (the “Lenders”) and MGG Investment Group LP, in its capacity as collateral agent and administrative agent for the Lenders (“MGG”), pursuant to which the Lenders extended credit to the Borrowers consisting of a term loan in the aggregate principal amount of $27,500,000 (the “Loan”). The Loan amount outstanding will accrue interest at the three month LIBOR plus 10.0% per annum, payable monthly, and the Loan has a maturity date of September 24, 2018. The Financing Agreement and related documents also provide for certain fees payable to the Lenders and for the issuance of the Financing Warrant (as defined below).

On September 24, 2015, we also entered into a Pledge and Security Agreement dated September 24, 2015 (the “Security Agreement”) with the other Borrowers and the Guarantors, for the benefit of MGG, as collateral agent for the Secured Parties referred to therein, to secure the obligations of the Borrowers and the Guarantors under the Financing Agreement. The Security Agreement provides for a first-priority lien on, and security interest in, all assets of Remark and our subsidiaries, subject to certain exceptions.
 
The Financing Agreement and the Security Agreement contain representations, warranties, affirmative and negative covenants (including financial covenants with respect to quarterly EBITDA levels and the value of our assets), events of default, indemnifications and other provisions customary for financings of this type. The occurrence of any event of default under the Financing Agreement may result in the Loan amount outstanding and unpaid interest thereon, becoming immediately due and payable.
 
On September 24, 2015, as a condition to closing the Financing Agreement, we issued to an affiliate of MGG a five-year warrant to purchase 2,580,423 shares of our common stock at an exercise price of $9.00 per share valued at $3.0 million, calculated based on specified valuation principles, subject to certain anti-dilution adjustments (the “Financing Warrant”). The Financing Warrant also provides as follows: (i) the Financing Warrant is exercisable on a cashless basis only; (ii) the number of shares of our common stock issuable upon exercise of the Financing Warrant and the exercise price thereof are subject to anti-dilution protection; (iii) we have the right to exercise all or any portion of the Financing Warrant if at any time following its issuance the closing price of our common stock is greater than or equal to $14.00; (iv) the holder has the right to sell the Financing Warrant back to Remark on its expiration date in exchange for $3.0 million in cash (reduced pro rata based on the percentage of the Financing Warrant exercised).
 
In accordance with our obligations under Nasdaq Listing Rule 5635, we are not permitted to issue any additional shares under the Financing Warrant to the extent that the issuance of such shares, when aggregated together in accordance with Nasdaq rules, would exceed 19.9% of the shares outstanding, unless we obtain Stockholder Approval, which we will seek at the Special Meeting.
 
On September 24, 2015, as a condition to closing the Financing Agreement, we also entered into a Registration Rights Agreement providing the holder of the Financing Warrant with registration rights for the shares of our common stock issuable under the Financing Warrants.
 
The foregoing descriptions of the Financing Agreement, the Security Agreement, the Registration Rights Agreement and the Financing Warrant do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, which are attached as Exhibit 10.2, Exhibit 10.3, Exhibit 10.4 and Exhibit 4.2, respectively, hereto and are incorporated herein by reference.
 

Letter of Credit Facility Agreement
 
On September 24, 2015, concurrently with the closing of the Vegas.com Acquisition, to satisfy the closing conditions under the Purchase Agreement, Vegas.com entered into a Loan Agreement dated as of September 24, 2015 with Bank of America, N.A. providing for a letter of credit facility with up to $9.3 million of availability, expiring May 31, 2016 (the “Letter of Credit Facility Agreement”). Amounts available under the Letter of Credit Facility Agreement are subject to customary fees and are secured by a first-priority lien on, and security interest in, a cash collateral account with the bank containing cash equal to 101.25% of the aggregate outstanding undrawn face amount of all letters of credit under the Letter of Credit Facility Agreement outstanding.
 
The Letter of Credit Facility Agreement contains representations, warranties, affirmative and negative covenants, events of default, indemnifications and other provisions customary for financings of this type. The occurrence of any event of default under the Letter of Credit Facility Agreement may result in the amount outstanding thereunder and unpaid interest thereon becoming immediately due and payable.
 
 
Conversion and Repayment of Promissory Notes
 
Effective September 23, 2015, we entered into amendments (collectively, the “Note Amendments”) to our $3.5 million Senior Secured Convertible Promissory Note dated January 29, 2014 with Digipac, LLC (“Digipac”) and our $3.0 million and $0.3 million Convertible Promissory Notes dated December 17, 2014 and March 13, 2015, respectively, with Ashford Capital Partners, L.P. (“ACP”). These convertible notes had conversion prices in excess of the market price of our common stock, and the Note Amendments provided that the unpaid principal amount thereof and all accrued and unpaid interest thereon would be converted automatically into shares of our common stock at a conversion price equal to the closing price of our common stock on the immediately preceding trading day, or $4.23 per share. Also effective on September 23, 2015, Digipac converted the unpaid principal amount of and all accrued and unpaid interest under it $2.5 million Senior Secured Convertible Promissory Note dated November 14, 2013 into shares of our common stock at the existing conversion price of $3.75 per share. The conversions resulted in the issuance of a total of 2,516,154 shares of our common stock.
 
Additionally, on September 24, 2015, we repaid the unpaid principal amount of, and all accrued and unpaid interest under our $0.35 million Demand Note dated September 11, 2014 with Digipac.
 
We entered into the Note Amendments and repaid the demand note to satisfy a condition to the closing of the Financing Agreement. Our Chairman of the Board and Chief Executive Officer, Kai-Shing Tao, is the manager of and a member of Digipac, and our Chief Financial Officer, Douglas Osrow, is also a member.

Item 1.01 Entry into a Material Definitive Agreement.

On August 18, 2015, Remark Media, Inc. (“we”, “us”, or “our”) entered into a Unit Purchase Agreement (the “Purchase Agreement”) with Vegas.com, LLC (“Vegas.com”) and the equity owners of Vegas.com listed on the signature page thereto (“Sellers”). Subject to the terms and conditions under the Purchase Agreement, we have agreed to purchase all of the outstanding equity interests in Vegas.com (the “Transaction”) for aggregate consideration including (i) $15.5 million of cash (the “Cash Payment”); (ii) $9.5 million of shares of our common stock, calculated based on a per share price equal to the volume weighted average price of our common stock during the 30 trading days ending on the third trading day prior to the closing date (the “Equity Payment”); (iii) $10 million of five-year warrants to purchase shares of our common stock at an exercise price of $9.00 per share, calculated based on specified valuation principles (the “Warrants”), and (iv) up to a total of $3 million in earnout payments based on the performance of Vegas.com in the years ending December 31, 2016, 2017 and 2018 (the “Earnout Payments,” and together with the Cash Payment, the Equity Payment and the Warrants, the “Purchase Price”). The parties will deposit the following portions of the Purchase Price into escrow at closing: (i) approximately $2.6 million of the Equity Payment to secure certain obligations of Sellers under the Purchase Agreement; and (ii) $2.2 million of a combination of the Cash Payment and the Equity Payment to secure payment of any post-closing liabilities in connection with a specified contract dispute, with an additional ability to offset up to $600,000 of Earnout Payments. The actual number of shares of our common stock issuable under the Purchase Agreement and the Warrants cannot be determined at this time and will be calculated in accordance with the terms of the Purchase Agreement and the Warrants at or prior to the closing of the Transaction.
 
The Purchase Price may be adjusted upwards or downwards based on the difference between the working capital of Vegas.com at closing and a specified target, and the number of shares constituting the Equity Payment may be subject to post-closing anti-dilution adjustments for certain issuances by the Company at a lower price per share during the 12 months following closing. The Warrants also provide as follows: (i) the Warrants are exercisable on a cashless basis only; (ii) we have the right to exercise all or any portion of the Warrants if at any time following their issuance the closing price of our common stock is greater than or equal to $14.00; and (iii) the holder has the right to sell the Warrants back to the Company on their expiration date in exchange for shares of our common stock having a value equivalent to the value of the Warrants at closing, calculated based on a per share price equal to the volume weighted average price of our common stock during the 30 trading days ending on the expiration date, provided that this right terminates if the closing price of our common stock equals or exceed a specified price limit for any 20 trading days during a period of 30 consecutive trading days at any time on or prior to the expiration date. The form of Warrant is included as an exhibit to the Purchase Agreement filed herewith.
 
Under the Purchase Agreement, as a condition to closing, among other matters, we have agreed to enter into (i) an Investors Rights Agreement with Sellers providing them with registration rights for the shares of our common stock issuable under the Purchase Agreement (including under the Warrants issuable at closing and shares issuable under anti-dilution adjustments) and for certain transfer restrictions on the shares held by Sellers, and (ii) Voting Agreements with stockholders who together hold at least 50.1% of our voting securities outstanding immediately prior to closing, providing for their agreement to vote in favor of the Stockholder Approval (as defined below). Forms of such agreements are included as exhibits to the Purchase Agreement filed herewith. Additionally, Vegas.com has agreed not to engage in certain transactions or take certain actions prior to closing without our prior written consent. The Purchase Agreement also contains other representations, warranties, covenants, indemnifications and closing conditions customary for transactions of this type.
 
The Purchase Agreement is subject to customary termination provisions. Additionally, the Purchase Agreement may be terminated by any party if closing has not occurred on or before October 25, 2015 (the “Outside Closing Date”) or by us if we have not obtained, or it becomes apparent that we will not obtain, financing in an amount sufficient for us to consummate the Transaction. If the Purchase Agreement is terminated (i) by us because we have not obtained sufficient financing to consummate the Transaction or (ii) by Sellers because there has been a material breach of our representations, warranties or covenants or because we have failed to close the Transaction on or before the Outside Closing Date, we will be obligated to pay Vegas.com a termination fee of $1 million, payable in cash or in shares of our common stock valued at 110% of such amount, calculated based on a per share price equal to the volume weighted average price of our common stock during the 30 trading days ending on the termination date.
 
In accordance with our obligations under Nasdaq Listing Rule 5635(d), we are not permitted to issue any shares under the Purchase Agreement and in related transactions (including under the Warrants) to the extent that the issuance of such shares, when aggregated together in accordance with Nasdaq rules, would exceed 19.9% of the shares outstanding, unless we obtain the approval of our stockholders for issuances in excess of such amount (the “Stockholder Approval”). We intend to hold a special meeting of stockholders following closing of the Transaction to seek the Stockholder Approval.
 
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed herewith as Exhibit 2.1 and is incorporated herein by reference. We have included the Purchase Agreement to provide investors and stockholders with information regarding its terms, but not to provide any other factual information about us or Vegas.com. The Purchase Agreement contains representations and warranties that the parties to the Purchase Agreement made to and solely for the benefit of each other, and the assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Purchase Agreement. Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Purchase Agreement and are modified in important part by the underlying disclosure schedules.
 

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 regarding the issuance of shares of our common stock pursuant to the Purchase Agreement and the Warrants is incorporated into this Item 3.02 by reference. The offer and sale of such securities is being made in reliance upon an exemption from the registration requirements pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended, based upon representations made by Sellers in the Purchase Agreement and related documents.

Management Discussion and Analysis

During the three months ended June 30, 2015, we continued to realize the benefit of increasing the selection of merchandise that we offer through Bikini.com’s sales channels, resulting in an increase in sales revenue of slightly more than$0.1 million. The increase in sales revenue from Bikini.com was partially offset by a decrease of slightly less than $0.1 million in revenue from our tax extension websites, which resulted because 2015 was the first year that the IRS allowed taxpayers to file tax extensions directly through the IRS website.

Item 1.01 Entry into a Material Definitive Agreement.

On July 28, 2015, Remark Media, Inc. (“we”, “us” or “our”) entered into a Settlement Agreement and Mutual General Release (the “Settlement Agreement”) with Bombo Sports & Entertainment, LLC (“BSE”) and Robert S. Potter (the “Principal”). The Settlement Agreement is related to that certain Loan Agreement, dated as of February 11, 2014, as amended by that certain Amendment No. 1 to Loan Agreement, dated as of April 16, 2014, by and between us and BSE (as amended, the “Loan Agreement”), pursuant to which we loaned BSE a total of $1.35 million. The Settlement Agreement provides for, among other things: (i) the settlement of our legal proceedings and release of our claims against BSE and the Principal, including for payment of all amounts due under the Loan Agreement; (ii) the termination of all agreements between us and the Principal; and (iii) certain other agreements and releases. Our entry into the Loan Agreement and the terms and conditions thereof were disclosed in our Current Reports on Form 8-K filed with the Securities and Exchange Commission on February 18, 2014 and on April 23, 2014.
On July 28, 2015, in connection with the Settlement Agreement, we also entered into a Servicing Agreement with BSE (the “Servicing Agreement”). The Servicing Agreement provides, among other things, for the following:
 

(i) for a period of two years, BSE will loan to us the services of the Principal for up to 100 hours each year;

(ii) for a period of two years, we may, at our option, engage BSE to produce a total of four one-hour length projects at cost;

(iii) for a period of five years, we will have the exclusive right to use BSE’s film library (the “BSE Library”) in specified Asian-Pacific countries and territories (the “Asia Pacific Territory”), to the extent of BSE’s rights thereto and subject to BSE’s approval of any license or similar agreement governing our exploitation thereof (not to be unreasonably withheld), with us retaining the first $500,000 of net profit and any additional net profit split equally between us and BSE; and

(iv) for a period of five years, we will have the right to purchase 10% of BSE for $1.50 or 20% of BSE for $5.00, provided that if we exercise this right, commencing on the six-month anniversary of such acquisition, we will be obligated to market the BSE Library in the Asia Pacific Territory for a period of 10 years, with us retaining 50% of the first $500,000 of net profits from such marketing and 25% of net profits thereafter, and us receiving $100,000 per year for such marketing services beginning on the 18-month anniversary of such acquisition.

The foregoing descriptions of the Settlement Agreement and the Servicing Agreement are not complete and are qualified in their entirety by reference to the full text of such documents, which we have filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.

Item 1.01 Entry into a Material Definitive Agreement.

On July 9, 2015, Remark Media, Inc. (“we”, “us” or “our”) entered into Subscription Agreements with certain investors with respect to the registered direct offering (the “Offering”) of 339,000 shares (the “Shares”) of our common stock, $0.001 par value per share (the “Common Stock”), at an offering price of $4.00 per share. We offered and sold the Shares directly to investors without a placement agent, underwriter, broker or dealer. The Offering closed on July 10, 2015.

We issued the Shares under our effective shelf Registration Statement on Form S-3 (File No. 333-202024), and we filed a prospectus supplement to such registration statement relating to the Offering with the Securities and Exchange Commission on July 9, 2015.

The net proceeds to us from the sale of the Shares in the Offering, after deducting offering expenses, are expected to be approximately $1.3 million. We intend to use the net proceeds of the Offering for general corporate purposes, which may include working capital for our various business units, acquisitions and capital expenditures.

We have attached a copy of the Form of Subscription Agreement relating to the Shares, which is incorporated herein by reference, as Exhibit 10.1. The legal opinion of Olshan Frome Wolosky LLP, relating to the Shares offered, is filed as Exhibit 5.1 to this report. The descriptions of these documents herein are not complete and are qualified in their entirety by reference to the full text of such documents attached as exhibits hereto.

Remark Media

339,000 Shares of Common Stock

We are offering 339,000 shares of our common stock directly to the investors in this offering at a price of $4.00 per share. We are not paying underwriting discounts or commissions, so the proceeds to us, before expenses, will be approximately $1.4 million. We estimate the total expenses of this offering will be approximately $25,000.

Our common stock is traded on the NASDAQ Capital Market under the symbol “MARK.” The last reported sales price of our common stock on the NASDAQ Capital Market on July 8, 2015 was $4.10 per share.

The aggregate market value of our outstanding shares of common stock held by non-affiliates was approximately $41.9 million based on 13,934,102 shares of common stock outstanding as of the date of this prospectus, of which 9,864,577 shares were held by non-affiliates, and a per share price of $4.25 based on the closing sale price of a share of our common stock on the NASDAQ Capital Market on July 2, 2015. Under the registration statement to which this prospectus supplement forms a part, we may not sell our securities in a primary offering with a value exceeding one-third of our public float in any 12-month period (unless our public float rises to $75.0 million or more). We have sold securities having an aggregate market value of $3.4 million pursuant to General Instruction I.B.6 of Form S-3 during the prior 12-calendar-month period that ends on, and includes, the date of this prospectus supplement, and accordingly, may sell up to approximately $10.6 million in shares of common stock hereunder.

Item 1.01 Entry into a Material Definitive Agreement.

Effective on June 4, 2015, the Board of Directors (the “Board”) of Remark Media, Inc. (“we”, “us” or “our”) authorized and declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock, par value $0.001 per share (the “Common Shares”), to stockholders of record as of the close of business on June 15, 2015 (the “Record Date”). Each Right entitles the registered holder to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock, par value $0.001 per share (the “Preferred Shares”), at an exercise price of $19.00 per one one-thousandth of a Preferred Share, subject to adjustment (the “Exercise Price”). The complete terms of the Rights are set forth in the Tax Benefit Preservation Plan (the “Rights Plan”), dated as of June 4, 2015, between us and Computershare Inc., as rights agent.
 
By adopting the Rights Plan, our Board is helping to preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”). Our ability to use these Tax Benefits would be substantially limited if we were to experience an “ownership change” as defined under §382 of the Internal Revenue Code of 1986, as amended (the “Code”). In general, an ownership change would occur if there is a greater than 50-percentage point change in ownership of securities by stockholders owning (or deemed to own under §382 of the Code) five percent or more of a corporation’s securities over a rolling three-year period. The Rights Plan reduces the likelihood that changes in our investor base have the unintended effect of limiting our use of our Tax Benefits. Our Board believes it is in our best interest and that of our stockholders that we provide for the protection of the Tax Benefits by adopting the Rights Plan.
 
We intend the Rights Plan to act as a deterrent to any person acquiring 4.99% or more of the outstanding Common Shares without the approval of our Board, which would protect the Tax Benefits because changes in ownership by a person owning less than 4.99% of the Common Shares are not included in the calculation of “ownership change” for purposes of §382 of the Code. Our Board has established procedures to consider requests to exempt certain acquisitions of our securities from the Rights Plan if the Board determines that doing so would not limit or impair the availability of the Tax Benefits or is otherwise in our best interests.
 
The following summary of the terms of the Rights Plan does not purport to be complete and is qualified in its entirety by reference to the Rights Plan, a copy of which is attached as Exhibit 4.1 and incorporated herein by reference.

 
Distribution and Transfer of Rights; Rights Certificates

Our Board has declared a dividend of one Right for each outstanding Common Share. Prior to the Distribution Date referred to below:

• the Rights will be evidenced by and trade with the certificates for the Common Shares (or, with respect to any uncertificated Common Shares registered in book entry form, by notation in book entry), and no separate rights certificates will be distributed;

• new Common Shares certificates issued after the Record Date will contain a legend incorporating the Rights Plan by reference (for uncertificated Common Shares registered in book entry form, this legend will be contained in a notation in book entry); and

• the surrender for transfer of any certificates for Common Shares (or the surrender for transfer of any uncertificated Common Shares registered in book entry form) will also constitute the transfer of the Rights associated with such Common Shares.

Rights will accompany any new Common Shares that are issued after the Record Date.

Distribution Date

Subject to certain exceptions specified in the Rights Plan, the Rights will separate from the Common Shares and become exercisable following (i) the 10th business day (or such later date as may be determined by the Board) after the public announcement that an Acquiring Person (as defined below) has acquired beneficial ownership of 4.99% or more of the Common Shares or (ii) the 10th business day (or such later date as may be determined by the Board) after a person or group announces a tender or exchange offer that would result in ownership by a person or group of 4.99% or more of the Common Shares.

The date on which the Rights separate from the Common Shares and become exercisable is referred to as the “Distribution Date.”
 
After the Distribution Date, we will send Rights certificates to stockholders holding Common Shares as of the close of business on the Distribution Date and the Rights will become transferable apart from the Common Shares. Thereafter, such Rights certificates alone will represent the Rights.
 

Preferred Shares Purchasable Upon Exercise of Rights

After the Distribution Date, each Right will entitle the holder to purchase, for the Exercise Price, one one-thousandth of a Preferred Share having economic and other terms similar to that of one Common Share. This portion of a Preferred Share is intended to give the stockholder approximately the same dividend, voting and liquidation rights as would one Common Share, and should approximate the value of one Common Share.
 
More specifically, each one one-thousandth of a Preferred Share, if issued, will:

• not be redeemable;

• entitle holders to quarterly dividend payments of $0.001 per share, or an amount equal to the dividend paid on one Common Share, whichever is greater;

• entitle holders upon liquidation either to receive $1.00 per share or an amount equal to the payment made on one Common Share, whichever is greater;

• have the same voting power as one Common Share; and

• entitle holders to a per share payment equal to the payment made on one Common Share, if the Common Shares are exchanged via merger, consolidation or a similar transaction.

Flip-In Trigger

If a person or group of affiliated or associated persons (an “Acquiring Person”) obtains beneficial ownership of 4.99% or more of the Common Shares, except pursuant to an offer for all outstanding Common Shares that the independent members of the Board determine to be fair and not inadequate and to otherwise be in our best interest and that of our stockholders after receiving advice from one or more investment banking firms, then each Right will entitle the holder thereof to purchase, for the Exercise Price, a number of Common Shares (or, in certain circumstances, cash, property or other of our securities) having a then-current market value of twice the Exercise Price. However, the Rights are not exercisable following the occurrence of the foregoing event until such time as the Rights are no longer redeemable by us, as further described below.

Following the occurrence of an event set forth in preceding paragraph, all Rights that are or, under certain circumstances specified in the Rights Plan, were beneficially owned by an Acquiring Person or certain of its transferees will be null and void.

Any person who, together with its affiliates and associates, beneficially owns 4.99% or more of the outstanding Common Shares as of the time of the first public announcement of the Rights Plan (an “Exempt Person”) shall not be deemed an Acquiring Person, but only for so long as such person, together with its affiliates and associates, does not become the beneficial owner of any additional Common Shares while such person is an Exempt Person. A person will cease to be an Exempt Person if such person, together with such person’s affiliates and associates, becomes the beneficial owner of less than 4.99% of the outstanding Common Shares.
 

Flip-Over Trigger

If, after an Acquiring Person obtains 4.99% or more of the Common Shares, (i) we merge into another entity, (ii) an acquiring entity merges into us or (iii) we sell or transfer more than 50% of our assets, cash flow or earning power, then each Right (except for Rights that have previously been voided as set forth above) will entitle the holder thereof to purchase, for the

Exercise Price, a number of shares of common stock of the person engaging in the transaction having a then-current market value of twice the Exercise Price.

Redemption of the Rights

The Rights will be redeemable at our option for $0.001 per Right (payable in cash, Common Shares or other consideration deemed appropriate by the Board) at any time on or prior to the 10th business day (or such later date as may be determined by the Board) after the public announcement that an Acquiring Person has acquired beneficial ownership of 4.99% or more of the Common Shares. Immediately upon the action of the Board ordering redemption, the Rights will terminate and the only right of the holders of the Rights will be to receive the $0.001 redemption price. The redemption price will be adjusted if we undertake a stock dividend or a stock split.

Exchange Provision

At any time after the date on which an Acquiring Person beneficially owns 4.99% or more of the Common Shares and prior to the acquisition by the Acquiring Person of 50% of the Common Shares, the Board may exchange the Rights (except for Rights that have previously been voided as set forth above), in whole or in part, for Common Shares at an exchange ratio of one Common Share per Right (subject to adjustment). In certain circumstances, we may elect to exchange the Rights for cash or other of our securities having a value approximately equal to one Common Share.

Expiration of the Rights

The Rights expire on the earliest of (i) 5:00 p.m., New York time, on the date that the votes of our stockholders, with respect to our 2015 Annual Meeting of Stockholders, are certified, unless the continuation of the Rights Plan is approved by the affirmative vote of the majority of the votes cast at the meeting (or any adjournment or postponement thereof) duly held in accordance with our Amended and Restated Bylaws, as amended, and applicable law; (ii) 5:00 p.m., New York time, on June 4, 2018; (iii) the time at which the Rights are redeemed or exchanged under the Rights Plan; (iv) the repeal of §382 or any successor statute and the Board’s determination that the Rights Plan is no longer necessary for preservation of our Tax Benefits; or (v) the beginning of one of our taxable years to which the Board determines that no Tax Benefits may be carried forward.

Amendment of Terms of Rights Plan and Rights

The terms of the Rights and the Rights Plan may be amended in any respect without the consent of the holders of the Rights on or prior to the Distribution Date. Thereafter, the terms of the Rights and the Rights Plan may be amended without the consent of the holders of Rights to (i) cure any ambiguities, (ii) shorten or lengthen any time period pursuant to the Rights Plan or (iii) make changes that do not adversely affect the interests of holders of the Rights.

Voting Rights; Other Stockholder Rights

The Rights will not have any voting rights. Until a Right is exercised, the holder thereof, as such, will have no separate rights as one of our stockholders.

Anti-Dilution Provisions

Our Board may adjust the Exercise Price, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split or a reclassification of the Preferred Shares or Common Shares.

With certain exceptions, no adjustments to the Exercise Price will be made until the cumulative adjustments sum to at least 1% of the Exercise Price. No fractional Preferred Shares will be issued and, in lieu thereof, an adjustment in cash will be made based on the current market price of the Preferred Shares.

Management Discussion and Analysis

Over the last several months, we have improved the content of our U.S. Tax Center at www.irs.com, as well as the search engine optimization in relation to the website. Our efforts drove an increase of more than $0.1 million in revenue from the website, accounting for nearly all of the overall increase in revenue.

Item 8.01.   Other Events.
 
On March 31, 2015, Remark Media, Inc. closed a registered direct offering of 850,000 shares of common stock for gross proceeds of $3.4 million, before deducting offering expenses.  The offering was previously disclosed in a Current Report on Form 8-K filed on March 31, 2015 and announced in a press release issued the same date.
 

Item 1.01. Entry into a Material Definitive Agreement.

 
On March 30, 2015, Remark Media, Inc. (the “Company”) entered into Subscription Agreements with certain investors with respect to the registered direct offering (the “Offering”) of 850,000 shares of its common stock, $0.001 par value per share (the “Common Stock”), at an offering price of $4.00 per share. Of the 850,000 shares offered in the Offering, 575,000 shares were offered directly to investors without a placement agent, underwriter, broker or dealer (the “Direct Shares”), and 275,000 shares were arranged for by placement agents (the “Placed Shares”).
 
Maxim Group LLC (“Maxim”) is acting as lead placement agent for the Offering and The Benchmark Company is acting as co-placement agent for the Offering. On March 30, 2015, the Company entered into a Placement Agent Agreement, dated March 30, 2015 (the “Placement Agent Agreement”), by and between the Company and Maxim. Under the Placement Agent Agreement, the Company has agreed to pay Maxim an aggregate cash placement fee equal to 8% of the gross proceeds in the Offering from sales arranged by the placement agents, or an aggregate of $88,000. The Company has also agreed to pay all of Maxim’s fees, disbursements and expenses in connection with the Offering, including but not limited to its reasonable legal fees, not to exceed $70,000.
 
The Shares will be issued under the Company’s effective shelf Registration Statement on Form S-3 (File No. 333-202024). A prospectus supplement to such registration statement relating to the Offering was filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2015. The Offering is expected to close on or about March 31, 2015, subject to the satisfaction of customary closing conditions.
 
The net proceeds to the Company from the sale of the Shares in the Offering, after deducting offering expenses, are expected to be approximately $3.1 million. The Company intends to use the net proceeds of the Offering for general corporate purposes, which may include working capital for the Company’s various business units, acquisitions and capital expenditures.

Management Discussion and Analysis

The following factors affected revenue during 2014:

• Advertising revenue from our personal finance sites decreased approximately $0.4 million, primarily due to the termination of a particular contract.

• Our purchase of the Taxextension.com domain names increased our revenue from tax extension services by $0.1 million.

850,000 Shares of Common Stock

We are offering 850,000 shares of our common stock directly to the investors in this offering at a price of $4.00 per share.

Our common stock is traded on the NASDAQ Capital Market under the symbol “MARK.” The last reported sales price of our common stock on the NASDAQ Capital Market on March 27, 2015 was $4.42 per share.

The aggregate market value of our outstanding shares of common stock held by non-affiliates was approximately $45.8 million based on 13,001,602 shares of common stock outstanding as of the date of this prospectus, of which 8,989,917 shares were held by non-affiliates, and a per share price of $5.10 based on the closing sale price of a share of our common stock on the NASDAQ Capital Market on February 5, 2015. Under the registration statement to which this prospectus supplement forms a part, we may not sell our securities in a primary offering with a value exceeding one-third of our public float in any 12-month period (unless our public float rises to $75.0 million or more). We have sold no securities pursuant to General Instruction I.B.6 of Form S-3 during the prior 12-calendar-month period that ends on, and includes, the date of this prospectus supplement.

We have engaged Maxim Group LLC as our lead placement agent for this offering. The Benchmark Company will be acting as co-placement agent for this offering. The placement agents are not purchasing or selling any shares offered by this prospectus supplement and the related prospectus, but have arranged for the sale of 275,000 of the shares offered hereby through direct subscription agreements entered into between the purchasers and us. The remaining shares offered hereby were offered directly to investors without a placement agent, underwriter, broker or dealer. See “Plan of Distribution” beginning on page S-23 of this prospectus supplement for more information regarding these arrangements.

		Per Share of Common Stock				Total
Public Offering Price		$	4.00			$	3,400,000
Placement Agent Fee(1)		$	0.32			$	88,000
Proceeds to the Company(1)		$	3.88			$	3,312,000

Item 1.01. Entry into a Material Definitive Agreement.

 
On December 17, 2014, Remark Media, Inc. (the “Company”) issued a Convertible Promissory Note in the original principal amount of $3,000,000 (the “Note”) to Ashford Capital Partners, L.P. (“Lender”) in exchange for $3,000,000 in cash. The Note is unsecured and bears interest at a rate of 8.00% per annum, with interest payable quarterly and all unpaid principal and any accrued but unpaid interest due and payable on the second anniversary of its issuance. The Company may prepay all or any portion of the Note at any time upon at least 15 days’ prior written notice to Lender.
 
Either Lender or the Company may elect to convert all or any portion of the outstanding principal amount and accrued but unpaid interest under the Note into shares of the Company’s common stock (the “Common Stock”) at a conversion price of $5.50 per share (the “Conversion Price”) at any time, except that the Company only may do so if the closing price of the Common Stock on the immediately preceding trading day is greater than or equal to the Conversion Price.
 
The foregoing description of the Note is not complete and is qualified in its entirety by reference to the full text of the Note, which is filed herewith as Exhibit 4.1 and incorporated herein by reference.
 

Item 1.01. Entry into a Material Definitive Agreement.

 
On November 17, 2014, Remark Media, Inc. (the “Company” or “Remark”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Discover Growth Fund, a Cayman Islands exempted mutual fund (the “Fund” or “Discover”). Pursuant to the Purchase Agreement, the Company agreed to issue and sell to Discover 250 shares of a new class of Series A Preferred Stock of the Company (the “Series A Preferred Stock”), convertible into shares of the Company’s common stock (the “Common Stock”) at a fixed conversion price of $6.50 per share (the “Conversion Price”), for a total purchase price of $2,500,000.00, subject to the satisfaction of certain closing conditions. These closing conditions include conditions customary for transactions of this type as well as (i) approval by the Company’s stockholders of the Purchase Agreement in accordance with the requirements of NASDAQ Listing Rule 5635(d) and (ii) the staff of the Securities and Exchange Commission (the “SEC”) indicating that it is willing to declare effective a registration statement registering the shares of Common Stock issuable under the terms of the Series A Preferred Stock. The Purchase Agreement will terminate automatically if the closing has not occurred on or before February 15, 2015. Series A Preferred Stock purchased by Discover will be non-transferable.

Management Discussion and Analysis

Revenue
 
Total revenue for the three months ended September 30, 2014 was approximately $230 thousand, an increase of approximately $96 thousand from the same period in 2013. For the nine months ended September 30, 2014 total revenue was $1.7 million, an increase of $0.6 million from the same period in 2013. The increase from the prior year’s period relates primarily to an increase in revenues generated from the purchase of tax extension services through the Company’s personal finance websites.
 

Management Discussion and Analysis

Revenue
 
Total revenue for the three months ended June 30, 2014 was $0.8 million, an increase of approximately $0.1 million from the same period in 2013. For the six months ended June 30, 2014 total revenue was $1.4 million, an increase of $0.5 million from the same period in 2013. The increase from the prior year’s period relates primarily to an increase in revenues generated from the purchase of tax extension services through the Company’s personal finance websites.