Good day, and welcome to the LogicMark Third Quarter 2023 Financial Results and Corporate Update Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pierre Dubois, Investor Relations. Please go ahead..

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.

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.

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

Carine Schneider and Tom Wilkinson, expanding the total number of directors to 6. We look forward to the Board's elective 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 through the next stage of the company's development. At this time, I'll hand over the call to Mark to provide a brief review of the financials..

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.

So our customers with older 3G Guardian Alert 911+ units needed to replace those units with our current model 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.

Back to our continued improvement in gross margin. We focused on 3 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. Second, we switched to procuring inventory more opportunistically versus our traditional previous just-in-time approach.

Now we purchased some of our components when prices are most favorable rather than when we need the part. 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. 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.

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.

[Indiscernible] have been adjusted for our 1 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 have no debt on our books.

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..

Our first question comes from Marla Marin with Zacks..

Can you talk a little bit about the launch of the Freedom Alert Plus product? First of all, were there any surprises that 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?.

Marla, I'm happy to answer that question. So we do not see a huge anticipated surprise when it came to the launch of this particular product. We have 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. So we have launched the app.

We launched the proprietary sort 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 do not see any surprises there.

However, I will say that this in-home solution, we have -- because it's our 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 these to them as we are going along. And so in the future, we may be simultaneously matching our technology platforms across all of the channels at the same time.

But at least with this particular first launch, because we're launching all of these different facets concurrently at the same time, we did launch consumer first and then 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..

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

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.

As we head into the Veteran's 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 a donation to the Bob Woodruff Foundation in support of their mission, which aligns with ours.

To ensure that our nation's veterans, service members and their families, who had stood for us, have stable and successful futures. We have worked with the Veterans Administration for over a decade to facilitate our veterans' 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..

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