UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| (Address of principal executive offices) (Zip Code) |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b)of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| - | - | - |
Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days.
Indicate by check mark whether the registranthas submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrantis a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 13, 2025, there were
LogicMark, Inc.
Form 10-Q
Table of Contents
June 30, 2025
i
PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
LogicMark, Inc.
CONDENSED BALANCE SHEETS
(Unaudited)
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Investments | ||||||||
| Accounts receivable, net | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use assets, net | ||||||||
| Product development costs, net of amortization of $ | ||||||||
| Software development costs, net of amortization of $ | ||||||||
| Goodwill | ||||||||
| Other intangible assets, net of amortization of $ | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities, Series C Redeemable Preferred Stock and Stockholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Total Current Liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 9) | ||||||||
| Series C Redeemable Preferred Stock | ||||||||
| Series C redeemable preferred stock, par value $ | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, par value $ | ||||||||
| Series F preferred stock, par value $ | ||||||||
| Series H preferred stock, par value $ | ||||||||
| Series I preferred stock, par value $ | ||||||||
| Common stock, par value $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities, Series C Redeemable Preferred Stock and Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part ofthese unaudited condensed financial statements.
1
LogicMark, Inc.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Costs of goods sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Direct operating cost | ||||||||||||||||
| Advertising costs | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| Research and development | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Other expense | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income | ||||||||||||||||
| Interest income | ||||||||||||||||
| Other (expense) income, net | ( | ) | - | |||||||||||||
| Total Other Income | ||||||||||||||||
| Loss Before Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | - | - | ||||||||||||||
| Net Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss Attributable to Common Stockholders | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss Attributable to Common Stockholders Per Share - Basic and Diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted Average Number of Common Shares Outstanding - Basic and Diluted | ||||||||||||||||
The accompanying notes are an integral part ofthese unaudited condensed financial statements.
2
LogicMark, Inc.
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’EQUITY
(Unaudited)
| Three Months Ended June 30, 2025 | ||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||||||||||||||
| Fees incurred in connection with equity offerings | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Warrants exercised for common stock on a cashless basis | - | ( | ) | |||||||||||||||||||||||||
| Series C preferred stock dividends | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Six Months Ended June 30, 2025 | ||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - January 1, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock-based compensation expense | - | - | ||||||||||||||||||||||||||
| Issuance of restricted stock | - | |||||||||||||||||||||||||||
| Sale of common stock, warrants and pre-funded warrants pursuant to a registration statement on Form S-1 | - | |||||||||||||||||||||||||||
| Fees incurred in connection with equity offerings | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Warrants exercised for common stock | - | |||||||||||||||||||||||||||
| Warrants exercised for common stock on a cashless basis | - | ( | ) | |||||||||||||||||||||||||
| Conversion of Series H preferred stock for common stock | ( | ) | ( | ) | ||||||||||||||||||||||||
| Redemption of Series I preferred stock | ( | ) | - | |||||||||||||||||||||||||
| Series C preferred stock dividends | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - June 30, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
3
| Three Months Ended June 30, 2024 | ||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock based compensation expense | - | - | ||||||||||||||||||||||||||
| Issuance of restricted stock | - | |||||||||||||||||||||||||||
| Common stock withheld to pay taxes | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Fees incurred in connection with equity offerings | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Series C preferred stock dividends | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Six Months Ended June 30, 2024 | ||||||||||||||||||||||||||||
| Additional | ||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance - January 1, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Stock based compensation | - | - | ||||||||||||||||||||||||||
| Issuance of restricted stock | - | |||||||||||||||||||||||||||
| Common stock withheld to pay taxes | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Fees incurred in connection with equity offerings | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Series C preferred stock dividends | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance - June 30, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
The accompanying notes are an integral part ofthese unaudited condensed financial statements.
4
LogicMark, Inc.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Stock-based compensation | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of product development costs | ||||||||
| Amortization of software development costs | ||||||||
| Loss on disposal of fixed assets | ||||||||
| Change in unrealized gain on investments | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Deferred revenue | ||||||||
| Net Cash Used in Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of equipment and website development | ( | ) | ( | ) | ||||
| Product development costs | ( | ) | ( | ) | ||||
| Software development costs | ( | ) | ( | ) | ||||
| Purchase of investments in government securities | ( | ) | ||||||
| Net Cash Used in Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from the sale of common stock and warrants | ||||||||
| Fees paid in connection with equity offerings | ( | ) | ( | ) | ||||
| Common stock withheld to pay taxes | ( | ) | ||||||
| Proceeds from exercise of warrants for common stock | ||||||||
| Series C redeemable preferred stock dividends | ( | ) | ( | ) | ||||
| Net Cash Provided by (Used in) Financing Activities | ( | ) | ||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | ( | ) | ||||||
| Cash and Cash Equivalents - Beginning of Period | ||||||||
| Cash and Cash Equivalents - End of Period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Series H preferred stock conversion to common stock | $ | $ | ||||||
| Website development costs included in accounts payable | ||||||||
| Fees in connection with offering costs included in accounts payable and accrued expenses | ||||||||
| Product development costs included in accounts payable and accrued expenses | ||||||||
| Software development costs included in accounts payable and accrued expenses | ||||||||
| Lease liability and right-of-use asset arising from lease extension | ||||||||
The accompanying notes are an integral part ofthese unaudited condensed financial statements.
5
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES
LogicMark, Inc. (“LogicMark,” the“Company,” or “we”) was incorporated in the State of Delaware on February 8, 2012 and was reincorporated in theState of Nevada on June 1, 2023. LogicMark operates its business in one segment and provides personal emergency response systems (“PERS”),health communications devices, and Internet of Things technology that creates a connected care platform. The Company’s devices givepeople the ability to receive care at home and confidence to age independently. LogicMark revolutionized the PERS industry by incorporatingtwo-way voice communication technology directly in the medical alert pendant and providing life-saving technology at a price point everydayconsumers could afford. The PERS technologies are sold direct-to-consumer through the Company’s eCommerce platform, to retailersand resellers, and to the United States Veterans Health Administration (“VHA”).
Through June 1, 2025, the Company’s commonstock was traded on the Nasdaq Capital Market. Effective June 2, 2025, the Company’s common stock has been publicly quoted on amarket operated by the OTC Markets Group Inc. under the symbol “LGMK”.
NOTE 2 - LIQUIDITY AND MANAGEMENT PLANS
The Company generated an operating loss of $
Given the Company’s cash and investmentpositions as of June 30, 2025 and its projected cash flow from operations, the Company believes that it will have sufficient capital tosustain operations for a period of at least one year following the date of this filing. The Company may also raise funds through equityor debt offerings in the future to further accelerate the execution of its long-term strategic plan to develop and commercialize its coreproducts.
NOTE 3 - BASIS OF PRESENTATION
The accompanying unaudited condensed financialstatements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicablerules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. In theopinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments, except as otherwisenoted, considered necessary for a fair statement of results of operations, financial position, stockholders’ equity, and cash flows.The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The followinginformation should be read in conjunction with the audited financial statements and notes thereto included in the Company’s AnnualReport on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 31, 2025.
Net loss per share and share data for the threeand six months ended June 30, 2024 have been retroactively adjusted to reflect the 1-for-25 reverse stock split that occurred on November18, 2024. See Note 7.
6
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES
USE OF ESTIMATES IN THE CONDENSED FINANCIAL STATEMENTS
U.S. GAAP requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financialstatements and the reported amounts of revenues and expenses during the reporting period. The Company’s management evaluates thesesignificant estimates and assumptions, including those related to the fair value of acquired assets and liabilities, stock-based compensation,income taxes, allowance for credit losses, long-lived assets, financial instruments and inventories, carrying amount and estimated useful livesof long-lived assets, income tax recoverability of deferred tax assets and provisions, and other matters that affect the financial statementsand disclosures. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid securitieswith an original maturity date of three months or less when purchased to be cash equivalents. Due to their short-term nature, cash equivalentsare carried at cost, which approximates fair value. The Company had cash equivalents of $
INVESTMENTS
Investments include investments in U.S. government securities, whichare classified as available for sale. Investments with original maturities at the date of purchase greater than approximately three monthsbut less than a year are classified as short-term investments, as they represent the investment of cash available for current operations.The Company has investments of $
CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subjectthe Company to concentrations of credit risk consist principally of cash, cash equivalents and investments. The Company maintains itscash and cash equivalents balances in large well-established financial institutions located in the United States. At times, the Company’scash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limits.
REVENUE RECOGNITION
We enter into contracts with customers that may include combinationsof product and subscription services, resulting in arrangements containing multiple performance obligations. TheCompany’s revenues consist of product sales to either end customers, to resellers or direct bulk sales to the VHA. The Company’srevenues are derived from contracts with customers, which are in most cases customer purchase orders. For each contract, the promise totransfer the title of the product, each of which is individually distinct, is considered to be the identified performance obligation.As part of the consideration promised in each contract, the Company evaluates the customer’s credit risk. Our contracts do not haveany financing components, as payments are mostly prepaid, or in limited cases, due net 30 days after the invoice date. The majority ofprepaid contracts are with the VHA, which consists of the majority of the Company’s revenues. The Company’s products are almostalways sold at fixed prices. In determining the transaction price, we evaluate whether the price is subject to any refunds, due to productreturns or adjustments due to volume discounts, rebates, or price concessions to determine the net consideration we expect to be entitledto. The Company’s sales are recognized at a point-in-time under the core principle of recognizing revenue when title transfers tothe customer, which generally occurs when the Company ships the product from its fulfillment center to our customers, when our customeraccepts and has legal title of the goods, and the Company has a present right to payment for such goods. Based on the respective contractterms, most of our contract revenues are recognized either (i) upon shipment based on free on board shipping point, or (ii) when the productarrives at its destination.
7
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
In cases where the Company enters into contractswith customers that contain multiple performance obligations for product and subscription services, we allocate the transaction pricefor the contract among the performance obligations on a relative standalone selling price (“SSP”) basis, which is generallynot directly observable and requires the Company to estimate SSP based on management judgment by considering available data such as internalmargin objectives, pricing strategies, as well as other observable inputs. Subscription services revenue in these cases are recognizedover time.
During the year ended December 31, 2024, the Companyreleased new offerings by leasing products coupled with monthly subscription services. We account for the revenue from our lease contractsby utilizing the single component accounting policy. This policy requires the Company to account for, by class of underlying asset, thelease component and non-lease component(s) associated with each lease as a single component if two criteria are met: (1) the timing andpattern of the lease component and the non-lease component are the same and (2) the lease component would be classified as an operatinglease, if accounted for separately. The Company has determined that its leased product meets the criteria to be operating leases and hasthe same timing and pattern of transfer as its monthly subscription services. The Company has elected the lessor practical expedient withinAccounting Standards Codification (“ASC”) 842, Leases and recognizes, measures, presents, and discloses therevenue for the new offering based upon the predominant component, either the lease or non-lease component. The Company recognizes revenueunder ASC 606, Revenue Recognition from Contracts with Customers for its leased products for which it has estimated thatthe non-lease components of the new offering are the predominant component of the contract.
For the three and six months ended June 30, 2025, the Company’ssales recognized over time was $
SALES TO DEALERS AND RESELLERS
The Company maintains a reserve for unprocessedand estimated future price adjustments, claims and returns as a refund liability. The reserve is recorded as a reduction to revenue inthe same period that the related revenue is recorded and is calculated based on an analysis of historical claims and returns over a periodof time to appropriately account for current pricing and business trends. Similarly, sales returns and allowances are recorded based onhistorical return rates, as a reduction to revenue with a corresponding reduction to cost of goods sold for the estimated cost of inventorythat is expected to be returned. These reserves were not material as of June 30, 2025 and December 31, 2024.
SHIPPING AND HANDLING
Amounts billed to customers for shipping and handling are includedin revenues. The related freight charges incurred by the Company are included in cost of goods sold and were $
ACCOUNTS RECEIVABLE - NET
For the three and six months ended June 30, 2025and 2024, the Company’s revenues were primarily the result of shipments to VHA hospitals and clinics, which are made in most caseson a prepaid basis. The Company also sells its products to dealers and resellers, typically providing customers with modest trade creditterms. Sales made to dealers and resellers are done with limited rights of return and are subject to the normal warranties offered tothe ultimate consumer for product defects.
Accounts receivable is stated at net realizablevalue. The Company regularly reviews accounts receivable balances and adjusts the accounts receivable allowance for credit losses as necessarywhenever events or circumstances indicate the carrying value may not be recoverable. As of June 30, 2025 and December 31, 2024, the allowancefor credit losses was immaterial.
8
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED REVENUE
Deferred revenue is recorded when the amountsinvoiced to customers are in excess of revenue that can be recognized because performance obligations have not been satisfied, and controlof the promised product or subscription services has not been transferred to the customer.
| June 30, | ||||
| 2025 | ||||
| Deferred Revenue | ||||
| Current | $ | |||
| Non-current | ||||
| Total | $ | |||
The Company recognized sales of $
INVENTORY
The Company measures inventory at the lower ofcost or net realizable value, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costsof completion, disposal, and transportation. Cost is determined using the first-in, first-out method.
The Company performs regular reviews of inventoryquantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessaryfor excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or productionrequirements. As of June 30, 2025, inventory comprised of $
The Company is required to partially prepay forinventory with certain vendors. As of June 30, 2025 and December 31, 2024, $
LONG-LIVED ASSETS
Long-lived assets, such as property and equipment,and other intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of anasset may not be recoverable. When indicators exist, the Company tests for the impairment of the definite-lived assets based on the undiscountedfuture cash flow the assets are expected to generate over their remaining useful lives, compared to the carrying value of the assets.If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimatesfuture cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows maydiffer from actual cash flow due to, among other things, technological changes, economic conditions, or changes to the Company’sbusiness operations.
9
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY AND EQUIPMENT
Property and equipment consisting of equipment,furniture, fixtures, website and other is stated at cost. The costs of additions and improvements are generally capitalized and expendituresfor repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the relatedcosts and accumulated depreciation are removed from the accounts and any gain or loss is included in income.
| Equipment | ||
| Furniture and fixtures | ||
| Website and other |
GOODWILL
Goodwill is reviewed annually in the fourth quarter,or when circumstances indicate that an impairment may have occurred. The Company first performs a qualitative assessment of goodwill impairment,which considers factors such as market conditions, performance compared to forecast, business outlook and unusual events. If the qualitativeassessment indicates a possible goodwill impairment, goodwill is then quantitatively tested for impairment. The Company may elect to bypassthe qualitative assessment and proceed directly to the quantitative test. If a quantitative goodwill impairment test is required, thefair value is determined using a variety of assumptions including estimated future cash flows using applicable discount rates (incomeapproach), comparisons to other similar companies (market approach), and an adjusted balance sheet approach. As of June 30, 2025 and December31, 2024, no indicators of impairment were noted.
OTHER INTANGIBLE ASSETS
The Company’s intangible assets are relatedto the acquisition of LogicMark LLC in 2016, the former subsidiary that was merged with and into the Company, and are included in otherintangible assets in the Company’s condensed balance sheets as of June 30, 2025 and December 31, 2024.
As of June 30, 2025, the other intangible assetsare composed of patents of $
Amortization expense is estimated to be approximately$
STOCK-BASED COMPENSATION
The Company accounts for stock-based awards exchangedfor employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employeesat their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlyingequity instrument vests or becomes non-forfeitable. Stock-based compensation charges are amortized over the vesting period or as earned.Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash.
10
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS PER SHARE
Basic net loss attributable to common stockholders per share was computedusing the weighted average number of shares of common stock, par value $
RESEARCH AND DEVELOPMENT AND PRODUCT AND SOFTWARE DEVELOPMENTCOSTS
Research and development costs are expenditures on new market developmentand related engineering costs. In addition to internal resources, the Company utilizes functional consulting resources, third-party software,and hardware development firms. The Company expenses all research and development costs as incurred until technological feasibility hasbeen established for the product. Once technological feasibility is established, development costs including software and hardware designare capitalized until the product is available for general release to customers. Judgment is required in determining when technologicalfeasibility of a product is established. For the three months ended June 30, 2025, the Company capitalized $
RECENT ACCOUNTING PRONOUNCEMENTS
Recently Issued Accounting Pronouncements –Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement–ReportingComprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses”(“ASU 2024-03”), which enhances the disclosure of expenses on the income statement. ASU 2024-03 is effective for annual reportingperiods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15,2027. The Company is currently evaluating ASU 2024-03 to determine its impact on the Company’s disclosures.
In December 2023, the Financial Accounting StandardsBoard issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures(“ASU 2023-09”), which requires disclosure of incremental income tax information within the rate reconciliation and expandeddisclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December15, 2024. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statementsand disclosures.
NOTE 5 - ACCRUED EXPENSES
Accrued expenses consist of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Salaries, payroll taxes and vacation | $ | $ | ||||||
| Merchant card fees | ||||||||
| Professional fees | ||||||||
| Management incentives | ||||||||
| Lease liability | ||||||||
| Development costs | ||||||||
| Other | ||||||||
| Totals | $ | $ | ||||||
11
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6 - FAIR VALUE MEASUREMENTS
The fair value of financial instruments is definedas an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transactionbetween market participants. The degree of judgment used in measuring the fair value of assets and liabilities generally correlates tothe level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fairvalue can be measured from quoted prices in active markets generally have more pricing observability and require less judgment in measuringfair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generallymeasured at fair value using valuation models that require more judgment. These valuation techniques involve some level of managementestimation and judgment, the degree to which depends on the price transparency of the asset, liability or market and the nature of theasset or liability. The Company has categorized its financial assets and liabilities measured at fair value into a three-level hierarchy.
Valuation Hierarchy
ASC 820, Fair Value Measurements and Disclosures,establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes theinputs into three broad levels as follows:
| ● | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. |
| ● | Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. |
| ● | Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. |
The classification of a financial asset or liabilitywithin the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.
Cash and accounts payable approximate their fairvalues due to their short maturities. The Company measures the fair value of financial assets and liabilities based on the exchange pricethat would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for theasset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observableinputs and minimizes the use of unobservable inputs when measuring fair value.
Assets measured at fair value on a recurring basis were as follows:
| June 30, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Fair Value Measurement | Fair Value Measurement | |||||||||||||||||||||||
| Total | Total | |||||||||||||||||||||||
| Level 1 | Level 2 | Balance | Level 1 | Level 2 | Balance | |||||||||||||||||||
| Cash equivalents | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| U.S. government securities | ||||||||||||||||||||||||
| Totals | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
NOTE 7 - STOCKHOLDERS’ EQUITY AND REDEEMABLE PREFERRED STOCK
February 2025 Public Offering
On February 18, 2025 (the “Closing Date”), the Company,in connection with a best efforts public offering (the “February Offering”), sold an aggregate of (x)
12
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - STOCKHOLDERS’ EQUITY AND REDEEMABLE PREFERRED STOCK(CONTINUED)
As of June 30, 2025, the February Purchasers exercisedall of their Pre-Funded Warrants for an aggregate of
November 2024 Reverse stock split
On November 18, 2024, the Company effected a
Net loss per share and all share data as of andfor the three and six months ended June 30, 2024 have been retroactively adjusted to reflect the reverse stock splits in accordance withASC 260-10-55-12, “Restatement of EPS Data”.
Inducement Agreements and Issuance of New Preferred Stock
On November 13, 2024, the Company entered into inducement and releaseagreements (the “Inducement Agreements”) with the current and former holders (the “Series B Holders”) of the Company’sSeries B warrants to purchase Common Stock (the “Series B Warrants”), issued in the August Offering (as defined below), pursuantwhich on such date all remaining Series B Warrants were exercised and the Series B Holders waived and released the Company from any potentialclaims in connection with the exercise thereof and in exchange the Company agreed to issue the New Preferred Stock (as defined below).
In connection with the Inducement Agreements, on November 13, 2024,the Company filed with the Secretary of State of the State of Nevada (the “Nevada Secretary of State”): (i) a Certificateof Designation of Preferences, Rights and Limitations of Series H Convertible Non-Voting Preferred Stock (the “Series H Certificateof Designation”) to designate
13
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - STOCKHOLDERS’ EQUITY AND REDEEMABLEPREFERRED STOCK (CONTINUED)
Pursuant to the Settlement Agreements, on November14, 2024, the Company issued to the Series B Holders (i) an aggregate of
As of December 31, 2024, the conversion priceof the Series H Preferred Stock was subject to an adjustment due to the November 18, 2024 reverse stock split, which resulted in a newconversion price of $
Also pursuant to the Settlement Agreements, onthe issuance date of the New Preferred Stock, the Company entered into registration rights agreements with the Series B Holders pursuantto which the Company agreed to register the resale of the Conversion Shares. The Company was required to prepare and file the resale registrationstatement with the SEC no later than the 30th calendar day following the date of the issuance of the New Preferred Stock and to use itsbest efforts to have such registration statement declared effective within 60 calendar days after such date, subject to certain exceptions.A registration statement on Form S-3 (File No.333-283821) registering the resale of the Conversion Shares was initially filed by the Companywith the SEC on December 13, 2024 and was declared effective by the SEC on December 27, 2024.
Rights Agreement
On November 1, 2024, the Company entered intoa rights agreement with Nevada Agency and Transfer Company, as rights agent (the “Rights Agreement”). Pursuant to the RightsAgreement, in the event that a person or entity or group thereof becomes the Beneficial Owner (as defined in the Rights Agreement) ofat least fifteen percent (
14
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - STOCKHOLDERS’ EQUITY AND REDEEMABLEPREFERRED STOCK (CONTINUED)
On November 1, 2024, in connection with the RightsAgreement, the Company filed a Certificate of Designation, Preferences, and Rights of Series G Non-Convertible Voting Preferred Stock(the “Series G Certificate of Designation”) with the Nevada Secretary of State. The Series G Certificate of Designation authorized
August 2024 PublicOffering
On August 5, 2024, the Company, in connectionwith a best efforts public offering (the “August Offering”), sold to certain purchasers an aggregate of (x)
As of December 31, 2024, the Purchasers exercisedtheir August Pre-Funded Warrants for an aggregate of
15
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7 - STOCKHOLDERS’ EQUITY AND REDEEMABLE PREFERRED STOCK(CONTINUED)
Series C Redeemable Preferred Stock
In May 2017, the Company authorized the SeriesC Redeemable Preferred Stock. Holders of Series C Redeemable Preferred Stock are entitled to receive dividends of
The Series C Redeemable Preferred Stock may beredeemed by the Company at the Company’s option in cash at any time, in whole or in part, upon payment of the stated value of theSeries C Redeemable Preferred Stock and unpaid dividends. If a “fundamental change” occurs, the Series C Redeemable PreferredStock shall be immediately redeemed in cash equal to the stated value of the Series C Redeemable Preferred Stock, and unpaid dividends.A fundamental change includes but is not limited to any change in the ownership of at least
The holder of the Series C Redeemable PreferredStock is entitled to vote on any matter submitted to the stockholders of the Company for a vote.
A redeemable equity security is to be classifiedas temporary equity if it is conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer.Upon the determination that such events are probable, the equity security would be classified as a liability. Given the Series C RedeemablePreferred Stock contains a fundamental change provision, the security is considered conditionally redeemable. Therefore, the Company hasclassified the Series C Redeemable Preferred Stock as temporary equity in the balance sheets as of June 30, 2025 and December 31, 2024until such time that events occur that indicate otherwise.
Warrants
The following table summarizes the Company’s warrants outstandingand exercisable as of June 30, 2025 and December 31, 2024:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Life | Intrinsic | |||||||||||||
| Warrants | Price | In Years | Value | |||||||||||||
| Outstanding and exercisable at January 1, 2025 | $ | $ | ||||||||||||||
| Issued in connection with February Offering | ||||||||||||||||
| Issued pre-funded warrants | - | |||||||||||||||
| Exercise of pre-funded warrants | ( | ) | - | |||||||||||||
| Exercise of Series D Warrants from February Offering | ( | ) | - | |||||||||||||
| Outstanding and exercisable at June 30, 2025 | $ | $ | ||||||||||||||
16
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8 - STOCK INCENTIVE PLANS
2023 Stock Incentive Plan
On March 7, 2023, the Company’s stockholdersapproved the 2023 Stock Incentive Plan (“2023 Plan”). The aggregate maximum number of shares of Common Stock that may be issuedunder the 2023 Plan was
Stock Options
During the three and six months ended June 30, 2025, the Company issuedan aggregate of
During the three and six months ended June 30, 2024, the Company issuedan aggregate of
During the three and six months ended June 30, 2025,
Restricted Stock
During the three and six months ended June 30, 2025, the Company granted
A summary of restricted stock awards is as follows:
| Number of | ||||
| Shares of Restricted Stock | ||||
| Unvested balance at January 1, 2025 | ||||
| Granted | ||||
| Vested | ( | ) | ||
| Unvested balance at June 30, 2025 | ||||
17
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8 - STOCK INCENTIVE PLANS (CONTINUED)
2017 Stock Incentive Plan
On August 24, 2017, the Company’s stockholdersapproved the 2017 Stock Incentive Plan (“2017 SIP”). The aggregate maximum number of shares of Common Stock that were issuableunder the 2017 SIP was limited to
Stock Options
During the three and six months ended June 30,2025 and 2024, the Company did not issue any stock options under the 2017 SIP.
During the three and six months ended June 30,2025,
Restricted Stock
During the three and six months ended June 30,2025 and 2024, the Company did not issue any restricted stock awards under the 2017 SIP. The unamortized compensation cost as of June30, 2025, related to all outstanding restricted stock was $
A summary of restricted stock awards is as follows:
| Number of | ||||
| Shares of Restricted Stock | ||||
| Unvested balance at January 1, 2025 | ||||
| Granted | ||||
| Vested | ( | ) | ||
| Unvested balance at June 30, 2025 | ||||
2013 Long-Term Stock Incentive Plan
On January 4, 2013, the Company’s stockholdersapproved the Company’s Long-Term Stock Incentive Plan (“2013 LTIP”). The maximum number of shares of Common Stock thatwere issuable under the 2013 LTIP, including stock awards, stock issued to the Company’s Board, and stock appreciation rights, waslimited to
During the three and six months ended June 30, 2025 and 2024, the Companydid not issue any stock options under the 2013 LTIP.
During the three and six months ended June 30,2025,
18
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8 - STOCK INCENTIVE PLANS (CONTINUED)
Stock Option Modification
During the six months ended June 30, 2025, theCompany cancelled
Stock-based Compensation Expense
Total stock-based compensation expense duringthe three and six months ended June 30, 2025 pertaining to awards under the 2023 Plan and the 2017 SIP amounted to $
NOTE 9 - COMMITMENTS AND CONTINGENCIES
LEGAL MATTERS
From time to time, the Company may be involvedin various claims and legal actions arising in the ordinary course of our business. There is no action, suit, proceeding, inquiry or investigationbefore or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executiveofficers of the Company, threatened against or affecting the Company, in which an adverse decision could have a material adverse effectupon our business, operating results, or financial condition.
COMMITMENTS
The Company leases warehouse space and equipmentin the U.S., which are classified as operating leases expiring at various dates. The Company determines if an arrangement qualifies asa lease at the lease inception. Operating lease liabilities are recorded based on the present value of the future lease payments overthe lease term, assessed as of the commencement date.
The Company’s lease agreements generallydo not specify an implicit borrowing rate, and as such, the Company uses its incremental borrowing rate to calculate the present valueof the future lease payments. The discount rate represents a risk-adjusted rate on a secured basis and is the rate at which the Companywould borrow funds to satisfy the scheduled lease liability payment streams. The Company entered into a renewal five-year lease agreementin April 2025 for the warehouse space located in Louisville, Kentucky. The Right of Use (“ROU”) asset value added as a resultof this renewal lease agreement was $
19
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
For the three and six months ended June 30, 2025, total operating leasecost was $
| Year Ending December 31, | ||||
| 2025 (excluding the six months ended June 30, 2025) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total future minimum lease payments | ||||
| Less imputed interest | ( | ) | ||
| Total present value of future minimum lease payments | $ | |||
| As of June 30, 2025 | ||||
| Operating lease right-of-use assets | $ | |||
| Accrued expenses | $ | |||
| Other long-term liabilities | $ | |||
| $ | ||||
| As of June 30, 2025 | ||||
| Weighted Average Remaining Lease Term | ||||
| Weighted Average Discount Rate | % | |||
NOTE 10 - SEGMENT REPORTING
The Company’s operations are managed andreported to its Chief Executive Officer (“CEO”), Chia-Lin Simmons, the Company’s chief operating decision maker (“CODM”),on a consolidated basis. The CODM assesses performance and allocates resources based on the Company’s statements of operations,which assists the CODM to manage and evaluate the results of the business in a consolidated manner to drive efficiencies and develop uniformstrategies. Accordingly, components and processes of the Company’s operations are managed centrally, including contracting withthe government, capitalizing and developing new products or software, including releases, customer service, marketing, and legal affairs.Segment asset information is not used by the CODM to allocate resources or manage the business. Under this reporting structure, the Companyhas one reportable segment. As a single reportable segment entity, the Company’s segment performance measure is net lossattributable to common stockholders. Significant segment expenses are presented in the Company’s statements of operations.
20
LogicMark, Inc.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
NOTE 11 - SUBSEQUENT EVENTS
One Big Beautiful Bill
On July 4, 2025, the One Big Beautiful Bill Act (“the Act”)was enacted into law. The Act includes significant changes to the U.S. tax code, including restoration of immediate recognition of domesticresearch and development expenditures and reinstatement of
Certificates of Withdrawal
On July 9, 2025, the Company filed with the Secretaryof State of the State of Nevada certificates of withdrawal for its Series H Certificate of Designation and Series I Certificate of Designationin order to eliminate and cancel all designations, rights, preferences and limitations of the shares of Series H Preferred Stock and SeriesI Preferred Stock, respectively. Prior to the filing of each such certificate of withdrawal, all
21
Item 2. Management’s Discussion and Analysis of FinancialCondition and Results of Operations
Thefollowing discussion and analysis of our financial condition and results of operations for the three and six months ended June 30, 2025should be read together with our condensed financial statements and related notes included elsewhere in this Quarterly Report on Form10-Q for the three and six months ended June 30, 2025 (this “Form 10-Q”). This discussion and other disclosure in this Form10-Q contain forward-looking statements and information relating to our business that reflect our current views and assumptions concerningfuture events and is subject to risks and uncertainties that may cause our or our industry’s actual results, levels of activity,performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressedor implied by these forward-looking statements. These forward-looking statements speak only as of the date of this Form 10-Q. Althoughwe believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levelsof activity, or achievements. Except as required by applicable law, including the securities laws of the United States, we expresslydisclaim any obligation or undertaking to disseminate any update or revisions of any of the forward-looking statements to reflect anychange in our expectations with regard thereto or to conform to these statements to actual results.
Overview
LogicMark, Inc. provides PERS, health communicationsdevices, and Internet of Things technology that creates a connected care platform. The Company’s devices provide people with theability to receive care at home and age independently and to check, manage and monitor a loved one’s health and safety remotely.The Company’s PERS devices incorporate two-way voice communication technology directly in the medical alert pendant and providinglife-saving technology at a consumer-friendly price point aimed at everyday consumers. The Company is focused on modernizing remote monitoringto help people stay safe and live independently longer. The PERS technologies, as well as other personal safety devices, are sold directto consumer through dealers and resellers, the Company’s eCommerce website (logicmark.com) and Amazon.com, as well as directly tothe United States Veterans Health Administration. The Company was awarded a contract by the U.S. General Services Administration thatenables the Company to distribute its products to federal, state, and local governments.
Recent Developments
On July 9, 2025, the Company filed with the Secretaryof State of the State of Nevada certificates of withdrawal for its Series H Certificate of Designation and Series I Certificate of Designationeliminating each of the Series H Preferred Stock and Series I Preferred Stock, respectively, as all shares of each such series had beenconverted into shares of Common Stock and redeemed, as applicable.
Results of Operations
Three and six months ended June 30, 2025, compared with the three andsix months ended June 30, 2024.
Revenue, Cost of Goods Sold, and Gross Profit
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 2,853,210 | $ | 2,336,268 | $ | 5,445,035 | $ | 4,947,351 | ||||||||
| Cost of Goods Sold | 925,910 | 781,318 | 1,872,507 | 1,625,183 | ||||||||||||
| Gross Profit | $ | 1,927,300 | $ | 1,554,950 | $ | 3,572,528 | $ | 3,322,168 | ||||||||
| Profit Margin | 68 | % | 67 | % | 66 | % | 67 | % | ||||||||
22
We experienced a 22% and 10% increase in revenuefor the three and six months ended June 30, 2025, respectively, as compared to the same periods ended June 30, 2024. The primary reasonfor the increase in revenue was due to higher sales of our Freedom Alert Mini units, launched in 2024 and our recently upgraded GuardianAlert 911 Plus.
Gross profit margin was 68% for the three monthsended June 30, 2025, up from 67% for the three months ended June 30, 2024, driven by a shift in sales mix to higher margin products. Grossprofit margin was 66% for the six months ended June 30, 2025, down from 67% for the six months ended June 30, 2024, as a result of anincrease in costs for monitoring services for our new monitored products.
Operating Expenses
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating Expenses | ||||||||||||||||
| Direct operating cost | $ | 350,453 | $ | 320,660 | $ | 694,079 | $ | 651,580 | ||||||||
| Advertising costs | 46,395 | 135,220 | 220,985 | 287,433 | ||||||||||||
| Selling and marketing | 703,249 | 605,493 | 1,220,348 | 1,193,031 | ||||||||||||
| Research and development | 138,115 | 133,556 | 293,604 | 307,458 | ||||||||||||
| General and administrative | 2,313,034 | 1,982,997 | 4,579,753 | 3,881,960 | ||||||||||||
| Other expense | 14,423 | 69,932 | 64,035 | 153,758 | ||||||||||||
| Depreciation and amortization | 494,045 | 377,974 | 993,472 | 723,525 | ||||||||||||
| Total Expenses | $ | 4,059,714 | $ | 3,625,832 | $ | 8,066,276 | $ | 7,198,745 | ||||||||
Direct Operating Cost
The $29.8 thousand and $42.5 thousand increase in direct operatingcost for the three and six months ended June 30, 2025, respectively, compared to the same periods ended June 30, 2024, was primarily drivenby an increase in personnel and temporary help fees.
Advertising Costs
The $88.8 thousand and $66.4 thousand decreasein advertising costs for the three and six months ended June 30, 2025, respectively, compared to the same periods ended June 30, 2024,was primarily driven by the reduction in the cost of advertising related to a shift away from sales to the business-to-consumer channeland towards sales thru the business-to-business channel.
Selling and Marketing
The $97.8 thousand and $27.3 thousand increase inselling and marketing expenses for the three and six months ended June 30, 2025, respectively, compared to the same periods ended June30, 2024, was driven by an increase in sales recruitment expenses to support the business-to-business channel and an increase in salespersonnel.
Research and Development
No materialfluctuations were noted for the three and six months ended June 30, 2025, respectively, compared to the same periods ended June 30, 2024.
23
General and Administrative
The $0.3 million and $0.7 million increase in general and administrativeexpenses for the three and six months ended June 30, 2025, respectively, compared to the same periods ended June 30, 2024, was drivenby higher consulting costs, legal fees and other public company expenses.
Other Expense
The $55.5 thousand and $89.7 thousand decreasein other expenses for the three and six months ended June 30, 2025, respectively, compared to the same periods ended June 30, 2024, wasdriven by severance cost in 2024 that were not incurred in 2025.
Other Income
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Other Income | ||||||||||||||||
| Interest income | $ | 133,648 | $ | 32,025 | $ | 178,863 | $ | 93,177 | ||||||||
| Other (expense) income | (53,906 | ) | - | 71,227 | - | |||||||||||
| Total Other Income | $ | 79,742 | $ | 32,025 | $ | 250,090 | $ | 93,177 | ||||||||
During each of the three and six months endedJune 30, 2025 and 2024, the Company recorded other income, which was driven by the generation of interest income from its cash balances.During the six months ended June 30, 2025, the Company recognized the receipt of a $0.1 million refund from the Internal Revenue Servicein connection with its application of an employee retention credit for businesses offset by the write-off of the prepaid annual registrationfee related to the de-listing of the Common Stock from The Nasdaq Stock Market LLC.
Liquidity and Capital Resources
Sources of Liquidity
The Company generated an operating loss of $4.5million, a net loss of $4.2 million and cash used in operations of $2.7 million for the six months ended June 30, 2025. As of June 30,2025, the Company had cash and cash equivalents of $5.0 million and $8.0 million investment in government securities. As of June 30, 2025,the Company had working capital of $12.6 million. During the six months ended June 30, 2025, the Company received gross proceeds of $14.4million from the issuance of Common Stock and warrants.
Given our cash position as of June 30, 2025, webelieve we will have sufficient capital to sustain operations for at least twelve months from the date of the filing of our condensedfinancial statements. We may, if ever deemed necessary, raise funds in the future through equity or debt offerings to further acceleratethe execution of our long-term strategic plan to develop and commercialize our new products.
Cash Flows
Cash Used in Operating Activities
During the six months ended June 30, 2025, netcash used in operating activities was $2.7 million. During the six months ended June 30, 2024, net cash used in operating activities was$2.6 million. Our primary ongoing uses of operating cash relate to payments to vendors, salaries and related expenses for our employeesand consulting and professional fees. Our vendors and consultants generally provide us with normal trade payment terms (net 30).
24
Cash Used in Investing Activities
During the six months ended June 30, 2025, we invested$0.7 million in product development and software development and purchased $8.0 million in government securities. During the six monthsended June 30, 2024, we purchased $16.7 thousand in equipment and website development costs and invested $0.6 million in product developmentand software development.
Cash Provided by (Used in) Financing Activities
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from sale of common stock and warrants | $ | 14,377,835 | $ | - | ||||
| Fees paid in connection with equity offerings | (1,773,169 | ) | (98,678 | ) | ||||
| Common stock withheld to pay taxes | (4,235 | ) | ||||||
| Proceeds from exercise of warrants for common stock | 22,147 | - | ||||||
| Series C redeemable preferred stock dividends | (150,000 | ) | (150,000 | ) | ||||
| Net Cash Provided by (Used in) Financing Activities | $ | 12,476,813 | $ | (252,913 | ) | |||
During thesix months ended June 30, 2025, we completed a registered public offering of units and pre-funded units, consisting of Common Stock, warrantsand pre-funded warrants, whereby we received gross proceeds of $14.4 million. The Company also received gross proceeds from the exerciseof all Pre-Funded Warrants of $22.1 thousand. The February Offering and the exercise of Pre-funded Warrants resulted in a total of $1.8million in fees incurred. During the six months ended June 30, 2025 and 2024, we paid Series C Redeemable Preferred Stock dividendsamounting to $0.2 million each period.
Impact of Inflation and Tariffs
We believe that our business has been modestly impacted by inflationarytrends during the past three fiscal years. However, recent activity by the U.S. administration concerning tariffs may increase our costof fulfilment in the remainder of fiscal year 2025. Should inflation continue to be a factor in the worldwide economy, it may increasethe cost of purchasing products from our contract manufacturers in Asia, as well as the cost of certain raw materials, component partsand labor used in the production of our products. It is uncertain what impact new or existing tariffs, trade restrictions or retaliatoryactions may have on us, the PERS industry or our customers. An escalation in trade tensions or the implementation of broader tariffs,trade restrictions or retaliatory measures on our products or components originating from countries outside the U.S. could adversely impactour ability to source necessary components, manufacture products at competitive cost, or sell our products at prices customers are willingto pay. We have been able to maintain our profit margins through higher productivity, better supply chain management, efficiency improvements,transferring much of our contract manufacturing from China and Hong Kong to Taiwan, and through other cost reduction programs.
Off Balance Sheet Arrangements
We do not have any relationships with unconsolidatedentities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which wouldhave been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.In addition, we do not have any undisclosed borrowings or debt, and we have not entered into any synthetic leases. We are, therefore,not materially exposed to any financing, liquidity, market, or credit risk that could arise if we had engaged in such relationships.
Critical Accounting Policies
There were no significant changes to our criticalaccounting policies and estimates during the three and six months ended June 30, 2025, from those disclosed in our Annual Report on Form10-K for the year ended December 31, 2024.
25
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
We are not required to provide the information required by this Item3 as we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participationof our management, including our principal executive officer and principal financial officer, we are required to perform an evaluationof our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended(the “Exchange Act”), as of June 30, 2025. Management has concluded that our disclosure controls and procedures were effectiveas of June 30, 2025 to provide reasonable assurance that information required to be disclosed by us in reports we file or submit underthe Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriateto allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
There wereno changes in the Company’s internal control over financial reporting that occurred during the three months ended June 30, 2025that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Limitations of the Effectiveness of Internal Control
Our management, including our Chief ExecutiveOfficer and Chief Financial Officer, do not expect that our disclosure controls and procedures will prevent all errors and all fraud.A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectivesof the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, andthe benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluationof controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherentlimitations include, but are not limited to, the realities that judgments in decision making can be faulty and that breakdowns can occurbecause of simple errors. Additionally, controls can be circumvented by the individual acts of a person, by collusion of two or more people,or by management override of the control. The design of any system of controls is also based in part upon certain assumptions about thelikelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potentialfuture conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occurand not be detected.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become subject to legalproceedings, claims, or litigation arising in the ordinary course of business. We are not presently a party to any other legal proceedingsthat in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effecton our business, operating results, financial condition, or cash flows.
Item 1A. Risk Factors
As a smaller reporting company, we are not required to provide theinformation required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On April 1, 2025, the Company granted 11,500 stockoptions under the Company’s 2023 Stock Incentive Plan (“2023 Plan”), vesting over a period of four years, to employeesand 2,000,000 fully vested stock options to four non-employee directors, all at an exercise price of $0.02 per share, in considerationfor services provided to the Company.
The sale and the issuance of the foregoing securitieswere offered and sold in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act of1933, as amended, for transactions not involving any public offering. Nounderwriter participated in the offer and sale of these securities, no commission or other remuneration was paid or given directly orindirectly in connection therewith, and there was no general solicitation or advertising for securities issued in reliance uponsuch exemption.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Item 6. Exhibits
In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 arebeing furnished and not filed.
| * | Filedherewith. |
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SIGNATURES
Pursuant to the requirements of Section 13 or15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned,thereunto duly authorized.
| LogicMark, Inc. | ||
| Date: August 13, 2025 | By: | /s/ Chia-Lin Simmons |
| Chia-Lin Simmons | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: August 13, 2025 | By: | /s/ Mark Archer |
| Mark Archer | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
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