Q2 2021 NXT-ID Inc Earnings Call
Begin momentarily thank you.
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[music].
Okay.
Thank you for standing by and welcome to the nurse I D second quarter 2021 Investor update conference call. Please be advised that today's conference call is being recorded.
I would now turn the call study you're supposed to silence him as Chief Executive Officer Eddie.
Please go ahead.
Thank you Valerie and good afternoon, everyone I'm honored to be hosting the call today as the newly appointed CEO of <unk>.
Also Turkey, as Mike Archer, our new Chief Financial Officer.
During this call, Mike and I will be making forward looking statements, which consist of statements that cannot be confirmed by reference to existing.
Information.
Statements regarding our beliefs goals expectations forecast.
Sections, and future performance and assumptions underlying such statements.
Please note that there are a number of factors that will cause actual results to differ materially from our forward looking statements, including factors identified and discussed in our SEC filings.
Please recognize that except as required by applicable law, we undertake no duty to update any forward looking statements and you should not place any undue reliance on such statements.
Yeah.
Since this is my first time addressing a broader audience.
For today by giving you a brief background on my career and why he joined <unk>.
It's possible. Some of you may not have had the opportunity to read the press release announcing my appointment. So I hope this is helpful.
Before turning next IV I served at the founder and CEO of Buckingham and artificial intelligence startup.
And as a result of my work there.
<unk> have been nominated as a top leader in AI sector.
I have been actively involved in the technology industry for over 25 years working with companies as diverse as startups to fortune 50 companies.
From precede a three D and public companies like audible, Google and Harman International which is now a division of Samsung.
At these companies I can probably the teams to help deliver innovation technologies, such as connected car services to companies like Honda Sukru a Porsche.
There have been part of the team that helped to position audible to sell to Amazon.
At every company I have had the responsibility to drive revenue customer acquisition partnerships and most importantly, develop and deliver innovation into the hands of everyday consumers.
In my professional career I also serve as a director on various boards, including a global privately held 100 plus year old company.
I remember, there and make strategic investments into venture capital funds.
<unk> launched the crusher surface.
I also serve on the board for a global non profit the funds innovators Green Tech startups.
I've been very fortunate to have spent my career working in the industry to I'm passionate about I've looked at marketing communications sales branding product development and business development.
To contribute my learnings in those areas to help make improvements at <unk>.
I know that my background is very different from those of the previous two Ceos, who come from more of a finance background.
I have to tell you that I am excited to join next IV because I believe the company has the potential to achieve greater things.
How did you spend more than 25 years in the tech industry. I believe there are three pillars that are required to make a technology company a success.
Let's call it a three legged stool of success.
They must have the right product the right timing and the right people.
Anything any one leg, it's like a school it will fall.
When it comes to the right product for next I D. I see a company with a promising portfolio of IP, many of which have not been developed one launched.
Currently next I D. Covid subsidiary logic market operates in the space called personal emergency response systems or Perth attitude prefer to.
Personally been relied upon like never before so anyone living alone we're needing increased medical attention this technology as a lifesaver.
However.
<unk> as a category area that many of US may not have focused on previously it's a technology category that has not been innovative four years at a time when innovation is most needed.
When magic, Mike first launched its non monitor product it was truly groundbreaking.
In a sea of products that came with a monthly bill for monitoring logical I came along and launched a product that goes with a fixed income to have safety and protection without a monthly bill to pay.
Without breakfast innovation and our background, we plan to continue to expand our portfolio and develop tools that caretakers need to support their loved ones.
We see the next generation of our IP portfolio as a way to once again differentiate ourselves from those in the large and expanding health care and aging Tech economy.
There are opportunities to provide innovation in areas such a fault detection, we can detect a difference between someone sitting down fast to someone who is truly fahmi.
Through our IP around biometrics and security you will see us evaluating and looking at launching products and services that can secure protected and transfer valuable personal data like health care information with financial data anymore.
So next I'd be has the right product portfolio for success.
But what makes system right time.
The impact of COVID-19 globally has made us a much more aware of the health and wellbeing of loved ones and for ourselves.
Research indicates that the health Tech market is growing for a number of reasons beyond COVID-19.
<unk> the need to provide a better quality of life for an aging population and a desire to lower health care costs.
According to a 2020 survey of approximately 1500 caregivers by the National Alliance for Caregiving and ERP.
Only 53% of respondents indicate the use of any tools for caregiving.
So we know that there is significant underutilization that exist.
Further the United States are in the midst of a demographic transformation.
In 2008, the share of the population that was 65 years or older with only 12.5%.
In 2018, it was 15%.
But if you're a 2038 it is projected to reach 21%.
This demographic the boomers between the ages of 53 to 76 make up 72% of the part B of the U S population.
Almost 70% of all disposable income three two trillion direct spending power.
They spend more than 27 hours, a week 7 billion and online shopping the.
But most importantly.
In this demographic, 60% want to age in place.
77% of our focus on health and mobility, and 78% are concerned about health and financial stability.
Fixed income.
They are underserved by the existing technology and represent a large economy.
The timing and economics have never been better the next idea to serve people, who want to age gracefully and apply new thinking in a category that's been neglected.
The final leg of the three legged stool success.
By team.
Next I D as a startup with the ticker symbol.
So we need a team that has the experience of success with public tech companies in execution.
Development and marketing launches, but with the agility of technology startups.
That means having the right people, who have the experience knowhow and the background to do both.
Unfortunate to have built a network during my 25 years in the tech industry to hire and to bring on board. The type of hires that we need that can execute on our vision for the future.
And in active discussions with a number of candidates for both at this company.
Yeah.
I'm very excited about being here at next I D.
The future opportunities that Ive, just discussed to some of the near term opportunities.
Despite some of the company's past challenges, they're a great product and partnership opportunities on your future.
We had a great we have a great relationship with the veterans administration for several years and now we're excited to have won a U S General services contract, which gives us the opportunity to put our products into the hands of many more who need them.
But those of you who may not be familiar with these GSA contracts are long term government contracts with commercial firms that provide federal state and local government buyers.
Access to more than 11 million commercial supplies and services.
They're not easy contracts to obtain and we are excited to happen or would it at GSA schedule, which will allow us to be a better service to our long term partners like the VA and to other agencies.
And we should stress about the veterans Health administration is the largest integrated healthcare system in the United States provide.
Providing care to 1263 health care facilities.
171, VA medical centers and 1112 outpatient sites.
And now we can also provide our products to other federal agencies in the U S as well as to some of the largest states such as Florida anymore.
We will explore to also exploring potentially expanding our self distribution opportunities.
<unk> the launch of <unk> direct to consumer sales efforts.
So to recap.
We are in a transition period as we align our focus and product development efforts.
This includes hiring debate team leveraging our intellectual property enhancing our existing product mix developing new solutions to meet customer needs and creating.
Creating the necessary policies and procedures and working towards improving our financial position over time.
Our recent capital raise was a step in that direction.
I'll be working very closely with the board and staff as we chart, our path and I look forward to providing periodic updates on our progress.
Now I'll turn the call over to Mark to provide a summary of financial results.
Thank you Sharon.
Let me start by saying I just hit my 30 day anniversary with the company. So I'm definitely the new Kid on the block.
That said.
Very happy to be part of Schilens team and I as well I'm excited about the future.
And what it holds for next I D.
I will now summarize the company's unaudited financial and operating results.
For the quarter ended June 32021.
And we will include a discussion of the three and six months periods also ended June 30th.
First the second quarter.
Revenue for the second quarter was approximately $2.8 million.
Up 14% from the prior quarter and up 12% from the same quarter last year.
We are not back to our preprint pandemic revenue levels, but are pleased with the quarter to quarter improvement.
Gross profit for the second quarter was approximately $1.8 million.
<unk> to approximately $1.6 million in the prior quarter.
And slightly favorable with the same quarter last year.
Gross margin was 65% of revenues.
Up 100 basis points from last quarter.
But down 800 basis points from the second quarter of last year.
At the end of 2020, we launched our new Guardian <unk> chief product.
Which is still really quite well, but has higher component costs.
The reason the year over year.
Margin is down.
Operating expenses for the quarter were approximately $2 million.
<unk> to $2.3 million in the prior quarter.
One 9 million in the same quarter last year.
G&A cost.
It's $1.2 million for the quarter.
Down from $1.5 million last quarter.
But up 12% from the same quarter last year.
Operating loss for the second quarter was approximately 212000.
This compares to a loss of approximately 783000.
In the prior quarter.
At a loss of approximately 103000 in the same quarter last year.
Versus last year, the higher loss was a result of our lower sales volume.
Net loss for the quarter.
It was approximately $1.2 million or two cents a share.
Compared to a net loss of approximately $5.8 million or 12 cents a share in the prior quarter.
And a net loss of approximately 668000 or two cents a share.
Same quarter last year.
During the quarter ended June 30, the company pay down term debt by an additional $4.5 million.
Now for the six months year to date results for the period ending June 30.
Revenue for the six months period was approximately $5.2 million.
And $1 million or 16% from last year.
Gross profit for the six month period was approximately $3.4 million.
Down approximately $1.2 million or 27% from last year.
Operating expenses for the six months period were approximately $4.4 million.
Up.
Approximately 691000 or 19% from the same period last year.
And the operating loss for the six month period was $1 million.
Compared to operating income of $1 million during the same six months last year.
Net loss for the six month period.
Was approximately $6.9 million or 14 cents a share.
Compared to a net loss of approximately 280000.
Or a penny a share in the prior year.
Let me take a second and talk about two key events that happened after the second quarter closed.
On August 13th the company closed a private preferred stock investment from institutional investors.
Raising an additional $4 million in working capital.
Prior to expenses associated with the offering.
And then on August 16th.
The company received written communication.
From the NASDAQ hearings panel.
Yes, it had granted the company's request to continue to be listed on the NASDAQ stock market.
This approval is subject to the company, achieving certain future milestones, including a shareholder meeting by.
October 15th.
And receiving shareholder approval at that meeting to effect, a reverse split of our common stock.
If such approval is.
Obtained the company will then have to demonstrate compliance with the NASDAQ rule, requiring maintenance of a minimum bid price of one dollar per share.
Over 10 consecutive trading days.
All by November one.
Should the company not received shareholder approval.
To reverse split the common stock.
Unlikely the company will be able to meet the dollar per share requirement, which would then result in the de listing of our common stock from the NASDAQ stock market.
So this concludes my remarks.
Salary would you please open up the call to any investor questions.
Thank you.
Ladies and gentlemen, if you'd like to ask a question. Please press Star then one on your touch tone telephone again, if you would like to ask a question. Please press Star then one one moment please.
Again to ask a question. Please press Star then one.
Okay.
I'm showing no questions at this time I'd like to turn the call back over to Charlotte Dennis for any closing remarks.
Thank you Valerie we appreciate all of you taking the time to listen to our call today.
It's very important for me to have the opportunity to meet with shareholders and so please reach out to us should you have any questions.
Thank you again for your time today.
Thank you ladies and gentlemen, this does conclude today's conference. Thank you for participating you may all disconnect have a great day.
[music].
Thank you.
[music].
Yes.
Got it.
Okay.
[music].
[music].
Thank you for standing by and welcome to the <unk> second quarter 2021 Investor update conference call. Please be advised that today's conference call is being recorded.
I will now turn the comps or do you flip the silencing and Chief Executive Officer Bobby.
Please go ahead.
Thank you Valerie and good afternoon, everyone.
I'm honored to be hosting the call today as the newly appointed CEO I'm excited.
Also joining me is Mike Archer, our new Chief Financial Officer.
During this call them back and I will be making forward looking statements, which consist of statements that cannot be confirmed by reference to existing information.
Statements regarding our beliefs goals expectations forecast projections and future performance and the assumptions underlying such statements.
Please note that there are a number of factors that will cause actual results to differ materially from our forward looking statements, including factors identified and discussed in our SEC filings.
Please recognize that except as required by applicable law, we undertake no duty to update any forward looking statements and you should not place any undue reliance on such statements.
Yeah.
Since this is my first time addressing a broader audience.
For today by giving you a brief background on my career and why I joined <unk>.
It's possible. Some of you may not have had the opportunity to read the press release announcing my appointment. So I hope this is helpful.
Before turning back psyche I served as a founder and CEO of Cookie layer and artificial intelligence start up.
And as a result of my work there I'm privileged to have been nominated as appropriate AR and AI sector.
I've been actively involved in the technology industry for over 25 years working with companies as diverse as startups to fortune 50 companies.
Some pre feed of series D and public companies like audible, Google and Harman International which is now a division of Samsung.
At these companies I've been part of the team to help deliver innovation technologies, such as connected car services to companies like Honda Subaru, a Porsche where I've been part of the team to help to position <unk> to sell to Amazon.
At every company I've had the responsibility to drive revenue customer acquisition partnerships and most importantly, develop and deliver innovation into the hands of everyday consumers.
In my professional career I also serve as a director on various boards, including a global privately held 100 plus year old company.
Board member, there and make strategic investments into venture capital funds to help launch the crusher startup.
I also serve on the board for a global nonprofit funds innovative green Tech startups.
I've been very fortunate tests, where my career working in the industry I am passionate about his.
What did marketing communications sales branding product development and different department. So I plan to contribute my learnings in those areas to help make improvements at <unk>.
I know that my background is very different from those of the previous two Ceos, who come from more of a finance background.
I have to tell you that I am excited to join next IV because I believe the company has the potential to achieve greater things.
Having spent more than 25 years in the tech industry. I believe there are three pillars that are required to make a technology company a success.
Let's call it a three legged stool of success.
They must have the right product the right timing and the right people.
Missing any one leg, it's like a school it will fall.
When it comes to the right product for next Friday, I see a company with a promising portfolio of IP, many of which have not been developed or launched.
Currently <unk> through its subsidiary logic Mark.
Operates in a space called personal emergency response systems or per.
As the preferred here.
Personally been relied upon like never before for anyone living alone or needing increased medical attention. This technology as a lifesaver.
However.
<unk> is a category that many of us may not have focused on previously.
It's a technology category that has not been innovative for years at a time when innovation is most needed.
When logic, Mike first launched its non monitor product it was truly groundbreaking.
In a sea of products that came with a monthly bill for monitoring logic, Mark came along and launched a product that allows those with a fixed income to have safety and protection without a monthly bill to pay.
Without breakfast innovation and our background, we plan to continue to expand our portfolio and develop tools that caretakers need to support their loved ones. We.
We see the next generation of our IP portfolio as a way to once again differentiate ourselves from dose and a large and expanding health care and aging tech economy.
There are opportunities to provide innovation in areas such a fault detection, we can detect a difference between someone sitting down fast to someone who is truly farming.
Through our IP around biometrics and security you will see us evaluating and looking at launching products and services that can secure protect against transfer valuable personal data like health care information with financial data anymore.
The next slide you have the right product portfolio for success, but what makes this the right time.
The impact of COVID-19 globally has made us all much more aware of the health and wellbeing of loved ones and for ourselves.
Research indicates that the health Tech market is growing for a number of reasons beyond COVID-19.
Including the need to provide a better quality of life for an aging population and a desire to lower health care cost.
According to a 2020 survey of approximately 500 caregivers, but the national Alliance for Caregiving and AARP.
Only 53% of respondents indicate the use of any tools for caregiving.
So we know that there is significant underutilization that exist.
Further the United States and in the midst of a demographic transformation.
In 2008, the share of the population that was 65 years or older with only 12, 5%.
In 2018, it was 15%.
But if you're a 2038 it is projected to reach 21%.
This demographic the boomers between the ages of 53 to 76 make up 72% on the part of the U S population.
The whole 70% of all disposable income.
Three two trillion direct spending power.
They spend more than 27 hours, a week and $7 billion in online shopping.
But most importantly.
In this demographic, 60% want to age in place.
77% of our focus on health and mobility and 78% are concerned about health financial stability.
Joost fixed income.
They are underserved by the existing technology and represent a large economy.
The timing and economics have never been better for next idea to serve people, who want to age gracefully and a prime you're thinking in a category that's been requested.
The final leg of the three legged stool success.
The <unk> team.
Next I D as a startup with the ticker symbol <unk>.
So we need a team that has the experience of success with public tech companies and the execution product development and marketing launches, but with the agility of technology startups.
It's hiring the right people, who have experience knowhow and the background to do both.
Unfortunate to have built a network during my 25 years in the tech industry to hire and bring on board. The type of hires that we need that can execute on our vision for the future.
Im in active discussions with a number of candidates for both at this company.
Yeah.
I'm very excited about being here at next IV.
And then the future opportunities that Ive, just discussed to some of the near term opportunities.
Despite of some of the company's past challenges, they're a great product and partnership opportunities on your future.
We had a great we have a great relationship with the veterans administration for several years and now we're excited to have won a U S General services contract, which gives us the opportunity to put our products into the hands of many more who need them.
But those of you who may not be familiar with these GSA contracts are long term government by contracts with commercial firms that provide federal state and local government buyers access to more than 11 million commercial supplies and services.
They're not easy contracts to obtain and we are excited to have been awarded at GSA schedule, which will allow us to be a better service to our long term partners like the V. A.
The agencies.
And we should stress that the veterans Health administration is the largest integrated healthcare system in the United States.
Providing care to 1263 health care facilities, including 171, VA medical centers and 1112 outpatient sites, but.
And now we can also provide our products to other federal agencies in the U S as well as to some of the largest states such as Florida and more.
We will explore to also exploring potentially expanding our self distribution opportunities.
<unk> the launch of <unk> direct to consumer sales efforts.
So to recap.
We are in a transition period as we align our focus and product development efforts.
Creating the necessary policies and procedures and working towards improving our financial position over time.
Our recent capital raise was a step in that direction.
I'll be working very closely with the board and staff as we chart our path.
Look forward to providing periodic updates on our progress.
Now I'll turn the call over to Mark to provide a summary of financial results.
Yeah.
Thank you Sharon.
Well, let me start by saying I just hit my 30 day anniversary with the company. So I am definitely the new Kid on the block.
I'm very happy to be part of <unk> team and I as well I'm excited about the future.
And what it holds for next I D.
I will now summarize the company's unaudited financial and operating results.
For the quarter ended June 32021.
And we will include a discussion of the three and six months periods also ended June 30th.
First the second quarter.
Revenue for the second quarter was approximately $2.8 million.
Up 14% from the prior quarter and up 12% from the same quarter last year.
We are not back to our preprint pandemic revenue levels, but are pleased with the quarter to quarter improvement.
Gross profit for the second quarter was approximately $1.8 million.
Compared to approximately $1.6 million in the prior quarter.
And slightly favorable.
The same quarter last year.
Gross margin was 65% of revenues.
Up 100 basis points from last quarter.
But down 800 basis points from the second quarter of last year.
At the end of 2020, we launched our new Guardian <unk> product.
But you're still doing quite well that has higher component costs.
The reason the year over year.
Margin is down.
Operating expenses for the quarter were approximately $2 million.
<unk> to $2.3 million in the prior quarter.
And $1.9 million in the same quarter last year.
G&A cost.
It's $1.2 million for the quarter.
Down from $1.5 million last quarter.
But up 12% from the same quarter last year.
Operating loss for the second quarter was approximately 212000.
This compares to a loss of approximately 783000.
In the prior quarter.
At a loss of approximately 103000 in the same quarter last year.
Versus last year, the higher loss was a result of our lower sales volumes.
Net loss for the quarter.
It was approximately $1.2 million or two cents a share.
Compared to a net loss of approximately $5.8 million or <unk> 12 cents a share in the prior quarter.
And a net loss of approximately 668000 or two cents a share.
Same quarter last year.
During the quarter ended June 30, the company paid down term debt by an additional $4.5 million.
Now for the six months year to date results for the period ending June 30.
Revenue for the six month period was approximately $5.2 million.
A million dollars or 16% from last year.
Gross profit for the six months period was approximately $3.4 million.
Down approximately $1.2 million or 27% from last year.
Operating expenses for the six month period were approximately $4.4 million.
Up.
Approximately 691000 or 19% from the same period last year.
And the operating loss for the six month period was $1 million.
Compared to operating income of $1 million during the same six months last year.
Net loss for the six month period.
Was approximately $6.9 million or 14 cents a share compared.
Compared to a net loss of approximately 280000.
Or a penny a share in the prior year.
Let me take a second and talk about two key events that happened after the second quarter closed.
On August 13th.
<unk> closed a private preferred stock investment from institutional investors.
Raising an additional $4 million in working capital.
Prior to expenses associated with the offering.
And then on August 16th.
The company received written communication.
From the NASDAQ hearings panel.
Yes, it had granted the company's request to continue to be listed on the NASDAQ stock market.
This approval is subject to the company, achieving certain future milestones, including a shareholder meeting right.
October 15th.
And receiving shareholder approval at that meeting to effect, a reverse split of our common stock.
If such approval is.
<unk> obtained the company will then have to demonstrate compliance with the NASDAQ rule, requiring maintenance of a minimum bid price of $1 per share.
Over 10 consecutive trading days.
All by November one.
Should the company not received shareholder approval.
The reverse split the common stock.
It's very unlikely the company will be able to meet the dollar per share requirement, which would then result in the de listing of our common stock from the NASDAQ stock market.
So this concludes my remarks.
<unk> would you please open up the call to any investor questions.
Thank you.
Ladies and gentlemen, if you'd like to ask a question. Please press Star then one on you touched on the telephone again, if he would like to ask a question. Please press Star then one one moment please.
Again to ask a question. Please press Star then one.
I'm showing no questions at this time I'd like to turn the call back over to southern seven for any closing remarks.
Thank you Valerie we appreciate all of you taking the time to listen to our call today.
Very important for me to have the opportunity to meet with shareholders and so please reach out to US should you have any questions and I. Thank you again for your time today.
Thank you ladies and gentlemen, this does conclude today's conference. Thank you for participating you may all disconnect have a great day.