10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q/A

Amendment No. 4

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number001-33720

________________________________________

REMARK MEDIA, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-1135689
(State of Incorporation)	(I.R.S. Employer
	Identification Number)

Six Concourse Parkway, Suite 1500

Atlanta, Georgia 30328

(Address of principal executive offices, including zip code)

770-821-6670

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x   No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o  No x

At November26, 2012, the number of common shares outstanding was  7,117,744.

The total number of pages is 36

EXPLANATORY NOTE

Subsequent to filing its Quarterly Report on Form 10-Q for the period ended September 30, 2012 (the “Form 10-Q”) with the Securities and Exchange Commission (the “SEC”) on November 26, 2012, Remark Media, Inc. and its subsidiaries (the “Company”), together with its auditors, determined that it should have used derivative liability accounting to account for the fair value of the warrants issued by the Company in its February 2012 equity financing (the “Equity Financing”) in recording the proceeds received from that transaction, due to the anti-dilution provision associated with the exercise price of the warrants. The Company previously recorded all of the proceeds from the Equity Financing as stockholders' equity.See Note 12 to the condensed financial statements included in this Amendment No. 4 for further information relating to the restatements.

As a result, to correct those non-cash accounting errors, the Company is filing this Amendment No. 4 to the Form 10-Q (“Amendment No. 4”) for the purpose of restating its condensed financial statements for the three and nine months ended September 30, 2012 included in Part I, “Item 1. Financial Statements.” Conforming changes have been made to Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, Part I, “Item 4. Controls and Procedures” has been revised to reflect management’s re-evaluation of the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2012. Part II, “Item 6. Exhibits” has been amended to include new certifications, as reflected in Exhibits 31.1, 32.1.

Items 1, 2 and 4 of Part I and Item 6 of Part II of the Form 10-Q are the only portions of the Form 10-Q being amended and restated by this Amendment No. 4. The Company has not modified or updated disclosures presented in the Form 10-Q, except to reflect the effects of the restatements. This Amendment No. 4 does not reflect events occurring after the original filing date of the Form 10-Q on November 26, 2012, and does not modify or update those disclosures affected by subsequent events, except as specifically referenced herein with respect to the restatements. Information not affected by the restatements is unchanged and reflects the disclosures made at the time of the original filing of the Form 10-Q. Accordingly, this Amendment No. 4 should be read in conjunction with the Form 10-Q and the Company’s filings with the SEC subsequent to the filing of the Form 10-Q on November 26, 2012.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011 (unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months and Nine Months Ended September 30, 2012 and 2011 (unaudited)	2
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011 (unaudited)	3
	Notes to Condensed Consolidated Financial Statements (unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	26
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	34
Item 5.	Other Information	34
Item 6.	Exhibits	35
Signature		36

PART I – FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

REMARK MEDIA, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Expressed in U.S. Dollars)

		September 30,		December 31,
		2012		2011
Assets	(Restated - Note 12)
Current assets
Cash and cash equivalents	$	692,675	$	1,531,502
Trade accounts receivable, net		156,020		21,730
Trade accounts receivable due from affiliates		-		302,129
Prepaid expenses and other current assets		165,528		393,989
Total current assets		1,014,223		2,249,350
Property and equipment, net		858,312		364,386
Investment in unconsolidated affiliate		847,756		905,852
License to operate in China		100,000		100,000
Intangibles assets, net		1,756,233		16,429
Goodwill		1,593,495		-
Other long-term assets		95,000		100,000
Total assets	$	6,265,019	$	3,736,017
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	564,998	$	93,806
Advances from shareholder		71,844		85,745
Accrued expenses and other current liabilities		336,015		547,569
Derivative liability		243,398		-
Current portion of capital lease obligations		111,794		-
Total current liabilities		1,328,049		727,120
Long-term liabilities
Deferred tax liabilities		25,000		25,000
Other long-term liabilities		304,350		290,714
Capital lease obligations, less current portion		335,298		-
Total liabilities		1,992,697		1,042,834
Stockholders’ equity
Preferred stock, $0.001 par value; 1,000,000 shares authorized, none issued		-		-
Common stock, $0.001 par value; 20,000,000 shares authorized, 7,117,744 and 5,422,295 issued and outstanding at September 30, 2012 and December 31,  2011, respectively		7,118		5,422
Additional paid-in-capital		107,153,321		101,444,780
Accumulated other comprehensive income		13,699		16,881
Accumulated deficit		(102,901,816)		(98,773,900)
Total stockholders’ equity		4,272,322		2,693,183
Total liabilities and stockholders’ equity	$	6,265,019	$	3,736,017
The accompanying notes are an integral part of these condensed consolidated financial statements

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REMARK MEDIA, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE LOSS (UNAUDITED) 

(Expressed in U.S. Dollars)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(Restated - Note 12)				(Restated - Note 12)
Operating revenue
Brands	$	263,119	$	37,396	$	320,233	$	103,408
Content and platform services to affiliates		-		1,172,883		-		3,934,102
Total revenue		263,119		1,210,279		320,233		4,037,510
Operating expenses
Sales and marketing		108,382		218		215,542		14,517
Content, technology and development		608,244		863,593		1,307,259		3,082,743
General and administrative		1,328,844		1,349,292		3,583,020		3,950,147
Impairment loss		-		381,000		-		381,000
Depreciation and amortization expense		149,689		73,973		202,213		203,163
Total operating expenses		2,195,159		2,668,076		5,308,034		7,631,570
Operating loss		(1,932,040)		(1,457,797)		(4,987,801)		(3,594,060)
Other income (expense)
Gain on change in fair value of derivative liability		269,852		-		964,380		-
Interest expense		(11,505)		(37,075)		(38,630)		(86,443)
Other income		(14,876)		159		(7,769)		1,380
Total other income (expense)		243,471		(36,916)		917,981		(85,063)
Loss before gain (loss) from equity-method investments		(1,688,569)		(1,494,713)		(4,069,820)		(3,679,123)
Proportional share in loss of equity-method investments		(739,704)		(1,143,499)		(2,553,086)		(1,624,950)
Change of interest gain of equity-method investments  (Note 3)		-		407,376		2,494,990		407,376
Net loss before benefit from income taxes		(2,428,273)		(2,230,836)		(4,127,916)		(4,896,697)
Income tax benefit		-		95,250		-		95,250
Net loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Net loss per share
Net loss per share, basic and diluted	$	(0.38)	$	(0.39)	$	(0.68)	$	(0.89)
Basic and diluted weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Comprehensive loss
Net loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Cumulative translation adjustments		1,179		(32,993)		(3,182)		(22,731)
Total comprehensive loss	$	(2,427,094)	$	(2,168,579)	$	(4,131,098)	$	(4,824,178)

The accompanying notes are an integral part of these condensed consolidated financial statements

2

REMARK MEDIA, INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOWS (UNAUDITED)

(Expressed in U.S. Dollars)

	Nine Months Ended September 30,
		2012		2011
Cash flows from operating activities:
Net cash used in operating activities	$	(3,698,125)	$	(2,006,553)
Cash used in operating activities		(3,698,125)		(2,006,553)
Cash flows from investing activities:
Purchases of property, equipment and software		(641,782)		(220,706)
Increase in restricted cash		-		(100,000)
Cash paid for acquisition of businesses, net of cash acquired		(346,189)		-
Cash used in investing activities		(987,971)		(320,706)
Cash flows from financing activities:
Proceeds from issuance of equity securities		4,251,500		-
Proceeds from ongoing capital raising		-		100,000
Stock issuance costs		(401,049)		-
Debt issuance costs		-		(20,000)
Cash provided in financing activities		3,850,451		80,000
Net change in cash and cash equivalents:		(835,645)		(2,247,259)
Impact of foreign currency translation on cash		(3,182)		(24,199)
Cash and cash equivalents at beginning of period		1,531,502		4,843,893
Cash and cash equivalents at end of period	$	692,675	$	2,572,435

	Nine Months Ended September 30,
		2012		2011
Supplemental disclosure of cash flow information
Acquisition of businesses:
Fair value of assets acquired	$	3,842,577	$	-
Less liabilities assumed		(1,023,619)		-
Total purchase price	$	2,818,958	$	-
Cash consideration	$	431,250		-
Consideration in the form of stock		2,387,708		-
Total acquisition consideration	$	2,818,958	$	-
	Nine Months Ended September 30,
Other non-cash financing and investing activities		2012		2011
Debt issuance costs in the form of warrants	$	-	$	128,104
Stock issuance costs in the form of warrants		133,567		-
Common shares issued for acquisition of business		2,387,708		-
The accompanying notes are an integral part of these condensed consolidated financial statements

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

1.  DESCRIPTION OF BUSINESS

Mission

Our mission is to provide digital experiences that deliver content and foster connections so engaging and dynamic that they inform, entertain and inspire our audiences. Our fundamentals for immersive digital experiences include: compelling content that fuels engagement, clean and intelligent organization and dynamic presentation that promotes content discovery, and intuitive discussion capabilities that generate content sharing and meaningful conversation.

Who We Are

Remark Media, Inc.  (“Remark Media” or the “Company”) is a global digital media company incorporated in Delaware and headquartered in Atlanta, with additional operations in New York, Beijing and São Paulo. The Company is comprised of two distinct and complementary segments: “Brands” and “Content and Platform Services”.

Remark Media is listed on The NASDAQ Capital Market and is currently in compliance with its listing standards.  The Company transferred its listing from The NASDAQ Global Market on May 31, 2011.

Brands

Our Brands segment consists of next-generation digital media properties that we develop, own and operate.  As of the end of the third quarter 2012, this segment included our translated and localized editions of HowStuffWorks.com in China and Brazil, our personal finance destination, “DimeSpring.com”, and the digital media businesses we acquired through the Banks.com merger completed on June 28, 2012. For more details, see “Banks.com Merger” below.

Content and Platform Services

Our Content and Platform Services segment provides third-party clients with content, design, and development services for their websites as well as advisory services and custom technology solutions. We also offer licensing of our proprietary web publishing and social media platforms. Our digital architects, developers and designers aim to construct a seamless connection between content and technology to create solutions that build consumer awareness, promote content engagement and foster brand-customer interactions.  Our prospective client base includes leading media and entertainment companies as well as Fortune 500 brands and boutique businesses. As examplesengagements under the Content and Platform segment have included the development and launch of the Dr. Oz website (http://doctoroz.com) for Sharecare (http://www.sharecare.com), andthe development and launch of Curiosity Online for Discovery Communications (http://www.curiosity.com).

Banks.com Merger 

On February 26, 2012, the Company entered into an agreement and plan of merger with Banks.com, Inc. (“Banks.com”), pursuant to which Banks.com became a wholly-owned subsidiary of Remark Media (the “Banks.com Merger”). Banks.com is a leading financial services portal operating a unique breadth and depth of financial products and services. The Company completed the acquisition on June 28, 2012 pursuant to which Remark Media issued approximately 702,267 shares of Common Stock to the shareholders of Banks.com, and paid $300,000 in cash, as consideration for the merger. Also, on the effective date of the merger, the Company paid $131,250 in settlement of a promissory note in the amount of $125,000  (and related unpaid interest), which matured on June 28, 2012.

Sale of Intersearch Corporate Services

On August 2, 2012 Remark Media sold Intersearch Corporate Services, Inc, a subsidiary of Banks.com, for a minimal consideration to better focus its resources on the Company’s core strategy.

Funding and Liquidity Considerations

As of September 30, 2012, the Company’s total cash and cash equivalents balance was approximately $0.7 million. After receipt of funding of the Term Loan Agreement discussed below, the balance of cash and cash equivalents would be approximately $1.97 million. The Company has incurred net losses and generated substantial negative cash flow from operations in the nine months ended September 30, 2012 and in each fiscal year since its inception and has an accumulated deficit of $103.9 million as of September 30, 2012. The Company had minimal revenues in the first three quarters of 2012 due to the termination of certain agreements in the Content and Platform Services segment at the end of 2011 and its transition to owning and operating its own digital media properties.

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

Since that time, the Company has been focused on building and acquiring wholly-owned digital media properties for its Brands segment and pursuing new services agreements with new customers for its Content and Platform Services segment.

On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and TheStreet will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $1.4 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report. 

On November 23, 2012, the Company entered into a $1.8 million Term Loan Agreement, with net proceeds expected to be $1.7 millon, at a 6.67% annual interest rate with a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Co-Chief Executive Officer.  Mr. Tao has been a director of the Company since 2007.  The Term Loan is secured by substantially all the tangible and intangible assets of the Company, excluding its shares of common stock of Sharecare. The principal and accrued interest under the Term Loan Agreement is convertible into Common Stock of the Company at the rate of $1.30 per share, which represents an approximately 33% premium to the average closing prices of the Company’s common stock for the ten days prior to entrance into the agreement and an approximately 53% premium to the closing price of the Company’s common stock on the day of entrance into the agreement.  This Term Loan Agreement was approved by the Audit Committee of the Board, which believes the related party transaction was negotiated as an arms-length transaction. The Company expects the funding of this loan to close by November 30, 2012.  See Note 11, Subsequent Events, for a description of the terms of  such Loan Agreement.

Finally the Company has taken steps to reduce operating costs, primarily payroll through a reduction in headcount, which will result in a decline in annual salary expense of approximately $1.2 million. The Company will continue to evaluate other opportunities to control costs. 

The Company intends to fund its future operations through a combination of revenue growth in its Brands segment, particularly its personal finance properties.  Additionally, the Company is actively engaged in evaluating future acquisitions to provide revenue growth and the sale of certain non-core assets to provide capital.

Absent any acquisitions of new businesses or the material increase in expectations from its existing customers, current revenue growth may not be sufficient to sustain the Company’s operations in the long term. As such, the Company may need to obtain additional equity financing and/or divest of certain assets or businesses, neither of which can be assured on commercially reasonable terms, if at all. In addition, any equity financing that might be obtained would substantially dilute existing stockholders.  There is no certainty that the Company will be successful at raising capital, nor is there certainty around the amount of funds that may be raised. In addition, the success of the Company will be subject to performance of the markets and investor sentiment regarding the macro and micro economic conditions under which we operate including stock market volatility. There can be no assurance that the Company will be successful at generating more revenues or selling any of its assets. Any failure by the Company to successfully implement these plans would have a material adverse effect on the Company’s business, including the possible inability to continue operations. 

Based on the Company’s current financial projections, which incorporates the Services Agreement with TheStreet, the new Term Loan Agreement, and the reduction in force, all discussed above, the Company believes it has sufficient existing cash resources to fund operations through June2013.  However, projecting operating results is inherently uncertain.  Anticipated expenses can exceed those that are projected, and expense reimbursements under TheStreet Agreement could be delayed or not meet expectations. Accordingly, the Company’s cash resources could be fully utilized prior to June 2013.

2.  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The accompanying interim condensed consolidated financial statements for the threeand nine months ended September 30, 2012and 2011 are unaudited. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information have been omitted pursuant to the rules and regulations of Article 10 of SEC Regulation S-X. In the opinion of management, these condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods indicated. The December 31, 2011 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required U.S. GAAP

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

(“GAAP”). Operating results for the three and nine months ended September 30, 2012are not necessarily indicative of results that may be expected for any other future interim period or for the year ending December 31, 2012. You should read the unaudited condensed consolidated financial statements in conjunction with Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as with Remark Media’s consolidated financial statements and accompanying notes included in the Company’s Forms 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and the Annual Report on Form 10-K for the year ended December 31, 2011.

Principles of Consolidation

The consolidated financial statements include the accounts of Remark Media and its subsidiaries (1) HSW Brasil – Tecnologia e Informação Ltda., (2) HSW (HK) Inc. Limited, (3) Bonet (Beijing) Technology Limited Liability Company, (4) BoWenWang Technology (Beijing) Limited Liability Company, (5) Banks.com, (6) My Stock Fund, and (7) My Dotted Ventures. Banks.com, MyStockFund and MyDottedVentures are wholly-owned subsidiaries acquired through the Banks.com’s acquisition completed on June 28, 2012. The equity of certain of these entities is partially or fully held by citizens of the country of incorporation to comply with local laws and regulations.

Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method.  In the event of a change in ownership, any gain or loss resulting from an investee share issuance is recorded in earnings.  Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.  Controlling interest is determined by majority ownership interest and the ability to unilaterally direct or cause the direction of management and policies of an entity after considering any third-party participatory rights.  The Company applies the guidelines set forth in Accounting Standards Codification (“ASC”) 810, “Consolidations”, in evaluating whether it has interests in variable interest entities (“VIE”) and in determining whether to consolidate any such entities.  All inter-company accounts and transactions between consolidated companies are eliminated in consolidation.

The Company uses qualitative analysis to determine whether or not it is the primary beneficiary of a VIE. The Company considers the rights and obligations conveyed by its implicit and explicit variable interest in each VIE and the relationship of these with the variable interests held by other parties to determine whether the variable interests will absorb a majority of a VIE’s expected losses, receive a majority of its expected residual returns, or both.  If the Company determines that its variable interests will absorb a majority of the VIE’s expected losses, receive a majority of its expected residual returns, or both, it consolidates the VIE as the primary beneficiary, and if not, the Company does not consolidate. 

The Company has determined that Bonet (Beijing) Technology Limited Liability Company is a variable interest entity as defined in ASC 810. Remark Media is the primary beneficiary of this entity and accordingly, the results of this entity have been consolidated along with other subsidiaries.

The Company has determined that its interest in Sharecare, Inc. (“Sharecare”) is not a VIE.  As of September 30, 2012, the Company believed that it was able to exercise significant influence over Sharecare due to its level of ownership and its representation on Sharecare’s Board of Directors. Accordingly, the equity method of accounting is used to account for the investment in Sharecare.As of October 15, 2012, Sharecare and Remark Media no longer had a common board member.  The Company is evaluating this event as it relates to the appropriate prospective accounting treatment for its investment in Sharecare.

Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes.  Actual results could differ materially from those estimates.  On an ongoing basis, the Company evaluates its estimates, including those related to accounts receivable, intangible assets, useful lives of property and equipment, stock-based compensation, equity-method investments, and income taxes, among other things.

Revenue Recognition

The Company generally recognizes revenue when services are provided and if the revenue arrangements meet the criteria set forth in Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition”, namely when a persuasive evidence of an arrangement exists; services have been provided; fees are fixed or determinable; and collectability is reasonably assured. 

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

Brands Revenue.The Company generally recognizes Brands revenue as visitors are exposed to or react to advertisements on its websites.  Revenue from advertising is generated in the form of sponsored links and image ads.  This includes both pay-per-performance ads and paid-for-impression advertising.  In the pay-per-performance model, revenue is generally earned based on the number of clicks or other actions taken associated with such ads; in the paid-for-impression model, revenue is derived from the display of ads.

Content and Platform Services.Revenue from Content and Platform services is recognized during the period services related to the design, development, hosting, and related web services are performed.  Revenue is recorded on a gross versus net basis when Remark Media bears the risk of loss related to the services performed, the majority of which relates to services performed by the Company’s resources. The Company may also recognize content and platform services revenue on certain projects using a percentage of completion method.  Sales are calculated based on the total costs incurred to date divided by total estimated costs at completion times the contract price.

Operating Expenses

In the second quarter 2012, and in light of the change in RemarkMedia’s business strategy, the Company revised the presentation of operating expenses in its consolidated statements of operations and has completed the reclassification of the consolidated statements of operations for the prior year periods presented. Beginning with the second quarter 2012, the Company’s operating expenses reflect sales and marketing; content, technology and development; general and administrative; and depreciation and amortization. Sales and marketing expenses include all selling and marketing expenses such as promotions, public relations and compensation of our sales and marketing departments. Content, technology and development expenses include costs of translating and localizing content and acquiring original content written by third-parties as well as costs associated with the design, development, hosting of websites in addition to user acquisition and user retentions and compensation of our technology, content, product and web design departments which does not qualify to be capitalized. General and administrative expenses include all legal, finance, accounting and administrative expenses such as professional fees and facilities costs. Depreciation and amortization include the depreciation of our acquired fixed assets and amortization of software and definite-lived intangible assets.

Purchase Price Allocations

Occasionally, the Company enters into business combinations.  In accordance to ASC 805, “Business Combinations”, the purchase price is allocated to the various assets acquired and liabilities assumed based on their estimated fair value.  Fair values of assets acquired and liabilities assumed are based upon available information and may involve engaging an independent third party to perform an appraisal of tangible and intangible assets.  Estimating fair values can be complex and subject to significant business judgment and most commonly impacts property, equipment, software, and definite- or indefinite-lived intangible assets. Refer to Note4 for further details.

Software Development Costs

In accordance with ASC 350-40, “Internal Use Software” and ASC 350-50, “Web Development Costs”, the Company capitalizes qualifying costs of computer software and website development costs. Costs incurred during the application development stage as well as upgrades and enhancements that result in additional functionality are capitalized. The internally developed software costs capitalized were $0.6 million and $0.1 million, atSeptember 30, 2012 and December 31, 2011, respectively and are included in “Property, equipment and software” in the condensed consolidated balance sheet. Internally developed software and website development costs will be amortized utilizing the straight-line method over a period of three years, the expected period of the benefit. There was no amortization recorded for these costs during 2012 as these projects were not complete at September 30, 2012.

Stock-Based Compensation

In accordance with ASC 718, “Compensation, Stock Compensation”, the Company measures stock-based compensation at the grant date based on the calculated fair value of the award.  The Company recognizes the expense over the recipient’s requisite service period, generally the vesting period of the award.  The Company estimates the fair value of stock options at the grant date using the Black-Scholes option pricing model with weighted average assumptions for the activity under its stock plans. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate among others, impact the fair value estimate.  These assumptions generally require significant analysis and use of judgment and estimates to develop. Options vest based on meeting a minimum service period or performance condition. Restricted stock grants are recorded using the fair value of the granted shares based on the market value at the grant date.  In addition, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop.

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

The Company does not recognize a deferred tax asset for unrealized tax benefits associated with the tax deductions in excess of the compensation recorded (excess tax benefit).  The Company applies the “with and without” approach for utilization of tax attributes upon realization of net operating losses in the future.  This method allocates stock-based compensation benefits last among other tax benefits recognized.  In addition, the Company applies the “direct only” method in calculating the amount of windfalls or shortfalls.

Derivative Liability for Warrants to Purchase Common Stock

The Company's derivative liability for warrants represents the fair value of warrants issued in connection with equity financing related to the Banks.com acquisition on February 27, 2012 ("Equity Financing"). These warrants are presented as liabilities based on certain exercise price reductions provisions. The liability, which is recorded at the fair value on the balance sheet, is calculated using the Monte Carlo simulation valuation method. The change in the fair value of these warrants is recognized as other income or expense in the condensed consolidated statement of operations.

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board ("FASB”) issued Accounting Standard Update (“ASU”) No. 2011-08, “Intangibles – Goodwill and Other” (Topic 350), (“ASU 2011-08”) which simplifies how entities test goodwill for impairment. This accounting update permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 with early adoption permitted. The Company adopted this ASU in the first quarter 2012 and the adoption had no material impact on the Company’s financial position, results of operations or cash flows.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income Topic 220” –  “Presentation of Comprehensive Income”  (“ASU 2011-05”). ASU 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, adjustments must be displayed for items that are reclassified from other comprehensive income to net income, in both net income and other comprehensive income. The standard does not change the current option for presenting components of other comprehensive income (“OCI”) gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share.

In December 2011, the FASB issued ASU 2011-12 Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”). ASU 2011-12 defers those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. The FASB has deferred those changes in order to reconsider whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. ASU 2011-12 does not impact the requirement of ASU 2011-05 to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. For public entities, ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. The Company adopted these updates in the first quarter 2012 and the adoption had no impact on its financial position, results of operations or cash flows.

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820)” – “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). The amendments in this ASU result in common fair value measurement disclosure requirements between U.S. GAAP and International Financial Reporting Standards. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and disclosing information about fair value measurements. The amendments include a clarification of the FASB’s intent about the application of existing fair value measurement requirements and change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this guidance are effective prospectively for interim and annual periods beginning after December 15, 2011, with no early adoption permitted. The Company adopted the update in the first quarter of 2012 and the adoption had no material impact on its financial position, results of operations or cash flows.

Effective January 1, 2011, the Company adopted ASU No. 2009-13, “Revenue Recognition (Topic 605)” – “Multiple-deliverables revenue arrangements”  (“ASU 2009-13”). This update provides that, when vendor-specific objective evidence or third party evidence of selling price is not available, a best estimate of the selling price is required to separate deliverables and allocate

8

REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

arrangement consideration based on the relative selling prices of the separate deliverables (the “relative selling price method”). The relative selling price method allocates any discount in the arrangement proportionately to each deliverable on the basis of each deliverable’s selling price. The Company concluded that the adoption of ASU 2009-13 did not have a material impact on its financial position, results of operations or cash flows, as the guidance applied to revenue arrangements with multiple deliverables, which were not significant.

3.INVESTMENT IN SHARECARE

As of September 30, 2012, Remark Media owns approximately 10.9% of the outstanding common stock of Sharecare. The Company accounts for its equity interest in Sharecare under the equity method of accounting, as Remark Media has the ability to exercise significant influence over Sharecare due to its seat on the Sharecare board of directors. Under this method, the Company records its proportionate share of Sharecare’s net income or loss based on the financial results of Sharecare. The Company continues to evaluate the facts and circumstances related to its investment to assess the need for change in its accounting method in future periods.

During the first and second quarters of 2012, Sharecare issued additional equity in exchange for assets. As a result, Remark Media recorded a gain of $2.5 million in the nine months ended September 30, 2012 due to the change in interest ownership.

The difference between the carrying amount of Remark Media’s investment balance in Sharecare and its proportionate share of Sharecare's underlying net assets was approximately $3.1 million as of September 30, 2012.  The difference is characterized as goodwill and is subject to review in accordance with ASC 323 – “Investments – Equity Method and Joint Ventures” for other than temporary decline in value. The investment balance in Sharecare reflects the intercompany profit elimination.

The following table shows selected unaudited financial data of Sharecare including Remark Media’s proportional share of net loss in Sharecare prior to the elimination of our portion of intercompany profit included in Sharecare’s earnings for the three and nine months ended September 30, 2011 of approximately $40 thousand and $123 thousand, respectively. There was no intercompany profit for the three and six months ended September 30, 2012:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Revenues	$	8,098,607	$	3,063,490	$	20,811,061	$	8,712,780
Gross profit		7,292,016		2,540,731		18,875,347		7,179,804
Loss from operations		(6,316,021)		(3,301,144)		(20,351,056)		(8,013,529)
Net loss		(6,466,551)		(3,763,083)		(20,637,135)		(8,727,767)
Proportional share of investee loss		(739,704)		(1,143,499)		(2,553,086)		(1,624,950)

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value on a recurring basis. The common stock warrants which are classified as liabilities are recorded at their fair market value as of each reporting period.

The measurement of fair market value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The inputs create the following fair market value hierarchy:

· Level 1 - Quoted prices for identical instruments in active markets.

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

· Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable.

· Level 3 - Instruments where significant value drivers are unobservable to third parties.

The Company uses model-derived valuations where inputs are both observable and unobservable in active markets to determine the fair value of certain common stock warrants on a recurring basis. The lowest level of significant inputs are classified as Level 3; thus, the common stock warrants are classified as Level 3. The Company utilized a Monte Carlo simulation valuation model to fair value the warrants. 

Assumptions used in calculating the fair value of these warrants were noted as follows (including assumptions used in calculating the transaction date fair value for the warrants issued in the February 2012 Equity Financing):

	September 30, 2012		February 27, 2012
Annual rate of quarterly dividend		0.00%		0.00%
Expected volatility		90.0%		90.0%
Risk free interest rate		0.53%		0.61%
Expected remaining term (in years)		2.41 - 4.91		3.01 - 5.50

In addition to the assumptions above, the Company takes into consideration whether or not it would participate in another round of equity financing and, if so, what the stock price would be for such a financing at that time.

At September 30, 2012 and December 31, 2011, the fair value of liability classified warrants were as follows:

	September 30, 2012		December 31, 2011
	(Restated)
Derivative liabilities	$	243,398	$	-

The change in the fair value of the warrants accounted for as derivative liabilities is reflected below:

Balance at January 1, 2012	$	-
Fair value of warrants issued in February 2012		1,207,778
Decrease in fair value resulting in gain		(964,380)
Fair value at September 30, 2012	$	243,398

The Company will continue to adjust the warrant liability for changes in fair value until the earlier of the warrants, exercise or expiration, at which time the liability will be reclassified to stockholders' equity.

5. ACQUISITIONS

On June 28, 2012, Remark Media completed the merger (the “Merger”) contemplated by the Agreement and Plan of Merger dated as of February 26, 2012, among the Company, Banks.com and Remark Florida, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Merger Sub merged with and into Banks.com and Banks.com survived the Merger as a wholly-owned subsidiary of Remark Media.  At the effective time of the Merger, each share of the outstanding common stock of Banks.com was converted into the right to receive 0.0258 shares of Remark Media common stock, for an aggregate of 670,815 shares of Remark Media common stock.  The outstanding shares of Banks.com preferred stock, including all accrued and unpaid dividends as of the date of closing of the Merger on such preferred stock, a Note and a Warrant, all of which are held by Daniel M. O’Donnell, President and Chief Executive Officer of Banks.com, and his affiliates, were converted into cash in the aggregate amount of $300,000 and the

10

REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

right to receive 31,452 shares of Remark Media common stock.  In connection with the Merger, Banks.com issued an Amended and Restated Promissory Note in the principal amount of $125,000 to Mr. O’Donnell and his wife which matured on June 28, 2012. The Company settled the cash consideration of $300,000 on the date of closing and $131,250 in settlement of the promissory note in the principal amount of $125,000 and related interest.

On August 2, 2012, Remark Media sold Intersearch Corporate Services, Inc. a subsidiary of Banks.com for a minimal consideration to better focus its resources on the Company’s core business strategy.

Allocation of purchase price

The application of purchase accounting under ASC 805 – “Business Combinations”, requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date. The allocation process requires an analysis of acquired various assets and assumed liabilities such as contracts, customer relationships, contractual commitments and legal contingencies to identify and record the fair value of all assets acquired and liabilities assumed. In valuing acquired assets and assumed liabilities, fair values are based on, but are not limited to: available market data, future expected cash flows; current replacement cost for similar capacity for certain assets; and appropriate discount rates and growth rates.

Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired businesses.  Goodwill, which is not amortizable and not tax deductible, resulting from the acquisitions discussed below was assigned to the Brands segment.

Tangible assets
Current assets	$	281,038
Fixed assets		54,358
Other long-term assets		53,686
Total tangible assets		389,082
Intangible assets
Customer relationships		680,000
Domain names		1,180,000
Total intangible assets		1,860,000
Liabilities assumed		(1,023,619)
Total identifiable net assets		1,225,463
Goodwill		1,593,495
Total purchase price	$	2,818,958

The total consideration of the transaction was $2.8 million comprised of the fair value of 702,267 common shares calculated based on the quoted price of $3.40 per share, $300,000 in cash and $131,250 in cash paid to settle the promissory note in the principal amount of $125,000 and related unpaid interest. The acquisition was accounted for under the purchase method and accordingly, the purchase price was allocated to the assets and liabilities based on their estimated fair values on the date of the acquisition. The aggregate purchase price allocation table below is subject to change in future periods as the Company has not yet completed its review of the current assets and liabilities.

The acquisition transactions costs incurred in the nine months ended September 30, 2012 were all expensed and totaled $0.2million. These expenses are included under the general and administrative expenses in the consolidated statements of operations for the nine months ended September 30, 2012.  Banks.com’s revenue since the acquisition effective date through the nine months ended September 30, 2012 totaled approximately $278 thousand and has been included in the Company’s consolidated statements of operations for those periods.

The table below reflects a summary of the unaudited pro forma results of operations data for three and nine months ended September 30, 2012 and 2011 as if Remark Media and Banks.com and its subsidiaries had been combined as of January 1, 2011. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not include any

11

REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the date indicated, or which may result in the future.

	Unaudited pro forma results of operations
	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Revenues	$	263,119	$	1,823,279	$	2,192,737	$	8,009,510
Operating loss		(1,932,040)		(2,401,797)		(5,102,088)		(4,657,060)
Net loss (restated)		(2,428,273)		(3,102,586)		(4,942,915)		(5,991,447)

6.  SEGMENTS

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.  Because of Remark Media’s integrated business structure, operating costs included in one segment can benefit other segments, and therefore these segments are not designed to measure operating income or loss directly related to the products included in each segment.  Reconciling amounts include adjustments to conform with U.S. GAAP and corporate-level activity not specifically attributed to a segment.  Corporate expenses include, among other items: corporate-level general and administration costs, content, design, technology costs and on-going maintenance charges; share-based compensation expense related to stock and stock option grants; depreciation and amortization expense; impairment loss, if any, and interest expense and income.

The Company has reported two segments for the three and nine months ended September 30, 2012 and 2011: Brands (formerly digital online publishing) and Content and Platform Services (formerly web platform services). The Brands segment consists of the business related to the Banks.com acquisition completed on June 28, 2012 which generates revenues in the United States and the websites related to the operations in Brazil and China which generate revenues from advertisers based in the respective countries. The Content and Platform Services segment consisted in 2011of the services provided to Remark Media’s affiliates, Sharecare and Discovery, Inc. (“Discovery”). These services are related to the design, development, hosting and related services necessary to launch and operate websites for Sharecare and Discovery through the Company’s direct activities and management of third party vendors.  

Operating results regarding reportable segments for the three months and nine months ended September 30, 2012 and 2011are presented in the following tables:

	Brands		Content and Platform Services		Corporate		Total
Three Months Ended September 30, 2012 (As restated)
Revenue	$	263,119	$	-	$	-	$	263,119
Operating loss		(27,084)		-		(1,904,956)		(1,932,040)
Gain on change in fair value of derivative  liability - restated		-		-		269,852		269,852
Interest expense		-		-		(11,505)		(11,505)
Other income (expense) including loss on equity-method investment		(210)		-		(754,370)		(754,580)
Net loss	$	(27,294)	$	-	$	(2,400,979)	$	(2,428,273)

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

	Brands		Content and Platform Services		Corporate		Total
Three Months Ended September 30, 2011
Revenue	$	37,396	$	1,172,883	$	-	$	1,210,279
Operating (loss) income		(166,355)		405,496		(1,696,938)		(1,457,797)
Interest expense		(49)		-		(37,026)		(37,075)
Other income (expense) including loss on equity-method investment		3,644		-		(644,358)		(640,714)
Net (loss) income	$	(162,760)	$	405,496	$	(2,378,322)	$	(2,135,586)

	Brands		Content and Platform Services		Corporate		Total
Nine Months Ended September 30, 2012 (As restated)
Revenue	$	320,233	$	-	$	-	$	320,233
Operating loss		(147,924)		-		(4,839,877)		(4,987,801)
Gain on change in fair value of derivative  liability - restated		-		-		964,380		964,380
Interest expense		-		-		(38,630)		(38,630)
Other income including loss on equity-method investment		4,951		-		(70,816)		(65,865)
Net loss	$	(142,973)	$	-	$	(3,984,943)	$	(4,127,916)

	Brands		Content and Platform Services		Corporate		Total
Nine Months Ended September 30, 2011
Revenue	$	103,408	$	3,934,102	$	-	$	4,037,510
Operating (loss) income		(589,285)		1,265,606		(4,270,381)		(3,594,060)
Interest expense		(49)		-		(86,394)		(86,443)
Other expense including loss on equity-method investment		3,266		-		(1,124,210)		(1,120,944)
Net (loss) income	$	(586,068)	$	1,265,606	$	(5,480,985)	$	(4,801,447)

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

Total assets regarding reportable segments at September 30, 2012 and December 31, 2011 are presented in the following table:

	September 30, 2012		December 31, 2011
Total assets:
Content and Platform Services	$	-	$	118,503
Brands		4,545,860		302,129
Business segments		4,545,860		420,632
Corporate		1,719,159		3,315,385
Total assets	$	6,265,019	$	3,736,017

7. CAPITAL LEASES

On December 7, 2010, Banks.com entered into a sale-leaseback arrangement with Domain Capital, LLC, (“Domain Capital”) consisting of an agreement to assign the domain name, banks.com, to Domain Capital in exchange for $0.6 million in cash and a Lease Agreement to lease back the domain name from Domain Capital for a five year term. Effective June 28, 2012, Banks.com became a wholly-owned subsidiary of Remark Media and according to the Agreement and Plan of Merger, Remark Media assumed all outstanding liabilities on the effective date of close. As of September 30, 2012,  total obligations under this agreement were $0.5 million, $0.1 million of which is included under the current portion of capital lease obligations and the remainder is included under capital lease obligations, net of current portion of the Company’s consolidated balance sheets at September 30, 2012.The following table represents the approximate future minimum capital lease payments due under this agreement as of September 30, 2012:

		Capital Lease
		Commitments
October 2012 through December 2012	$	42,822
2013		171,287
2014		171,287
2015		171,287
Total commitments		556,683
Interest on capital leases		(109,591)
Present value of minimum capital lease payments	$	447,092

8.  COMMITMENTS AND CONTINGENCIES

On July 23, 2012, a complaint was filed by FOLIOfn, Inc. (“FOLIOfn”), against the Company’s subsidiary MyStockFund Securities, Inc. (“MyStockFund”), alleging that MyStockFund has infringed six U.S. Patents held by FOLIOfn relating to investment methods. The complaint seeks injunctive relief, damages, pre-judgment interest, and attorneys' fees. The Company believes that MyStockFund has meritorious defenses to the complaint, and MyStockFund intends to contest the claims.

In addition, the Company is engaged from time to time in certain legal disputes arising in the ordinary course of business.Furthermore, the Company accrues liabilities for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company will review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and the Company's views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made.

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

9.  STOCKHOLDERS’ EQUITY AND NET LOSS PER SHARE

Issuance of Common Shares

As discussed in Note 1 and Note 4 of the condensed consolidated financial statements, on June 28, 2012, the Company issued 702,267shares of common stock pursuant to the acquisition of Banks.com. The Company recorded the fair value of the common stock at $3.40 per share based on the closing price of Remark Media’s common stock on the effective date of the acquisition. On April 2, 2012, the Company issued 32,405 common shares in connection with the cashless exercise of the warrants to purchase 65,359common shares issued in 2011 in connection with the debt agreement entered into with Theorem Capital which expired in March 2012.

Net Loss per Share

The following is a reconciliation of the numerators and denominators of our basic and diluted loss per share computations:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(Restated)				(Restated)
Loss per share:
Net  loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Net  loss per share, basic and diluted	$	(0.38)	$	(0.39)	$	(0.68)	$	(0.89)
Common shares and dilutive securities:
Weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Dilutive securities		-		-		-		-
Total common shares and dilutive securities		6,414,200		5,408,455		6,089,553		5,401,807

Stock options and warrants are not included in the diluted earnings per share calculation above as they are anti-dilutive.  The number of anti-dilutive shares outstanding excluded from the calculation above was  1,435,349 and 1,115,538 for the three and nine periods ended September 30, 2012 and 2011, respectively.

Stock-Based Compensation

Remark Media has authorized 800,000 shares under the 2006 Equity Incentive Plan adopted April 13, 2006 (the “2006 Plan”), and an additional 525,000 shares authorized under the 2010 Equity Incentive Plan adopted June 15, 2010, and modified on December 30, 2011 (the “2010 Plan”), for grant as part of long-term incentive plans to attract, retain and motivate its eligible executives, employees, officers, directors and consultants.  Options to purchase common stock under the 2006 and 2010 Plans have been granted to its officers and employees with an exercise price equal to the fair market value of the underlying shares on the date of grant.

In accordance with the current authoritative guidance,  the Company measures stock-based compensation cost at the grant date based on the fair value of the award, and recognizes it as an expense over the requisite service period.  Stock-based compensation expense for the three months ended September 30, 2012 and 2011 was approximately $0.23 million and $0.14 million, respectively.For the nine months ended September 30, 2012 and September 30, 2011, stock-based compensation expense was $0.70 million and $0.51 million, respectively. An expense of $49 thousand was included in the stock compensation expense for the nine months ended September 30, 2012 related to the modification in the terms of exercising of 66,575 shares of stock option grants in the first quarter

15

REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

of 2012.  As of September 30, 2012, unrecognized compensation expense relating to non-vested stock options approximated $1.2 million, which we expect to recognize through 2015.During thenine months endedSeptember 30, 2012,  Remark Media granted options to purchase 241,927 shares at aweighted average exercise price of $5.83.  The grant date fair value of grant options vesting during the threemonths ended September 30, 2012 and 2011 wasapproximately $0.18 million and $0.11 million, respectively and during the nine months ended September 30, 2012and 2011 was approximately $0.33 million and $0.17 million respectively. Additionally, the Company granted 16,000 shares of restricted stock related to director compensation plans for 2012.  ThroughSeptember 30, 2012, no options have been exercised under the 2006 Plan or the 2010 Plan.

10.  RELATED PARTY TRANSACTIONS

On October 30, 2009, the Company entered into and effectuated a series of transactions with Sharecare, a related party.  As a result of these transactions, the Company received an equity stake in Sharecare, sold substantially all of the assets of its DailyStrength subsidiary to Sharecare, agreed to provide management and website development services to Sharecare, and received a limited license to use the Sharecare web platform for its own businesses.  Additionally, the Company issued a promissory note to Sharecare, all of which was settled by services the Company provided to Sharecare during 2009.  As of September 30, 2012, Remark Media owned approximately 10.9% of the outstanding common stock of Sharecare.

Jeff Arnold, a former member of the Company’s Board of Directors, is the Chairman and Chief Executive Officer and a significant stockholder of Sharecare.  Additionally, Discovery Communications, Inc., the Company’s largest stockholder, is a significant stockholder of Sharecare.   

The Company’s service agreement with Sharecare expired on December 31, 2011. As a result, the Company did not have any revenues generated from Sharecare during the nine months ended September 30, 2012. The Company’s revenue from Sharecare for the three and nine months ended September 30, 2011 totaled approximately $0.9 million and $3.0 million, respectively.   Additionally, there were no amounts due from Sharecare at September 30, 2012.

In April 2010, the Company entered into an agreement with Discovery Communications, LLC, an affiliated entity, to provide website development services to Discovery. The agreement expired in December 31, 2011.  As a result, the Company did not have any revenues generated from Discovery during the nine months ended September 30, 2012. The Company’s Content and Platform Services revenue from Discovery, an affiliated entity, for the three months and nine months ended September 30, 2012 totaled approximately $0.3 million and $1.0 million, respectively, and there were no amounts due from Discovery at September 30, 2012.

In March 2010, the Company entered into a 24-month sublease agreement with Sharecare for rental of our corporate headquarters in Atlanta, Georgia, effective March 1, 2010.  On August 1, 2011, the Company mutually agreed to end the sublease agreement prior to the contracted termination date.Rent expense related to this agreement for the six months ended June 30, 2011, was approximately $0.1 million.

As of September 30, 2012, the Company had an outstanding liability due to its affiliate, Discovery, of approximately $0.1 million.

10.  SUBSEQUENT EVENTS 

On October 15, 2012, Scott Booth and Gregory M. Swayne resigned from the Company’s Board of Directors (the “Board”).  Mr. Booth was also a member of the Audit Committee and was the Chairman of the Compensation Committee.  The resignations resulted from disagreements among the members of the Board and executive management regarding the future strategic and financial direction of the Company.  The remaining members of the Board of Directors intend to appoint at least two independent directors to the Board in the near future. 

The Company’s Board of Directors appointed Kai-Shing Tao as Chairman of the Board and Co-Chief Executive Officer of the Company, on October 16, 2012, and effective the same day.  Mr. Tao has been a member of the Board since the Company’s formation in 2007.  Mr. Tao will serve as the Company’s principal executive officer and principal financial officer, and will not draw a salary.  Carrie B. Ferman, formerly Chief Executive Officer of the Company, was appointed Co-Chief Executive Officer by the Board, on October 16, 2012 and effective the same day. 

On October 16, 2012, each of the three executive officers of the Company agreed to reduce their base salary compensation to $150,000 per year, in support of the Company’s growth plans, effective October 1, 2012.  All executive compensation agreements have been modified in accordance with the base salary adjustments. 

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

On October, 29, 2012, Eric Orme, became an advisor and consultant to the Company, with a specific focus on advising the Company related to its technology strategy.  Mr. Orme was previously Chief Technology Officer of the Company, and resigned such role on October 24, 2012. 

On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and The Street will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $1.4 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report. 

On November 23, 2012, the Company issued a $1.8 million Senior Secured Convertible Promissory Note (the “Note”) to a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Co-Chief Executive Officer.  Mr. Tao has been a director of the Company since 2007. The Note was approved by the Audit Committee of the Board, which believes the related party transaction was negotiated as an arms-length transaction.. The terms of the Note include:

· Interest accrues at 6.67% on an annual basis, payable quarterly.

· All principal and any accrued and unpaid interest is due and payable in full on the second anniversary of the Note.

· The repayment of all principal and accrued and unpaid interest is secured by all assets of the Company other than the common shares of Sharecare, Inc. owned by the Company.

· All principal and accrued interest is convertible at any time at the election of the Lender at the rate of $1.30 of principal and interest for each share of Company common stock.

The Company expects the funding of this loan to close by November 30, 2012.

12. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

Subsequent to filing the quarterly report Form 10-Q for the quarter ended September 30, 2012, the Company determined that it should have used derivative liability accounting to account for the fair value of the warrants issued in the its February 27, 2012 Equity Financing in recording the proceeds received, due to the down round provision associated with the exercise price of the warrants. The Company previously recorded all of the proceeds from the Equity Financing as stockholders' equity. In recording the proceeds received, due to the down round provision associated with the exercise price of the warrants, the fair value of the warrants should have been recorded as a liability as of the February 27, 2012 with a corresponding decrease in equity. Changes in the fair value of these warrants should have been recognized as other income or expense in the condensed consolidated statements of operations.

The Company has calculated the fair value of the warrants issued in Equity Financing for each relevant reporting period using the Monte Carlo simulation method. The Company has restated its previously issued financial statements to correct the non-cash errors related to the derivative related to derivative warrant liability accounting for warrants issued in the February 2012 Equity Financing.

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REMARK MEDIA INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Expressed in U.S. Dollars)

The impact of the restatement is reflected below for the periods indicated:

	As of September 30, 2012
	As previously reported		Adjustment		As restated
Balance sheets:
Total assets	$	6,265,019	$	-	$	6,265,019
Current liabilities
Derivative liabilities		-		243,398		243,398
All other current liabilities		1,084,651		-		1,084,651
Total current liabilities		1,084,651		243,398		1,328,049
All other liabilities		664,648		-		664,648
Total liabilities		1,749,299				1,992,697
Preferred shares		-		-		-
Common stock		7,118		-		7,118
Additional paid-in capital		108,361,099		(1,207,778)		107,153,321
Accumulated other comprehensive income (loss)		13,699		-		13,699
Accumulated deficit	(103,866,196)			964,380	(102,901,816)
Stockholders' equity		4,515,720		(243,398)		4,272,322
Total liabilities and stockholders' equity	$	6,265,019	$	-	$	6,265,019

	Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
	As previously reported		Adjustment		As restated		As previously reported		Adjustment		As restated
Statement of operations:
Operating Loss	$	(1,932,040)	$	-	$	(1,932,040)	$	(4,987,801)	$	-	$	(4,987,801)
Gain on change in fair value of derivative  liability		-		269,852		269,852		-		964,380		964,380
All other income (expense) items		(766,085)		-		(766,085)		(104,495)		-		(104,495)
Net loss	$	(2,698,125)	$	269,852	$	(2,428,273)	$	(5,092,296)	$	964,380	$	(4,127,916)
Net loss per share (basic and diluted)	$	(0.42)	$	0.04	$	(0.38)	$	(0.84)	$	0.16	$	(0.68)
Weighted average shares outstanding		6,414,200				6,414,200		6,089,553				6,089,553

Certain amounts in the related statements of cash flows have been corrected, but those changes do not impact the net cash provided from or used in operating, investing, and financing activities.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company is relying on the Order of the Securities and Exchange Commission entered on November 14, 2012, in Release No. 68224 issued under the Securities and Exchange Act of 1934, providing regulatory relief to publicly traded companies affected by Hurricane Sandy, as our office housing certain of our accounting personnel located in the Union Square area of lower Manhattan lacked power, telephone and internet service as a result of Hurricane Sandy for seven (7) days.

Cautionary Statement Regarding Forward-Looking Information

The following Management’s Discussion and Analysis of our Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements and notes thereto included as part of this Form 10-Q.  Our disclosure and analysis in this report concerning our operations, cash flows and financial position, including, in particular, the likelihood of our success in expanding our business, the likelihood of our success in closing upon and achieving the desired benefits from the Banks.com Merger and our assumptions regarding the regulatory environment and international markets, include forward-looking statements.  Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “may” and similar expressions are forward-looking statements.  Although these statements are based upon reasonable assumptions, they are subject to risks and uncertainties that are described more fully in our Annual Report on Form 10-K for the year ended December 31, 2011. These forward-looking statements represent our estimates and assumptions only as of the date of this filing and are not intended to give any assurance as to future results.  As a result, undue reliance should not be placed on any forward-looking statements.  We assume no obligation to update any forward-looking statements to reflect actual results, changes in assumptions or changes in other factors, except as required by applicable securities laws. 

Business Overview and Recent Events

Remark Media, Inc. (“Remark Media” or the “Company”) is a global digital media company focused on developing, owning and operating next-generation digital platforms that combine traditional web publishing and social media, with the goal of revolutionizing the way people search and exchange information over the Internet. The Company also offers a suite of content and platform services that provide its clients with opportunities to build consumer awareness, promote content engagement and foster brand-customer interactions.  

The Company’s current leading brands, BoWenWang (bowenwang.com.cn) and ComoTudoFunciona (hsw.com.br), provide readers in China and Brazil with thousands of articles about how the world around them works, serving as destinations for credible, easy-to-understand reference information. Remark Media is the exclusive digital publisher in China and Brazil for translated content from HowStuffWorks.com, a subsidiary of Discovery Communications, and in China for certain content from World Book, Inc., publisher of World Book Encyclopedia. The Company’s website services business seeks to create innovative content and platform solutions for leading media and entertainment companies as well as Fortune 500 brands and boutique businesses. The solutions the Company offers center on helping clients generate value with the objective of maximizing content utilization, enhancing online engagement and customer experience and by driving online and offline actions. Remark Media is also a founding partner and developer of the U.S.-based product Sharecare, a highly searchable social Q&A healthcare platform organizing and answering health and medical questions. The Company generates revenue primarily through service and licensing fees as well as online advertising sales on its owned and operated websites.   

The Company was incorporated in Delaware in March 2006 and is headquartered in Atlanta with additional operations in New York, Beijing and São Paulo. 

On February 27, 2012, the Company entered into definitive equity financing agreements with accredited and institutional investors to raise funds in the amount of $4.25 million through a private placement. In connection with the transaction, the Company issued to investors common stock priced at $4.50 per share. Investors also received warrants to acquire shares of common stock at an exercise price of $6.81 per share, in the amount of 25% of the number of shares of common stock that the investors purchased. On February 29, 2012, the Company received $4.25 million in cash and issued to the investors a total of 944,777 shares of common stock and warrants to acquire an additional 236,194 shares of common stock.  

On February 26, 2012, the Company entered into an agreement and plan of merger with Banks.com, Inc. (“Banks.com”), pursuant to which Banks.com becomes a wholly-owned subsidiary of Remark Media (the “Banks.com Merger”). Banks.com is a leading financial services portal operating a unique breadth and depth of financial products and services. Upon the closing of the merger on June 28, 2012, Remark Media issued approximately 702,267 shares of Common Stock to the shareholders of Bank.com, plus $300,000 in cash, as consideration for the merger. Also, on the effective date of the merger, the Company paid $131,250 in settlement of a promissory note in the amount of $125,000 which matured on June 28, 2012 and related unpaid interest.

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On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and TheStreet will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $0.9 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report..

Our Strategy 

Through 2011, we dedicated our resources mainly to the development and operations of Sharecare and our international businesses. At the start of 2012, our operating obligations to Sharecare came to an end and we made a strategic decision to shift our focus to the U.S. market which we believe holds larger near-term opportunity.  

During the course of 2012, we have committed ourselves to the development and growth of  new U.S.-based digital properties in the personal finance and consumer money markets category. To that end, we  launched a new website DimeSpring and completed a merger with Banks.com in which we obtain ownership of Banks.com, IRS.com and Filelater.com. In an effort to accelerate awareness and revenue growth, on November 13, 2012, we entered into a strategic partnership with TheStreet.com. We also continue to seek engagements with 3^rd parties to grow our Content and Platform Services, and have recently completed a consulting engagement with a Fortune 100 company.

The completion of our obligation to Sharecare in addition to our strategic shift resulted in the Company reporting minimal revenue for the three and nine months ended September 30, 2012, derived from our Brands segment. We continue to maintain an equity stake in Sharecare which we account for under the equity method of accounting. 

Our Operations

Domestic 

Brands.  In September 2012, we launched DimeSpring.com, a U.S.-focused personal finance website that intends to utilize rich content and advice from a wide array of professionals to build a community of people interested in managing life’s financial hurdles and opportunities. DimeSpring.com is part of a larger product strategy to leverage our experience and expertise to create leading destination websites that offer a dynamic online experience around a given topic with access to relevant content and subject matter experts. The Banks.com merger was successfully completed on June 28, 2012. Banks.com’s revenue included in our consolidated statements of operations for the three and nine months ended September 30, 2012 was $278 thousand and $263 thousand, respectively. Assets obtained through the Banks.com Merger complement DimeSpring and serve to build a network of personal finance digital media businesses. We continue to invest in technologyand product development to support this initiative, and more recently have entered into a services agreement with The Street.com to accelerate consumer awareness and revenue growth of these sites.  

Content and Platform Services.  Our agreements with Sharecare and Discovery expired in December 2011, and while we have entered into new service agreements, revenues from these agreements are not significant at this time. We do intend to expand our services business to new clients in 2013and we continue to invest in sales and evolve our technology platforms to ensure we incorporate the latest in social media and content trends. 

Sharecare Investment.  Although Remark Media is no longer providing services for Sharecare, the Company maintains equity ownership in the venture.  As of September 30, 2012, we own approximately 10.9% of Sharecare’s common stock and had representation on Sharecare’s board of directors.  We account for our investment in Sharecare under the equity method of accounting for investments and we record our proportionate share of Sharecare’s net income or loss in our consolidated statements of operations under proportional share in income or loss from equity-method investments. In the case of a change of interest, we record a gain or loss in our consolidated statement of operations in the period the change of interest occurs. As of October 15, 2012, Sharecare and Remark Media no longer had a common board member.  The Company is evaluating this event as it relates to the appropriate prospective accounting for its investment in Sharecare.

International 

During 2011, we implemented certain cost-savings measures in our Brazil and China operations in connection with a strategic shift towards operations in the United States. We believe that the value of our international assets will be recognized over a longer term horizon, as online advertising markets develop for Brazil and China and the websites’ traffic fundamentals improve. 

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ComoTudoFunciona  (http://hsw.com.br) is Brazil’s online source for credible, unbiased and easy-to-understand explanations of how the world actually works.  The Portuguese-language site is the exclusive digital publisher in Brazil of translated and localized content from the leading Discovery Communications brand HowStuffWorks, and is published from Remark Media’s São Paulo operations. Revenue generated from our operations in Brazil was approximately $15 thousand and $24 thousand during the three months ended September 30, 2012 and 2011, respectively. Brazil revenues and operating results are included in the Brands reporting segment. We do not expect to see major growth in our Brazil operations in the near term unless we increase investment in the brand. 

BoWenWang  (http://www.bowenwang.com.cn) is an information and reference website that provides China with encyclopedic knowledge and easy-to-understand explanations of how the world works.  The website is published from Beijing in the Chinese language.  Launched in June 2008, BoWenWang features a combination of original content authored by the Company, translated and localized articles from the leading Discovery Communications brand HowStuffWorks, and content from World Book, Inc.  As a result of our cost cutting measures implemented in China in September 2011, we experienced a decline in revenues in the third quarter of 2012 as compared to the same period of 2011. Revenue generated from our operations in China was minimal during the second quarter ended September 30, 2012. China revenues and operating results are included in the Brands reporting segment. We do not expect to see major growth in our China operations in the near term unless we increase investment in the brand.

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Results of Operations 

The following table sets forth our operations for the three and nine months ended September 30, 2012 and 2011: 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(Restated - Note 12)				(Restated - Note 12)
Operating revenue
Brands	$	263,119	$	37,396	$	320,233	$	103,408
Content and platform services to affiliates		-		1,172,883		-		3,934,102
Total revenue		263,119		1,210,279		320,233		4,037,510
Operating expenses
Sales and marketing		108,382		218		215,542		14,517
Content, technology and development		608,244		863,593		1,307,259		3,082,743
General and administrative		1,328,844		1,349,292		3,583,020		3,950,147
Impairment loss		-		381,000		-		381,000
Depreciation and amortization expense		149,689		73,973		202,213		203,163
Total operating expenses		2,195,159		2,668,076		5,308,034		7,631,570
Operating loss		(1,932,040)		(1,457,797)		(4,987,801)		(3,594,060)
Other income (expense)
Gain on change in fair value of derivative liability		269,852		-		964,380		-
Interest expense		(11,505)		(37,075)		(38,630)		(86,443)
Other income		(14,876)		159		(7,769)		1,380
Total other income (expense)		243,471		(36,916)		917,981		(85,063)
Loss before gain (loss) from equity-method
investments		(1,688,569)		(1,494,713)		(4,069,820)		(3,679,123)
Proportional share in loss of equity-method
investments		(739,704)		(1,143,499)		(2,553,086)		(1,624,950)
Change of interest gain of equity-method
investments  (Note 3)		-		407,376		2,494,990		407,376
Net loss before benefit from income taxes		(2,428,273)		(2,230,836)		(4,127,916)		(4,896,697)
Income tax benefit		-		95,250		-		95,250
Net loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Net loss per share
Net loss per share, basic and diluted	$	(0.38)	$	(0.39)	$	(0.68)	$	(0.89)
Basic and diluted weighted average
shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Comprehensive loss
Net loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Cumulative translation adjustments		1,179		(32,993)		(3,182)		(22,731)
Total comprehensive loss	$	(2,427,094)	$	(2,168,579)	$	(4,131,098)	$	(4,824,178)

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Segment Data

We monitor and analyze our financial results on a segment basis for reporting and management purposes, as presented in Note 5 to the accompanying condensed consolidated financial statements.  Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and assess performance.   

Our Brands segment consists of our websites in Brazil and China and generates revenues from advertisers based in the respective countries. This segment also includes the businesses acquired through the recent Banks.com’s acquisition completed on June 28, 2012.  The operating results for services performed under the Sharecare and Discovery services agreements are included in the Content and Platform Services segment. 

Revenue 

Total revenue for the three months ended September 30, 2012 was approximately $263 thousand, a decrease of approximately $0.9 million from the same period in 2011. For the nine months ended September 30, 2012 and 2011, revenue was $320 thousand, a decrease of $3.7 million as compared to the same period of 2011. All revenue generated in the three and nine months ended Sept 30, 2012 was related to the Brands segment, while 97% of our revenue in the three and none months ended September 30, 2011 was generated from the Content and Platform Services segment. The major decrease was due to the fact that all of our content and platform service agreements expired in December 2011 and we did not renew or enter into any significant revenue generating service agreements with our customers under the Content and Platform Services segment. Also, pursuant to closing of the Banks.com merger on June 28, 2012, we recorded $278 thousand of Banks.com revenues in our statements of operations for the nine months ended September 30, 2012.  

Sales and Marketing 

We have been and will continue to focus on sales and marketing to support our growth initiatives. Going forward, for our domestic assets, we are participating in a strategic advertising sales partnership with The Street. Sales and marketing expenses were $108 thousand and $216 thousand in the three months ending September 30, 2012 and 2011, respectively, and $216 thousand and $15 thousand in the nine months ended September 30, 2012 and 2011, respectively.  

Content, technology and development

Content, technology and development expenses include the ongoing third-party costs to acquire original content, translate and localize content for our Brands segment from English to Portuguese and Chinese, as well as costs of designing and developing our products as well as expenses to support our Content and Platform Services segment including labor, content and third party platform support services. These expenses were $0.6 million and $0.9 million in the three months ended September 30, 2012 and 2011 , respectively and $1.3 million and $3.1 million in the nine months ended September 30, 2012 and 2011, respectively. The decrease is related to web developments costs which were capitalized during the three and nine months ended Sept  30, 2012 of $0.2 million and $0.6 million, respectively in addition to the decrease in the services provided to customers in the content and platform services segment.  

General and Administrative Expenses 

Our total general and administrativeexpenses were approximately $1.3 million and $1.3 million in the three months ended September 30, 2012 and 2011, respectively and $3.6 million and $4.0 million in the nine months ended September 30, 2012 and 2011, respectively.

Gain on Change in Fair Value of Derivative Liability

The gain on change in fair value of the derivative liability for the three months and nine months ended September 30, 2012 was $0.3 million and $1.0 million, respectively. The decrease since the transaction date is due to the decline in the Company's closing stock price, remaining expected life, and the risk free rate.

Interest Expense 

Interest expense for the three months ended September 30, 2012 and 2011 was $12 thousand and $37 thousand, respectively and $39 thousand and $86 thousand for the nine months ended September 30, 2012 and 2011, respectively. These amounts reflect the amortization of debt issuance costs in connection with our revolving credit facility entered into in March 2011 which expired in March 2012. The debt issuance costs were fully amortized in the first quarter of 2012. 

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Loss from Equity-Method Investments and Change of Interest Gain 

We account for our investment in Sharecare under the equity method of accounting.  Sharecare issued additional equity in the first and second quarters of 2012. As a result, we recorded a gain of $2.5 million in the nine months ended September 30, 2012. Additionally, we recorded a loss of $0.7 million in the three months ended September 30, 2012, and 2011, respectively and $2.6 million and $1.6 million in the nine months ended September 30, 2012 and 2011, respectively. These losses represent our share in Sharecare’s loss during those periods. At September 30, 2012, our percentage ownership in Sharecare was 10.9%. We continually evaluate the facts and circumstances related to our investment in Sharecare to assess the need for change in our accounting method in future periods.

Recent Accounting Pronouncements  

Recent accounting pronouncements are summarized in Note 2 to the accompanying notes to the condensed consolidated financial statements.  

Liquidity and Capital Resources  

Cash and cash equivalents was $0.7 million at September 30, 2012, compared to $1.5 million at December 31, 2011.  The decrease in cash is primarily due to the proceeds provided through the equity funding completed in February 2012 offset by use of cash to fund our operating and investing activities, including website development costs and the acquisition of Banks.com . Our cash on hand at September 30, 2011 was $2.6 million. 

	Nine Months Ended September 30,
	2012		2011
Cash flows used in operating activities	$	(3,698,125)	$	(2,006,553)
Cash flows used in investing activities		(987,971)		(320,706)
Cash flows provided by financing activities		3,850,451		80,000
Net change in cash and cash equivalents		(835,645)		(2,247,259)
Impact of currency translation on cash		(3,182)		(24,199)
Cash and cash equivalents at beginning of year		1,531,502		4,843,893
Cash and cash equivalents at end of period	$	692,675	$	2,572,435

Cash flows from operations 

Our net cash used in operating activities during the nine months ended September 30, 2012, increased by $1.7 million compared to the same period in the prior year due to a major decrease in revenues and operating income partially offset by a decrease in expenses as a result of our continued cost monitoring measures. 

Cash flows from investing activities 

During the nine months ended September 30, 2012, our net cash used in investing activities was approximately $1 million compared to $0.3 million for the same period in 2011. The cash used in investing activities in the nine months ended September 30, 2012 consisted of website development activities of $0.6 million and the payment of the cash consideration of $0.4 million related to the Banks.com’s acquisition consummated on June 28, 2012 of which $0.1 million was related to the settlement of the promissory note issued by Banks.com to the former Banks.com’s CEO and his wife. The cash used in the nine months ended September 30, 2011 consisted of $0.2 million of office assets and leasehold improvements in addition to a restricted cash balance of $0.1 million received as a deposit in advance of the close of our ongoing capital funding activities.    

Cash flows from financing activities 

For the nine months ended September 30, 2012, the net cash provided by financing activities consists of the cash proceeds of $4.25 million provided through the equity financing transaction completed in February 2012 partially offset by payments of stock issuance costs of $0.4 million. For the nine months ended September 30, 2011, net cash provided by financing activities was $0.08 million consisting of proceeds related to our ongoing capital funding activities of $0.1 million partially offset by payment for debt issuance costs of $0.02 million related to our revolving credit agreement.   

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Non-cash financing and investing activities 

In the first quarter of 2012, the Company issued warrants to the placement agent as part of the stock issuance costs associated with the issuance of capital for cash completed in February 2012. The fair value of these warrants was $0.1 million at the date of issuance and was reported under non-cash investing and financing activities in the statement of cash flows for the six periods ended June 30, 2012. In addition, pursuant to the close of the Banks.com acquisition completed on June 28, 2012, we issued 702,267 common shares at a price of $3.40 per share. Non-cash financing activities for the nine months ended September 30, 2011 were approximately $0.13 million, related to the warrants issued in conjunction with the revolving credit agreement entered into in March 2011 which expired in March 2012. These warrants were exercised in April 2012 and accordingly, we issued 32,405 common shares under the cashless exercise of these warrants. 

As of September 30, 2012, the Company’s total cash and cash equivalents balance was approximately $0.7 million. After receipt of funding of the Term Loan Agreement discussed below, the balance of cash and cash equivalents would be approximately $1.97 million. The Company has incurred net losses and generated substantial negative cash flow from operations in the nine months ended September 30, 2012 and in each fiscal year since its inception and has an accumulated deficit of $103.9 million as of September 30, 2012. The Company had minimal revenues in the first three quarters of 2012 due to the termination of certain agreements in the Content and Platform Services segment at the end of 2011 and its transition to owning and operating its own digital media properties. Since that time, the Company has been focused on building and acquiring wholly-owned digital media properties for its Brands segment and pursuing new services agreements with new customers for its Content and Platform Services segment.

On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and TheStreet will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $1.4 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report. 

On November 23, 2012, the Company entered into a $1.8 million Term Loan Agreement, with net proceeds expected to be $1.7 millon, at a 6.67% annual interest rate with a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Co-Chief Executive Officer.  Mr. Tao has been a director of the Company since 2007.  The Term Loan is secured by substantially all the tangible and intangible assets of the Company, excluding its shares of common stock of Sharecare. The principal and accrued interest under the Term Loan Agreement is convertible into Common Stock of the Company at the rate of $1.30 per share, which represents an approximately 33% premium to the average closing prices of the Company’s common stock for the ten days prior to entrance into the agreement and an approximately 53% premium to the closing price of the Company’s common stock on the day of entrance into the agreement.  This Term Loan Agreement was approved by the Audit Committee of the Board, which believes the related party transaction was negotiated as an arms-length transaction.  The Company expects the funding of this loan to close by November 30, 2012. See Note 11, Subsequent Events, for a description of the terms of  such Loan Agreement.

Finally the Company has taken steps to reduce operating costs, primarily payroll through a reduction in headcount, which will result in a decline in annual salary expense of approximately $1.2 million. The Company will continue to evaluate other opportunities to control costs. 

The Company intends to fund its future operations through a combination of revenue growth in its Brands segment, particularly its personal finance properties.  Additionally, the Company is actively engaged in evaluating future acquisitions to provide revenue growth and the sale of certain non-core assets to provide capital.

Absent any acquisitions of new businesses or the material increase in expectations from its existing customers, current revenue growth may not be sufficient to sustain the Company’s operations in the long term. As such, the Company may need to obtain additional equity financing and/or divest of certain assets or businesses, neither of which can be assured on commercially reasonable terms, if at all. In addition, any equity financing that might be obtained would substantially dilute existing stockholders.  There is no certainty that the Company will be successful at raising capital, nor is there certainty around the amount of funds that may be raised. In addition, the success of the Company will be subject to performance of the markets and investor sentiment regarding the macro and micro economic conditions under which we operate including stock market volatility. There can be no assurance that the Company will be successful at generating more revenues or selling any of its assets. Any failure by the Company to successfully implement these plans would have a material adverse effect on the Company’s business, including the possible inability to continue operations. 

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Based on the Company’s current financial projections, which incorporates the Services Agreement with TheStreet, the new Term Loan Agreement, and the reduction in force, all discussed above, the Company believes it has sufficient existing cash resources to fund operations through June 2013.  However, projecting operating results is inherently uncertain.  Anticipated expenses can exceed those that are projected, and expense reimbursements under TheStreet Agreement could be delayed or not meet expectations. Accordingly, the Company’s cash resources could be fully utilized prior to June 2013.

Off Balance Sheet Arrangements 

None.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We translate the foreign currency financial statements of our international operations into U.S. dollars at current exchange rates, except revenue and expenses, which we translate at average exchange rates during each reporting period. We accumulate net exchange gains or losses resulting from the translation of assets and liabilities in a separate caption of stockholders’ equity titled “accumulated other comprehensive income (loss)”. Generally, our foreign expenses are denominated in the same currency as the associated foreign revenue, and at this stage of our development, the exposure to rate changes is minimal.

Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash and accounts receivables.  At September 30, 2012, 99% of our cash was denominated in U.S. dollars. The remaining 1% was denominated in Brazilian Reais, Chinese Renminbi or Hong Kong Dollars. The majority of our cash is placed with financial institutions we believe are of high credit quality.  Our cash is maintained in bank deposit accounts, which, at times, exceed federally insured limits.  We have not experienced any losses in such accounts and do not believe our cash is exposed to any significant credit risk.

We do not use financial instruments to hedge our foreign exchange exposure because the effects of the foreign exchange rate fluctuations are not currently significant. We do not use financial instruments for trading purposes. We do not use any derivative financial instruments to mitigate any of our currency risks. The net assets of our foreign operations at September 30, 2012, were approximately $0.2 million.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, or the Exchange Act. Our disclosure controls and procedures are designed to ensure that material information relating to us is made known to our principal executive officer and principal accounting officer by others within our organization. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of September 30, 2012 to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In light of the restatement of our financial statements for the quarter-ended September 30, 2012 that is described in Note 12 to the accompanying condensed financial statements, our principal executive officer and principal accounting officer concluded that our disclosure controls and procedures were not effective as of September 30, 2012.

Changes in Internal Control over Financial Reporting

The Company is committed to a strong internal control environment. Therefore, in consideration of the restatement described in Note 12, the Company implemented new disclosure policies and procedures in order to remediate the deficiency noted above. The new disclosure policies and procedures were fully implemented as of September 26, 2013, the report date.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings.

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On July 23, 2012, a complaint was filed by FOLIOfn, Inc. (“FOLIOfn”), against the Company’s subsidiary MyStockFund Securities, Inc. (“MyStockFund”), alleging that MyStockFund has infringed six U.S. Patents held by FOLIOfn relating to investment methods. The complaint seeks injunctive relief, damages, pre-judgment interest, and attorneys' fees. The Company believes that MyStockFund has meritorious defenses to the complaint, and MyStockFund intends to contest the claims.

In addition, the Company is engaged from time to time in certain legal disputes arising in the ordinary course of business.

Furthermore, the Company accrues liabilities for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company will review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and the Company's views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made.

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Item 1A.  Risk Factors.

For a discussion of risk factors regarding our company prior to the Banks.com’s merger, see “Item 1A. – Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011 except for the risk factor noted below related to our liquidity and the risk factors related to Banks.com which is currently a wholly-owned subsidiary of the Company:

We may not have sufficient liquidity to support our operations.

As of September 30, 2012, the Company’s total cash and cash equivalents balance was approximately $0.7 million. After receipt of funding of the Term Loan Agreement discussed below, the balance of cash and cash equivalents would be approximately $1.97 million. The Company has incurred net losses and generated substantial negative cash flow from operations in the nine months ended September 30, 2012 and in each fiscal year since its inception and has an accumulated deficit of $103.9 million as of September 30, 2012. The Company had minimal revenues in the first three quarters of 2012 due to the termination of certain agreements in the Content and Platform Services segment at the end of 2011 and its transition to owning and operating its own digital media properties. Since that time, the Company has been focused on building and acquiring wholly-owned digital media properties for its Brands segment and pursuing new services agreements with new customers for its Content and Platform Services segment.

On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and TheStreet will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $1.4 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report. 

On November 23, 2012, the Company entered into a $1.8 million Term Loan Agreement, with net proceeds expected to be $1.7 millon, at a 6.67% annual interest rate with a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Co-Chief Executive Officer.  Mr. Tao has been a director of the Company since 2007.  The Term Loan is secured by substantially all the tangible and intangible assets of the Company, excluding its shares of common stock of Sharecare. The principal and accrued interest under the Term Loan Agreement is convertible into Common Stock of the Company at the rate of $1.30 per share, which represents an approximately 33% premium to the average closing prices of the Company’s common stock for the ten days prior to entrance into the agreement and an approximately 53% premium to the closing price of the Company’s common stock on the day of entrance into the agreement.  This Term Loan Agreement was approved by the Audit Committee of the Board, which believes the related party transaction was negotiated as an arms-length transaction. The Company expects the funding of this loanto close by November 30, 2012. See Note 11, Subsequent Events, for a description of the terms of  such Loan Agreement.

Finally the Company has taken steps to reduce operating costs, primarily payroll through a reduction in headcount, which will result in a decline in annual salary expense of approximately $1.2 million. The Company will continue to evaluate other opportunities to control costs. 

The Company intends to fund its future operations through a combination of revenue growth in its Brands segment, particularly its personal finance properties.  Additionally, the Company is actively engaged in evaluating future acquisitions to provide revenue growth and the sale of certain non-core assets to provide capital.

Absent any acquisitions of new businesses or the material increase in expectations from its existing customers, current revenue growth may not be sufficient to sustain the Company’s operations in the long term. As such, the Company may need to obtain additional equity financing and/or divest of certain assets or businesses, neither of which can be assured on commercially reasonable terms, if at all. In addition, any equity financing that might be obtained would substantially dilute existing stockholders.  There is no certainty that the Company will be successful at raising capital, nor is there certainty around the amount of funds that may be raised. In addition, the success of the Company will be subject to performance of the markets and investor sentiment regarding the macro and micro economic conditions under which we operate including stock market volatility. There can be no assurance that the Company will be successful at generating more revenues or selling any of its assets. Any failure by the Company to successfully implement these plans would have a material adverse effect on the Company’s business, including the possible inability to continue operations. 

Based on the Company’s current financial projections, which incorporates the Services Agreement with TheStreet, the new Term Loan Agreement, and the reduction in force, all discussed above, the Company believes it has sufficient existing cash resources to fund operations through June 2013.   However, projecting operating results is inherently uncertain.  Anticipated expenses can exceed

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those that are projected, and expense reimbursements under TheStreetAgreement could be delayed or not meet expectations. Accordingly, the Company’s cash resources could be fully utilized prior to June 2013.

The market price of our stock is likely to be volatile and various factors could negatively affect the market price or market for our common stock.

The market for and price of our common stock could be affected by the following factors: 



Ÿ	general market and economic conditions;
Ÿ	our common stock has been thinly traded; and
Ÿ	minimal third party research is available regarding our company.

Additionally, the terms of the Discovery Merger provided that payment to HowStuffWorks stockholders for a significant portion of HowStuffWorks’ ownership of our common stock would not be paid at the October 2007 closing of the transaction and instead are  payable to HowStuffWorks’ former stockholders in three semi-annual installments.  The installments were planned to begin in October 2008; however, payment had not yet occurred as of the date of this report.  We have been informed by Discovery that it intends to begin the distribution of such shares of Remark Media to the HowStuffWorks’ former stockholders in the near future.  Accordingly, the amount of shares of our common stock Discovery owns in the future will fall.  All of our rights to publish HowStuffWorks content will remain effective regardless of the number of shares Discovery owns in the future.  As a result of such distributions, a significant number of shares may be sold by such stockholders relative to the daily market trading volumes for our common stock.  These factors could also affect our common stock, and depress the market price for our common stock or limit the market for resale of our common stock.  The market price of our common stock has been volatile, particularly in the recent stock market turmoil, and is also based on other factors outside of our control.

The anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected.

The merger with Banks.com involves the integration of two companies that have previously operated independently with principal offices in two distinct locations. Significant management attention and resources will be required to integrate the two companies. Delays in this process could adversely affect the combined company's business, financial results, financial condition, and stock price following the merger. Even if the combined company were able to integrate the business operations successfully, there can be no assurance that this integration will result in the realization of the full benefits of synergies, innovation and operational efficiencies that may be possible from this integration and that these benefits will be achieved within a reasonable period of time.

We face intense competition from larger, more established companies, and we may not be able to compete effectively, which could reduce demand for our services.

We compete for Internet advertising revenues with the personal finance sections of general interest sites such as Bankrate.com, Yahoo! Finance, and Smartmoney.com.

Nearly all our competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. Our competitors may secure more favorable revenue arrangements with advertisers, devote greater resources to marketing and promotional campaigns, adopt more aggressive growth strategies and devote substantially more resources to website and systems development than we do. In addition, the Internet media and advertising industries continue to experience consolidation, including the acquisitions of companies offering finance related content and services and paid search services. Industry consolidation has resulted in larger, more established and well-financed competitors with a greater focus. If these industry trends continue, or if we are unable to compete in the Internet media and paid search markets, our financial results may suffer.

Additionally, larger companies may implement policies and/or technologies into their search engines or software that make it less likely that consumers can reach our websites and less likely that consumers will click-through on sponsored listings from our advertisers. The implementation of such technologies could result in a decrease in our revenues. If we are unable to successfully compete against current and future competitors, our operating results will be adversely affected.

Historically, a few of our advertising networks and direct advertisers have provided a substantial portion of our revenue; the loss of one of these partners may have a material adverse effect on our operating results.

We cannot assure you that, should agreements with our advertising networks, strategic sales and marketing partners, and/or direct advertisers fail to renew or should the contracts be terminated or modified in advance of their expiration, we will be able to timely

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replace the sponsored listings they provide us. We have had similar agreements in the past that have failed to renew or been modified prior to their termination where our financial results were harmed.

If we do not maintain and grow a critical mass of advertising networks, the value of our services could be adversely affected.

Our success depends, in part, on the maintenance and growth of a critical mass of advertising networks and a continued interest in our performance-based advertising. We currently have a small number of advertising networks providing advertisements on our websites. If our business is unable to achieve a growing base of advertisers through our advertising networks, it may reduce the revenues we can generate from our websites. Any decline in the number of advertising networks could adversely affect the value of our services and lead to a loss of revenue.

Our quarterly results of operations might fluctuate due to seasonality, which could adversely affect our growth rate and in turn the market price of our securities.

Our quarterly results have fluctuated in the past and will likely fluctuate in the future due to seasonal fluctuations in the level of Internet usage and the seasonal interest in tax-related information and services. As is typical in the Internet search industry, the second and third quarters of the calendar year generally experience relatively lower usage than the first and fourth quarters. It is generally understood that during the spring and summer months of the year, Internet usage is lower than during other times of the year, especially in comparison to the fourth quarter of the calendar year. The extent to which usage may decrease during these off-peak periods is difficult to predict. Prolonged or severe decreases in usage during these periods may adversely affect our growth rate and in turn the market price of our securities. In addition, we expect the revenues associated with our website www.irs.com to be largely seasonal in nature, with peak revenues occurring during January through April, corresponding to the U.S. tax season.

We could be liable for breaches of security on our website.

A fundamental requirement for e-commerce is the secure transmission of confidential information over public networks. Although our systems and processes are designed to protect consumer information and other security breaches, failure to mitigate such fraud or breaches may adversely affect our operating results.

If the market for our services decreases it will have a material adverse effect on our business, prospects, financial condition and results of operations.

Internet marketing and advertising, in general, and paid search advertising, in particular, are in the early stages of development. Our future revenue and profits are substantially dependent upon the continued widespread acceptance, growth, and use of the Internet and other online services as effective advertising mediums. Many of the largest advertisers have generally relied upon more traditional forms of media advertising and have only limited experience advertising on the Internet. If consumers reject the advertising and marketing present on our websites, and the number of click-throughs from our websites decreases, the commercial utility of our websites could be adversely affected.

If we do not continue to innovate and provide products and services that are useful to users, we may not remain competitive, and our revenues and operating results could suffer.

Our success depends on providing products and services that people use for a high quality Internet experience. Our competitors are constantly developing innovations in web search, online advertising and providing information to people. As a result, we must continue to invest significant resources in research and development in order to enhance our existing products and services and introduce new high-quality products and services that people can easily and effectively use. If we are unable to ensure that our users and customers have a high quality experience with our products and services, then they may become dissatisfied and move to competitors’ products and services. In addition, if we are unable to predict user preferences or industry changes or if we are unable to modify our products and services on a timely basis, we may lose users and advertisers. Our operating results would also suffer if our innovations are not responsive to the needs of our users and advertisers, are not appropriately timed with market opportunity or are not effectively brought to market. This may force us to compete in different ways with our competitors and to expend significant resources in order to remain competitive.

Our technical systems are vulnerable to interruption and damage that may be costly and time-consuming to resolve and may harm our business and reputation.

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A disaster could interrupt our services for an indeterminate length of time and severely damage our business, prospects, financial condition and results of operations. Our systems and operations are vulnerable to damage or interruption from:

§	fire;
§	floods;
§	network failure;
§	hardware failure;
§	software failure,
§	power loss;
§	telecommunications failures;
§	break-ins;
§	terrorism, war or sabotage;
§	computer viruses;
§	denial of service attacks;
§	penetration of our network by unauthorized computer users and “hackers” and other similar events;
§	natural disaster; and
§	other unanticipated problems.

We may not have developed or implemented adequate protections or safeguards to overcome any of these events. We also may not have anticipated or addressed many of the potential events that could threaten or undermine our technology network. Any of these occurrences could cause material interruptions or delays in our business, result in the loss of data or render us unable to provide services to our customers. In addition, if a person is able to circumvent our security measures, he or she could destroy or misappropriate valuable information or disrupt our operations. Our insurance may not be adequate to compensate us for all losses that may occur as a result of a catastrophic system failure or other loss, and our insurers may not be able or may decline to do so for a variety of reasons.

If we fail to address these issues in a timely manner, we may lose the confidence of our advertisers, our revenue may decline and our business could suffer. In addition, as we expand our service offerings and enter into new business areas, we may be required to significantly modify and expand our software and technology platform. If we fail to accomplish these tasks in a timely manner, our business and reputation will likely suffer.

New technologies could block our ads, which would harm our business.

Technologies may be developed that can block the display of our ads. Most of our revenues are derived from fees paid to us by advertisers in connection with the display or performance of ads on web pages. As a result, ad-blocking technology could, in the future, adversely affect our operating results.

We depend on the growth of the Internet and Internet infrastructure for our future growth and any decrease or less than anticipated growth in Internet usage could adversely affect our business prospects.

Our future revenue and profits, if any, depend upon the continued widespread use of the Internet as an effective commercial and business medium. Factors which could reduce the widespread use of the Internet include:

§	possible disruptions or other damage to the Internet or telecommunications infrastructure;
§	failure of the individual networking infrastructures of our advertisers and advertising networks;
§	a decision by merchant advertisers to spend more of their marketing dollars in offline areas;
§	increased governmental regulation and taxation; and
§	actual or perceived lack of security or privacy protection.

In particular, concerns over the security of transactions conducted on the Internet and the privacy of users may inhibit the growth of the Internet and other online services, especially online commerce. In order for the online commerce market to develop successfully, we and other market participants must be able to transmit confidential information, including credit card information, securely over public networks. Any decrease or less than anticipated growth in Internet usage could have a material adverse effect on our business prospects.

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We may be subject to lawsuits for information displayed on our websites, which may affect our business.

Laws relating to the liability of providers of online services for activities of their advertisers and for the content of their advertisers’ listings are currently unsettled. It is unclear whether we could be subjected to claims for defamation, negligence, copyright or trademark infringement or claims based on other theories relating to the information we publish on our websites. These kinds of claims have been brought, sometimes successfully, against online services as well as other print publications in the past. We may not successfully avoid civil or criminal liability for unlawful activities carried out by advertisers displayed on our websites. Our potential liability for unlawful activities of advertisers could require us to implement measures to reduce our exposure to such liability, which may require us, among other things, to spend substantial resources or to discontinue certain service offerings. Our insurance may not adequately protect us against these kinds of claims and the defense of such claims may divert the attention of our management from our operations. If we are subjected to such lawsuits, it may adversely affect our business.

In addition, much of the information on www.banks.com that is provided by advertisers and collected from third parties relates to the rates, costs and features for various loan, depositary, personal credit and investment products offered by financial institutions, mortgage companies, investment companies, insurance companies and others participating in the consumer financial marketplace. We are exposed to the risk that some advertisers may provide us, or directly post on our websites, (i) inaccurate information about their product rates, costs and features, or (ii) rates, costs and features that are not available to all consumers. This could cause consumers to lose confidence in the information provided by advertisers on our websites, and cause certain advertisers to become dissatisfied with our websites, and result in lawsuits being filed against us.

Government and legal regulations have damaged our business in the past and may damage it in the future.

We are subject to general business regulations and laws, as well as regulations and laws specifically governing the Internet and e-commerce. Such existing and future laws and regulations may impede the growth of the Internet or other online services. These regulations and laws may cover taxation, user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services, broadband residential Internet access, and the characteristics and quality of products and services.

The Federal Trade Commission has recently reviewed the way in which search engines disclose paid search practices to Internet users. In 2002, the FTC issued guidance recommending that all search engine companies ensure that all paid search results are clearly distinguished from non-paid results, that the use of paid search is clearly and conspicuously explained and disclosed and that other disclosures are made to avoid misleading users about the possible effects of paid search listings on search results. The adoption of laws or regulations relating to placement of paid search advertisements or user privacy, defamation or taxation may inhibit the growth in use of the Internet, which in turn, could decrease the demand for our services and increase our cost of doing business or otherwise have a material adverse effect on our business, prospects, financial condition and results of operations. Any new legislation or regulation, or the application of existing laws and regulations to the Internet or other online services, could have a material adverse effect on our business, prospects, financial condition and results of operations.

The application of new and existing laws and regulations to the Internet or other online services has had a material adverse effect on our business, prospects, financial condition and results of operations in the past. For example, on April 17, 2007, the U.S. House of Representatives passed H.R. 1677, The Taxpayer Protection Act of 2007(“H.R. 1677”). Section 8 of H.R. 1677 would have amended Section 333, Title 31 of the U.S. Code to include Internet domain addresses in the prohibition on misuse of the U.S. Department of the Treasury names and symbols. Although the legislation was never passed by the Senate or signed into law and the bill died with the ending of the 110th Congress in January 2009, there is no guarantee that similar legislation won’t be introduced and passed into law by the current or future Congress. While the ultimate impact of any such proposed legislation is not presently determinable, if enacted, such legislation may adversely impact our overall operations. We own the Internet domain address www.irs.com, which is an acronym commonly associated with the Internal Revenue Service, a division of the U.S. Department of the Treasury. While the bill was never passed into law, if enacted, the passage of such legislation could have severely adversely affected our use of our Internet domain address www.irs.com as well as our overall operations. In the event a bill such as H.R. 1677 were to become law, we intend to be continue to be diligent in our communications with the Internal Revenue Service and Congress in an effort to mitigate any potential negative effects of such legislation.

We may be subject to large scale advertiser defections due to external organizations exerting influence.

The passage of H.R. 1677 in April 2007 resulted in a modification of the 2008 Operating Agreement of the Free File Alliance and prohibited their members from advertising on the domain irs.com. The Free File Alliance is a public/private cooperative of nineteen online tax providers who provide certain U.S. citizens with access to free online tax preparation in cooperation with the Internal Revenue Service. Their members represent the vast majority of the online tax preparation market including TurboTax, H&R Block and TaxAct and the unexpected loss of their advertising dollars had an adverse affect on our business in 2008. We have worked to mitigate the adverse affects of this and have historically taken such steps as redirecting the traffic from irs.com to banks.com. We have also increased the prominence of our disclaimer that we are not the Internal Revenue Service to help minimize the possibility of

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any user confusion, as well as providing users links to irs.gov. The Free File Alliance no longer prohibits their members from advertising on the banks.com domain but we cannot assure you that they will continue allow their members to advertise with us or that individual members will not decide on their own not to advertise with us.

State and local governments may be able to levy additional taxes on Internet access and electronic commerce transactions, which could result in a decrease in the level of usage of our services.

Beginning in 1998, the federal government imposed a moratorium on state and local governments’ imposition of new taxes on Internet access and eCommerce transactions, which has now expired. State and local governments may be able to levy additional taxes on Internet access and eCommerce transactions unless the moratorium is reinstituted. Any increase in applicable taxes may make eCommerce transactions less attractive for businesses and consumers, which could result in a decrease in eCommerce activities and the level of usage of our services.

We are subject to the extensive regulations that govern a broker-dealer.

MyStockFund Securities, Inc., is a broker-dealer registered with the SEC and in all 50 states, the District of Columbia, and Puerto Rico, and a member of a self-regulatory organization, the Financial Industry Regulatory Authority (“FINRA”). Broker-dealers are subject to federal and state laws and regulations covering all aspects of the securities business, including sales and trading practices, securities offerings, publication of research reports, use of customers’ funds and securities, minimum net capital requirements, record-keeping and retention, anti-money laundering, privacy laws, and the conduct of their directors, officers, employees and other associated persons. Violations of the federal and state laws and regulations governing a broker-dealers actions could result in civil and criminal liability and administrative liability in the form of censures, fines, the issuance of cease-and-desist orders, revocation of licenses or registrations, the suspension or expulsion from the securities industry of such broker-dealer or its officers or employees, or other similar consequences by both federal and state securities administrators.

Failure to comply with laws and regulations that protect our customers’ personal and financial information could result in significant fines, penalties and damages and could harm our brand and reputation.

Privacy concerns relating to the disclosure of consumer financial information have drawn increased attention from federal and state governments. For example, the Internal Revenue Service generally prohibits the use or disclosure by tax return preparers of taxpayers’ information without the prior written consent of the taxpayer. In addition, other regulations require financial service providers to adopt and disclose consumer privacy policies and provide consumers with a reasonable opportunity to “opt-out” of having personal information disclosed to unaffiliated third-parties for marketing purposes. Although we have procedures to protect against identity theft, breaches of our clients’ privacy may occur. To the extent the measures we have taken prove to be insufficient or inadequate, we may become subject to litigation or administrative sanctions, which could result in significant fines, penalties or damages and harm to our brand and reputation. In addition, changes in these federal and state regulatory requirements could result in more stringent requirements and could result in a need to change business practices, including how information is disclosed. Establishing systems and processes to achieve compliance with these new requirements may increase costs and/or limit our ability to pursue certain business opportunities.

If insolvency laws or actions of our lessor prevent us from exercising our rights under our option agreement entered into in connection with our sale/leaseback transaction relating to our banks.com domain name, it could have a material adverse impact on our business, results of operation and financial condition.

We entered into a sale-leaseback arrangement whereby we assigned our domain name, banks.com, in exchange for a cash payment and entered into a lease agreement to lease back the domain name for a five year term. At the same time, the lessor of the domain name granted us an option to purchase the domain for a nominal amount at the end of the lease. If the lessor of the domain name were to become subject to any insolvency law, the lessor or its trustee-in-bankruptcy may attempt to reject the option agreement or provisions of the United States Bankruptcy Code may materially limit or prevent the enforcement of the lessor’s obligations under the option agreement. If a court were to limit or prevent enforcement of the option agreement or if an attempt were made to litigate any of the foregoing issues, then we may lose our right to exercise the option or such right could be delayed or the exercise price of the option could be increased. In addition, if, through inadvertence or fraud, the lessor transfers only the domain, but not the option agreement, to a purchaser who purchases in good faith without knowledge that the purchase violates our rights in the domain name, the purchaser could defeat our ownership interest in the domain pursuant to the exercise of its purchase option. We and the lessor have taken certain steps in structuring the sale-leaseback transaction in an effort to mitigate the occurrence of the foregoing. However, there is no assurance that these measures will be respected by a court if the lessor seeks bankruptcy protection or otherwise transfers the domain in violation of the option agreement. Our loss of the banks.com domain name or any substantial increase in the price we must pay to exercise our purchase option for the domain would likely have a material adverse affect on our business, results of operation and financial condition.

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Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information.

None.

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Item 6.  Exhibits.

Exhibit
Number	Description of Document
10.1*	Services Agreement between Remark Media, Inc and TheStreet, Inc., effective November 15, 2012.
31.1	Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer pursuant to Section 240.13a-14 or section 240.15d-14 of the Securities and Exchange Act of 1934, as amended
32.1**	Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase

_________________________

*Confidential treatment had been requested as to a portion of these exhibits, which portion had been omitted and filed separately with the Securities and Exchange Commission.

**These exhibits are furnished to the SEC as accompanying documents and are not to be deemed “filed” for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of these Sections nor shall they be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	REMARK MEDIA, INC.
Date: September 26, 2013	By:	/s/ Kai-Shing Tao
		Kai-Shing Tao
		Co-Chief Executive Officer(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

Confidential Treatment Requested and appropriate disclosure that a certain portion of the Exhibit has been omitted based upon a request for confidential treatment. A confidential portion of this document have been redacted and has been separately filed with the Commission.

SERVICES AGREEMENT

This Agreement (the “Agreement”) is entered into as of November 13, 2012, and effective as of November 15, 2012, between TheStreet, Inc., a Delaware corporation with its principal place of business at 14 Wall Street, 15^th Floor, New York, New York 10005 (“TheStreet”) and Remark Media, a Delaware corporation with its principal place of business at 6 Concourse Parkway, Atlanta, GA 30328 (“Remark”, and collectively with TheStreet, the “Parties”) .

1.License Grant by Remark. Remark grants to TheStreet an exclusive, worldwide, royalty free, during the Term, right and license to use, reproduce, distribute, exhibit, display certain materials made available by Remark to TheStreet (“Remark Materials”), including but not limited to the Remark Sites (“Sites”) listed on Exhibit A, and all trademarks, logos, service marks, other brand elements and content pertaining to the Sites, other than content that requires a third party’s consent to sub-license.  With respect to Remark Materials consisting of trademarks, logos, trade names and service marks (“Marks”), TheStreet will use such Marks according to Remark’s reasonable usage guidelines and instructions made available to TheStreet from time to time, and Remark may terminate this license for material breach if TheStreet violates such usage guidelines, following written notice detailing such violation and subject to the cure period described below.

2.Sites.  Remark will host the Sites, provided that TheStreet may take over hosting of the Sites and thereby reduce costs upon mutual consent. The Parties will execute any documentation that reasonably may be required by Nielsen, comScore or other Web traffic measurement companies to report the Web traffic of the Sites as being traffic on TheStreet’s network.

3.Advertising.   TheStreet has the exclusive right to sell and serve advertisements and e-commerce on the Sites and may display advertising promoting TheStreet’s premium subscription products (“Premium Product Advertising” and collectively with display and other Advertising for the Sites, “Advertising”), subject to the guidelines and revenue share set forth in the business plan listed on Exhibit B (the “Business Plan“) 

4.Support by TheStreet.  TheStreet shall provide to the Sites at least:

(a)******** articles of personal finance content ******** (“TheStreet Content”), as well as edit support for content supplied to Remark by its partners;

(b)reasonable promotional advertisements and links on TheStreet’s sites to drive traffic to the Sites;

(c)******** support from TheStreet’s marketing and promotions departments; and

(d)financial record-keeping for the revenue and costs of the Sites. 

5.********

**********THIS PORTION OF THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

6.Audit Right.  Remark shall have the right to visit TheStreet’s offices during normal business hours and review the financial record-keeping for the revenues and costs of the Sites. TheStreet shall have the

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right to visit Remark’s offices during normal business hours and review the financial record-keeping for the Direct Revenue (as such term is defined in the Business Plan).

7.Representations, Warranties, and Covenants.  Each party  represents, warrants and covenants that: (a) it has the right, including all necessary licenses and consents, to perform its obligations hereunder and to grant the rights granted herein;  (b) with respect to Remark, the Remark Materials, and with respect to TheStreet, TheStreet Content and the Advertising, do not infringe, violate or misappropriate the copyright, trademark, patent or other proprietary or personal right of any third party, are not lewd, pornographic or obscene, do not contain or promote illegal activity, do not promote or sell products or services pertaining to alcohol, tobacco, gambling, firearms or pornography, and do not solicit end users through the use of unsolicited commercial electronic messages; and (c) with respect to Remark, the Remark Materials, and with respect to TheStreet, TheStreet Content and the Advertising do not contain material that is libelous, defamatory or an infringement of any right of privacy or that is otherwise contrary to law.

8.DISCLAIMER.  EXCEPT AS SPECIFICALLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AND DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY REPRESENTATIONS AND WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE

9.Mutual Indemnification.  Each party shall defend, indemnify, and hold harmless the other party, its current and former affiliates, its and their respective current and former officers, directors, employees, representatives, and the successors and assigns, from and against any and all liabilities, losses, damages, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) associated with or incurred as a result of any claim, action, or proceeding brought by a third party arising out of or relating to (i) any breach of such Party’s representations, warranties, covenants and obligations under this Agreement; (ii) with respect to TheStreet, its unauthorized use or modification of the Remark Materials; (iii) such Party’s gross negligence or willful misconduct in performing its obligations under this Agreement; or (iv) such Party’s failure or alleged failure to comply with all applicable laws; provided each Party shall promptly notify the other Party in writing of any such claim, action or proceeding,  promptly give the other Party the opportunity to assume sole control of the defense or settlement of such claim, action or proceeding and give the other Party all necessary information and assistance (at the other Party’s sole expense) in connection with such defense and settlement.  Either Party shall have the right to retain counsel and participate in such defense or settlement.  Neither Party shall settle any matter subject to indemnification without the prior written consent of the other Party; provided, however, that such consent shall not be required if the settlement will not impose any restriction or liability on the other Party that is not fully discharged.

10.LIMITATION OF LIABILITY.  NEITHER PARTY WILL BE LIABLE FOR ANY INCIDENTAL, SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR RELIANCE DAMAGES ARISING FROM OR RELATING TO THIS AGREEMENT, HOWEVER CAUSED, AND UNDER WHATEVER CAUSE OF ACTION OR THEORY OF LIABILITY BROUGHT (INCLUDING UNDER ANY CONTRACT, NEGLIGENCE OR OTHER TORT THEORY OF LIABILITY), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  IN NO EVENT WILL EITHER PARTY’S AGGREGATE LIABILITY TO THE OTHER PARTY UNDER THIS AGREEMENT EXCEED THE GREATER OF (A) $50,000 AND (B) THE TOTAL AMOUNT PAID BY THESTREET TO REMARK UNDER THE AGREEMENT DURING THE 12 MONTHS PRIOR TO THE INCIDENT FIRST GIVING RISE TO SUCH LIABILITY, PROVIDED THAT SUCH LIMITATION WILL NOT APPLY TO A PARTY’S: (A) BREACH OF CONFIDENTIALITY, (B) INDEMNIFICATION OBLIGATIONS, OR (C) WILLFUL AND KNOWING MISCONDUCT.

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11.Term and Termination.  The term of this Agreement expires on December 31, 2014.  Commencing on May 31, 2013, either Party may terminate this Agreement (i) upon 60 days written notice for any reason; and (ii) upon 30 days written notice in the case of an uncured material breach.  Within 15 days of the end of the calendar month in which the effective date of termination occurs, TheStreet shall remit payments owed to Remark through the effective date of termination and each Party shall return or destroy all Confidential Information of the other Party.  Written notice shall be provide to:

********

12.Confidentiality.  Unless required by law, neither Party will disclose Confidential Information (as defined below) to third parties nor use it for any purpose other to perform its duties or enforce its rights under this Agreement. “Confidential Information” means any confidential or proprietary information, including, without limitation, the terms of this Agreement, business and financial information, customer lists, advertiser lists and advertising rates and any information that is of a nature or disclosed under circumstances that a reasonable person would know to treat as confidential.  Confidential Information excludes information in the public domain, independently developed without the use of the other’s confidential information, or provided by a third party who is not bound by obligations of confidentiality.   If either party is requested to disclose Confidential Information (by subpoena or regulatory body or other request), such party will (i) notify the other before making disclosures, (ii) cooperate with the other to limit or afford confidential protection to such disclosures, and (iii) only disclose such amounts of Confidential Information as it is required to disclose by law.

13.Miscellaneous.  This Agreement contains the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior understandings, representations, negotiations and agreements, whether oral or written, regarding such subject matter.  This Agreement shall be construed in accordance with the internal substantive laws of the State of New York, without regard to its conflict of laws provisions.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT SUCH PARTY HAVE TO OBTAIN A TRIAL BY JURY WITH RESPECT TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT. 

THESTREET, INC.		REMARK MEDIA
By:	_____________________________	By:	_____________________________
Name:	_____________________________	Name:	_____________________________
Title:	_____________________________	Title:	_____________________________
Date:	_____________________________	Date:	_____________________________

**********THIS PORTION OF THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

3

Exhibit A

Remark Sites

Dimespring.com

Banks.com

Irs.com

Filelater.com

4

Exhibit B

Business Plan

1.

*********

2.

Advertising Revenue Share and Guidelines.  ********

3.

TheStreet Content.  ********

4.

********

**********THIS PORTION OF THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

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EX-31.1

Exhibit 31.1

Certification pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Kai-Shing Tao, certify that:

1 I have reviewed this quarterly report on Form 10-Q/A of Remark Media, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  September 26, 2013

/s/ Kai-Shing Tao

Kai-Shing Tao

Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

A signed original of this written statement required by Section 302, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 302, has been provided to Remark Media and will be retained by Remark Media, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Remark Media, Inc. (the “Company”) on Form 10-Q/A for the period ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shing Tao, Chief Executive Officer of the Company, certify, to the best of my knowledge, pursuant to Rule 13a-14(g) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 26, 2013
By:	/s/ Kai-Shing Tao
	Kai-Shing Tao
	Chief Executive Officer (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document. This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act except to the extent this Exhibit 32 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Remark Media, Inc. and will be retained by Remark Media, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

10.  SUBSEQUENT EVENTS 

On October 15, 2012, Scott Booth and Gregory M. Swayne resigned from the Company’s Board of Directors (the “Board”).  Mr. Booth was also a member of the Audit Committee and was the Chairman of the Compensation Committee.  The resignations resulted from disagreements among the members of the Board and executive management regarding the future strategic and financial direction of the Company.  The remaining members of the Board of Directors intend to appoint at least two independent directors to the Board in the near future. 

The Company’s Board of Directors appointed Kai-Shing Tao as Chairman of the Board and Co-Chief Executive Officer of the Company, on October 16, 2012, and effective the same day.  Mr. Tao has been a member of the Board since the Company’s formation in 2007.  Mr. Tao will serve as the Company’s principal executive officer and principal financial officer, and will not draw a salary.  Carrie B. Ferman, formerly Chief Executive Officer of the Company, was appointed Co-Chief Executive Officer by the Board, on October 16, 2012 and effective the same day. 

On October 16, 2012, each of the three executive officers of the Company agreed to reduce their base salary compensation to $150,000 per year, in support of the Company’s growth plans, effective October 1, 2012.  All executive compensation agreements have been modified in accordance with the base salary adjustments. 

On October, 29, 2012, Eric Orme, became an advisor and consultant to the Company, with a specific focus on advising the Company related to its technology strategy.  Mr. Orme was previously Chief Technology Officer of the Company, and resigned such role on October 24, 2012. 

On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and The Street will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $1.4 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report. 

On November 23, 2012, the Company issued a $1.8 million Senior Secured Convertible Promissory Note (the “Note”) to a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Co-Chief Executive Officer.  Mr. Tao has been a director of the Company since 2007. The Note was approved by the Audit Committee of the Board, which believes the related party transaction was negotiated as an arms-length transaction.. The terms of the Note include:

· Interest accrues at 6.67% on an annual basis, payable quarterly.

· All principal and any accrued and unpaid interest is due and payable in full on the second anniversary of the Note.

· The repayment of all principal and accrued and unpaid interest is secured by all assets of the Company other than the common shares of Sharecare, Inc. owned by the Company.

· All principal and accrued interest is convertible at any time at the election of the Lender at the rate of $1.30 of principal and interest for each share of Company common stock.

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Condensed Consolidated Statements Of Operations And Comprehensive Loss (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Operating revenue
Brands	$ 263,119	$ 37,396	$ 320,233	$ 103,408
Content and platform services to affiliates		1,172,883		3,934,102
Total revenue	263,119	1,210,279	320,233	4,037,510
Operating expenses
Sales and marketing	108,382	218	215,542	14,517
Content, technology and development	608,244	863,593	1,307,259	3,082,743
General and administrative	1,328,844	1,349,292	3,583,020	3,950,147
Impairment loss		381,000		381,000
Depreciation and amortization expense	149,689	73,973	202,213	203,163
Total operating expenses	2,195,159	2,668,076	5,308,034	7,631,570
Operating loss	(1,932,040)	(1,457,797)	(4,987,801)	(3,594,060)
Other income (expense)
Gain (loss) on change in fair value of derivative	269,852		964,380
Interest expense	(11,505)	(37,075)	(38,630)	(86,443)
Other income (expense)	(14,876)	159	(7,769)	1,380
Total other income (expense)	243,471	(36,916)	917,981	(85,063)
Loss before gain (loss) from equity-method investments	(1,688,569)	(1,494,713)	(4,069,820)	(3,679,123)
Proportional share in loss of equity-method investments	(739,704)	(1,143,499)	(2,553,086)	(1,624,950)
Change of interest gain of equity-method investments (Note 3)		407,376	2,494,990	407,376
Net loss before benefit from income taxes	(2,428,273)	(2,230,836)	(4,127,916)	(4,896,697)
Income tax benefit		95,250		95,250
Net loss	(2,428,273)	(2,135,586)	(4,127,916)	(4,801,447)
Net loss per share
Net loss per share, basic and diluted	$ (0.38)	$ (0.39)	$ (0.68)	$ (0.89)
Basic and diluted weighted average shares outstanding	6,414,200	5,408,455	6,089,553	5,401,807
Comprehensive loss
Cumulative translation adjustments	1,179	(32,993)	(3,182)	(22,731)
Total comprehensive loss	$ (2,427,094)	$ (2,168,579)	$ (4,131,098)	$ (4,824,178)

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Fair Market Value Of Financial Instruments

9 Months Ended

Sep. 30, 2012

Fair Market Value Of Financial Instruments [Abstract]

Fair Market Value Of Financial Instruments

4. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company measures certain financial assets and liabilities at fair value on a recurring basis. The common stock warrants which are classified as liabilities are recorded at their fair market value as of each reporting period.

The measurement of fair market value requires the use of techniques based on observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The inputs create the following fair market value hierarchy:

· Level 1 - Quoted prices for identical instruments in active markets.

· Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations where inputs are observable or where significant value drivers are observable.

· Level 3 - Instruments where significant value drivers are unobservable to third parties.

The Company uses model-derived valuations where inputs are both observable and unobservable in active markets to determine the fair value of certain common stock warrants on a recurring basis. The lowest level of significant inputs are classified as Level 3; thus, the common stock warrants are classified as Level 3. The Company utilized a Monte Carlo simulation valuation model to fair value the warrants. 

Assumptions used in calculating the fair value of these warrants were noted as follows (including assumptions used in calculating the transaction date fair value for the warrants issued in the February 2012 Equity Financing):

	September 30, 2012		February 27, 2012
Annual rate of quarterly dividend		0.00%		0.00%
Expected volatility		90.0%		90.0%
Risk free interest rate		0.53%		0.61%
Expected remaining term (in years)		2.41 - 4.91		3.01 - 5.50

In addition to the assumptions above, the Company takes into consideration whether or not it would participate in another round of equity financing and, if so, what the stock price would be for such a financing at that time.

At September 30, 2012 and December 31, 2011, the fair value of liability classified warrants were as follows:

	September 30, 2012		December 31, 2011
	(Restated)
Derivative liabilities	$	243,398	$	-

The change in the fair value of the warrants accounted for as derivative liabilities is reflected below:

Balance at January 1, 2012	$	-
Fair value of warrants issued in February 2012		1,207,778
Decrease in fair value resulting in gain		(964,380)
Fair value at September 30, 2012	$	243,398

The Company will continue to adjust the warrant liability for changes in fair value until the earlier of the warrants, exercise or expiration, at which time the liability will be reclassified to stockholders' equity.

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Capital Leases (Tables)

9 Months Ended

Sep. 30, 2012

Capital Leases [Abstract]

Schedule Of Future Minimum Capital Lease Payments

		Capital Lease
		Commitments
October 2012 through December 2012	$	42,822
2013		171,287
2014		171,287
2015		171,287
Total commitments		556,683
Interest on capital leases		(109,591)
Present value of minimum capital lease payments	$	447,092

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Restatement Of Consolidated Financial Statements

9 Months Ended

Sep. 30, 2012

Restatement Of Consolidated Financial Statements [Abstract]

Restatement Of Consolidated Financial Statements

12. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

Subsequent to filing the quarterly report Form 10-Q for the quarter ended September 30, 2012, the Company determined that it should have used derivative liability accounting to account for the fair value of the warrants issued in the its February 27, 2012 Equity Financing in recording the proceeds received, due to the down round provision associated with the exercise price of the warrants. The Company previously recorded all of the proceeds from the Equity Financing as stockholders' equity. In recording the proceeds received, due to the down round provision associated with the exercise price of the warrants, the fair value of the warrants should have been recorded as a liability as of the February 27, 2012 with a corresponding decrease in equity. Changes in the fair value of these warrants should have been recognized as other income or expense in the condensed consolidated statements of operations.

The Company has calculated the fair value of the warrants issued in Equity Financing for each relevant reporting period using the Monte Carlo simulation method. The Company has restated its previously issued financial statements to correct the non-cash errors related to the derivative related to derivative warrant liability accounting for warrants issued in the February 2012 Equity Financing.

The impact of the restatement is reflected below for the periods indicated:

	As of September 30, 2012
	As previously reported		Adjustment		As restated
Balance sheets:
Total assets	$	6,265,019	$	-	$	6,265,019
Current liabilities
Derivative liabilities		-		243,398		243,398
All other current liabilities		1,084,651		-		1,084,651
Total current liabilities		1,084,651		243,398		1,328,049
All other liabilities		664,648		-		664,648
Total liabilities		1,749,299				1,992,697
Preferred shares		-		-		-
Common stock		7,118		-		7,118
Additional paid-in capital		108,361,099		(1,207,778)		107,153,321
Accumulated other comprehensive income (loss)		13,699		-		13,699
Accumulated deficit	(103,866,196)			964,380	(102,901,816)
Stockholders' equity		4,515,720		(243,398)		4,272,322
Total liabilities and stockholders' equity	$	6,265,019	$	-	$	6,265,019

	Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
	As previously reported		Adjustment		As restated		As previously reported		Adjustment		As restated
Statement of operations:
Operating Loss	$	(1,932,040)	$	-	$	(1,932,040)	$	(4,987,801)	$	-	$	(4,987,801)
Gain on change in fair value of derivative  liability		-		269,852		269,852		-		964,380		964,380
All other income (expense) items		(766,085)		-		(766,085)		(104,495)		-		(104,495)
Net loss	$	(2,698,125)	$	269,852	$	(2,428,273)	$	(5,092,296)	$	964,380	$	(4,127,916)
Net loss per share (basic and diluted)	$	(0.42)	$	0.04	$	(0.38)	$	(0.84)	$	0.16	$	(0.68)
Weighted average shares outstanding		6,414,200				6,414,200		6,089,553				6,089,553

Certain amounts in the related statements of cash flows have been corrected, but those changes do not impact the net cash provided from or used in operating, investing, and financing activities.

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Restatmente Of Consolidated Financial Statements (Schedule Of The Effects Of The Revision On The Statement Of Operations) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Operating loss	$ (1,932,040)	$ (1,457,797)	$ (4,987,801)	$ (3,594,060)
Gain (loss) on change in fair value of derivative	269,852		964,380
All other income (expense) items	(766,085)		(104,495)
Net loss	(2,428,273)	(2,135,586)	(4,127,916)	(4,801,447)
Net loss per share (basic and diluted)	$ (0.38)	$ (0.39)	$ (0.68)	$ (0.89)
Weighted average shares outstanding	6,414,200		6,089,553
As Previously Reported [Member]
Operating loss	(1,932,040)		(4,987,801)
All other income (expense) items	(766,085)		(104,495)
Net loss	(2,698,125)		(5,092,296)
Net loss per share (basic and diluted)	$ (0.42)		$ (0.84)
Weighted average shares outstanding	6,414,200		6,089,553
Restatement Adjustment [Member]
Gain (loss) on change in fair value of derivative	269,852		964,380
Net loss	$ 269,852		$ 964,380
Net loss per share (basic and diluted)	$ 0.04		$ 0.16

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Segments (Operating Results Regarding Reportable Segments) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Segment Reporting Information [Line Items]
Revenue	$ 263,119	$ 1,210,279	$ 320,233	$ 4,037,510
Operating (loss) income	(1,932,040)	(1,457,797)	(4,987,801)	(3,594,060)
Gain (loss) on change in fair value of derivative	269,852		964,380
Interest expense	(11,505)	(37,075)	(38,630)	(86,443)
Other income (expense) including gain loss from equity-method investments	(754,580)	(640,714)	65,865	(1,120,944)
Net (loss) income	(2,428,273)	(2,135,586)	(4,127,916)	(4,801,447)
Brands [Member]
Segment Reporting Information [Line Items]
Revenue	263,119	37,396	320,233	103,408
Operating (loss) income	(27,084)	(166,355)	(147,924)	(589,285)
Interest expense		(49)		(49)
Other income (expense) including gain loss from equity-method investments	(210)	3,644	(4,951)	3,266
Net (loss) income	(27,294)	(162,760)	(142,973)	(586,068)
Content And Platform Services [Member]
Segment Reporting Information [Line Items]
Revenue		1,172,883		3,934,102
Operating (loss) income		405,496		1,265,606
Net (loss) income		405,496		1,265,606
Corporate [Member]
Segment Reporting Information [Line Items]
Operating (loss) income	(1,904,956)	(1,696,938)	(4,839,877)	(4,270,381)
Gain (loss) on change in fair value of derivative	269,852		964,380
Interest expense	(11,505)	(37,026)	(38,630)	(86,394)
Other income (expense) including gain loss from equity-method investments	(754,370)	(644,358)	70,816	(1,124,210)
Net (loss) income	$ (2,400,979)	$ (2,378,322)	$ (3,984,943)	$ (5,480,985)

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Description Of Business (Details) (USD $)	0 Months Ended		3 Months Ended		9 Months Ended				0 Months Ended		12 Months Ended
	Nov. 23, 2012	Jun. 28, 2012	Sep. 30, 2012 segment	Sep. 30, 2011 segment	Sep. 30, 2012 segment	Sep. 30, 2011 segment	Dec. 31, 2011	Dec. 31, 2010	Jun. 28, 2012 Banks.com [Member]	Nov. 27, 2012 Scenario, Forecast [Member]	Sep. 30, 2013 Scenario, Forecast [Member] The Street [Member]
Description Of Business [Line Items]
Number of segments			2	2	2	2
Cash and cash equivalents			$ 692,675	$ 2,572,435	$ 692,675	$ 2,572,435	$ 1,531,502	$ 4,843,893		$ 1,970,000
Accumulated deficit			(102,901,816)		(102,901,816)		(98,773,900)
Issue shares of common stock to the shareholders of Banks.com		670,815							702,267
Cash consideration for the Banks.com merger									300,000
Cash paid in settlement of Banks.com notes payable									131,250
Settled promissory note, principle		125,000							125,000
Revenue			263,119	1,210,279	320,233	4,037,510					1,400,000
Term loan	1,800,000
Proceeds from term loan	1,700,000
Term loan annual interest rate	6.67%
Conversion price of term loan conversion to common stock	$ 1.30
Term loan conversion premium to the average closing prices of the Company’s common stock for the ten days prior to entrance into the agreement	33.00%
Term loan conversion premium to the closing price of the Company’s common stock on the day of entrance into the agreement	53.00%
Reduction in annual salary expense					$ 1,200,000

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Restatement Of Consolidated Financial Statements (Tables)

9 Months Ended

Sep. 30, 2012

Restatement Of Consolidated Financial Statements [Abstract]

Schedule Of The Effects Of The Revision On The Financial Statements

	As of September 30, 2012
	As previously reported		Adjustment		As restated
Balance sheets:
Total assets	$	6,265,019	$	-	$	6,265,019
Current liabilities
Derivative liabilities		-		243,398		243,398
All other current liabilities		1,084,651		-		1,084,651
Total current liabilities		1,084,651		243,398		1,328,049
All other liabilities		664,648		-		664,648
Total liabilities		1,749,299				1,992,697
Preferred shares		-		-		-
Common stock		7,118		-		7,118
Additional paid-in capital		108,361,099		(1,207,778)		107,153,321
Accumulated other comprehensive income (loss)		13,699		-		13,699
Accumulated deficit	(103,866,196)			964,380	(102,901,816)
Stockholders' equity		4,515,720		(243,398)		4,272,322
Total liabilities and stockholders' equity	$	6,265,019	$	-	$	6,265,019

	Three Months Ended September 30, 2012						Nine Months Ended September 30, 2012
	As previously reported		Adjustment		As restated		As previously reported		Adjustment		As restated
Statement of operations:
Operating Loss	$	(1,932,040)	$	-	$	(1,932,040)	$	(4,987,801)	$	-	$	(4,987,801)
Gain on change in fair value of derivative  liability		-		269,852		269,852		-		964,380		964,380
All other income (expense) items		(766,085)		-		(766,085)		(104,495)		-		(104,495)
Net loss	$	(2,698,125)	$	269,852	$	(2,428,273)	$	(5,092,296)	$	964,380	$	(4,127,916)
Net loss per share (basic and diluted)	$	(0.42)	$	0.04	$	(0.38)	$	(0.84)	$	0.16	$	(0.68)
Weighted average shares outstanding		6,414,200				6,414,200		6,089,553				6,089,553

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Subsequent Events (Details) (USD $)	3 Months Ended		9 Months Ended					12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Nov. 23, 2012	Oct. 16, 2012 employee	Oct. 15, 2012 employee	Sep. 30, 2013 Scenario, Forecast [Member] The Street [Member]
Subsequent Events [Line Items]
Board of Directors intend to appoint independent directors to the Board							2
Number of executive officers						3
Executive officers new annual salary						$ 150,000
Revenue	263,119	1,210,279	320,233	4,037,510				1,400,000
Term loan					$ 1,800,000
Term loan annual interest rate					6.67%
Conversion price of term loan conversion to common stock					$ 1.30

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Acquisitions (Narrative) (Details) (USD $)	0 Months Ended	9 Months Ended	0 Months Ended
	Jun. 28, 2012	Sep. 30, 2012	Jun. 28, 2012 Banks.com [Member]	Jun. 30, 2012 Banks.com [Member]
Acquisitions [Line Items]
Each share of the outstanding common stock of Banks.com converted into the right to receive Remark media common stock	$ 0.0258
Issue shares of common stock to the shareholders of Banks.com	670,815		702,267
Preferred stock, including all accrued and unpaid dividends, a note, and warrant converted into cash	$ 300,000
Preferred stock, including all accrued and unpaid dividends, a note, and warrant converted into the right to receive common stock	31,452
Settled cash consideration	300,000
Settled promissory note	131,250
Settled promissory note, principle	125,000		125,000
Cash consideration for the Banks.com merger			300,000
Total consideration	2,818,958
Number of shares issued	(702,267)
Quoted price per share used to calculate fair value	$ 3.40		$ 3.40
Acquisition transactions costs		200,000
Revenues				$ 278,000

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Capital Leases (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Dec. 07, 2010
Capital Leases [Abstract]
Sale-leaseback arrangement, cash exchange		$ 600,000
Sale-leaseback arrangement term	5 years
Total obligations	447,092
Current portion of obligations under sale-leaseback arrangement	$ 42,822

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Fair Market Value Of Financial Instruments (Schedule Of Assumptions Used In Calculating The Fair Value Of Warrants) (Details)	0 Months Ended	9 Months Ended
	Feb. 27, 2012	Sep. 30, 2012
Annual rate of quarterly dividend	0.00%	0.00%
Expected volatility	90.00%	90.00%
Risk free interest rate	0.61%	0.53%
Minimum [Member]
Expected remaining term	3 years 4 days	2 years 4 months 28 days
Maximum [Member]
Expected remaining term	5 years 6 months	4 years 10 months 28 days

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Stockholders' Equity And Net Loss Per Share (Net Loss Per Share) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Stockholders' Equity And Net Loss Per Share [Abstract]
Net loss	$ (2,428,273)	$ (2,135,586)	$ (4,127,916)	$ (4,801,447)
Weighted average shares outstanding	6,414,200	5,408,455	6,089,553	5,401,807
Net loss per share, basic and diluted	$ (0.38)	$ (0.39)	$ (0.68)	$ (0.89)
Dilutive securities
Total common shares and dilutive securities	6,414,200	5,408,455	6,089,553	5,401,807
Anti-dilutive shares outstanding excluded from the calculation of earnings per share	1,435,349	1,115,538	1,435,349	1,115,538

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Stockholders' Equity And Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Stockholders' Equity And Net Loss Per Share [Abstract]

Reconciliation Of Numerators And Denominators Of Basic And Diluted Loss Per Share

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(Restated)				(Restated)
Loss per share:
Net  loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Net  loss per share, basic and diluted	$	(0.38)	$	(0.39)	$	(0.68)	$	(0.89)
Common shares and dilutive securities:
Weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Dilutive securities		-		-		-		-
Total common shares and dilutive securities		6,414,200		5,408,455		6,089,553		5,401,807

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Condensed Consolidated Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net cash used in operating activities	$ (3,698,125)	$ (2,006,553)
Cash used in operating activities	(3,698,125)	(2,006,553)
Cash flows from investing activities:
Purchases of property, equipment and software	(641,782)	(220,706)
Increase in restricted cash		(100,000)
Cash paid for acquisition of businesses, net of cash acquired	(346,189)
Cash used in investing activities	(987,971)	(320,706)
Cash flows from financing activities:
Proceeds from issuance of equity securities	4,251,500
Proceeds from ongoing capital raising		100,000
Stock issuance costs	(401,049)
Debt issuance costs		(20,000)
Cash provided in financing activities	3,850,451	80,000
Net change in cash and cash equivalents:	(835,645)	(2,247,259)
Impact of foreign currency translation on cash	(3,182)	(24,199)
Cash and cash equivalents at beginning of period	1,531,502	4,843,893
Cash and cash equivalents at end of period	692,675	2,572,435
Supplemental disclosure of cash flow information
Fair value of assets acquired	3,842,577
Less liabilities assumed	(1,023,619)
Cash consideration	431,250
Consideration in the form of stock	2,387,708
Total purchase price	2,818,958
Other non-cash financing and investing activities
Debt issuance costs in the form of warrants		128,104
Stock issuance costs in the form of warrants	$ 133,567
Common shares issued for acquisition of business	2,387,708

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Basis Of Presentation And Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Basis Of Presentation And Summary Of Significant Accounting Policies [Abstract]

Basis Of Presentation And Summary Of Significant Accounting Policies

2.  BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The accompanying interim condensed consolidated financial statements for the threeand nine months ended September 30, 2012and 2011 are unaudited. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information have been omitted pursuant to the rules and regulations of Article 10 of SEC Regulation S-X. In the opinion of management, these condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods indicated. The December 31, 2011 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required U.S. GAAP (“GAAP”). Operating results for the three and nine months ended September 30, 2012are not necessarily indicative of results that may be expected for any other future interim period or for the year ending December 31, 2012. You should read the unaudited condensed consolidated financial statements in conjunction with Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as with Remark Media’s consolidated financial statements and accompanying notes included in the Company’s Forms 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and the Annual Report on Form 10-K for the year ended December 31, 2011.

Principles of Consolidation

The consolidated financial statements include the accounts of Remark Media and its subsidiaries (1) HSW Brasil – Tecnologia e Informação Ltda., (2) HSW (HK) Inc. Limited, (3) Bonet (Beijing) Technology Limited Liability Company, (4) BoWenWang Technology (Beijing) Limited Liability Company, (5) Banks.com, (6) My Stock Fund, and (7) My Dotted Ventures. Banks.com, MyStockFund and MyDottedVentures are wholly-owned subsidiaries acquired through the Banks.com’s acquisition completed on June 28, 2012. The equity of certain of these entities is partially or fully held by citizens of the country of incorporation to comply with local laws and regulations.

Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method.  In the event of a change in ownership, any gain or loss resulting from an investee share issuance is recorded in earnings.  Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.  Controlling interest is determined by majority ownership interest and the ability to unilaterally direct or cause the direction of management and policies of an entity after considering any third-party participatory rights.  The Company applies the guidelines set forth in Accounting Standards Codification (“ASC”) 810, “Consolidations”, in evaluating whether it has interests in variable interest entities (“VIE”) and in determining whether to consolidate any such entities.  All inter-company accounts and transactions between consolidated companies are eliminated in consolidation.

The Company uses qualitative analysis to determine whether or not it is the primary beneficiary of a VIE. The Company considers the rights and obligations conveyed by its implicit and explicit variable interest in each VIE and the relationship of these with the variable interests held by other parties to determine whether the variable interests will absorb a majority of a VIE’s expected losses, receive a majority of its expected residual returns, or both.  If the Company determines that its variable interests will absorb a majority of the VIE’s expected losses, receive a majority of its expected residual returns, or both, it consolidates the VIE as the primary beneficiary, and if not, the Company does not consolidate. 

The Company has determined that Bonet (Beijing) Technology Limited Liability Company is a variable interest entity as defined in ASC 810. Remark Media is the primary beneficiary of this entity and accordingly, the results of this entity have been consolidated along with other subsidiaries.

The Company has determined that its interest in Sharecare, Inc. (“Sharecare”) is not a VIE.  As of September 30, 2012, the Company believed that it was able to exercise significant influence over Sharecare due to its level of ownership and its representation on Sharecare’s Board of Directors. Accordingly, the equity method of accounting is used to account for the investment in Sharecare. As of October 15, 2012, Sharecare and Remark Media no longer had a common board member.  The Company is evaluating this event as it relates to the appropriate prospective accounting treatment for its investment in Sharecare.

Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes.  Actual results could differ materially from those estimates.  On an ongoing basis, the Company evaluates its estimates, including those related to accounts receivable, intangible assets, useful lives of property and equipment, stock-based compensation, equity-method investments, and income taxes, among other things.

Revenue Recognition

The Company generally recognizes revenue when services are provided and if the revenue arrangements meet the criteria set forth in Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition”, namely when a persuasive evidence of an arrangement exists; services have been provided; fees are fixed or determinable; and collectability is reasonably assured. 

Brands Revenue.The Company generally recognizes Brands revenue as visitors are exposed to or react to advertisements on its websites.  Revenue from advertising is generated in the form of sponsored links and image ads.  This includes both pay-per-performance ads and paid-for-impression advertising.  In the pay-per-performance model, revenue is generally earned based on the number of clicks or other actions taken associated with such ads; in the paid-for-impression model, revenue is derived from the display of ads.

Content and Platform Services.Revenue from Content and Platform services is recognized during the period services related to the design, development, hosting, and related web services are performed.  Revenue is recorded on a gross versus net basis when Remark Media bears the risk of loss related to the services performed, the majority of which relates to services performed by the Company’s resources. The Company may also recognize content and platform services revenue on certain projects using a percentage of completion method.  Sales are calculated based on the total costs incurred to date divided by total estimated costs at completion times the contract price.

Operating Expenses 

In the second quarter 2012, and in light of the change in RemarkMedia’s business strategy, the Company revised the presentation of operating expenses in its consolidated statements of operations and has completed the reclassification of the consolidated statements of operations for the prior year periods presented. Beginning with the second quarter 2012, the Company’s operating expenses reflect sales and marketing; content, technology and development; general and administrative; and depreciation and amortization. Sales and marketing expenses include all selling and marketing expenses such as promotions, public relations and compensation of our sales and marketing departments. Content, technology and development expenses include costs of translating and localizing content and acquiring original content written by third-parties as well as costs associated with the design, development, hosting of websites in addition to user acquisition and user retentions and compensation of our technology, content, product and web design departments which does not qualify to be capitalized. General and administrative expenses include all legal, finance, accounting and administrative expenses such as professional fees and facilities costs. Depreciation and amortization include the depreciation of our acquired fixed assets and amortization of software and definite-lived intangible assets.

Purchase Price Allocations

Occasionally, the Company enters into business combinations.  In accordance to ASC 805, “Business Combinations”, the purchase price is allocated to the various assets acquired and liabilities assumed based on their estimated fair value.  Fair values of assets acquired and liabilities assumed are based upon available information and may involve engaging an independent third party to perform an appraisal of tangible and intangible assets.  Estimating fair values can be complex and subject to significant business judgment and most commonly impacts property, equipment, software, and definite- or indefinite-lived intangible assets. Refer to Note4 for further details. 

Software Development Costs

In accordance with ASC 350-40, “Internal Use Software” and ASC 350-50, “Web Development Costs”, the Company capitalizes qualifying costs of computer software and website development costs. Costs incurred during the application development stage as well as upgrades and enhancements that result in additional functionality are capitalized. The internally developed software costs capitalized were $0.6 million and $0.1 million, atSeptember 30, 2012 and December 31, 2011, respectively and are included in “Property, equipment and software” in the condensed consolidated balance sheet. Internally developed software and website development costs will be amortized utilizing the straight-line method over a period of three years, the expected period of the benefit. There was no amortization recorded for these costs during 2012 as these projects were not complete at September 30, 2012.

Stock-Based Compensation

In accordance with ASC 718, “Compensation, Stock Compensation”, the Company measures stock-based compensation at the grant date based on the calculated fair value of the award.  The Company recognizes the expense over the recipient’s requisite service period, generally the vesting period of the award.  The Company estimates the fair value of stock options at the grant date using the Black-Scholes option pricing model with weighted average assumptions for the activity under its stock plans. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate among others, impact the fair value estimate.  These assumptions generally require significant analysis and use of judgment and estimates to develop. Options vest based on meeting a minimum service period or performance condition. Restricted stock grants are recorded using the fair value of the granted shares based on the market value at the grant date.  In addition, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop.

The Company does not recognize a deferred tax asset for unrealized tax benefits associated with the tax deductions in excess of the compensation recorded (excess tax benefit).  The Company applies the “with and without” approach for utilization of tax attributes upon realization of net operating losses in the future.  This method allocates stock-based compensation benefits last among other tax benefits recognized.  In addition, the Company applies the “direct only” method in calculating the amount of windfalls or shortfalls.

Derivative Liability for Warrants to Purchase Common Stock

The Company's derivative liability for warrants represents the fair value of warrants issued in connection with equity financing related to the Banks.com acquisition on February 27, 2012 ("Equity Financing"). These warrants are presented as liabilities based on certain exercise price reductions provisions. The liability, which is recorded at the fair value on the balance sheet, is calculated using the Monte Carlo simulation valuation method. The change in the fair value of these warrants is recognized as other income or expense in the condensed consolidated statement of operations.

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board ("FASB”) issued Accounting Standard Update (“ASU”) No. 2011-08, “Intangibles – Goodwill and Other” (Topic 350), (“ASU 2011-08”) which simplifies how entities test goodwill for impairment. This accounting update permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350.  The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 with early adoption permitted.  The Company adopted this ASU in the first quarter 2012 and the adoption had no material impact on the Company’s financial position, results of operations or cash flows. 

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income Topic 220” –  “Presentation of Comprehensive Income” (“ASU 2011-05”). ASU 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, adjustments must be displayed for items that are reclassified from other comprehensive income to net income, in both net income and other comprehensive income. The standard does not change the current option for presenting components of other comprehensive income (“OCI”) gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. 

In December 2011, the FASB issued ASU 2011-12 Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”). ASU 2011-12 defers those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. The FASB has deferred those changes in order to reconsider whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. ASU 2011-12 does not impact the requirement of ASU 2011-05 to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. For public entities, ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. The Company adopted these updates in the first quarter 2012 and the adoption had no impact on its financial position, results of operations or cash flows. 

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820)” – “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). The amendments in this ASU result in common fair value measurement disclosure requirements between U.S. GAAP and International Financial Reporting Standards. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and disclosing information about fair value measurements. The amendments include a clarification of the FASB’s intent about the application of existing fair value measurement requirements and change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this guidance are effective prospectively for interim and annual periods beginning after December 15, 2011, with no early adoption permitted. The Company adopted the update in the first quarter of 2012 and the adoption had no material impact on its financial position, results of operations or cash flows. 

Effective January 1, 2011, the Company adopted ASU No. 2009-13, “Revenue Recognition (Topic 605)” – “Multiple-deliverables revenue arrangements” (“ASU 2009-13”). This update provides that, when vendor-specific objective evidence or third party evidence of selling price is not available, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration based on the relative selling prices of the separate deliverables (the “relative selling price method”). The relative selling price method allocates any discount in the arrangement proportionately to each deliverable on the basis of each deliverable’s selling price. The Company concluded that the adoption of ASU 2009-13 did not have a material impact on its financial position, results of operations or cash flows, as the guidance applied to revenue arrangements with multiple deliverables, which were not significant.

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Acquisitions

9 Months Ended

Sep. 30, 2012

Acquisitions [Abstract]

Acquisitions

5. ACQUISITIONS 

On June 28, 2012, Remark Media completed the merger (the “Merger”) contemplated by the Agreement and Plan of Merger dated as of February 26, 2012, among the Company, Banks.com and Remark Florida, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which Merger Sub merged with and into Banks.com and Banks.com survived the Merger as a wholly-owned subsidiary of Remark Media.  At the effective time of the Merger, each share of the outstanding common stock of Banks.com was converted into the right to receive 0.0258 shares of Remark Media common stock, for an aggregate of 670,815 shares of Remark Media common stock.  The outstanding shares of Banks.com preferred stock, including all accrued and unpaid dividends as of the date of closing of the Merger on such preferred stock, a Note and a Warrant, all of which are held by Daniel M. O’Donnell, President and Chief Executive Officer of Banks.com, and his affiliates, were converted into cash in the aggregate amount of $300,000 and the right to receive 31,452 shares of Remark Media common stock.  In connection with the Merger, Banks.com issued an Amended and Restated Promissory Note in the principal amount of $125,000 to Mr. O’Donnell and his wife which matured on June 28, 2012. The Company settled the cash consideration of $300,000 on the date of closing and $131,250 in settlement of the promissory note in the principal amount of $125,000 and related interest. 

On August 2, 2012, Remark Media sold Intersearch Corporate Services, Inc. a subsidiary of Banks.com for a minimal consideration to better focus its resources on the Company’s core business strategy. 

Allocation of purchase price

The application of purchase accounting under ASC 805 – “Business Combinations”, requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date. The allocation process requires an analysis of acquired various assets and assumed liabilities such as contracts, customer relationships, contractual commitments and legal contingencies to identify and record the fair value of all assets acquired and liabilities assumed. In valuing acquired assets and assumed liabilities, fair values are based on, but are not limited to: available market data, future expected cash flows; current replacement cost for similar capacity for certain assets; and appropriate discount rates and growth rates. 

Goodwill represents the excess of the purchase price over the fair value of the net assets of acquired businesses.  Goodwill, which is not amortizable and not tax deductible, resulting from the acquisitions discussed below was assigned to the Brands segment.  

Tangible assets
Current assets	$	281,038
Fixed assets		54,358
Other long-term assets		53,686
Total tangible assets		389,082
Intangible assets
Customer relationships		680,000
Domain names		1,180,000
Total intangible assets		1,860,000
Liabilities assumed		(1,023,619)
Total identifiable net assets		1,225,463
Goodwill		1,593,495
Total purchase price	$	2,818,958

The total consideration of the transaction was $2.8 million comprised of the fair value of 702,267 common shares calculated based on the quoted price of $3.40 per share, $300,000 in cash and $131,250 in cash paid to settle the promissory note in the principal amount of $125,000 and related unpaid interest. The acquisition was accounted for under the purchase method and accordingly, the purchase price was allocated to the assets and liabilities based on their estimated fair values on the date of the acquisition. The aggregate purchase price allocation table below is subject to change in future periods as the Company has not yet completed its review of the current assets and liabilities.  

The acquisition transactions costs incurred in the nine months ended September 30, 2012 were all expensed and totaled $0.2million. These expenses are included under the general and administrative expenses in the consolidated statements of operations for the nine months ended September 30, 2012.  Banks.com’s revenue since the acquisition effective date through the nine months ended September 30, 2012 totaled approximately $278 thousand and has been included in the Company’s consolidated statements of operations for those periods. 

The table below reflects a summary of the unaudited pro forma results of operations data for three and nine months ended September 30, 2012 and 2011 as if Remark Media and Banks.com and its subsidiaries had been combined as of January 1, 2011. The pro forma results include estimates and assumptions which management believes are reasonable. However, pro forma results do not include any anticipated cost savings or other effects of the planned integration of these entities, and are not necessarily indicative of the results that would have occurred if the business combination had been in effect on the date indicated, or which may result in the future.

	Unaudited pro forma results of operations
	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Revenues	$	263,119	$	1,823,279	$	2,192,737	$	8,009,510
Operating loss		(1,932,040)		(2,401,797)		(5,102,088)		(4,657,060)
Net loss (restated)		(2,428,273)		(3,102,586)		(4,942,915)		(5,991,447)

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Investment In Sharecare

9 Months Ended

Sep. 30, 2012

Investment In Sharecare [Abstract]

Investment In Sharecare

3.INVESTMENT IN SHARECARE

As of September 30, 2012, Remark Media owns approximately 10.9% of the outstanding common stock of Sharecare. The Company accounts for its equity interest in Sharecare under the equity method of accounting, as Remark Media has the ability to exercise significant influence over Sharecare due to its seat on the Sharecare board of directors. Under this method, the Company records its proportionate share of Sharecare’s net income or loss based on the financial results of Sharecare. The Company continues to evaluate the facts and circumstances related to its investment to assess the need for change in its accounting method in future periods.

During the first and second quarters of 2012, Sharecare issued additional equity in exchange for assets. As a result, Remark Media recorded a gain of $2.5 million in the nine months ended September 30, 2012 due to the change in interest ownership.

The difference between the carrying amount of Remark Media’s investment balance in Sharecare and its proportionate share of Sharecare's underlying net assets was approximately $3.1 million as of September 30, 2012.  The difference is characterized as goodwill and is subject to review in accordance with ASC 323 – “Investments – Equity Method and Joint Ventures” for other than temporary decline in value. The investment balance in Sharecare reflects the intercompany profit elimination.

The following table shows selected unaudited financial data of Sharecare including Remark Media’s proportional share of net loss in Sharecare prior to the elimination of our portion of intercompany profit included in Sharecare’s earnings for the three and nine months ended September 30, 2011 of approximately $40 thousand and $123 thousand, respectively. There was no intercompany profit for the three and six months ended September 30, 2012:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Revenues	$	8,098,607	$	3,063,490	$	20,811,061	$	8,712,780
Gross profit		7,292,016		2,540,731		18,875,347		7,179,804
Loss from operations		(6,316,021)		(3,301,144)		(20,351,056)		(8,013,529)
Net loss		(6,466,551)		(3,763,083)		(20,637,135)		(8,727,767)
Proportional share of investee loss		(739,704)		(1,143,499)		(2,553,086)		(1,624,950)

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Capital Leases (Schedule Of Future Minimum Capital Lease Payments) (Details) (USD $)	Sep. 30, 2012
Capital Leases [Abstract]
October 2012 through December 2012	$ 42,822
2013	171,287
2014	171,287
2015	171,287
Total commitments	556,683
Interest on capital leases	(109,591)
Present value of minimum capital lease payments	$ 447,092

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Basis Of Presentation And Summary Of Significant Accounting Policies (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
More-likely-than-not threshold	50.00%
Software And Website Development [Member]
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items]
Internally developed software costs capitalized	$ 0.6	$ 0.1
Software and website, useful life	3 years

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Fair Market Value Of Financial Instruments (Fair Value Of Warrants Accounted For As Derivative Liabilities) (Details) (USD $)	Sep. 30, 2012
Fair Market Value Of Financial Instruments [Abstract]
Derivative liabilities	$ 243,398

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Segments (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2012 segment	Sep. 30, 2011 segment	Sep. 30, 2012 segment	Sep. 30, 2011 segment
Segments [Abstract]
Number of segments	2	2	2	2

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Related Party Transactions (Details) (USD $)	3 Months Ended	9 Months Ended	3 Months Ended	6 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2011	Sep. 30, 2011	Sep. 30, 2011 Sharecare [Member]	Jun. 30, 2012 Sharecare [Member]	Sep. 30, 2012 Sharecare [Member]	Sep. 30, 2011 Sharecare [Member]	Sep. 30, 2012 Discovery Communications, LLC [Member]	Sep. 30, 2012 Discovery Communications, LLC [Member]
Related Party Transaction [Line Items]
Ownership percentage of outstanding common stock					10.90%
Revenue	$ 1,172,883	$ 3,934,102	$ 900,000			$ 3,000,000	$ 300,000	$ 1,000,000
Rental agreement term					24 months
Rent expense				100,000
Outstanding liability							$ 100,000	$ 100,000

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	7,117,744	5,422,295
Common stock, shares outstanding	7,117,744	5,422,295

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

8. COMMITMENTS AND CONTINGENCIES 

On July 23, 2012, a complaint was filed by FOLIOfn, Inc. (“FOLIOfn”), against the Company’s subsidiary MyStockFund Securities, Inc. (“MyStockFund”), alleging that MyStockFund has infringed six U.S. Patents held by FOLIOfn relating to investment methods. The complaint seeks injunctive relief, damages, pre-judgment interest, and attorneys' fees. The Company believes that MyStockFund has meritorious defenses to the complaint, and MyStockFund intends to contest the claims.

In addition, the Company is engaged from time to time in certain legal disputes arising in the ordinary course of business. Furthermore, the Company accrues liabilities for legal contingencies when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company will review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and the Company's views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made.

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Condensed Consolidated Statements Of Operations And Comprehensive Loss (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Condensed Consolidated Statements Of Operations And Comprehensive Loss [Abstract]
General and Administrative, stock based compensation expense	$ 0.23	$ 0.14	$ 0.70	$ 0.51

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Condensed Consolidated Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and cash equivalents	$ 692,675	$ 1,531,502
Trade accounts receivable, net	156,020	21,730
Trade accounts receivable due from affiliates		302,129
Prepaid expenses and other current assets	165,528	393,989
Total current assets	1,014,223	2,249,350
Property and equipment, net	858,312	364,386
Investment in unconsolidated affiliate	847,756	905,852
License to operate in China	100,000	100,000
Intangibles assets, net	1,756,233	16,429
Goodwill	1,593,495
Other long-term assets	95,000	100,000
Total assets	6,265,019	3,736,017
Liabilities and Stockholders’ Equity
Accounts payable	564,998	93,806
Advances from shareholder	71,844	85,745
Accrued expenses and other current liabilities	336,015	547,569
Derivative liability	243,398
Current portion of capital lease obligations	111,794
Total current liabilities	1,328,049	727,120
Long-term liabilities
Deferred tax liabilities	25,000	25,000
Other long-term liabilities	304,350	290,714
Capital lease obligations, less current portion	335,298
Total liabilities	1,992,697	1,042,834
Stockholders’ equity
Preferred stock, $0.001 par value; 1,000,000 shares authorized, none issued
Common stock, $0.001 par value; 20,000,000 shares authorized, 7,117,744 and 5,422,295 issued and outstanding at September 30, 2012 and December 31, 2011, respectively	7,118	5,422
Additional paid-in-capital	107,153,321	101,444,780
Accumulated other comprehensive income	13,699	16,881
Accumulated deficit	(102,901,816)	(98,773,900)
Total stockholders’ equity	4,272,322	2,693,183
Total liabilities and stockholders’ equity	$ 6,265,019	$ 3,736,017

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Investment In Sharecare (Narrative) (Details) (Sharecare [Member], USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012
Sharecare [Member]
Investments In Sharecare [Line Items]
Ownership percentage of outstanding common stock	10.90%	10.90%
Gain due to change in interest ownership in Sharecare		$ 2,500,000
Difference between the carrying amount of investment in Sharecare and its proportionate share of underlying net assets	3,100,000	3,100,000
Intercompany profit prior to the elimination in Sharecare's earnings	$ 40,000	$ 123,000

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Segments (Tables)

9 Months Ended

Sep. 30, 2012

Segments [Abstract]

Operating Results Regarding Reportable Segments

	Brands		Content and Platform Services		Corporate		Total
Three Months Ended September 30, 2012 (As restated)
Revenue	$	263,119	$	-	$	-	$	263,119
Operating loss		(27,084)		-		(1,904,956)		(1,932,040)
Gain on change in fair value of derivative  liability - restated		-		-		269,852		269,852
Interest expense		-		-		(11,505)		(11,505)
Other income (expense) including loss on equity-method investment		(210)		-		(754,370)		(754,580)
Net loss	$	(27,294)	$	-	$	(2,400,979)	$	(2,428,273)

	Brands		Content and Platform Services		Corporate		Total
Three Months Ended September 30, 2011
Revenue	$	37,396	$	1,172,883	$	-	$	1,210,279
Operating (loss) income		(166,355)		405,496		(1,696,938)		(1,457,797)
Interest expense		(49)		-		(37,026)		(37,075)
Other income (expense) including loss on equity-method investment		3,644		-		(644,358)		(640,714)
Net (loss) income	$	(162,760)	$	405,496	$	(2,378,322)	$	(2,135,586)

	Brands		Content and Platform Services		Corporate		Total
Nine Months Ended September 30, 2012 (As restated)
Revenue	$	320,233	$	-	$	-	$	320,233
Operating loss		(147,924)		-		(4,839,877)		(4,987,801)
Gain on change in fair value of derivative  liability - restated		-		-		964,380		964,380
Interest expense		-		-		(38,630)		(38,630)
Other income including loss on equity-method investment		4,951		-		(70,816)		(65,865)
Net loss	$	(142,973)	$	-	$	(3,984,943)	$	(4,127,916)

	Brands		Content and Platform Services		Corporate		Total
Nine Months Ended September 30, 2011
Revenue	$	103,408	$	3,934,102	$	-	$	4,037,510
Operating (loss) income		(589,285)		1,265,606		(4,270,381)		(3,594,060)
Interest expense		(49)		-		(86,394)		(86,443)
Other expense including loss on equity-method investment		3,266		-		(1,124,210)		(1,120,944)
Net (loss) income	$	(586,068)	$	1,265,606	$	(5,480,985)	$	(4,801,447)

Total Assets Regarding Reportable Segments

	September 30, 2012		December 31, 2011
Total assets:
Content and Platform Services	$	-	$	118,503
Brands		4,545,860		302,129
Business segments		4,545,860		420,632
Corporate		1,719,159		3,315,385
Total assets	$	6,265,019	$	3,736,017

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Stockholders' Equity And Net Loss Per Share (Stock-Based Compensation) (Details) (USD $)	3 Months Ended		9 Months Ended				9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Apr. 13, 2006 2006 Equity Incentive Plan [Member] Stock Compensation Plan [Member]	Dec. 30, 2011 2010 Equity Incentive Plan [Member] Stock Compensation Plan [Member]	Sep. 30, 2012 2012 Director Compensation Plans [Member] Restricted Stock [Member]	Sep. 30, 2012 Modification In The Terms Of Exercising [Member]
Stockholders' Equity And Net Loss Per Share [Line Items]
Share authorized					800,000	525,000
Stock-based compensation expense	$ 230,000	$ 140,000	$ 700,000	$ 510,000				$ 49,000
Stock option grants			241,927					66,575
Compensation expense relating to non-vested stock options	1,200,000		1,200,000
Granted options exercise price	$ 5.83		$ 5.83
Fair value of grant options vesting	$ 180,000	$ 110,000	$ 330,000	$ 170,000
Shares granted							16,000

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Segments (Total Assets Regarding Reportable Segments) (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Segment Reporting Information [Line Items]
Assets	$ 6,265,019	$ 3,736,017
Content And Platform Services [Member]
Segment Reporting Information [Line Items]
Assets		118,503
Brands [Member]
Segment Reporting Information [Line Items]
Assets	4,545,860	302,129
Business Segments [Member]
Segment Reporting Information [Line Items]
Assets	4,545,860	420,632
Corporate [Member]
Segment Reporting Information [Line Items]
Assets	$ 1,719,159	$ 3,315,385

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Acquisitions (Schedule Of Purchase Price Allocation) (Details) (USD $)	Jun. 28, 2012
Acquisitions [Abstract]
Current assets	$ 281,038
Fixed assets	54,358
Other long-term assets	53,686
Total tangible assets	389,082
Customer relationships	680,000
Domain names	1,180,000
Total intangible assets	1,860,000
Liabilities assumed	(1,023,619)
Total identifiable net assets	1,225,463
Goodwill	1,593,495
Total purchase price	$ 2,818,958

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Acquisitions (Summary Of The Unaudited Pro Forma Results Operations Data As If Remark Media And Banks.com And Its Subsidiary Had Been Combined) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Acquisitions [Abstract]
Revenues	$ 263,119	$ 1,823,279	$ 2,192,737	$ 8,009,510
Operating loss	(1,932,040)	(2,401,797)	(5,102,088)	(4,657,060)
Net loss (restated)	$ (2,428,273)	$ (3,102,586)	$ (4,942,915)	$ (5,991,447)

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Capital Leases

9 Months Ended

Sep. 30, 2012

Capital Leases [Abstract]

Capital Leases

7. CAPITAL LEASES 

On December 7, 2010, Banks.com entered into a sale-leaseback arrangement with Domain Capital, LLC, (“Domain Capital”) consisting of an agreement to assign the domain name, banks.com, to Domain Capital in exchange for $0.6 million in cash and a Lease Agreement to lease back the domain name from Domain Capital for a five year term. Effective June 28, 2012, Banks.com became a wholly-owned subsidiary of Remark Media and according to the Agreement and Plan of Merger, Remark Media assumed all outstanding liabilities on the effective date of close. As of September 30, 2012,  total obligations under this agreement were $0.5 million, $0.1 million of which is included under the current portion of capital lease obligations and the remainder is included under capital lease obligations, net of current portion of the Company’s consolidated balance sheets at September 30, 2012. The following table represents the approximate future minimum capital lease payments due under this agreement as of September 30, 2012:

		Capital Lease
		Commitments
October 2012 through December 2012	$	42,822
2013		171,287
2014		171,287
2015		171,287
Total commitments		556,683
Interest on capital leases		(109,591)
Present value of minimum capital lease payments	$	447,092

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Investment In Sharecare (Selected Financial Data Of Sharecare) (Details) (Sharecare [Member], USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Investments In Sharecare [Line Items]
Revenues	$ 8,098,607	$ 3,063,490	$ 20,811,061	$ 8,712,780
Gross profit	7,292,016	2,540,731	18,875,347	7,179,804
Loss from operations	(6,316,021)	(3,301,144)	(20,351,056)	(8,013,529)
Net loss	(6,466,551)	(3,763,083)	(20,637,135)	(8,727,767)
Proportional Share Of Investee Loss [Member]
Investments In Sharecare [Line Items]
Net loss	$ (739,704)	$ (1,143,499)	$ (2,553,086)	$ (1,624,950)

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Stockholders' Equity And Net Loss Per Share (Issuance Of Common Shares) (Details) (USD $)	0 Months Ended	9 Months Ended		0 Months Ended
	Jun. 28, 2012	Sep. 30, 2012	Dec. 31, 2011	Jun. 28, 2012 Banks.com [Member]	Apr. 02, 2012 Theorem Capital, LLC [Member]
Stockholders' Equity And Net Loss Per Share [Line Items]
Common stock, shares issued		7,117,744	5,422,295
Stock issuance costs		$ 401,049
Fair value of warrants		$ 1,207,778
Issue shares of common stock to the shareholders of Banks.com	670,815			702,267
Quoted price per share used to calculate fair value	$ 3.40			$ 3.40
Common shares issued in connection with cashless exercise of warrants					32,405
Number of shares available to purchase from warrant					65,359

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Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

10.  RELATED PARTY TRANSACTIONS 

On October 30, 2009, the Company entered into and effectuated a series of transactions with Sharecare, a related party.  As a result of these transactions, the Company received an equity stake in Sharecare, sold substantially all of the assets of its DailyStrength subsidiary to Sharecare, agreed to provide management and website development services to Sharecare, and received a limited license to use the Sharecare web platform for its own businesses.  Additionally, the Company issued a promissory note to Sharecare, all of which was settled by services the Company provided to Sharecare during 2009.  As of September 30, 2012, Remark Media owned approximately 10.9% of the outstanding common stock of Sharecare. 

Jeff Arnold, a former member of the Company’s Board of Directors, is the Chairman and Chief Executive Officer and a significant stockholder of Sharecare.  Additionally, Discovery Communications, Inc., the Company’s largest stockholder, is a significant stockholder of Sharecare.    

The Company’s service agreement with Sharecare expired on December 31, 2011. As a result, the Company did not have any revenues generated from Sharecare during the nine months ended September 30, 2012. The Company’s revenue from Sharecare for the three and nine months ended September 30, 2011 totaled approximately $0.9 million and $3.0 million, respectively.   Additionally, there were no amounts due from Sharecare at September 30, 2012.

In April 2010, the Company entered into an agreement with Discovery Communications, LLC, an affiliated entity, to provide website development services to Discovery. The agreement expired in December 31, 2011.  As a result, the Company did not have any revenues generated from Discovery during the nine months ended September 30, 2012. The Company’s Content and Platform Services revenue from Discovery, an affiliated entity, for the three months and nine months ended September 30, 2012 totaled approximately $0.3 million and $1.0 million, respectively, and there were no amounts due from Discovery at September 30, 2012.

In March 2010, the Company entered into a 24-month sublease agreement with Sharecare for rental of our corporate headquarters in Atlanta, Georgia, effective March 1, 2010.  On August 1, 2011, the Company mutually agreed to end the sublease agreement prior to the contracted termination date.Rent expense related to this agreement for the six months ended June 30, 2011, was approximately $0.1 million.

As of September 30, 2012, the Company had an outstanding liability due to its affiliate, Discovery, of approximately $0.1 million.

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Segments

9 Months Ended

Sep. 30, 2012

Segments [Abstract]

Segments

6.  SEGMENTS 

Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision making group, in deciding how to allocate resources and in assessing performance.  Because of Remark Media’s integrated business structure, operating costs included in one segment can benefit other segments, and therefore these segments are not designed to measure operating income or loss directly related to the products included in each segment.  Reconciling amounts include adjustments to conform with U.S. GAAP and corporate-level activity not specifically attributed to a segment.  Corporate expenses include, among other items: corporate-level general and administration costs, content, design, technology costs and on-going maintenance charges; share-based compensation expense related to stock and stock option grants; depreciation and amortization expense; impairment loss, if any, and interest expense and income. 

The Company has reported two segments for the three and nine months ended September 30, 2012 and 2011: Brands (formerly digital online publishing) and Content and Platform Services (formerly web platform services). The Brands segment consists of the business related to the Banks.com acquisition completed on June 28, 2012 which generates revenues in the United States and the websites related to the operations in Brazil and China which generate revenues from advertisers based in the respective countries. The Content and Platform Services segment consisted in 2011of the services provided to Remark Media’s affiliates, Sharecare and Discovery, Inc. (“Discovery”). These services are related to the design, development, hosting and related services necessary to launch and operate websites for Sharecare and Discovery through the Company’s direct activities and management of third party vendors.  

Operating results regarding reportable segments for the three months and nine months ended September 30, 2012 and 2011are presented in the following tables:

	Brands		Content and Platform Services		Corporate		Total
Three Months Ended September 30, 2012 (As restated)
Revenue	$	263,119	$	-	$	-	$	263,119
Operating loss		(27,084)		-		(1,904,956)		(1,932,040)
Gain on change in fair value of derivative  liability - restated		-		-		269,852		269,852
Interest expense		-		-		(11,505)		(11,505)
Other income (expense) including loss on equity-method investment		(210)		-		(754,370)		(754,580)
Net loss	$	(27,294)	$	-	$	(2,400,979)	$	(2,428,273)

	Brands		Content and Platform Services		Corporate		Total
Three Months Ended September 30, 2011
Revenue	$	37,396	$	1,172,883	$	-	$	1,210,279
Operating (loss) income		(166,355)		405,496		(1,696,938)		(1,457,797)
Interest expense		(49)		-		(37,026)		(37,075)
Other income (expense) including loss on equity-method investment		3,644		-		(644,358)		(640,714)
Net (loss) income	$	(162,760)	$	405,496	$	(2,378,322)	$	(2,135,586)

	Brands		Content and Platform Services		Corporate		Total
Nine Months Ended September 30, 2012 (As restated)
Revenue	$	320,233	$	-	$	-	$	320,233
Operating loss		(147,924)		-		(4,839,877)		(4,987,801)
Gain on change in fair value of derivative  liability - restated		-		-		964,380		964,380
Interest expense		-		-		(38,630)		(38,630)
Other income including loss on equity-method investment		4,951		-		(70,816)		(65,865)
Net loss	$	(142,973)	$	-	$	(3,984,943)	$	(4,127,916)

	Brands		Content and Platform Services		Corporate		Total
Nine Months Ended September 30, 2011
Revenue	$	103,408	$	3,934,102	$	-	$	4,037,510
Operating (loss) income		(589,285)		1,265,606		(4,270,381)		(3,594,060)
Interest expense		(49)		-		(86,394)		(86,443)
Other expense including loss on equity-method investment		3,266		-		(1,124,210)		(1,120,944)
Net (loss) income	$	(586,068)	$	1,265,606	$	(5,480,985)	$	(4,801,447)

Total assets regarding reportable segments at September 30, 2012 and December 31, 2011 are presented in the following table:

	September 30, 2012		December 31, 2011
Total assets:
Content and Platform Services	$	-	$	118,503
Brands		4,545,860		302,129
Business segments		4,545,860		420,632
Corporate		1,719,159		3,315,385
Total assets	$	6,265,019	$	3,736,017

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Description Of Business

9 Months Ended

Sep. 30, 2012

Description Of Business [Abstract]

Description Of Business

1.  DESCRIPTION OF BUSINESS

Mission 

Our mission is to provide digital experiences that deliver content and foster connections so engaging and dynamic that they inform, entertain and inspire our audiences. Our fundamentals for immersive digital experiences include: compelling content that fuels engagement, clean and intelligent organization and dynamic presentation that promotes content discovery, and intuitive discussion capabilities that generate content sharing and meaningful conversation. 

Who We Are 

Remark Media, Inc.  (“Remark Media” or the “Company”) is a global digital media company incorporated in Delaware and headquartered in Atlanta, with additional operations in New York, Beijing and São Paulo. The Company is comprised of two distinct and complementary segments: “Brands” and “Content and Platform Services”.

Remark Media is listed on The NASDAQ Capital Market and is currently in compliance with its listing standards.  The Company transferred its listing from The NASDAQ Global Market on May 31, 2011. 

Brands 

Our Brands segment consists of next-generation digital media properties that we develop, own and operate.  As of the end of the third quarter 2012, this segment included our translated and localized editions of HowStuffWorks.com in China and Brazil, our personal finance destination, “DimeSpring.com”, and the digital media businesses we acquired through the Banks.com merger completed on June 28, 2012. For more details, see “Banks.com Merger” below. 

Content and Platform Services 

Our Content and Platform Services segment provides third-party clients with content, design, and development services for their websites as well as advisory services and custom technology solutions. We also offer licensing of our proprietary web publishing and social media platforms. Our digital architects, developers and designers aim to construct a seamless connection between content and technology to create solutions that build consumer awareness, promote content engagement and foster brand-customer interactions.  Our prospective client base includes leading media and entertainment companies as well as Fortune 500 brands and boutique businesses. As examples engagements under the Content and Platform segment have included the development and launch of the Dr. Oz website (http://doctoroz.com) for Sharecare (http://www.sharecare.com), and the development and launch of Curiosity Online for Discovery Communications (http://www.curiosity.com). 

Banks.com Merger 

On February 26, 2012, the Company entered into an agreement and plan of merger with Banks.com, Inc. (“Banks.com”), pursuant to which Banks.com became a wholly-owned subsidiary of Remark Media (the “Banks.com Merger”). Banks.com is a leading financial services portal operating a unique breadth and depth of financial products and services. The Company completed the acquisition on June 28, 2012 pursuant to which Remark Media issued approximately 702,267 shares of Common Stock to the shareholders of Banks.com, and paid $300,000 in cash, as consideration for the merger. Also, on the effective date of the merger, the Company paid $131,250 in settlement of a promissory note in the amount of $125,000 (and related unpaid interest), which matured on June 28, 2012.

Sale of Intersearch Corporate Services

On August 2, 2012 Remark Media sold Intersearch Corporate Services, Inc, a subsidiary of Banks.com, for a minimal consideration to better focus its resources on the Company’s core strategy.

Funding and Liquidity Considerations 

As of September 30, 2012, the Company’s total cash and cash equivalents balance was approximately $0.7 million. After receipt of funding of the Term Loan Agreement discussed below, the balance of cash and cash equivalents would be approximately $1.97 million. The Company has incurred net losses and generated substantial negative cash flow from operations in the nine months ended September 30, 2012 and in each fiscal year since its inception and has an accumulated deficit of $103.9 million as of September 30, 2012. The Company had minimal revenues in the first three quarters of 2012 due to the termination of certain agreements in the Content and Platform Services segment at the end of 2011 and its transition to owning and operating its own digital media properties. Since that time, the Company has been focused on building and acquiring wholly-owned digital media properties for its Brands segment and pursuing new services agreements with new customers for its Content and Platform Services segment.

On November 13, 2012, the Company entered into a Services Agreement with TheStreet Inc. (Nasdaq: TST) (“TheStreet”) in which Remark Media granted TheStreet an exclusive right to sell and serve advertisement and e-commerce on certain of Remark Media’s personal finance websites. TheStreet will also support the websites by providing personal finance content, various promotion and advertisements on TheStreet’s websites, and marketing and accounting support. Remark Media and TheStreet will share in the revenue generated by the partnership, after TheStreet recoups certain sales, marketing, editorial and operational costs. The Company expects the agreement to provide at least $1.4 million in proceeds over the next twelve months.  A copy of the Services Agreement is filed with this report. 

On November 23, 2012, the Company entered into a $1.8 million Term Loan Agreement, with net proceeds expected to be $1.7 millon, at a 6.67% annual interest rate with a lender controlled by and in part owned by Mr. Kai-Shing Tao, the Company’s Chairman and Co-Chief Executive Officer.  Mr. Tao has been a director of the Company since 2007.  The Term Loan is secured by substantially all the tangible and intangible assets of the Company, excluding its shares of common stock of Sharecare. The principal and accrued interest under the Term Loan Agreement is convertible into Common Stock of the Company at the rate of $1.30 per share, which represents an approximately 33% premium to the average closing prices of the Company’s common stock for the ten days prior to entrance into the agreement and an approximately 53% premium to the closing price of the Company’s common stock on the day of entrance into the agreement.  This Term Loan Agreement was approved by the Audit Committee of the Board, which believes the related party transaction was negotiated as an arms-length transaction. The Company expects the funding of this loan to close by November 30, 2012.  See Note 11, Subsequent Events, for a description of the terms of  such Loan Agreement.

Finally the Company has taken steps to reduce operating costs, primarily payroll through a reduction in headcount, which will result in a decline in annual salary expense of approximately $1.2 million. The Company will continue to evaluate other opportunities to control costs. 

The Company intends to fund its future operations through a combination of revenue growth in its Brands segment, particularly its personal finance properties.  Additionally, the Company is actively engaged in evaluating future acquisitions to provide revenue growth and the sale of certain non-core assets to provide capital.

Absent any acquisitions of new businesses or the material increase in expectations from its existing customers, current revenue growth may not be sufficient to sustain the Company’s operations in the long term. As such, the Company may need to obtain additional equity financing and/or divest of certain assets or businesses, neither of which can be assured on commercially reasonable terms, if at all. In addition, any equity financing that might be obtained would substantially dilute existing stockholders.  There is no certainty that the Company will be successful at raising capital, nor is there certainty around the amount of funds that may be raised. In addition, the success of the Company will be subject to performance of the markets and investor sentiment regarding the macro and micro economic conditions under which we operate including stock market volatility. There can be no assurance that the Company will be successful at generating more revenues or selling any of its assets. Any failure by the Company to successfully implement these plans would have a material adverse effect on the Company’s business, including the possible inability to continue operations. 

Based on the Company’s current financial projections, which incorporates the Services Agreement with TheStreet, the new Term Loan Agreement, and the reduction in force, all discussed above, the Company believes it has sufficient existing cash resources to fund operations through June 2013.  However, projecting operating results is inherently uncertain.  Anticipated expenses can exceed those that are projected, and expense reimbursements under TheStreet Agreement could be delayed or not meet expectations. Accordingly, the Company’s cash resources could be fully utilized prior to June 2013.

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Restatement Of Consolidated Financial Statements (Schedule Of The Effects Of The Revision On The Balance Sheets) (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Total assets	$ 6,265,019	$ 3,736,017
Derivative liability	243,398
All other current liabilities	1,084,651
Total current liabilities	1,328,049	727,120
All other liabilities	664,648
Total liabilities	1,992,697	1,042,834
Preferred shares
Common stock	7,118	5,422
Additional paid-in-capital	107,153,321	101,444,780
Accumulated other comprehensive income (loss)	13,699	16,881
Accumulated deficit	(102,901,816)	(98,773,900)
Total stockholders’ equity	4,272,322	2,693,183
Total liabilities and stockholders’ equity	6,265,019	3,736,017
As Previously Reported [Member]
Total assets	6,265,019
All other current liabilities	1,084,651
Total current liabilities	1,084,651
All other liabilities	664,648
Total liabilities	1,749,299
Common stock	7,118
Additional paid-in-capital	108,361,099
Accumulated other comprehensive income (loss)	13,699
Accumulated deficit	(103,866,196)
Total stockholders’ equity	4,515,720
Total liabilities and stockholders’ equity	6,265,019
Restatement Adjustment [Member]
Derivative liability	243,398
Total current liabilities	243,398
Additional paid-in-capital	(1,207,778)
Accumulated deficit	964,380
Total stockholders’ equity	$ (243,398)

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Fair Market Value Of Financial Instruments (Change In Fair Value Of Warrants Accounted For As Derivative Liabilities ) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Fair Market Value Of Financial Instruments [Abstract]
Fair value of warrants issued in February 2012	$ 1,207,778
Decrease in fair value resulting in gain	(964,380)
Derivative liability	$ 243,398

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Basis Of Presentation And Summary Of Significant Accounting Policies (Policy)

9 Months Ended

Sep. 30, 2012

Basis Of Presentation And Summary Of Significant Accounting Policies [Abstract]

Basis Of Preparation

Basis of Preparation

The accompanying interim condensed consolidated financial statements for the threeand nine months ended September 30, 2012and 2011 are unaudited. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for financial information have been omitted pursuant to the rules and regulations of Article 10 of SEC Regulation S-X. In the opinion of management, these condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments, necessary to state fairly the financial position, results of operations and cash flows for the periods indicated. The December 31, 2011 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required U.S. GAAP (“GAAP”). Operating results for the three and nine months ended September 30, 2012are not necessarily indicative of results that may be expected for any other future interim period or for the year ending December 31, 2012. You should read the unaudited condensed consolidated financial statements in conjunction with Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as with Remark Media’s consolidated financial statements and accompanying notes included in the Company’s Forms 10-Q for the quarters ended March 31, 2012 and June 30, 2012 and the Annual Report on Form 10-K for the year ended December 31, 2011.

Principles Of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Remark Media and its subsidiaries (1) HSW Brasil – Tecnologia e Informação Ltda., (2) HSW (HK) Inc. Limited, (3) Bonet (Beijing) Technology Limited Liability Company, (4) BoWenWang Technology (Beijing) Limited Liability Company, (5) Banks.com, (6) My Stock Fund, and (7) My Dotted Ventures. Banks.com, MyStockFund and MyDottedVentures are wholly-owned subsidiaries acquired through the Banks.com’s acquisition completed on June 28, 2012. The equity of certain of these entities is partially or fully held by citizens of the country of incorporation to comply with local laws and regulations.

Equity investments in which the Company exercises significant influence but does not control and is not the primary beneficiary are accounted for using the equity method.  In the event of a change in ownership, any gain or loss resulting from an investee share issuance is recorded in earnings.  Investments in which the Company is not able to exercise significant influence over the investee are accounted for under the cost method.  Controlling interest is determined by majority ownership interest and the ability to unilaterally direct or cause the direction of management and policies of an entity after considering any third-party participatory rights.  The Company applies the guidelines set forth in Accounting Standards Codification (“ASC”) 810, “Consolidations”, in evaluating whether it has interests in variable interest entities (“VIE”) and in determining whether to consolidate any such entities.  All inter-company accounts and transactions between consolidated companies are eliminated in consolidation.

The Company uses qualitative analysis to determine whether or not it is the primary beneficiary of a VIE. The Company considers the rights and obligations conveyed by its implicit and explicit variable interest in each VIE and the relationship of these with the variable interests held by other parties to determine whether the variable interests will absorb a majority of a VIE’s expected losses, receive a majority of its expected residual returns, or both.  If the Company determines that its variable interests will absorb a majority of the VIE’s expected losses, receive a majority of its expected residual returns, or both, it consolidates the VIE as the primary beneficiary, and if not, the Company does not consolidate. 

The Company has determined that Bonet (Beijing) Technology Limited Liability Company is a variable interest entity as defined in ASC 810. Remark Media is the primary beneficiary of this entity and accordingly, the results of this entity have been consolidated along with other subsidiaries.

The Company has determined that its interest in Sharecare, Inc. (“Sharecare”) is not a VIE.  As of September 30, 2012, the Company believed that it was able to exercise significant influence over Sharecare due to its level of ownership and its representation on Sharecare’s Board of Directors. Accordingly, the equity method of accounting is used to account for the investment in Sharecare. As of October 15, 2012, Sharecare and Remark Media no longer had a common board member.  The Company is evaluating this event as it relates to the appropriate prospective accounting treatment for its investment in Sharecare.

Use Of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect amounts reported and disclosed in the consolidated financial statements and accompanying notes.  Actual results could differ materially from those estimates.  On an ongoing basis, the Company evaluates its estimates, including those related to accounts receivable, intangible assets, useful lives of property and equipment, stock-based compensation, equity-method investments, and income taxes, among other things.

Revenue Recognition

Revenue Recognition

The Company generally recognizes revenue when services are provided and if the revenue arrangements meet the criteria set forth in Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition”, namely when a persuasive evidence of an arrangement exists; services have been provided; fees are fixed or determinable; and collectability is reasonably assured. 

Brands Revenue.The Company generally recognizes Brands revenue as visitors are exposed to or react to advertisements on its websites.  Revenue from advertising is generated in the form of sponsored links and image ads.  This includes both pay-per-performance ads and paid-for-impression advertising.  In the pay-per-performance model, revenue is generally earned based on the number of clicks or other actions taken associated with such ads; in the paid-for-impression model, revenue is derived from the display of ads.

Content and Platform Services.Revenue from Content and Platform services is recognized during the period services related to the design, development, hosting, and related web services are performed.  Revenue is recorded on a gross versus net basis when Remark Media bears the risk of loss related to the services performed, the majority of which relates to services performed by the Company’s resources. The Company may also recognize content and platform services revenue on certain projects using a percentage of completion method.  Sales are calculated based on the total costs incurred to date divided by total estimated costs at completion times the contract price.

Operating Expenses

Operating Expenses 

In the second quarter 2012, and in light of the change in RemarkMedia’s business strategy, the Company revised the presentation of operating expenses in its consolidated statements of operations and has completed the reclassification of the consolidated statements of operations for the prior year periods presented. Beginning with the second quarter 2012, the Company’s operating expenses reflect sales and marketing; content, technology and development; general and administrative; and depreciation and amortization. Sales and marketing expenses include all selling and marketing expenses such as promotions, public relations and compensation of our sales and marketing departments. Content, technology and development expenses include costs of translating and localizing content and acquiring original content written by third-parties as well as costs associated with the design, development, hosting of websites in addition to user acquisition and user retentions and compensation of our technology, content, product and web design departments which does not qualify to be capitalized. General and administrative expenses include all legal, finance, accounting and administrative expenses such as professional fees and facilities costs. Depreciation and amortization include the depreciation of our acquired fixed assets and amortization of software and definite-lived intangible assets.

Purchase Price Allocations

Purchase Price Allocations

Occasionally, the Company enters into business combinations.  In accordance to ASC 805, “Business Combinations”, the purchase price is allocated to the various assets acquired and liabilities assumed based on their estimated fair value.  Fair values of assets acquired and liabilities assumed are based upon available information and may involve engaging an independent third party to perform an appraisal of tangible and intangible assets.  Estimating fair values can be complex and subject to significant business judgment and most commonly impacts property, equipment, software, and definite- or indefinite-lived intangible assets. Refer to Note4 for further details. 

Software Development Costs

Software Development Costs

In accordance with ASC 350-40, “Internal Use Software” and ASC 350-50, “Web Development Costs”, the Company capitalizes qualifying costs of computer software and website development costs. Costs incurred during the application development stage as well as upgrades and enhancements that result in additional functionality are capitalized. The internally developed software costs capitalized were $0.6 million and $0.1 million, atSeptember 30, 2012 and December 31, 2011, respectively and are included in “Property, equipment and software” in the condensed consolidated balance sheet. Internally developed software and website development costs will be amortized utilizing the straight-line method over a period of three years, the expected period of the benefit. There was no amortization recorded for these costs during 2012 as these projects were not complete at September 30, 2012.

Stock-Based Compensation

Stock-Based Compensation

In accordance with ASC 718, “Compensation, Stock Compensation”, the Company measures stock-based compensation at the grant date based on the calculated fair value of the award.  The Company recognizes the expense over the recipient’s requisite service period, generally the vesting period of the award.  The Company estimates the fair value of stock options at the grant date using the Black-Scholes option pricing model with weighted average assumptions for the activity under its stock plans. Option pricing model input assumptions such as expected term, expected volatility and risk-free interest rate among others, impact the fair value estimate.  These assumptions generally require significant analysis and use of judgment and estimates to develop. Options vest based on meeting a minimum service period or performance condition. Restricted stock grants are recorded using the fair value of the granted shares based on the market value at the grant date.  In addition, the forfeiture rate impacts the amount of aggregate compensation. These assumptions are subjective and generally require significant analysis and judgment to develop.

The Company does not recognize a deferred tax asset for unrealized tax benefits associated with the tax deductions in excess of the compensation recorded (excess tax benefit).  The Company applies the “with and without” approach for utilization of tax attributes upon realization of net operating losses in the future.  This method allocates stock-based compensation benefits last among other tax benefits recognized.  In addition, the Company applies the “direct only” method in calculating the amount of windfalls or shortfalls.

Derivative Liability For Warrants To Purchase Common Stock

Derivative Liability for Warrants to Purchase Common Stock

The Company's derivative liability for warrants represents the fair value of warrants issued in connection with equity financing related to the Banks.com acquisition on February 27, 2012 ("Equity Financing"). These warrants are presented as liabilities based on certain exercise price reductions provisions. The liability, which is recorded at the fair value on the balance sheet, is calculated using the Monte Carlo simulation valuation method. The change in the fair value of these warrants is recognized as other income or expense in the condensed consolidated statement of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board ("FASB”) issued Accounting Standard Update (“ASU”) No. 2011-08, “Intangibles – Goodwill and Other” (Topic 350), (“ASU 2011-08”) which simplifies how entities test goodwill for impairment. This accounting update permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in Topic 350.  The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011 with early adoption permitted.  The Company adopted this ASU in the first quarter 2012 and the adoption had no material impact on the Company’s financial position, results of operations or cash flows. 

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income Topic 220” –  “Presentation of Comprehensive Income” (“ASU 2011-05”). ASU 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, adjustments must be displayed for items that are reclassified from other comprehensive income to net income, in both net income and other comprehensive income. The standard does not change the current option for presenting components of other comprehensive income (“OCI”) gross or net of the effect of income taxes, provided that such tax effects are presented in the statement in which OCI is presented or disclosed in the notes to the financial statements. Additionally, the standard does not affect the calculation or reporting of earnings per share. 

In December 2011, the FASB issued ASU 2011-12 Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (“ASU 2011-12”). ASU 2011-12 defers those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. The FASB has deferred those changes in order to reconsider whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. ASU 2011-12 does not impact the requirement of ASU 2011-05 to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. For public entities, ASU 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and is to be applied retrospectively, with early adoption permitted. The Company adopted these updates in the first quarter 2012 and the adoption had no impact on its financial position, results of operations or cash flows. 

In May 2011, the FASB issued ASU No. 2011-04, “Fair Value Measurement (Topic 820)” – “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”). The amendments in this ASU result in common fair value measurement disclosure requirements between U.S. GAAP and International Financial Reporting Standards. Consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and disclosing information about fair value measurements. The amendments include a clarification of the FASB’s intent about the application of existing fair value measurement requirements and change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this guidance are effective prospectively for interim and annual periods beginning after December 15, 2011, with no early adoption permitted. The Company adopted the update in the first quarter of 2012 and the adoption had no material impact on its financial position, results of operations or cash flows. 

Effective January 1, 2011, the Company adopted ASU No. 2009-13, “Revenue Recognition (Topic 605)” – “Multiple-deliverables revenue arrangements” (“ASU 2009-13”). This update provides that, when vendor-specific objective evidence or third party evidence of selling price is not available, a best estimate of the selling price is required to separate deliverables and allocate arrangement consideration based on the relative selling prices of the separate deliverables (the “relative selling price method”). The relative selling price method allocates any discount in the arrangement proportionately to each deliverable on the basis of each deliverable’s selling price. The Company concluded that the adoption of ASU 2009-13 did not have a material impact on its financial position, results of operations or cash flows, as the guidance applied to revenue arrangements with multiple deliverables, which were not significant.

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Stockholders' Equity And Net Loss Per Share

9 Months Ended

Sep. 30, 2012

Stockholders' Equity And Net Loss Per Share [Abstract]

Stockholders' Equity And Net Loss Per Share

9.  STOCKHOLDERS’ EQUITY AND NET LOSS PER SHARE 

Issuance of Common Shares 

As discussed in Note 1 and Note 4 of the condensed consolidated financial statements, on June 28, 2012, the Company issued 702,267 shares of common stock pursuant to the acquisition of Banks.com. The Company recorded the fair value of the common stock at $3.40 per share based on the closing price of Remark Media’s common stock on the effective date of the acquisition. On April 2, 2012, the Company issued 32,405 common shares in connection with the cashless exercise of the warrants to purchase 65,359 common shares issued in 2011 in connection with the debt agreement entered into with Theorem Capital which expired in March 2012.  

Net Loss per Share

The following is a reconciliation of the numerators and denominators of our basic and diluted loss per share computations:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
	(Restated)				(Restated)
Loss per share:
Net  loss	$	(2,428,273)	$	(2,135,586)	$	(4,127,916)	$	(4,801,447)
Weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Net  loss per share, basic and diluted	$	(0.38)	$	(0.39)	$	(0.68)	$	(0.89)
Common shares and dilutive securities:
Weighted average shares outstanding		6,414,200		5,408,455		6,089,553		5,401,807
Dilutive securities		-		-		-		-
Total common shares and dilutive securities		6,414,200		5,408,455		6,089,553		5,401,807

Stock options and warrants are not included in the diluted earnings per share calculation above as they are anti-dilutive.  The number of anti-dilutive shares outstanding excluded from the calculation above was  1,435,349 and 1,115,538 for the three and  nine periods ended September 30, 2012 and 2011, respectively. 

Stock-Based Compensation

Remark Media has authorized 800,000 shares under the 2006 Equity Incentive Plan adopted April 13, 2006 (the “2006 Plan”), and an additional 525,000 shares authorized under the 2010 Equity Incentive Plan adopted June 15, 2010, and modified on December 30, 2011 (the “2010 Plan”), for grant as part of long-term incentive plans to attract, retain and motivate its eligible executives, employees, officers, directors and consultants.  Options to purchase common stock under the 2006 and 2010 Plans have been granted to its officers and employees with an exercise price equal to the fair market value of the underlying shares on the date of grant.

In accordance with the current authoritative guidance,  the Company measures stock-based compensation cost at the grant date based on the fair value of the award, and recognizes it as an expense over the requisite service period.  Stock-based compensation expense for the three months ended September 30, 2012 and 2011 was approximately $0.23 million and $0.14 million, respectively.For the nine months ended September 30, 2012 and September 30, 2011, stock-based compensation expense was $0.70 million and $0.51 million, respectively. An expense of $49 thousand was included in the stock compensation expense for the nine months ended September 30, 2012 related to the modification in the terms of exercising of 66,575 shares of stock option grants in the first quarter of 2012.  As of September 30, 2012, unrecognized compensation expense relating to non-vested stock options approximated $1.2 million, which we expect to recognize through 2015.During thenine months endedSeptember 30, 2012,  Remark Media granted options to purchase 241,927 shares at aweighted average exercise price of $5.83.  The grant date fair value of grant options vesting during the threemonths ended September 30, 2012 and 2011 wasapproximately $0.18 million and $0.11 million, respectively and during the nine months ended September 30, 2012 and 2011 was approximately $0.33 million and $0.17 million respectively. Additionally, the Company granted 16,000 shares of restricted stock related to director compensation plans for 2012.  Through September 30, 2012, no options have been exercised under the 2006 Plan or the 2010 Plan.

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Acquisitions (Tables)

9 Months Ended

Sep. 30, 2012

Acquisitions [Abstract]

Schedule Of Purchase Price Allocation

Tangible assets
Current assets	$	281,038
Fixed assets		54,358
Other long-term assets		53,686
Total tangible assets		389,082
Intangible assets
Customer relationships		680,000
Domain names		1,180,000
Total intangible assets		1,860,000
Liabilities assumed		(1,023,619)
Total identifiable net assets		1,225,463
Goodwill		1,593,495
Total purchase price	$	2,818,958

Summary Of The Unaudited Pro Forma Results Operations Data As If Remark Media And Banks.com And Its Subsidiary Had Been Combined

	Unaudited pro forma results of operations
	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Revenues	$	263,119	$	1,823,279	$	2,192,737	$	8,009,510
Operating loss		(1,932,040)		(2,401,797)		(5,102,088)		(4,657,060)
Net loss (restated)		(2,428,273)		(3,102,586)		(4,942,915)		(5,991,447)

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Investment In Sharecare (Tables)

9 Months Ended

Sep. 30, 2012

Investment In Sharecare [Abstract]

Selected Financial Data Of Sharecare

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012		2011
Revenues	$	8,098,607	$	3,063,490	$	20,811,061	$	8,712,780
Gross profit		7,292,016		2,540,731		18,875,347		7,179,804
Loss from operations		(6,316,021)		(3,301,144)		(20,351,056)		(8,013,529)
Net loss		(6,466,551)		(3,763,083)		(20,637,135)		(8,727,767)
Proportional share of investee loss		(739,704)		(1,143,499)		(2,553,086)		(1,624,950)

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 26, 2012
Document And Entity Information [Abstract]
Document Type	10-Q/A
Amendment Flag	true
Document Period End Date	Sep. 30, 2012
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012
Entity Registrant Name	Remark Media, Inc.
Entity Central Index Key	0001368365
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,117,744
Amendment Description	To account for warrants as free-standing derivative financial instruments instead of equity instruments because of the anti-dilutive, down-round provisions.

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Fair Market Value Of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Fair Market Value Of Financial Instruments [Abstract]

Schedule Of Assumptions Used In Calculating The Fair Value Of Warrants

	September 30, 2012		February 27, 2012
Annual rate of quarterly dividend		0.00%		0.00%
Expected volatility		90.0%		90.0%
Risk free interest rate		0.53%		0.61%
Expected remaining term (in years)		2.41 - 4.91		3.01 - 5.50

Fair Value Of Warrants Accounted For As Derivative Liabilities

	September 30, 2012		December 31, 2011
	(Restated)
Derivative liabilities	$	243,398	$	-

Change In Fair Value Of Warrants Accounted For As Derivative Liabilities

Balance at January 1, 2012	$	-
Fair value of warrants issued in February 2012		1,207,778
Decrease in fair value resulting in gain		(964,380)
Fair value at September 30, 2012	$	243,398