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LogicMark, Inc. Announces Third Quarter 2022 Financial and Operational Results

Nov 10, 2022
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LOUISVILLE, Ky., Nov. 10, 2022 (GLOBE NEWSWIRE) -- LogicMark, Inc. (Nasdaq: LGMK), a provider of personal emergency response systems (PERS), health communications devices, and technology for the growing care economy, announces financial and operating results for the third quarter ended September 30, 2022.   

Highlights Include:   

  • Revenue growth of 15% in Q3 and 28% YTD 
  • Gross profit increased by 51% in Q3 and 38% YTD  
  • Gross margin was 62% in Q3, up from 47% in the same prior year period and 60% YTD from 56% in the same prior year period.  
  • Appointed Garett Hunter as Senior Vice President of Marketing 
  • Appointed John Federico as Senior Director, Product 
  • Launched Direct-to-Consumer sales channel and enhanced corporate website and e-commerce functionality enabling direct purchases 
  • Strong balance sheet with $9.3 million in cash and no debt as of September 30, 2022 

The company continues to make substantial progress in the third quarter across multiple initiatives in product development, operations and governance, sales and marketing and intellectual property expansion while delivering another quarter of solid revenue growth with higher gross profits and improved gross margins.  The team added two key members in both product development and marketing with John Federico joining us as Senior Director, Product and Garett Hunter joining us as our Senior Vice President of Marketing.  

Chia-Lin Simmons, LogicMark’s Chief Executive Officer, commented, “We are very excited about John and Garett joining the team, especially in our anticipation of two new product launches – our mobile app AsterX+1 and the Freedom Alert+, which we look forward to providing further updates on during this quarter and into the new year.” 

“Our R&D and product development teams are hard at work, and we believe the results they are producing will be transformational for LogicMark as we grow our foothold and expand our market share in this growing care economy.  We have also made great strides in expanding our intellectual property portfolio with the filing of additional patents for our innovations and solutions including filing a provisional patent for Incentive Misalignment Detection And Remediation Device which we filed September 30, 2022, the final filings for System And Method For Fall Detection Using Multiple Sensors, Including Barometric Or Atmospheric Pressure Sensors filed on October 24, 2022 and final filings for Preference-Driven Advertising Systems And Methods, which is a continuation with new material filed Nov 1, 2022.”   

“We are steadfast in our commitment to delivering on the promises we’ve made to our shareholders to transform LogicMark through improved financial performance, operational excellence and what we believe are market leading solutions that will diversify our revenue generation and continue to drive enhanced shareholder value. We look forward to providing further updates on our exciting developments in the coming quarters,” concluded Ms. Simmons.   

Q3 2022 Financial Results  

Revenue for the third quarter ended September 30, 2022, was $2.8 million, up 15% over the year-ago period.  Revenue increases were driven by improvements in sales to VA hospitals and clinics.    

Gross profit was $1.7 million for the three months ended September 30, 2022, up 51% compared to the same period ended September 30, 2021.  Gross margin increased from 47% in the quarter ended September 30, 2021, to 62% for the quarter ended September 30, 2022. 

Direct operating costs in the third quarter were $345,972, increasing 51% over the year-ago period, driven by higher sales and the initiation of online advertising to support the July 2022 launch of the Company’s new direct to consumer eCommerce Website.  Selling and marketing expenses in the third quarter of 2022 increased to $332,696, from $75,389 from the same period in the prior year due to the addition of new personnel and higher sales commissions paid on the increase in sales.  Increased marketing costs for the third quarter 2022 were due to the addition of new personnel as well as the addition of investor relations, public relations and social media support organizations.  Research and development expenses increased to $374,842 in the third quarter of 2022 from $136,891 in the same period in the prior year due to new product development activity.  General and administrative expenses were $2.6 million in the third quarter of 2022, up from $1 million in the year-ago period.  The increase in general and administrative was due to higher insurance costs, higher consultant fees, increased spending in the accounting and finance area, and higher costs related to being a public company.

Net loss attributable to common shareholders in the third quarter was $2.2 million, or $0.23 per share versus a net loss of $724,005or $0.12 per share in the prior-year period. 

Cash balance as of September 30, 2022, was $9.3 million versus $12.0 million at December 31, 2021. 
  
Investor Call and SEC Filings    

Management will host a conference call at 1:30 PM (PDT) / 4:30 PM (EDT) today, to review financial results and provide a corporate update. Following management’s remarks there will be a formal question and answer session.    

Participants wishing to dial into the conference call may dial in using the USA & Canada Toll-Free (800) 715-9871 or Toll - (646) 307-1963 and advise the Operator of either the Conference ID 1557140 or the Conference Name.  

To listen to the live webcast please visit the LogicMark Investor Relations website here, or participants may join using the following link: https://edge.media-server.com/mmc/p/i35aektb.

The associated press release, SEC filings, and webcast replay will also be accessible on the Company’s 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 confidence to age in place. LogicMark revolutionized the PERS industry by incorporating two-way voice communication technology directly into its medical alert pendant and providing this life-saving technology at a price point everyday consumers can afford. The Company’s PERS technologies are sold through the United States Veterans Health Administration and dealers/distributors.  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 as a result 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 AsterX+1 and Freedom Alert+; 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:   
CORE IR   
Investor@logicmark.com

Financial tables to follow: 

LogicMark, Inc. 
CONDENSED BALANCE SHEETS 

  September 30,   December 31,
    2022       2021  
Assets      
Current Assets      
Cash and cash equivalents $ 9,328,504     $ 12,044,415  
Restricted cash   59,988       210,131  
Accounts receivable, net   416,852       98,749  
Inventory, net   1,077,160       1,237,280  
Prepaid expenses and other current assets   889,413       849,190  
Total Current Assets   11,771,917       14,439,765  
       
Property and equipment:      
Equipment   414,671       410,444  
Furniture and fixtures   35,761       35,761  
Website and other   259,646       9,427  
    710,078       455,632  
Accumulated depreciation   (463,376 )     (455,632 )
Property and equipment, net   246,702       -  
Right-of-use assets, net   199,619       248,309  
Product development costs   481,768       -  
Goodwill   10,958,662       10,958,662  
Other intangible assets, net of amortization of $4,710,437 and $4,127,920, respectively   3,900,138       4,476,647  
       
Total Assets $ 27,558,806     $ 30,123,383  
       
Liabilities, Series C Redeemable Preferred Stock and Stockholders' Equity      
       
Current Liabilities      
Accounts payable $ 1,330,780     $ 492,431  
Accrued expenses   1,049,754       849,285  
Total Current Liabilities   2,380,534       1,341,716  
Other long-term liabilities   331,351       385,196  
Total Liabilities   2,711,885       1,726,912  
       
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; 200 shares issued and outstanding as of September 30, 2022 and December 31, 2021   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; 173,333 shares issued and outstanding as of September 30, 2022, aggregate liquidation preference of $520,000 as of September 30, 2022, and December 31, 2021   520,000       520,000  
Common stock, par value $0.0001 per share: 100,000,000 shares authorized; 9,608,937 and 9,163,039 issued and outstanding as of September 30, 2022 and December 31, 2021   961       917  
Additional paid-in capital   105,697,391       104,725,115  
Accumulated deficit   (83,178,731 )     (78,656,861 )
       
Total Stockholders' Equity   23,039,621       26,589,171  
       
Total Liabilities, Series C Redeemable Preferred Stock and Stockholders' Equity $ 27,558,806     $ 30,123,383  
       

LogicMark, Inc. 
CONDENSED STATEMENTS OF OPERATIONS 

  Three Months Ended   Nine Months Ended
  September 30,   September 30,
    2022     2021 (1)     2022     2021 (1)
Revenues $ 2,751,570     $ 2,383,029     $ 9,769,951     $ 7,604,287  
Costs of goods sold   1,047,204       1,255,445       3,860,176       3,319,710  
Gross Profit   1,704,366       1,127,584       5,909,775       4,284,577  
               
Operating Expenses              
Direct operating cost   345,972       228,512       1,156,959       729,038  
Selling and marketing   332,698       75,389       796,916       245,292  
Research and development   374,842       136,891       841,917       730,236  
General and administrative   2,575,105       969,264       7,025,674       3,426,596  
Other expense   3,222       20,588       35,306       45,856  
Depreciation and amortization   210,632       193,823       599,686       599,004  
               
Total Operating Expenses   3,842,471       1,624,467       10,456,458       5,776,022  
               
Operating Loss   (2,138,105 )     (496,883 )     (4,546,683 )     (1,491,445 )
               
Other Income and (Expense)              
Interest income (expense)   44,587       (144,821 )     57,747       (1,395,611 )
Forgiveness of Paycheck Protection Program loan and accrued interest   -       -       -       349,176  
Warrant modification expense   -       -       -       (2,881,729 )
Total Other Income (Expense), Net   44,587       (144,821 )     57,747       (3,928,164 )
               
Loss before Income Taxes   (2,093,518 )     (641,704 )     (4,488,936 )     (5,419,609 )
Income tax (expense) benefit   -       -       -       -  
Net Loss   (2,093,518 )     (641,704 )     (4,488,936 )     (5,419,609 )
Preferred stock dividends   (81,790 )     (82,301 )     (257,934 )     (2,253,102 )
               
Net Loss Attributable to Common Stockholders ($2,175,308 )   ($724,005 )   ($4,746,870 )   ($7,672,711 )
               
Net Loss Per Share - Basic and Diluted ($0.23 )   ($0.12 )   ($0.50 )   ($1.43 )
               
Weighted Average Number of Common Shares Outstanding - Basic and Diluted   9,608,937       5,969,312       9,562,347       5,377,465  
               
(1) Expenses in 2021 have been reclassified to conform to the 2022 presentation format.


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Source: LogicMark, Inc.