Q3 2021 NXT-ID Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the X T. I D third quarter results conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
I'll ask a question. During this session you will need to press star one on your telephone keypad. If you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Schilens shipments C. E O of NXT Eitan. Thank you. Please go ahead.
Thank you Cherry.
Before we get started I would like to remind everyone that during this call we will be making forward looking statements, which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs goals expectations forecast projections and future performance and assess.
<unk> underlying such statements.
Please note that there are a number of factors that will cause actual results to differ materially from my forward looking statements.
Coding factors identified and discussed in our SEC filings.
Please recognize that that's required by applicable law, we undertake no duty to update any forward looking statements and you should not place any angelica reliance on such statements.
Today, we'll summarize our financial results, but the recent third quarter and nine month 2021 period.
I'll also discuss operations.
In August I spoke about establishing b pillars to put us on solid ground and lead the right timing product and people.
Let's first talk about time.
Where we've been spending it and how our company is poised to take advantage of the demographic shifts we currently find ourselves in.
To ensure we have a solid foundation from which to grow I spent much of my time, keeping the company listed on the NASDAQ stock exchange.
Addressing this challenge became a priority because we plan to increase our sales channels structured partnerships and think beyond hybrid opportunities.
Much easier when accompanies listed on about respective stock exchange.
We asked you our shareholders to approve a reverse stock split of our common and preferred shares.
It was the consolidation of shares to make each one more to maintain the minimum price of a dollar per share fantastic requires.
I'm pleased to say that we received approval for both the preferred and common reverse splits.
And we have also now received a formal compliance letter from NASDAQ.
Thank you to all our shareholders for your support and her team for helping push this too.
We also have spent time raising additional capital to ensure we can build the products and hire the talent necessary to bring our vision to life.
We raised $16 4 million of capital to focus on product marketing and operations at.
At the end of September we had $60 million in cash.
The equity offering allowed us to attract new investors to the company who share our desire to see.
Cause he changed in a market that has not seen much technological innovation that has tremendous opportunities.
Investing the time to shore up capital and our corporate structure has been time, well spent and we hope to further expand our institutional shareholder base.
Because we have the opportunity to take advantage of the silver tsunami that will define the next 40 plus years of personal monitoring safety and security software and devices.
We show some of the statistics about the granting of America and the globe last quarter.
And the need to apply new thinking to the sector.
Our vision is to build a platform to power a new carrying economy to support the silver tsunami and the sandwich generation that supports them.
Our proprietary products, the freedom alert and Guardian plus them on one currently support seniors by providing critical solutions without a monthly fee there.
There are many seniors in our fixed income on Medicare or Medicaid for whom recurring billing, but forced them to choose between their safety and security and potentially other critical needs in their lives.
With a strong base of existing products, we're excited to expand into new product offerings now monitor and monitor services, both domestic and international in home professional services for senior living and direct to consumer markets.
Here's our vision.
Many of you are familiar with software as a service or SaaS.
Hi, Karen platform as a service or C Pass will act as the center of our offering to the care economy and technology space.
This will bring together not just our own proprietary products will allow us to collaborate with potential partners and the H Tech and healthcare communities.
To date.
And X T. I D has 26 pending and issued patents I'm pleased to share that two provisional patents were filed of alcohol detection this past quarter.
Each year.
<unk> one out of four adults over 65 plus experienced by infants.
Less than half till their doctors.
And once the fog of chances are falling again doubles.
One out of five of those balls result in serious injuries.
3 million older people are treated in E ours for falls.
Well finally may not result in serious injury.
It does cost fear, resulting in reduction of daily activities.
When a person is less active they are weaker resulting in an increased chance of falling.
Despite a pressing need to improve fault detection and ensure response times and more rapid.
Personal emergency response systems or <unk> for short.
And care, taking technology has not evolved for decades.
NXT ideas looking to develop solutions to meet these needs.
Our latest provisional patents are focused on improving fault detection.
One of the reasons why many people do not like to wear monitor first products is because of false positives that can come from fault detection.
It can remove a sense of independence and cause embarrassment.
We're developing patents and patent protection technology artificial intelligence and machine learning that we believe will help us better identify and actual fall event versus a false positive.
Better technology of alcohol detection will not only save lives save money.
In 2015 total Medicare medical cost for falls was more than $50 billion, Medicare and Medicaid shoulder, 75% of those costs.
Reducing medical costs for our government and individuals' is another reason why I'm, so passionate about carrying platform as a service.
Have you ever seen in the news.
Many industries have been affected by supply chain issues and semiconductor chip shortages.
In our case the biggest impact we have seen is the availability of chips and certain components.
Despite these challenges we have been able to meet that demand.
As a company that is nimble and fast moving we're able to pick up parts in a spot market redesign quickly to ensure that we can continue to operate with as much speed and efficiency at a challenging time for many companies.
Well, hi, chip costs may impact our margins, we have been able to secure the supply we need and we will continue to focus on product development and shipments to our customers.
Finally, let's briefly discuss people.
As we hope to increase our revenue stream from existing products and new product development.
We also hope to grow our already talented team.
Our recent funding allows us to do so.
We're in discussions with a number of candidates currently and hope to make some announcements by the end of 2021 or early next year.
At this point I will hand over the call to Mark for a brief summary of financial.
Thank you.
And shine when it was quite an intense quarter for us with the successful completion of two separate fundraisings.
Special shareholders meeting to approve a reverse split of our common stock.
Now with that behind US our focus is back on the business.
I'd like to discuss.
The company's unaudited.
Financial and operating results for the third quarter ended September 30th.
And for the nine months year to date period.
First the third quarter.
Revenue was $2 4 million.
<unk> decreased 10% from the same quarter last year.
While third quarter revenue was soft we're encouraged by the lift we saw in revenue in October which was up 6% from prior year.
Gross profit was $1 3 million for the quarter.
A decrease of 611000 compared to the same quarter last year.
Gross margin was 53%.
Compared with 71% in the prior quarter.
Gross profit was mainly impacted by lower revenues.
And a $314000 reserve for obsolete inventory that was recorded in the quarter.
Gross margin was impacted by both the inventory reserve.
And the higher manufacturing costs for our new <unk> Guardian product.
Was introduced late in the fourth quarter.
Operating expenses were $1 8 million compared to 2 million in the prior quarter.
And $2 4 million in the same quarter last year.
We do not expect this year over year favorability to continue.
We begin to add resources to support new product development and launch.
Operating loss for the quarter was 497000.
<unk> better compared to the operating loss in the same quarter last year.
And finally net loss was 743000.
Our 12 cents a share.
Compared to a net loss of $1 1 million or 32 cents a share.
Same quarter last year.
The earnings per share numbers have been adjusted for the one for 10 reverse stock split made in October.
Now, let me talk about the nine months year to date.
Revenue was seven 6 million a decrease of 14% compared to the nine months period last year.
Gross profit was $4 6 million.
A decrease of 29% from the same period last year.
Gross margin declined from 73% to 61%.
As was the case with third quarter results.
Gross profit and margin was impacted by lower revenue the inventory reserve and the higher manufacturing cost for them.
For G Guardian product, which was launched in November of last year.
Operating expenses for the nine months were $6 1 million.
Essentially flat to prior year.
Operating loss.
It's $1 5 million compared to operating income of 410000 during the same months nine months period last year.
And finally net loss was $7 7 million.
Or $1 43 per share.
Compared to a net loss of $1 4 million or <unk> 44 cents a share in.
In the same nine month period last year.
This year's results included $6 6 million of nonrecurring expense.
And again, the EPS numbers have been adjusted for the stock split.
Now, let me speak to three key events that happened after the close of the quarter.
On October 18th we shut our Oxford, Connecticut, corporate office and consolidated corporate functions.
Our Louisville.
Operating office and opportunity for us to further rationalize our cost structure.
And run more efficiently.
On November 1st.
Companys wholly owned subsidiary logic Mark.
Made a $1 1 million dollar payment to them.
Senior lender completely satisfy all of its financial obligations with that lender.
With that payment made the company no longer has any senior debt.
And then finally on November 3rd we set the record date for our annual shareholders meeting to be held in New York City on December 17th.
So this concludes my remarks Jerry.
Open the call up for questions.
As a reminder to ask a question you will need to press star one on your telephone keypad again, everyone. If you have a question that star one on your telephone keypad than where you are your question you May press the pound key please stand by while we compile the Q&A roster.
Yeah.
Your first question comes into line of Brian gets linger from Alliance Global Your line is now open.
Hi, great. Thanks for taking my question just one question actually prior to joining <unk>. He.
I would say it was not really a great.
Execute them and so really it didn't really allow the company to succeed my opinion we.
We don't get maybe two or three keys to stronger execution, notwithstanding capitalize it but don't go to market strategy is it you need to update the technology sales leadership, just I'm curious a couple of what you think are the primary things you can do to turn the story around.
Thank you.
I'll go ahead and take that thank you Brian for asking that question. So I think that it's the key for any company who is in the technology space not just ours.
When it comes to basically success right, we absolutely need marketing and sales capabilities.
My background is actually in marketing and I've been a revenue generator for every company out there that for the last 26 years on the technology side.
Secondarily you know.
We havent launched a new products since November of 2020, and the <unk> product is fantastic and we are excited to be selling that product, but we also need to continue to look at innovation.
And they'll provide offerings back can actually expand the spectrum of consumers lifecycle, and certainly I think that for the.
And monitor products space, we are doing a fantastic job, ensuring that those who have needs and cannot afford everything billing we're able to.
Help them stay safe and secure.
So, but you will see us basically also looking at addressing additional fit out yeah customer and partner segments and so I think that's really key to helping us help our consumer as they age into the different products and Sheila lifecycle. So we have that products for every part of that you know sort of lifecycle of that customer.
And I think third is now.
It's really important for a technology company not just to have I would say R&D acumen, which I think this company has had a lot of but also the capability to have the right team members to actually execute against us which means stronger index at.
Engineering talent and product talent to bring onto the company and the capability to execute and market those products and so I think if you put all of those things together we absolutely.
Half the olive ingredients and we're gathering all of those ingredients for success for the company moving forward.
Great if I could just ask one follow up on the people side.
I even spoke you have people you want to bring on it.
Through past relationships, but outside of some of those key management roles that you've identified how does the labor shortage.
If at all impact your business as you look to recruit people.
Sure. That's a great question I think that certainly every company is experiencing the squeeze.
You know talent and so you know I I'm chuckling, a little bit because obviously I want to hire the best most talented executives, but we also are very interested in hiring some of the best talent.
Many of our boss.
We are thrilled to have recently hired a amazing marketing manager to come to us from timberlands. She has been managing social.
And so there as well as other marketing piece.
Pieces and so she actually joined us.
Thank you Liz around October 18th.
Fast and she is actually already executing up to speed and helping us with marketing as well as you know getting our social program together and so we're not looking at I think across the board. We are absolutely like every company looking at you know a tremendous amount of shortage in talent that I'm very happy to note that I have.
Extremely volatile.
When it comes to technology talents and focus on the technology industry that I'm tapping into for all levels of hiring for this company.
And I think the second part the second part is that you know.
I've often told people I think were like a startup its ticker symbol, we should operate with speed with efficiency and so sometimes that can mean that we're outsourcing some of that development work and not having to hire in house to do it because thats a faster way to do it sometimes that could be a partnership in terms of development work and so we're looking at all of those different options.
I think that to be a nimble company and for the shareholders to benefit from a company that can operate like a startup and leap into results of actually a company that can operate with speed.
And the things that we need to look at.
Okay. Thank you.
Yeah.
Okay.
Your next question comes into line of Kris Tuttle from Soundview. Your line is now open.
Hi, there thanks for taking my call congratulations on getting the company on a more sustainable capital base.
I had just a couple of questions I know, it's early but if you think about your where do you want to go in the next few years and product mix do you do you see the company as you know basically predominantly more sort of an AI software company are you how far into the device you know physical segment do you think.
You'll be versus partners that you might integrate with.
Well. Thank you for the question I think that is a great question I think that we.
We are looking at a mix I think that for a successful company too.
What we would like to do to transform this industry I think we need to be looking at a mix of software in our.
Machine learning artificial intelligence as well as hardware I'd like to thank I'd like to think that we can all develop hardware that would be a perfect fit for people who are a little bit older can I think that you know when we have and when we think about our customer base. We have to think that way about the ERP has been doing for the last.
Well, yes, it used to be that I think you know if you ever retired and you try 65, that's when you get the letter from ERP.
Mitch the consternation of many people I'm sure. They are getting a L. P letters earlier in their life right around 50, then nowadays right and so we tend to think about our customers lifecycle with us in a similar way, which is what can we offer as a product. That's you know earlier that could be of assistance and then how do we partner.
With our.
Customers as they age now not just them, but also the caretakers and so how are we developing products that actually fit better yeah.
Customer life journey.
So I could see that as a combination of not just software.
Social intelligence and machine learning, but also yeah, I think we will probably stay to a certain degree in some level of proprietary hardware work as well as partner with other hardware companies.
As part of that so if you're younger.
Yeah, the Apple devices a good one for you you know you can see is to look at expanding software and services into that category space, but you know as we all know when when you get a little bit older manual dexterity doesn't often sort of let us utilize things that are very small in form function and so we may never be able to.
To a certain degree look at completely getting out of the device space I think that we would want to state that because our customers need us to be there and so you'll always see us probably be in a mix of.
Providing a blend of software.
Services as well as hardware.
Okay. Thanks, I appreciate that.
Second question is just on the <unk>.
Existing business it doesn't have to be legacy, but the existing business.
Do you feel that that is I mean, it's been running at sort of a.
No I wont say autopilot.
At that level for a long time, you feel that you know.
That's going to continue to sort of help you operate the annuity is there any risk to that business in the short term or.
Is your positioning there such that you guys can rely on that kind of on a quarterly basis to support your operation.
I think if we are referring to our.
Incredible partnership on the logic side with the Veterans administration and others. I think you can absolutely say that we hope to continue to earn their trust.
As providers of very needed products to the.
So that's of the United States I mean, I think that you know we are proud to have that partnership will continue to basically deal.
Everything we can to basically be the best partner possible for the veterans administration.
You can imagine you know, we've gotten our GSA and the past year and so we will continue to look to expand our government works you know into other sectors that the government I mean today, we offer our products the largest health care system in the United States, which is the veterans administration hospitals and clinics and so.
We would like to look at what that means with the GSA to expand into.
The Medicare Medicaid side state and local municipalities and so you know.
I would say that what we call said that the legacy business that the business, where we serve the government for United States you will see US continue to not just the service to veterans administration that we will continue to we will be looking at expanding the government business as well as add on direct to consumer.
As well as you know <unk> businesses and probiotics.
Okay, that's great I'm glad to hear that.
Last question for me for now.
Yes.
Yeah, obviously closing the Connecticut office.
And and Louisville and existing location.
What are your thoughts on physical location I mean, you need one are you guys going to be more virtual how are you. How are you kind of thinking about that.
So it's.
Just a question I'm sure every company gets asked nowadays.
And the world of Covid Ironically this company has always been.
Somewhat you know the Mone, Oregon said since the beginning logic, Mark which is a wholly owned subsidiary of the company had been I believe actually was started in Virginia and so they said we've always had employees based on a multiple a multitude of different locations I'd like to think that you know this company has had a very strong sort of.
Foundation, and looking for the best employees wherever they sit in the United States and so we've been very proud of doing that and we'll continue to sort of look at growing that footprint.
We find the best you know I think.
Employees that we can find them.
Think that physical location in Louisville.
You know is fantastic I mean from Louisville, we can reach 80% of United States from a distribution perspective, and so and that's something that we think is important to have.
You know, our warehousing or customer support.
Operations run out of Kentucky So.
And I think we'll continue to sort of be there for the at least for the foreseeable.
The foreseeable future.
Okay.
Well, that's all I have for now I'm eager to watch you guys develop over the next few quarters. Thanks very much.
Thank you for your questions.
Again, everyone. As a reminder, if you have questions. Please press star one on your telephone keypad again that stores are the number one on your telephone keypad.
I am showing no further questions at this time I would now like to turn the conference back to Mr. Schilens Simmons.
I want to thank you all for participating our call today and for your continued support just a reminder, that the replay will be available on our website.
And feel free.
To send any comments or questions to us through the Investor Relations you know investors and next I D Dot com.
We are entering the final months of the year I want to wish everyone, a happy and healthy holiday season, with your family and friends. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation you may now disconnect.
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Ladies and gentlemen, thank you for standing by and welcome to the F. T. I D third quarter results conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
I asked the question during the session you will need to press star one on your telephone keypad. If you require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today Schilens commenced C E O of NXT Eitan. Thank you. Please go ahead.
Thank you Jerry.
Before we get started I would like to remind everyone that during this call we will be making forward looking statements, which consist of statements that cannot be confirmed by reference to existing information.
Including statements regarding our beliefs goals expectations forecasts projections 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.
Coding factors identified and discussed in our SEC filings.
Please recognize that that's 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.
Today, I will summarize our financial results for the recent third quarter and nine month 2021 period.
I'll also discuss operations.
In August I spoke about establishing speed pillars to put us on solid ground, mainly the right timing product and people.
Let's first talk about time.
Where we've been spending it and how our company is poised to take advantage of the demographic shifts we currently find ourselves in.
To ensure we have a solid foundation from which to grow.
Spent much of my time, keeping the company listed on the NASDAQ stock exchange.
Addressing this challenge became a priority because we plan to increase our sales channels structured partnerships and think beyond hardware opportunities.
All much easier when accompanies listed on a box split the stock exchange.
I asked you our shareholders to approve a reverse stock split of our common and preferred shares.
It was a consolidation of shares to make each one more to maintain the minimum price of a dollar per share diagnostic requires.
I'm pleased to say that we received approval for both the preferred and common reverse split.
And we have also now received a formal compliance letter from NASDAQ.
Thank you to all our shareholders for your support and our team for helping push this too.
We also have spent time raising additional capital to ensure we can build the products and hired the talent necessary to bring our vision to life.
We raised $16 4 million of capital to focus on product marketing and operations.
At the end of September we had $60 million in cash.
The equity offering allowed us to attract new investors to the company who share our desire to see.
Cause the change in a market that has not seen much technological innovation that has tremendous opportunities.
Investing the time to shore up capital and our corporate structure has been time, well spent and we hope to further expand our institutional shareholder base.
Because we have the opportunity to take advantage of the silver tsunami that will define the next 40 plus years of personal monitoring safety and security software and devices.
We show some of the statistics about the granting of America, and the globe last quarter and.
And the need to apply new thinking to the sector.
Our vision is to build a platform to power a new carrying an economy to support the silver tsunami and the sandwich generation that supports them.
Our proprietary products, the freedom alert and Guardian plus them on one currently support seniors by providing critical solutions without a monthly fee there.
There are many seniors on a fixed income on Medicare or Medicaid for whom recurring billing, but forced them to choose between their safety and security and potentially other critical needs in their lives.
With a strong base of existing products, we're excited to expand into new product offerings now monitor and monitor services, both domestic and international in home professional services for senior living and direct to consumer markets.
Here's our vision.
Many of you are familiar with software as a service or SaaS.
Recurring platform as a service or C Pass will act as the center of our offering to the care economy and technology space.
This will bring together not just our own proprietary products, but allow us to collaborate with potential partners and the H Tech and healthcare communities.
Debate.
Our next T. I D has 26 pending and issued patents I'm pleased to share that two provisional patents were filed of alcohol detection this past quarter.
Each year.
One out of four adults over 65 plus experience for instance.
Less than half till their doctors.
And once they fog or chances are falling again doubles.
One out of five of those balls result in serious injuries.
3 million older people are treated in E ours for falls.
While falling may not result in serious injury.
It does cost fear, resulting in reduction of daily activities.
When a person is less active they're weaker resulting in an increased chance of falling.
Despite a pressing need to improve fall detection and ensure response times are more rapid.
Personal emergency response systems or <unk> for short.
We're taking technology has not evolved for decades.
NXT ideas looking to develop solutions to meet these needs.
Our latest provisional patents are focused on improving fall detection one of the reasons why many people do not like to wear monitor per potash is because of false positives that can come from fault detection.
It can remove a sense of independence and cause embarrassment.
We are developing patents and fall protection technology artificial intelligence and machine learning that we believe will help us better identify and actual fall event versus a false positive.
Better technology of alcohol detection will not only save lives, but save money.
In 2015 total Medicare medical cost for falls with more than $50 billion.
Medicare and Medicaid shoulder, 75% of those costs.
Reducing medical costs for our government and individuals' is another reason why I'm, so passionate about carrying platform as a service.
Have you ever seen in the news.
Many industries have been affected by supply chain issues and semiconductor chip shortages.
In our case the biggest impact we have seen is the availability of chips and certain components.
Despite these challenges we have been able to meet the demands.
As a company that is nimble and fast moving we're able to pick up parts in a spot market redesign quickly to ensure that we can continue to operate with as much speed and efficiency at a challenging time for many companies.
Well, hi, chip costs may impact our margins we have.
Been able to secure the supply we need and we'll continue to focus on product development and shipments to our customers.
Finally, let's briefly discuss people.
As we hope to increase our revenue stream from existing products and new product development. We also hope to grow our already talented team.
Our recent funding allows us to do so.
We're in discussions with a number of candidates currently and hope to make some announcements by the end of 2021 or early next year.
At this point I will hand over the call to Mark for a brief summary of financials.
Thank you.
Scheindlin Chad it was quite an intense quarter for us with the successful completion of two separate fundraisings.
And the special shareholders meeting to approve a reverse split of our common stock.
Now with that behind US our focus is back on the business.
I'd like to discuss.
The company's unaudited.
Financial and operating results for the third quarter ended September 30th.
And for the nine month year to date period.
First the third quarter.
Revenue was $2 4 million a.
Decrease of 10% from the same quarter last year.
While third quarter revenue was soft.
We're encouraged by the lift we saw in revenue in October which was up 6% from prior year.
Gross profit was $1 3 million for the quarter.
Decrease of 611000 compared to the same quarter last year.
Gross margin was 53%.
Impaired was 71% in the prior quarter.
Gross profit was mainly impacted by lower revenues.
And a $314000 reserve for obsolete inventory that was recorded in the quarter.
Gross margin was impacted by both the inventory reserves.
And the higher manufacturing cost for our new <unk> Guardian product that was introduced late in the fourth quarter.
Operating expenses were $1 8 million compared to 2 million in the prior quarter.
And $2 4 million in the same quarter last year.
We do not expect this year over year favorability to continue.
As we begin to add resources to support new product development and launch.
Operating loss for the quarter was 497000.
Slightly better compared to the operating loss in the same quarter last year.
And finally net loss was 743000 or.
12 cents a share.
Compared to a net loss of $1 1 million or 32 cents a share in the same quarter last year.
The earnings per share numbers have been adjusted for the one for 10 reverse stock split made in October.
Now, let me talk about the nine months year to date.
Revenue was $7 6 million decrease of 14% compared to the nine months period last year.
Gross profit was $4 6 million a day.
Decrease of 29% from the same period last year.
Gross margin declined from 73% to 61%.
As was the case with third quarter results.
Gross profit and margin was impacted by lower revenue the inventory reserve and the higher manufacturing costs for the.
For G Guardian product, which was launched in November of last year.
Operating expenses for the nine months were $6 1 million Sn.
Essentially flat to prior year.
Operating loss was $1 5 million compared to operating income of 410000 during the same months nine months period last year.
And finally net loss was $7 7 million or $1 43 per share.
Impaired to a net loss of $1 4 million or <unk> 44 cents a share.
In the same nine month period last year.
This year's results included $6 6 million of nonrecurring expense.
And again, the EPS numbers have been adjusted for the stock split.
Now, let me speak to three key events that happened after the close in the quarter.
On October 18th we shut our Oxford, Connecticut, corporate office and consolidated corporate functions.
Our Louisville.
As you know operating office and opportunity for us to further rationalize our cost structure.
And run more efficiently.
On November 1st.
Companys wholly owned subsidiary logic Mark.
Made a $1 1 million dollar payment to its senior lender completely satisfy all of its financial obligations with that lender.
With that payment made the company no longer has any senior debt.
And then finally on November 3rd we set the record date for our annual shareholders meeting to be held in New York City on December 17th.
So this concludes my remarks, Jerry what's.
Open the call up for questions.
As a reminder to ask a question you will need to press star one on your telephone keypad again, everyone. If you have a question that star one on your telephone keypad. So enjoy a question you may press the pound key please standby, while we compile the Q&A roster.
Okay.
Okay.
Yeah.
Your first question comes into line of Brian gets Langer from Alliance Global Your line is now open.
Hi, great. Thanks for taking my question just one question actually prior to joining T.
I would say it was not really a great.
Execute or and so really it didn't really allow the company to succeed my opinion.
I don't know, maybe two or three keys to stronger execution notwithstanding capital is it better to go to market strategy is it you need to update the technology sales leadership, just I'm curious a couple of what you think are the primary things you can do to turn the story around.
Thank you.
Yeah.
I'll go ahead and take that thank you Brian for asking that question. So I think that it's the key for any company who is in the technology space not just ours.
When it comes to basically success right, we absolutely need marketing and sales capabilities.
My background is actually in marketing and I've been a revenue generator for every company out there that for the last 26 years on the technology side.
Secondarily as you know, we Havent launched a new products since November of 2020, and the <unk> product is fantastic and we are excited to be selling that product, but we also need to continue to look at innovation.
And provide offerings that can actually expand the spectrum of consumers lifecycle and certainly I think that you know for the.
And monitor products space, we are doing a fantastic job, ensuring that those who have needs and cannot afford everything billing we're able to.
To help them stay safe and secure.
And so but youll see us basically also looking at you know addressing additional customer.
Customer and customer segments, and so I think that's really key to helping us help our consumer as they age into the different products and Sheila lifecycle. So we have to have products for every part of that you know sort of lifecycle of that customer.
And I think third is not it.
It's really important for a technology company not just to have I would say R&D acumen, which I think this company has had a lot of but also the capability to have the right team members to actually execute against us, which means stronger box at no engineering talent and product talent to bring on shoes.
The company and our capability to execute and market those products and so I think if you bring all of those things together we absolutely.
Now have to have all of the ingredients and we are gathering all of those ingredients for success for the company moving forward.
Great if I could just ask one follow up on the people side.
I even spoke you have people you want to bring on it too.
Through past relationships, but outside of some of those key management roles that you've identified how.
Guys the labor shortage.
If at all impact your business as you look to recruit people.
Sure. That's a great question I think that certainly every company is experiencing the squeeze.
You know talent and so I, yeah, I I'm chuckling, a little bit because obviously I want to hire the best most talented executives, but we also are very interested in hiring some of the best talent I've met many of my boss.
We are thrilled to have recently hired a amazing marketing manager to come to us from timberlands. She has been managing social.
And so on there as well as other marketing piece.
Pieces and so she actually joined us.
Think it was around October 18th of last and she is actually already executing you know up to speed and helping us with marketing as well as you know getting a social program together and so we're not looking at I think across the board. We are absolutely like every company looking at you know a tremendous amount.
A shortage of talent that I'm very happy to note that I have a extremely vast.
When it comes to technology talents and focus on the technology industry that I'm tapping into for all levels of hiring for this company.
And I think the second for the second part is that you know.
I've, often told people I think where I'd like a startup its ticker symbol, we should operate with speed with efficiency and so sometimes that could mean that were outsourcing some of that development work and not having to hire in house to do it because that's a faster way to do it sometimes that could be a partnership in terms of development work and so we're looking at all of those different options.
I think that to be a nimble company and for the shareholders to benefit from a company that can operate like a startup and leap into results of actually a company that can operate with speed.
And the things that we need to look at.
Okay. Thank you.
Yeah.
Okay.
Your next question comes in the line of Kris Tuttle from Soundview. Your line is now open.
Hi, there thanks for taking my call congratulations on getting the company on a more sustainable.
I'll bet.
I had just a couple of questions I know, it's early but if you think about your where do you want to go in the next few years and product mix do you do you see the company as you know basically predominantly more sort of an AI software company are you how far into the device you know physical segment do you think.
You'll be versus partners that you might integrate with.
Yeah.
Well. Thank you for the question I think that is a great question I think that we.
We are looking at a mix right I think that for a successful company too.
What we would like to do to transform this industry I think we need to be looking at a mix of software and a.
Machine learning artificial intelligence as well as hardware I'd like to thank I'd like to think that we can all develop hardware that would be a perfect fit for people who are a little bit older and I think that you know when we have and when we think about our customer base. We have to think that way about the ERP has been doing for the last.
Yes, it used to be that I think you know if you're a retired and you're trying to 65. That's when you get the letter from a R. P M.
Much the consternation of many people I'm sure. They are getting a L. P letters earlier in their life right around 50, even nowadays right and so we tend to think about our customers lifecycle with us in a similar way, which is what can be offered as a product. That's you know earlier that could be of assistance and then how do we partner.
With our.
Customers as they age now not just them, but also the caretakers and so how are we developing products that actually fit that yeah.
Customer life journey.
So I see that as a combination of not just software.
Fishel intelligence and machine learning, but also you know I think we will probably stay to a certain degree in some level of proprietary hybrid work as well as partner with other hardware companies.
As part of that so if you're younger.
Yeah, the Apple devices a good one for you you know you could see us look at expanding software and services into that category space.
But you know as we all know when when you get a little bit older manual dexterity doesn't often sort of let us utilize things that are very small in form function and so we may never be able to a certain degree look at completely getting out of the device space I think that we would want to stay there because our customers need us to be there.
And so you'll always see us probably.
And our mix of providing a blend of software.
Services as well as hardware.
Okay. Thanks, I appreciate that.
Second question is just on the you know the.
Existing business it doesn't have to be a legacy but the existing business.
Do you feel that that is I mean, it's been running at sort of a.
No I wont say autopilot, they've just been kind of running at that level for a long time, you feel that you know that.
To continue to sort of help you operate.
Is there any risk to that business in the short term or your is your positioning there such that you guys can rely on that kind of on a quarterly basis to support your operation.
I think if we are referring to our.
So incredible partnership on the logic side with the Veterans administration and others. I think you can absolutely say that no. We hope to continue to earn their trust as providers of very needed products to the.
So that's of the United States I mean, I think that you know we are proud to have that partnership will continue to basically deal.
Everything we can to basically be the best partner possible for the veterans administration.
You can imagine you know, we've gotten our GSA and the past year and so we will continue to look to expand our government work.
The other sectors that the government I mean today, we offer our products the largest health care system in the United States, which is the veterans administration hospitals and clinics and so we would like to look at what that means with the GSA to expand into.
The Medicare Medicaid side state and local municipalities and so you know.
I would say that what we call so to the legacy business the business, where we serve the government of the United States you will see US continue to not just the service to veterans administration that will continue we will be looking at expanding the government business as well as add on direct to consumer.
As well as you know <unk> businesses and probiotics.
Okay, that's great I'm glad to hear that.
Last question for me for now.
Yeah, obviously closing the Connecticut office, there's a lot of sense.
And.
And in Louisville and existing location.
What are your thoughts on physical location I mean, you need one are you guys going to be more virtual how are you how are you thinking about that.
Yeah. So it's yeah.
That's a question I'm sure every company gets off nowadays.
And the world of Covid Ironically this company has always been.
Somewhat you know, Oregon said since the beginning logic, Mark which is a wholly owned subsidiary of the company had been I believe actually what started in Virginia and so they said we've always had employees based on the multiple multitude of different locations I'd like to think that you know this company has had a very strong sort of.
Foundation and looking for the best employees wherever they said in the United States and so we've been very proud of doing that we'll continue to sort of look at growing that footprint.
We find the best you know I think.
Employees that we can find them.
Think that physical location in Louisville.
Is fantastic I mean from Louisville, we can reach 80% of United States from a distribution perspective, and so that's something that we think is important to have.
You know, our warehousing or customer support.
Operations run out of Kentucky So.
And I think well continue to sort of be there for them at least for the foreseeable.
The foreseeable future.
Okay.
Well, that's all I have for now I'm eager to watch you guys develop over the next few quarters. Thanks very much.
Thank you for your questions.
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