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LogicMark, Inc. Reports Third Quarter Results Highlighted by Five Percentage Point Increase in Gross Margin

Nov 09, 2023
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Shipments of Freedom Alert Plus Underway 
New PERS Device Expected to Launch in Fourth Quarter 
Expanded Board of Directors Adds Expertise

LOUISVILLE, Ky., Nov. 09, 2023 (GLOBE NEWSWIRE) --  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 third quarter ended September 30, 2023, and recent highlights.   

Results and Recent Highlights:   

  • Gross margin percentage improved to 67% in the third quarter of 2023, a five percentage point increase compared to 62% for the prior year period.
  • Revenues were $2.4 million, compared with $2.8 million for the prior year period.
  • Overall operating expenses were 12% lower at $3.4 million compared with $3.8 million in the prior year period.
  • Cash and cash equivalents were $6.7 million, on September 30, 2023, compared with $7.0 million at year-end 2022.
  • Two new board members were recently appointed to expand depth of experience.
  • Freedom Alert Plus PERS shipments are in progress, complemented by our unique Care Village software suite.
  • Preparations are underway for the launch of a new PERS device in the coming weeks.

Ms. Chia-Lin Simmons, Chief Executive Officer of LogicMark, commented, “In the third quarter, we made significant strides with our Care Village ecosystem as our catalog of innovative products, services, and intellectual property expanded. With the successful launch of the new Freedom Alert Plus, our focus now turns to the release of another new PERS product in the weeks ahead. This will mark our second product launch this year and we are delighted to report that the initial feedback during testing has been very positive, particularly regarding its compact design, GPS location service, and fall detection feature."

“I’m pleased to see that our new product launches are gaining traction, as we introduce a variety of industry-leading solutions with modern technology to meet on-the-go and at-home customer needs. We pride ourselves on offering options for every budget, including premium Wi-Fi-connected devices with a monthly subscription service, continuous monitoring, and automatic software updates through our Care Village application. We also offer 4G LTE as well as landline-based connectivity to support consumers whose budget better accommodates the one-time purchase of a PERS device with no recurring costs. For those unable to purchase their PERS device upfront, interest-free installment plans are also available.”

“Given our plans to enter several new verticals, we recently named two new board members, expanding the total number of directors to six. We look forward to the Board’s collective expertise in many areas, including corporate governance, finance, operations, hardware, and software solutions. I’m excited about our depth of talent and growing product offering as we enter the next phase of our evolution as a company,” concluded Simmons.

Third Quarter 2023 Results  

Revenue for the third quarter ended September 30, 2023, was $2.4 million compared with $2.8 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 networks.

Gross profit margin in the third quarter was 67%, or five percentage points higher compared with 62% in the prior year period. The higher margin was due to improvements in the Company’s supply chain management, including a shift from air freight to transpacific shipping from Asia-based contract manufacturers, as well as a competitive bidding process to obtain optimal shipping rates to all domestic customers. Gross profit in the third quarter of this year was $1.6 million compared to $1.7 million in the same period last year.

Total operating expenses in the third quarter of 2023 were $3.4 million, decreasing 12% or $0.5 million, compared with the same period last year and down 13% quarter-over-quarter. The lower operating expenses year-over-year were mainly due to a reduction in general and administrative expenses, slightly offset by higher selling and marketing expenses.

Net loss attributable to common shareholders for the third quarter was $1.5 million compared with a net loss of $2.2 million in the same period last year.   On a fully diluted basis, the net loss per share was $1.10, compared with a net loss of $4.53 per share in the prior period. The year-over-year earnings per common share comparison includes a 1-for-20 reverse split of outstanding common stock that took place in the second quarter of 2023.

As of September 30, 2023, the cash and cash equivalents balance was $6.7 million, compared with $7.0 million at the end of December 2022.

Investor Call and SEC Filings    

Ms. Chia-Lin Simmons, CEO, and Mr. Mark Archer, CFO, will host a live investor call and webcast on November 9, 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/BI5a557980b737415b9849bf393083a654.

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/tpcfsqtm.  

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.  For more information visit our corporate website at logicmark.com and the investor website at investors.logicmark.com.

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 Dubois
FINN Partners, Inc.
investors@logicmark.com
  
Financial tables to follow:

LogicMark, Inc.
CONDENSED BALANCE SHEETS
(Unaudited)		  
   
    September 30,     December 31,  
    2023     2022  
Assets            
Current Assets            
Cash and cash equivalents   $ 6,682,997     $ 6,977,114  
Restricted cash     59,988       59,988  
Accounts receivable, net     12,194       402,595  
Inventory     1,135,786       1,745,211  
Prepaid expenses and other current assets     680,872       349,097  
Total Current Assets     8,571,837       9,534,005  
                 
Property and equipment, net     228,530       255,578  
Right-of-use assets, net     128,718       182,363  
Product development costs, net of amortization of $15,029 as of September 30, 2023 and December 31, 2022     1,117,135       646,644  
Software development costs     1,018,810       364,018  
Goodwill     10,958,662       10,958,662  
Other intangible assets, net of amortization of $5,476,060 and $4,904,713, respectively     3,128,507       3,699,854  
                 
Total Assets   $ 25,152,199     $ 25,641,124  
                 
Liabilities, Series C Redeemable Preferred Stock and Stockholders’ Equity                
                 
Current Liabilities                
Accounts payable   $ 715,838     $ 673,052  
Accrued expenses     1,211,005       1,740,490  
Total Current Liabilities     1,926,843       2,413,542  
Other long-term liabilities     390,259       440,263  
Total Liabilities     2,317,102       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 September 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 September 30, 2023 and December 31, 2022, respectively, aggregate liquidation preference of $319,000 as of September 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; 1,419,017 and 480,447 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively     142       48  
Additional paid-in capital     111,864,732       106,070,253  
Accumulated deficit     (91,156,077 )     (85,610,282 )
                 
Total Stockholders’ Equity     21,027,797       20,980,019  
                 
Total Liabilities, Series C Redeemable Preferred Stock and Stockholders’ Equity   $ 25,152,199     $ 25,641,124  


LogicMark, Inc.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 
    For the Three Months Ended
September 30,		     For the Nine Months
Ended September 30,		  
    2023     2022     2023     2022  
Revenues   $ 2,367,227     $ 2,751,570     $ 7,503,940     $ 9,769,951  
Costs of goods sold     769,956       1,047,204       2,444,401       3,860,176  
Gross Profit     1,597,271       1,704,366       5,059,539       5,909,775  
                                 
Operating Expenses                                
Direct operating cost     266,746       345,972       841,974       1,156,959  
Advertising costs     57,195       68,170       190,588       68,170  
Selling and marketing     636,643       264,528       1,620,109       728,746  
Research and development     242,697       374,842       806,851       841,917  
General and administrative     1,901,516       2,575,105       6,759,135       7,025,674  
Other expense     54,296       3,222       133,261       35,306  
Depreciation and amortization     217,767       210,632       649,468       599,686  
                                 
Total Operating Expenses     3,376,860       3,842,471       11,001,386       10,456,458  
                                 
Operating Loss     (1,779,589 )     (2,138,105 )     (5,941,847 )     (4,546,683 )
                                 
Other Income                                
Interest income     88,975       44,587       149,914       57,747  
Other income     246,138       -       246,138       -  
Total Other Income     335,113       44,587       396,052       57,747  
                                 
Loss before Income Taxes     (1,444,476 )     (2,093,518 )     (5,545,795 )     (4,488,936 )
Income tax expense     -       -       -       -  
Net Loss     (1,444,476 )     (2,093,518 )     (5,545,795 )     (4,488,936 )
Preferred stock dividends     (75,000 )     (81,790 )     (225,000 )     (257,934 )
Net Loss Attributable to Common Stockholders   $ (1,519,476 )   $ (2,175,308 )   $ (5,770,795 )   $ (4,746,870 )
                                 
Net Loss Attributable to Common Stockholders Per Share - Basic and Diluted   $ (1.10 )   $ (4.53 )   $ (4.73 )   $ (9.93 )
                                 
Weighted Average Number of Common Shares Outstanding - Basic and Diluted     1,380,373       480,447       1,219,749       478,118  

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Source: LogicMark, Inc.