LogicMark(LGMK) - 2025 Q1 - Quarterly Report

Part I: Financial Information Item 1. Condensed Financial Statements (Unaudited) The unaudited condensed financial statements for Q1 2025 reflect increased assets from a public offering, a wider net loss, and subsequent Nasdaq delisting concerns Condensed Balance Sheets The balance sheet as of March 31, 2025, shows a significant increase in total assets and stockholders' equity, primarily driven by a public offering Condensed Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $8,990 | $3,807 | | Investments | $5,999 | $0 | | Total Current Assets | $16,486 | $5,337 | | Total Assets | $25,217 | $14,221 | | Liabilities & Equity | | | | Total Current Liabilities | $2,180 | $2,029 | | Total Liabilities | $2,203 | $2,029 | | Total Stockholders' Equity | $21,207 | $10,385 | Condensed Statements of Operations Q1 2025 saw a slight revenue decrease and a widened operating loss, leading to an increased net loss per share compared to Q1 2024 Q1 2025 vs. Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenues | $2,591.8 | $2,611.1 | | Gross Profit | $1,645.2 | $1,767.2 | | Total Operating Expenses | $4,009.3 | $3,572.9 | | Operating Loss | $(2,364.1) | $(1,805.7) | | Net Loss | $(2,191.0) | $(1,744.5) | | Net Loss Attributable to Common Stockholders | $(2,266.0) | $(1,819.5) | | Net Loss Per Share (Basic and Diluted) | $(0.12) | $(21.15) | Condensed Statements of Cash Flows Net cash used in operating activities increased in Q1 2025, but a significant public offering led to a substantial overall increase in cash and cash equivalents Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(1,651.7) | $(1,091.2) | | Net Cash Used in Investing Activities | $(6,168.4) | $(168.0) | | Net Cash Provided by (Used in) Financing Activities | $13,003.2 | $(91.6) | | Net Increase (Decrease) in Cash | $5,183.1 | $(1,350.7) | | Cash and Cash Equivalents - End of Period | $8,990.0 | $5,047.4 | Notes to Condensed Financial Statements Notes to the financial statements detail the company's business, liquidity, and accounting policies, highlighting a recent public offering and subsequent Nasdaq delisting notice - The company provides personal emergency response systems (PERS) and related technology, sold direct-to-consumer, through retailers, and to the U.S. Veterans Health Administration (VHA)[20] - Despite a Q1 2025 net loss of $2.2 million, management believes its cash position of $9.0 million and $6.0 million in investments is sufficient to sustain operations for at least one year[21][22] - In February 2025, the company completed a public offering, receiving gross proceeds of approximately $14.4 million from the sale of common stock, warrants, and pre-funded warrants[63][65] - On May 2, 2025, Nasdaq notified the company of its determination to delist the common stock, citing public interest concerns under Listing Rule 5101 due to substantial shareholder dilution from the February 2025 offering[115] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's discussion highlights a Q1 2025 revenue decline, decreased gross profit margin, increased operating expenses, and improved liquidity from a public offering, alongside a recent Nasdaq delisting notification - The company received a delisting notification from Nasdaq on May 2, 2025, due to public interest concerns regarding substantial shareholder dilution from the February 2025 offering. The company has responded and is appealing the decision[120][121] Q1 2025 vs. Q1 2024 Performance | Metric | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $2,591,824 | $2,611,083 | (1)% | | Gross Profit | $1,645,227 | $1,767,218 | (7)% | | Gross Profit Margin | 63% | 68% | (5) p.p. | | Total Operating Expenses | $4,009,345 | $3,572,913 | 12% | - General and administrative costs increased by $0.4 million (20%) in Q1 2025 compared to Q1 2024, driven by higher consulting, investor relations, and legal fees[128][133] - The company's liquidity position improved significantly with cash and cash equivalents of $9.0 million and investments of $6.0 million as of March 31, 2025, following a public offering that raised $14.4 million in gross proceeds[135] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[143] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[144] - No changes occurred during the quarter that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting[145] Part II: Other Information Item 1. Legal Proceedings The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - The company reports no pending legal proceedings that would have a material adverse effect on its business[148] Item 1A. Risk Factors The primary risk factor is the potential delisting of the company's common stock from Nasdaq due to non-compliance with minimum bid price and substantial shareholder dilution concerns - The company is not in compliance with Nasdaq Listing Rules and faces delisting[149] - On May 2, 2025, Nasdaq issued a delisting determination under its discretionary authority (Rule 5101), citing public interest concerns about substantial shareholder dilution from the February 2025 offering[151] - On March 20, 2025, Nasdaq notified the company of non-compliance with the Minimum Bid Price Requirement (Rule 5550(a)(2)). The company has appealed this notice[153] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company granted stock options and restricted common stock to employees, directors, and executives in January 2025 under the 2023 Stock Incentive Plan, relying on a Section 4(a)(2) exemption - On January 2, 2025, the company granted 93,000 stock options to employees and 26,668 to non-employee directors[156] - On January 2, 2025, the company granted 156,900 shares of restricted stock to executives and a consultant, vesting over four years[157] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - The company reports no defaults upon senior securities[159] Item 4. Mine Safety Disclosures This item is not applicable to the company's operations - This item is not applicable to the company[160] Item 5. Other Information The company reports no other information for this item - The company reports no other information for this item[161] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including documents related to the public offering and officer certifications - Exhibits filed include documents related to the February 2025 public offering, such as forms of Series C and D Warrants, the Securities Purchase Agreement, and the Placement Agency Agreement[162] - Certifications by the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are included as exhibits[162]