LogicMark Inc. Q1 2023 Earnings Call

Speaker 1: We.

Speaker 1: I.

Speaker 2: Good day.

Speaker 3: And thank you for standing by. Welcome to Logic Mark's first quarter, 2023, financial results, and corporate update conference call. At this time, all participants aren't listening on the mode. After the speakers presentation, there will be a Q&A session. To ask a question, doing this session, you will need to press star 1-1 on your telephone. And then you will hear an automated message advising your hand is raised. Please.

Speaker 3: To withdraw your question, please press star 111 again. Please be advised that today's conference is being recorded. I will now hand it over to Louis Toma from Core IR, the company's investor relations firm. Please go ahead. Good afternoon, and thank you for participating in today's conference call.

Speaker 4: Joining me from Logic Mark's Leadership Team are Sharlene Simmons, Chief Executive Officer, and Mark Archer, Chief Financial Officer.

Speaker 4: During this call, management will be making forward-looking statements, including statements to address logic marks, expectations for future performance, or operational results, and a tips-based of product launches. Forward-looking statements involve risk and other factors that may cause actual results to different materially from those statements.

Speaker 4: For more information about these risks,

Speaker 4: Please refer to the list of factors described in logic marks most recently filed in your report on form 10k.

Speaker 4: and subsequent periodic reports filed with the SEC and Logic Mark's press release that accompanies this call, particularly the cautionary segment in it. The content of this call contains time sensitive information that is accurate only as of today, May 11, 2023. Except this required by law, Logic Mark disclaims any obligation. Do you really feel a guilty case, with Dodor Collins? There's certainly a case with Dodor Collins. The

Speaker 4: to publicly update or advise any information to reflect events or circumstances that occur after this call.

Speaker 5: Thank you, Louis. Welcome, everyone. And thanks for joining us. 2023 is off to a very productive space. We have one of our best quarters in terms of gross margin. We have successfully completed a capital raise and have made meaningful progress in the development of our new products. I'm very happy to also share that we open a new sales channel that will significantly expand our direct-to-consumer business. I'm also excited to be establishing a new partnership with US Monitoring, one of the leading providers of monitoring services and began offering that service on our light-centric product. In January , we raised 5.2 million in gross proceeds.

Speaker 5: a direct-to-consumer channel, providing an enormous opportunity to sell our products, both existing and new.

Speaker 5: Since its launch, we have seen promising early results with the study streamer sales.

Speaker 5: Like all stores, we're working on fine-tuning our offers, our product listing, and how our product shows up on Amazon search, et cetera.

Speaker 5: In addition to this new sales channel, I'm excited to announce that LogicMonk is partnering with US Monitoring to Logic 217 Monitor Service.

Speaker 5: US Monitoring is a US-based company that provides monitoring through ETIMA certified trained operators, so committed to providing the highest measure of quality and customer service.

Speaker 5: Through this partnership, MagicMok will be able to provide reliable monitoring to ensure ultimate protection and peace of mind.

Speaker 5: Life's Century is the first category put on the monitoring service.

Speaker 5: This launch is the first time the logic life will be providing subscription services to customers. Taking us from being a hardware company, it should be a technology company that provides not just hardware but also services to the customer.

Speaker 5: Substitution services moving forward will provide a source of recurring revenue and, as you've said in our business, should provide us with an opportunity to grow our margins as well.

Speaker 5: We are looking forward to bringing more subscription services as well as new devices to consumers as we move forward.

Speaker 5: We're excited about our recent launches and have other new products in the development.

Speaker 5: Speed and bandwidth improvement are being incorporated into our new products as to a critical factors in responding to alerts, minimizing risk of paddles results for the way for this use of.

Speaker 5: We are also focused on improving our technology to make the vise alerts more accurate through AI, ML, and other technologies we are building and filing patterns on.

Speaker 5: Our goal is to minimize false alarms which cause issues with emergency services and, unfortunately, motivates the users to turn off false detection on their devices.

Speaker 5: We're also working towards a goal of providing more predictive technology and making our products more of a health communication device that does more than just be active falls.

Speaker 5: We believe our new devices will lead the PERS market in advanced AI and machine learning technology.

Speaker 5: We look forward to sharing the new launches with you very soon. There are three factors that are expected to drive accelerating growth in the care economy. First, the percentage of population that is entering elder years is increasing because of demographics.

Speaker 5: This will result in more people needing help at the age. Second, there's an increase in trend of older people preferring to age at home as an alternative to nursing homes and similar types of facilities.

Speaker 5: Third, prior to, during COVID and after COVID, there has been a shortage of professional caretakers to help our loved ones.

Speaker 5: There's a real and intriguing need for our title solution. Our devices were enabled loved ones at home and to do so in a safe way and provide peace of mind to caretakers.

Speaker 5: With a new Director Consumer Sales Channel, with the largest online retail in the country, a new source of high margin recurring revenue through our new Monitor and Service offerings.

Speaker 5: New innovative products coming to market and enough cash to execute on our strategy. We are confident and excited about our future. We are coming to market at an opportune time with solutions that are best in class at a time when they are desperately needed. The company is well positioned for success.

Speaker 5: I'll now pause and ask more gargers to discuss your first quarter 2023 financial results.

Speaker 5: And then we turn to provide some closing remarks. Thank you, Shailin.

Speaker 6: Here are the financial results for the first quarter ended March 31st.

Speaker 6: Here are the financial results for the first quarter ended March 31, 2023.

Speaker 6: Revenue for the quarter was $2.8 million, down 23% from the year-ago quarter.

Speaker 6: Last year, we had a significant amount of one-time sales of our 4G compatible Perst units, replacing older 3G units that were no longer supported by the National Cellular Carriers as they upgraded their cell towers to 5G.

Speaker 6: Our revenues for the first quarter of last year were up 50% much of which we attribute to these one-time replacements.

Speaker 6: So adjusting for these replacement cells, we believe ourselves for this just completed quarter or up double digits.

Speaker 6: Gross profit in the first quarter was 1.9 million down 15% from the year ago period.

Speaker 6: Gross profit in the first quarter was 1.9 million, down 15% from the year ago period. The declining gross profit in the second quarter was 1.9 million.

Speaker 6: compared to the March quarter of 2022 was a result of lower sales.

Speaker 6: compared to the March quarter 2022 was a result of lower sales partially offset by higher margins.

Speaker 6: Gross margin in this first quarter was 66.3%.

Speaker 6: Gross margin in this first quarter was 66.3% up almost 600 dips.

Speaker 6: from 60.4% in the year-ago quarter. The improvement in gross margin was a result of a

Speaker 6: of improvements in supply chain management, including a return to Trans-Pacific Shipping versus Air Freight.

Speaker 6: from our Asian-based contract manufacturers.

Speaker 6: Total operating expense in the first quarter of 2023 was 3.7 million, flat with last quarter and up slightly from the prior year period.

Speaker 6: Net loss attributable to common shareholders for the first quarter was 1.9 million versus a net loss of 1.4 million in the quarter of go period. But net loss per share improved to a loss of $1.92 in this year's first quarter versus a net loss of $2.89 per share in the prior year quarter. This improvement is a result of the higher numbers shares outstanding due to the capital raise we completed on January 25th of this year.

Speaker 6: Cash balance at the end of March 2023 was 9.8 million.

Speaker 6: at the end of March 2023 was 9.8 million versus 7.0 million.

Speaker 6: at December 31st, 2022. Thanks, Ryan.

Speaker 6: December 31, 2022. Thanks, Ryan. Thank you, Mark.

Speaker 5: 2023 is going to be an exciting year for Logic Mark. We've been busy putting all the pieces in place to put us on a path to drive growth and execute on our strategy. We have new exciting products coming to market. We launch a new channel that has the potential to reach an enormous audience and we have a strong marketing team to execute in growing sales. We have a strong marketing team that has the potential to reach an enormous audience and we have a strong marketing team that has the potential to reach an enormous audience.

Speaker 5: We're at a critical period where the demographic shift will drive strong market demand for the foreseeable future, and we have the cash to execute on our strategy. We take pride in being able to offer innovative solutions that enable loved ones to aid safely in their own home and ensure that they're being properly monitored and appropriately cared for. We're not here to be another provider of solutions, but a market-leading provider who leads by innovation. At this time, I will open the call to questions. Operator? Thank you. At this time, we will conduct the Q&A session. As a reminder...

Speaker 3: To ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster.

Speaker 3: as a reminder again.

Speaker 3: If you would like to ask a question, please press star 11 on your telephone.

Speaker 3: I am showing no further questions. I will now turn the call over to Sharlene Simmons for final remarks.

Speaker 5: I want to thank everyone for joining us today and we look forward to having you join us in a next quarter earnings call. If you have any questions concerning this presentation, please reach out to our IR company. Thank you so much and we'll see you next quarter. Thank you for your participation in today's conference.

Speaker 1: This concludes the program. You may now disconnect.

Speaker 1: I have you.

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