LogicMark Inc (LGMK) 2023 Q3 法說會逐字稿

Day and welcome to the LogicMark third quarter 2023 financial results and corporate update conference call. (Operator instructions)

歡迎參加 LogicMark 2023 年第三季財務表現與公司更新電話會議。 （操作員說明）

I would now like to hand the conference over to your speaker today, Pierre Dubois, Investor Relations. Please go ahead.

我現在想將會議交給今天的發言人、投資者關係部門的皮埃爾·杜布瓦 (Pierre Dubois)。請繼續。

Thank you, Abigail, and good afternoon, everyone. We appreciate you participating in today's conference call. Joining me from LogicMark are Chia-Lin Simmons, Chief Executive Officer, and Mark Archer, Chief Financial Officer.

謝謝阿比蓋爾，大家下午好。我們感謝您參加今天的電話會議。與我一起來自 LogicMark 的是執行長 Chia-Lin Simmons 和財務長 Mark Archer。

During this call, management will be making forward-looking statements, including statements that address LogicMark's expectations for future performance or operational results and anticipated product launches. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in LogicMark's most recently filed annual report on Form 10-K and subsequent reports filed with the SEC as well as LogicMark's press release that accompanies this call particularly the cautionary statements in it.

在本次電話會議中，管理層將做出前瞻性聲明，包括涉及 LogicMark 對未來業績或營運結果以及預期產品發布的預期的聲明。前瞻性陳述涉及風險和其他因素，可能導致實際結果與這些陳述有重大差異。有關這些風險的更多信息，請參閱LogicMark 最近提交的10-K 表年度報告和隨後向SEC 提交的報告以及LogicMark 隨本次電話會議發布的新聞稿（特別是其中的警告聲明）中描述的風險因素。

The content of this call contains time-sensitive information that is accurate only as of today, November 9, 2023. Except as required by law, LogicMark disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

本次電話會議的內容包含時效性訊息，僅截至今天（2023 年11 月9 日）準確。除法律要求外，LogicMark 不承擔任何公開更新或修改任何資訊以反映本次電話會議後發生的事件或情況的義務。

With that said, I'll hand over the call to Chia-Lin.

說完，我就把電話轉給嘉琳了。

Thank you, Pierre, and good afternoon, everyone. I'm excited to speak with you today on the heels of our first new product launch. Since our team came together and the first for the Company in many years. When our team began this journey, the opportunity to build a company that continues to meet the needs of our valued veterans and aging population was front and centre, but also the potential to develop an expanded suite of products to improve safety for an even broader population was very compelling and it still is.

謝謝皮埃爾，大家下午好。我很高興今天在我們推出首款新產品後與您交談。自從我們的團隊聚集在一起以來，這是公司多年來的第一次。當我們的團隊開始這趟旅程時，建立一家能夠繼續滿足我們尊貴的退伍軍人和老齡化人口需求的公司的機會是首要的和中心的，而且還有開發一套擴展產品以提高更廣泛人群的安全性的潛力非常引人注目，現在仍然如此。

Our vision is to expand beyond just hardware to a broader ecosystem that better prepares us to capture opportunities in the growing care economy. We're doing just that with our new Care Village Ecosystem , a proprietary software stack that includes an iOS and Android app, on-device proprietary middleware, a Proprietary AI enabled cloud infrastructure as well as subscription services, all of which will allow us to add additional revenue streams and obtain margin uplift.

我們的願景是將硬體擴展到更廣泛的生態系統，讓我們更好地準備在不斷增長的護理經濟中抓住機會。我們正在透過新的Care Village 生態系統來實現這一目標，這是一個專有軟體堆疊，包括iOS 和Android 應用程式、設備上專有中間件、專有的AI 支援雲端基礎設施以及訂閱服務，所有這些都將使我們能夠增加額外的收入來源並提高利潤率。

Our research and development teams worked extremely hard to release the new Freedom Alert Plus, the first product to be offered under our New Care Platform as a Service or CPaaS platform. Freedom Alert Plus is an advanced device offering features such as our new patented fall detection algorithms and GPS location.

我們的研發團隊非常努力地發布了新的 Freedom Alert Plus，這是我們的新護理平台即服務或 CPaaS 平台下提供的第一個產品。 Freedom Alert Plus 是一款先進的設備，提供我們新的專利跌倒偵測演算法和 GPS 定位等功能。

It also provides 2-way communications with a caregiver and 24/7 monitor emergency services with our partner, U.S. Monitoring, a prestigious 5 diamond monitoring centre. Our new Care Village app can be downloaded for free at the Apple App Store or Google Play Store, which connects the Freedom Alert Plus, allowing caregivers to always connect to their loved ones PERS device, providing a caregiver access to monitor file status, device battery and more.

它還提供與護理人員的雙向通信，以及與我們的合作夥伴 U.S. Monitoring（著名的 5 鑽石監控中心）的 24/7 監控緊急服務。我們新的 Care Village 應用程式可以在 Apple App Store 或 Google Play Store 免費下載，該應用程式連接 Freedom Alert Plus，使護理人員能夠始終連接到其親人的 PERS 設備，使護理人員能夠監控文件狀態、設備電池和更多。

And of course, we have accessories to accompany the device, including both a lanyard to wear around your neck and a clip that can be attached for belts, purse or backpacks. Freedom Alert Plus is one of several in an expanded line of solutions that we are developing to meet the specific needs of our customers. LogicMark has 3 other products to choose from currently, whether or not that be Wi-Fi, 4G or landline connected devices at various price points.

當然，我們也為設備提供了配件，包括戴在脖子上的掛繩和可固定在腰帶、錢包或背包上的夾子。 Freedom Alert Plus 是我們為滿足客戶的特定需求而開發的擴展解決方案系列中的幾個之一。 LogicMark 目前還有另外 3 種產品可供選擇，無論是不同價位的 Wi-Fi、4G 或固定電話連線設備。

The Freedom Alert and LogicMark Guardian Alert 911 are at our home solutions. And for those on the go, we have our Guardian Alert 911+. Our devices have recently been recognized by Forbes as among top-rated medical alert systems with no monthly fee. We believe that those with limited means should have access to a PERS device that fits within their budgets. So, we continue to offer these products with no monthly subscription fees. Further, for those who need help with the purchase of their device, we have a new partnership with Afterpay, which offers a no interest payment plan.

Freedom Alert 和 LogicMark Guardian Alert 911 是我們的家庭解決方案。對於那些忙碌的人，我們有 Guardian Alert 911+。我們的設備最近被福布斯評為頂級免費醫療警報系統之一。我們認為，財力有限的人應該能夠使用符合其預算的 PERS 設備。因此，我們繼續提供這些產品，且不收取月費。此外，對於那些在購買設備時需要幫助的人，我們與 Afterpay 建立了新的合作夥伴關係，後者提供無利息付款計劃。

So what's next ? Our ability to use artificial intelligence, sensors and machine learning is revolutionizing the direction of our product road map. Along the way, our team is finding new innovative solutions using this technology and at the same time, expanding our IP portfolio. At the moment, we are preparing to launch a new device, our second PERS device launch this year. We are delighted to report that the initial feedback during testing has been very positive, particularly regarding its weight, compact design, GPS location service and fault detection feature. This new product is a smaller form factor which some customers prefer, not dissimilar to phones which come in various sizes to meet consumer preferences.

下一個是什麼 ？我們使用人工智慧、感測器和機器學習的能力正在徹底改變我們產品路線圖的方向。一路走來，我們的團隊正在利用這項技術尋找新的創新解決方案，同時擴大我們的智慧財產權組合。目前，我們正準備推出一款新設備，這是我們今年推出的第二款 PERS 設備。我們很高興地報告，測試期間的初步回饋非常積極，特別是在其重量、緊湊設計、GPS 定位服務和故障檢測功能方面。這款新產品外型較小，受到部分顧客的青睞，與手機不同，手機有各種尺寸以滿足消費者的喜好。

Our efforts not only focus on new devices, but we continue to look for ways to improve operating efficiencies and find sustainable solutions. For example, we are working towards environmentally friendly packing solutions, including biodegradable boxes and bags, and reducing packaging waste. And as we've mentioned, transitioning from shipping versus airfreight after COVID-19 is also helping us reduce shipping costs and sustain our margins.

我們的努力不僅集中在新設備上，而且我們不斷尋找提高營運效率和永續解決方案的方法。例如，我們正在努力開發環保包裝解決方案，包括可生物降解的盒子和袋子，並減少包裝廢物。正如我們所提到的，在新冠肺炎 (COVID-19) 疫情之後，從海運轉向空運也有助於我們降低運輸成本並維持利潤。

LogicMark's planned expansion includes entry into other areas such as health monitoring and offering expanded features to complement what we're doing with our PERS devices, not only solutions that are reactive, but those that are predictive or preventative, such as medicine reminders.

LogicMark 計劃的擴張包括進入健康監測等其他領域，並提供擴展功能來補充我們使用 PERS 設備所做的工作，不僅是反應性的解決方案，還包括預測性或預防性的解決方案，例如藥物提醒。

Given our plans to enter several new verticals and the progress we are making, we are excited to have recently welcomed two new Board members : Carine Schneider and Tom Wilkinson, expanding the total number of Directors to six.

鑑於我們計劃進入幾個新的垂直領域以及我們正在取得的進展，我們很高興最近迎來了兩位新的董事會成員：Carine Schneider 和 Tom Wilkinson，將董事總數增加到六人。

We look forward to the Board's collective expertise in many areas, including corporate governance, finance, operations, hardware and software solutions. I'm very excited about our talented team and growing product lineup as we advance to the next stage of the Company's developments.

我們期待董事會在許多領域發揮集體專業知識，包括公司治理、財務、營運、硬體和軟體解決方案。隨著我們進入公司發展的下一階段，我對我們才華橫溢的團隊和不斷增長的產品陣容感到非常興奮。

At this time, I'll hand over the call to Mark to provide a brief review of the financials.

此時，我將把電話轉交給馬克，以提供對財務狀況的簡要回顧。

Thank you, Chia-Lin. Our third quarter results included a gross margin of 67% on revenues of $2.4 million. This compares to a gross margin of 62% on revenues of $2.8 million for the same quarter last year. The year-over-year decline in sales during this third quarter was due to the onetime sale of replacement units last year which boosted prior year quarter results. The national cellular network carriers, as they upgraded to 5G discontinued their support for 3G.

謝謝你，嘉琳。我們第三季的業績包括 67% 的毛利率和 240 萬美元的收入。相較之下，去年同期的毛利率為 62%，營收為 280 萬美元。第三季銷售額年減的原因是去年一次性銷售替換設備，這提振了去年同期的表現。國家蜂窩網路營運商在升級到 5G 後停止了對 3G 的支援。

So our customers with older 3G Guardian Alert 911+ units needed to replace those units with our current model that supports 4G services. This replacement process was completed in September of last year, so we anticipate an end to the reduction in year-over-year sales starting with this current December quarter.

因此，擁有舊版 3G Guardian Alert 911+ 設備的客戶需要將這些設備更換為支援 4G 服務的當前型號。這項更換過程已於去年 9 月完成，因此我們預計從目前 12 月所在季度開始，銷售量年減的情況將結束。

Back to our continued improvement in gross margin, we focused on three areas to drive that improvement. First, we've been able to shift from air freight back to transpacific shipping from our Asia-based contract manufacturers. During the peak of COVID, shipping costs and port delays increased, which necessitated us to move to expensive airfreight in order to ensure that we could meet customer demand on a timely basis.

回到毛利率的持續改善，我們將重點放在三個領域來推動這項改善。首先，我們已經能夠從亞洲合約製造商的空運轉向跨太平洋運輸。在新冠肺炎疫情高峰期，運輸成本和港口延誤增加，這迫使我們轉向昂貴的空運，以確保我們能及時滿足客戶的需求。

Second, we switched to procuring inventory more opportunistically versus our traditional previous just-in-time approach. Now we purchase some of our components when prices are most favourable rather than when we need the part.

其次，與先前傳統的準時制方法相比，我們轉向更有機會主義地採購庫存。現在，我們在價格最優惠的時候而不是在我們需要零件的時候購買一些零件。

And third, our domestic shipping costs to customers have improved. Previously, we were using one shipping vendor exclusively. Now we've implemented software that selects whether the United States Postal Service, UPS or FedEx is the lowest cost option on each particular order.

第三，我們提供給客戶的國內運輸成本有所改善。此前，我們只使用一家運輸供應商。現在，我們已經實施了軟體，可以選擇美國郵政服務、UPS 還是聯邦快遞是每個特定訂單的成本最低的選項。

Turning to total operating expenses, the third quarter came in at $3.4 million, decreasing 12% or $0.5 million compared with the same quarter last year and down 13% from this year's June quarter. The lower operating expense year over year was due mainly to a reduction in general and administrative expenses, slightly offset by higher selling and marketing expenses to support our new product launches.

至於總營運費用，第三季為 340 萬美元，比去年同期下降 12%，即 50 萬美元，比今年 6 月季度下降 13%。營業費用較去年同期下降主要是由於一般和管理費用的減少，但被支持我們新產品發布的銷售和行銷費用的增加所略微抵消。

Net loss attributable to common shareholders for the third quarter was $1.5 million versus a net loss of $2.2 million in the same quarter last year. On a fully diluted basis, the net loss per share was $1.10 compared with a net loss of $4.53 a share in the prior year quarter.

第三季普通股股東應佔淨虧損 150 萬美元，去年同期淨虧損為 220 萬美元。在完全稀釋的基礎上，每股淨虧損為 1.10 美元，而去年同期每股淨虧損為 4.53 美元。

Third, our EPS values, have been adjusted for our one for 20 reverse stock split completed this last April. In terms of liquidity as of the end of September, the cash balance was $6.7 million compared to $7 million at the end of December 2022. We had no debt on our books.

第三，我們的每股盈餘值已根據去年 4 月完成的 20 股反向股票分割進行了調整。就流動性而言，截至 9 月底，現金餘額為 670 萬美元，而 2022 年 12 月底為 700 萬美元。我們帳上沒有債務。

So as we move into the last quarter of the year, we remain focused on launching new products increasing year over year revenues, continuing to improve margins, and reaching breakeven profitability. And with that, I'd like to hand it back to Abigail, who will open the call up for questions to queue.

因此，當我們進入今年最後一個季度時，我們仍然專注於推出新產品，以逐年增加收入，繼續提高利潤率，並實現盈虧平衡的盈利能力。說到這裡，我想把它交還給阿比蓋爾，她將打開電話詢問問題。

Thank you. At this time, we'll conduct a question-and-answer session. One moment for our first question. Marla Marin with Zacks.

謝謝。這個時候，我們將進行問答環節。請稍等一下我們的第一個問題。瑪拉馬林和扎克斯。

Hi, thank you. Can you talk a little bit about the launch of the Freedom Alert Plus Product ? First of all, were there any surprises that, you know, you saw like following your product introduction? And also, do you think that you can use this experience with introducing this new product as a template for other potential product launches going forward? Thank you.

嗨，謝謝你。您能談談 Freedom Alert Plus 產品的推出嗎？首先，您知道，在產品介紹之後您是否看到了任何驚喜？另外，您認為您可以利用這次推出新產品的經驗作為未來其他潛在產品發布的模板嗎？謝謝。

Hello Marla. I'm happy to answer that question. So, we did not see a huge unanticipated -- surprise when it came to the launch of this particular product. We had gone through a fairly rigorous QA testing of the product, the back-end services, and a 24/7 monitor service. As you -- as I might have spoken about during this particular call, when we talked about the launch of the FA Plus, it's really not just the launch of that particular hardware itself, but with the launch basically of our Care Village Technology platform.

你好，瑪拉。我很高興回答這個問題。因此，在推出這款特定產品時，我們並沒有看到巨大的意外驚喜。我們對產品、後端服務和 24/7 監控服務進行了相當嚴格的 QA 測試。正如我在這次特別電話會議中可能談到的那樣，當我們談論 FA Plus 的推出時，這實際上不僅僅是特定硬體本身的推出，而是基本上我們的護理村技術平台的推出。

So we have launched the app. We launched the proprietary suite of middleware technology, the AI-enabled cloud-based services and then sort of the recurring subscription services in the form of the 24/7 monitor service, the fall detection sort of technology and so forth and so we did not see any surprises there.

所以我們推出了該應用程式。我們推出了專有的中間件技術套件、基於人工智慧的雲端服務，然後以 24/7 監控服務、跌倒偵測技術等形式提供定期訂閱服務，所以我們沒有看看那裡有什麼驚喜。

However, I will say that this in-home solution we have -- because it's the first time sort of rolling out a 24/7 monitor service and a subscription fall detection service, we have launched this on a consumer platform side and so as we are going out and reaching out to our B2B and B2G partners, we are introducing some of the technology to them and demonstrating this to them as we are going along.

然而，我要說的是，我們擁有的這個家庭解決方案 - 因為這是第一次推出 24/7 監控服務和訂閱下降檢測服務，我們已經在消費者平台端推出了它，所以我們我們正在走出去並與我們的B2B 和B2G 合作夥伴聯繫，我們正在向他們介紹一些技術，並在我們進行過程中向他們展示這些技術。

And so in the future, we may be simultaneously launching our technology platforms across all of the channels in pair, at the same time. But at least with this particular first launch because we're launching all of these different facets of concurrently at the same time, we did launch consumer first and then I'm rolling out to B2B and B2G. And so even this week, we actually have -- we're attending our Veterans Administration Show in Orlando, where the government sector is being introduced to our new technology this week.

因此，在未來，我們可能會同時在所有管道上同時推出我們的技術平台。但至少在這次特別的首次發布中，因為我們同時推出了所有這些不同的方面，所以我們首先推出了消費者，然後再推出到 B2B 和 B2G。因此，即使在本週，我們實際上也參加了在奧蘭多舉行的退伍軍人管理展，本週將向政府部門介紹我們的新技術。

Thank you.

謝謝。

Thank you. I'm showing no further questions at this time. I would like to turn the call back to Chia-Lin Simmons for closing remarks.

謝謝。我目前沒有提出任何進一步的問題。我想將電話轉回給嘉琳·西蒙斯（Chia-Lin Simmons），讓其致閉幕詞。

Thank you. In conclusion, I would like to thank all our employees, customers, and investors for their continued support. We look forward to reporting on the fourth quarter and full year results early next year. In the meantime, our dedicated teams will continue to work passionately to progress our vision, which is to provide solutions for every segment of the population to help improve the quality of their lives. This includes our valued veterans, our elderly aging in place and those who seek enhanced safety and health.

謝謝。最後，我要感謝我們所有員工、客戶和投資者的持續支持。我們期待明年初報告第四季和全年業績。同時，我們的敬業團隊將繼續熱情地工作，以實現我們的願景，為各階層人口提供解決方案，幫助改善他們的生活品質。這包括我們尊貴的退伍軍人、就地養老的老年人以及尋求增強安全和健康的人們。

As we head into the Veterans Day holiday, we reflect on their service and sacrifice as well as the sacrifice of our veterans families in honor to our country. Today, we announced the donation to the Bob Woodruff foundation in support of their mission which aligns with ours. To ensure that our nation's veterans and service members and their families, which stood for us has stable and successful futures.

當我們進入退伍軍人節假期時，我們反思他們的服務和犧牲，以及我們的退伍軍人家庭為我們的國家所做的犧牲。今天，我們宣布向鮑勃伍德拉夫基金會捐款，以支持他們與我們的使命一致的使命。確保代表我們的國家退伍軍人和軍人及其家人擁有穩定和成功的未來。

We have worked with the Veterans Administration for over a decade to facilitate our veteran's independence, and we look forward to continuing our great relationship with them. As we enter the holiday season, our entire team at LogicMark wishes all of you the very best. Thank you so much.

我們與退伍軍人管理局合作了十多年，以促進退伍軍人的獨立，我們期待繼續與他們保持良好的關係。在我們進入假期之際，LogicMark 的整個團隊祝福大家一切順利。太感謝了。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。