LogicMark, Inc. (Nasdaq: LGMK), a provider of personal
emergency response systems (PERS), health communications devices,
and technology for the growing care economy, announced financial
results for the quarter ended June 30, 2023, and recent operating
highlights.
Summary:
- Gross margin in the second quarter of 2023 improved to 69%,
compared with 59% for the prior year period.
- Revenues were $2.3 million, compared with $3.4 million for the
prior year period.
- Cash balance on June 30, 2023, was $7.6 million, compared to
$7.0 million at year-end 2022.
- Pre-orders are now underway for the new Freedom Alert Plus PERS
product with the proprietary Care Village software suite, with
shipments expected to begin at month-end.
Chia-Lin Simmons, Chief Executive
Officer of LogicMark, commented, “Our second quarter
results reflect efforts to increase operational efficiencies,
including supply chain logistics, leading to the highest gross
margin in ten quarters.
“Our ongoing product research and development efforts have
helped us build a product pipeline that stands at the highest level
seen in over 20 years. These innovative solutions form
part of our strategy to build a Caring Platform as a Service
(CPaaS). Under this new ecosystem, our Care Village Software
platform will host all the hardware on a common operating system
accessible on both iOS and Android mobile devices.
“The recent launch of the Freedom Alert Plus PERS unit is a
great example of the CPaaS system and how we view our expanding
role in the care economy. The new Freedom Alert Plus is a wearable
device that introduces fall detection, instant connection to
caregivers, and a touchscreen design that is unique to the PERS
industry. We can now capture the needed data to monitor
our customers’ well-being in real-time, using artificial
intelligence and machine learning to optimize the best care. We
believe this is a milestone for a PERS product to move beyond
alerts and into predictive safety space.
“Our team is new, but our progress is encouraging.
We’re making great strides with the testing and refining of new
products and anticipate further launches in the second half of this
year. The Freedom Alert Plus launch further assists our existing
product development efforts, allowing for the integration of other
innovative connected devices and solutions on a common platform.
Continued execution of our strategy to design and deliver hardware
and software solutions to the growing care economy will help
contribute to revenue growth in the months ahead,” concluded
Simmons.
Second Quarter 2023
Results
Revenue for the second quarter ended June 30, 2023, was $2.3
million compared with $3.4 million in the same period last year.
The decrease in year-over-year revenues was due to one-time
replacement sales in the same period last year of Freedom Alert 911
Plus 4G PERS units replacing older 3G units, as the national
cellular network carriers announced in 2022 that they would no
longer support 3G network products.
Gross profit margin percentage in the second quarter increased
to 69%, compared with 59% in the prior year period, because of
improvements in the Company’s supply chain management, including a
return to transpacific shipping from our Asia-based contract
manufacturers. Gross profit in the second quarter of this year was
$1.6 million compared to $2.0 million in the same period last
year.
Total operating expenses in the second quarter of 2023 were $3.9
million, increasing by $0.7 million compared with the same period
last year and up just slightly quarter-over-quarter. The increased
operating expenses were related to the build-out of our sales team,
the initiation, and continuation of social media and web-based
advertising to support our direct-to-consumer sales efforts, as
well as one-time legal and administrative costs associated with the
Company’s reincorporation in Nevada and reverse stock split.
Net loss attributable to common shareholders for the second
quarter was $2.3 million compared with a net loss of $1.2 million
in the same period last year. On a fully diluted basis,
the net loss per share was $1.83, compared with a net loss of $2.50
per share in the prior period.
As of June 30, 2023, the cash balance was $7.6 million, compared
with $7.0 million at the end of December 2022.
On April 21, 2023, the Company effected a 1-for-20 reverse split
of its outstanding common stock and Series C redeemable preferred
stock. As a result of the reverse splits, each 20 pre-split shares
of common stock outstanding and each 20 pre-split shares of Series
C redeemable preferred stock outstanding were automatically
exchanged for one new share of each respectively, without any
action on the part of the holders. The purpose of the
reverse split was to regain compliance with the Nasdaq listing rule
requiring our listed common stock to maintain a minimum bid price
of $1.00 per share. Nasdaq notified LogicMark on May 8th, 2023,
that it had regained compliance.
Investor Call and SEC Filings
Ms. Chia-Lin Simmons, CEO, and Mr. Mark Archer, CFO, will host a
live investor call and webcast on August 10, 2023, at 1:30 PM (PDT)
/ 4:30 PM (EDT) to review the Company’s results.
Investors wishing to participate in the conference call must
register to obtain their dial-in and pin number here
https://register.vevent.com/register/BIbefd2f6f723340eaa682c4fe37d12aec.
To listen to the live webcast, please visit the LogicMark
Investor Relations website here, or use the following link:
https://edge.media-server.com/mmc/p/uz9fo83g.
The associated press release, SEC filings, and webcast replay
will also be accessible on the investor relations
website.
About LogicMark
LogicMark, Inc. (Nasdaq: LGMK) provides personal emergency
response systems (PERS), health communications devices and
technologies to create a Connected Care Platform. The Company’s
devices give people the ability to receive care at home and the
confidence to age in place. LogicMark revolutionized the PERS
industry by directly incorporating two-way voice communication
technology into its medical alert pendant, providing life-saving
technology at a price point that everyday consumers can afford. The
Company’s PERS technologies are sold through the United States
Veterans Health Administration, dealers, distributors, and
direct-to-consumers. LogicMark has been awarded a contract by the
U.S. General Services Administration that enables the Company to
distribute its products to federal, state, and local
governments.
Cautionary Statement Regarding Forward-Looking
Statements This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements reflect management’s current expectations, as of the
date of this press release, and involve certain risks and
uncertainties. Forward-looking statements include statements herein
with respect to the successful execution of the Company’s business
strategy. The Company’s actual results could differ materially from
those anticipated in these forward-looking statements because of
various factors. Such risks and uncertainties include, among other
things, our ability to establish and maintain the proprietary
nature of our technology through the patent process, as well as our
ability to possibly license from others patents and patent
applications necessary to develop products; the availability of
financing; the Company’s ability to implement its long range
business plan for various applications of its technology, including
the anticipated product launches of Aster, CPaaS and Freedom Alert
Plus; the Company’s ability to enter into agreements with any
necessary marketing and/or distribution partners; the impact of
competition, the obtaining and maintenance of any necessary
regulatory clearances applicable to applications of the Company’s
technology; the Company’s ability to maintain its Nasdaq listing
for its common stock; and management of growth and other risks and
uncertainties that may be detailed from time to time in the
Company’s reports filed with the SEC.
Investor Relations Contact: A. Pierre
DuboisFINN Partners,
Inc.615-610-0326investors@logicmark.com Financial tables to
follow:
LogicMark,
Inc |
CONDENSED
BALANCE SHEETS |
|
|
|
|
|
June
30, |
|
December
31, |
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
Current Assets |
|
|
|
Cash and
cash equivalents |
$ |
7,649,730 |
|
|
$ |
6,977,114 |
|
Restricted
cash |
|
59,988 |
|
|
|
59,988 |
|
Accounts
receivable, net |
|
16,409 |
|
|
|
402,595 |
|
Inventory |
|
987,219 |
|
|
|
1,745,211 |
|
Prepaid
expenses and other current assets |
|
600,270 |
|
|
|
349,097 |
|
Total Current Assets |
|
9,313,616 |
|
|
|
9,534,005 |
|
|
|
|
|
Property and
equipment, net |
|
253,472 |
|
|
|
255,578 |
|
Right-of-use
assets, net |
|
146,173 |
|
|
|
182,363 |
|
Product
development costs, net of amortization of $15,029 at June 30, 2023
and December 31, 2022 |
|
1,177,302 |
|
|
|
646,644 |
|
Software
development costs |
|
470,545 |
|
|
|
364,018 |
|
Goodwill |
|
10,958,662 |
|
|
|
10,958,662 |
|
Other
intangible assets, net of amortization of $5,285,611 and
$4,904,713, respectively |
|
3,318,956 |
|
|
|
3,699,854 |
|
|
|
|
|
Total Assets |
$ |
25,638,726 |
|
|
$ |
25,641,124 |
|
|
|
|
|
Liabilities, Series C Redeemable Preferred Stock and
Stockholders' Equity |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
Accounts
payable |
$ |
446,692 |
|
|
$ |
673,052 |
|
Accrued
expenses |
|
847,637 |
|
|
|
1,740,490 |
|
Total Current Liabilities |
|
1,294,329 |
|
|
|
2,413,542 |
|
Other
long-term liabilities |
|
407,600 |
|
|
|
440,263 |
|
Total Liabilities |
|
1,701,929 |
|
|
|
2,853,805 |
|
|
|
|
|
Commitments and Contingencies (Note 8) |
|
|
|
|
|
|
|
Series C Redeemable Preferred Stock |
|
|
|
Series C
redeemable preferred stock, par value $0.0001 per share: 2,000
shares designated; 10 shares issued and outstanding as of June 30,
2023 and December 31, 2022 |
|
1,807,300 |
|
|
|
1,807,300 |
|
|
|
|
|
Stockholders' Equity |
|
|
|
Preferred
stock, par value $0.0001 per share: 10,000,000 shares
authorized |
|
|
|
Series F
preferred stock, par value $0.0001 per share: 1,333,333 shares
designated; 106,333 and 173,333 shares issued and outstanding as of
June 30, 2023 and December 31, 2022, respectively, aggregate
liquidation preference of $319,000 as of June 30, 2023 and $520,000
as of December 31, 2022 |
|
319,000 |
|
|
|
520,000 |
|
Common
stock, par value $0.0001 per share: 100,000,000 shares authorized;
1,325,017 and 480,447 issued and outstanding as of June 30, 2023
and December 31, 2022, respectively |
|
133 |
|
|
|
48 |
|
Additional
paid-in capital |
|
111,521,965 |
|
|
|
106,070,253 |
|
Accumulated
deficit |
|
(89,711,601 |
) |
|
|
(85,610,282 |
) |
|
|
|
|
Total Stockholders' Equity |
|
22,129,497 |
|
|
|
20,980,019 |
|
|
|
|
|
Total Liabilities, Series C Redeemable Preferred Stock and
Stockholders' Equity |
$ |
25,638,726 |
|
|
$ |
25,641,124 |
|
|
|
|
|
LogicMark,
Inc. |
|
CONDENSED
STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Revenues |
$ |
2,326,995 |
|
|
$ |
3,367,692 |
|
|
$ |
5,136,713 |
|
|
$ |
7,018,380 |
|
|
Costs of goods sold |
|
727,276 |
|
|
|
1,364,586 |
|
|
|
1,674,445 |
|
|
|
2,811,891 |
|
|
Gross Profit |
|
1,599,719 |
|
|
|
2,003,106 |
|
|
|
3,462,268 |
|
|
|
4,206,489 |
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
Direct
operating cost |
|
312,426 |
|
|
|
336,544 |
|
|
|
575,228 |
|
|
|
810,987 |
|
|
Advertising
costs |
|
85,277 |
|
|
|
- |
|
|
|
133,393 |
|
|
|
- |
|
|
Selling and
marketing |
|
517,931 |
|
|
|
275,011 |
|
|
|
983,466 |
|
|
|
464,216 |
|
|
Research and
development |
|
250,266 |
|
|
|
204,592 |
|
|
|
564,154 |
|
|
|
467,077 |
|
|
General and
administrative |
|
2,443,860 |
|
|
|
2,115,700 |
|
|
|
4,857,619 |
|
|
|
4,451,647 |
|
|
Other
expense |
|
50,646 |
|
|
|
2,000 |
|
|
|
78,964 |
|
|
|
32,084 |
|
|
Depreciation
and amortization |
|
215,703 |
|
|
|
194,691 |
|
|
|
431,701 |
|
|
|
389,054 |
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
3,876,109 |
|
|
|
3,128,538 |
|
|
|
7,624,525 |
|
|
|
6,615,065 |
|
|
|
|
|
|
|
|
|
|
|
Operating Loss |
|
(2,276,390 |
) |
|
|
(1,125,432 |
) |
|
|
(4,162,257 |
) |
|
|
(2,408,576 |
) |
|
|
|
|
|
|
|
|
|
|
Other Income |
|
|
|
|
|
|
|
|
Interest
income |
|
8,510 |
|
|
|
13,159 |
|
|
|
60,938 |
|
|
|
13,159 |
|
|
Total Other Income |
|
8,510 |
|
|
|
13,159 |
|
|
|
60,938 |
|
|
|
13,159 |
|
|
|
|
|
|
|
|
|
|
|
Loss
before Income Taxes |
|
(2,267,880 |
) |
|
|
(1,112,273 |
) |
|
|
(4,101,319 |
) |
|
|
(2,395,417 |
) |
|
Income tax
expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Net
Loss |
|
(2,267,880 |
) |
|
|
(1,112,273 |
) |
|
|
(4,101,319 |
) |
|
|
(2,395,417 |
) |
|
Preferred
stock dividends |
|
(75,000 |
) |
|
|
(88,144 |
) |
|
|
(150,000 |
) |
|
|
(176,144 |
) |
|
Net
Loss Attributable to Common Stockholders |
$ |
(2,342,880 |
) |
|
$ |
(1,200,417 |
) |
|
$ |
(4,251,319 |
) |
|
$ |
(2,571,561 |
) |
|
|
|
|
|
|
|
|
|
|
Net Loss
Attributable to Common Stockholders Per Share - Basic and
Diluted |
$ |
(1.83 |
) |
|
$ |
(2.50 |
) |
|
$ |
(3.73 |
) |
|
$ |
(5.39 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted
Average Number of Common Shares Outstanding - Basic and
Diluted |
|
1,282,794 |
|
|
|
479,738 |
|
|
|
1,139,437 |
|
|
|
476,934 |
|
|
|
|
|
|
|
|
|
|
|
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