Good day. My name is Chantel and I will be your conference operator today. At this time, I would like to welcome everyone to the LogicMark Second Quarter Financial Results and Corporate Update Conference Call. As a reminder, today's conference call is being recorded. All lines have been placed on mute to prevent any background noise. After your speaker's remarks, there will be a question-and-answer session. Thank you. I'd now like to turn the call over to Louis Toma from CORE IR, the company's Investor Relations firm.

Good afternoon and thank you for participating in today's conference call. Joining me from LogicMark's leadership team 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. 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 periodic reports filed with the SEC and 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, August 11, 2022. 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. It is my pleasure to turn the call over to the company's CEO, Chia-Lin Simmons.

Thank you, Louie. Welcome, everyone, and thanks for joining us. The second quarter was another success as we grew our revenues by 21% over the prior year quarter, while continuing to execute on our strategy of building solutions that address the growing care economy. Our relationship with the veterans' health administration remains solid, contributing to our healthy sales growth. As an approved GSA vendor, we've had the opportunity to generate additional governmental-related business at the federal, state, and local agency level, increasing our sales opportunity to drive future revenue growth. In July, we launched our new direct-to-consumer sales channel through our newly designed website where consumers can buy products directly from LogicMark. This launch opens up the new B2C sales channel that I have talked about in past calls and expands our market opportunity. Currently, the website includes several products for sale, including our Guardian Alert, Guardian Alert 911 Plus, Freedom Alert models, as well as various related accessories. We will be adding new products as they become available. This new channel will enable us to establish deeper connections with our end customers by being directly involved in product sales. This direct relationship will provide the opportunity to sell additional products and accessories and should positively impact future revenue growth and profit. Recently, we added two senior sales professionals and upgraded our sales leadership. We think of our investments in this important area. As we establish our product roadmap, having a solid sales infrastructure will be critical in successfully getting these products to market. This investment will establish a foundation to support strong revenue growth over time. Given the current market dynamics, we are in a position to capitalize on some very strong market trends. Here are a few. We're currently in the midst of a silver tsunami with 10,000 baby boomers turning 65 daily; the demand for technology that supports a growing care economy is increasing rapidly. The expected CAGR of this total aging and place market is 13% in a total care economy that is about $24 billion. Research has shown that 90% of people that are over 50 want to age in place, setting the stage for strong demand for years to come. Our mission is to protect the personal experience of living life to the fullest. At LogicMark, we don't believe that aging is a strategy; we believe aging is a gift to be enjoyed and relished. Our job is to remove the worry of aging independently for everyone involved, providing a direct connection to loved ones and the help that they need. We're excited about this opportunity to continue to work hard to provide innovative solutions that address the care economy. We look forward to updating you with new announcements as we progress with these initiatives. Since joining the company in June of last year, my mission has been to position LogicMark for success. We have set and shared our objectives and have established a track record of successfully achieving those goals: one, improve the financial condition of the company and execute to drive substantial revenue growth; two, establish a new direct-to-consumer channel to drive additional sales opportunities and have begun to build a new sales team; three, improve corporate governance and cost management; four, expand our intellectual property portfolio and also add experienced personnel to our management team and our board of directors. These accomplishments highlight that we are successfully executing on our strategy, building credibility with our stakeholders, and laying a solid foundation to launch new products. We're excited about the progress that we have made to date, but have just started to scratch the surface. I'll now pause and ask Mark Archer to discuss our second quarter financial results, and then I'll return to provide some closing remarks.

Well, thank you, Chia-Lin. Here are the financial results for the second quarter ended June 30, 2022. Revenue was $3.4 million, up 21% over the year-ago period, driven by improved sales to VA hospitals and clinics, and from replacement sales of our 4G Guardian Alert 911 Plus device due to the sunset of our previous 3G model. We believe these replacement sales opportunities were mostly finished at the end of this quarter. Gross profit was $2 million, up 17% from the same quarter last year. Gross margin was 59% compared to 61% in the same quarter last year. The lower gross margin this quarter was a result of a product mix shift to the lower margin Guardian Alert 911 Plus unit, as well as higher shipping costs, which we are addressing this quarter. Operating expenses were $3.1 million compared to $1.9 million in the same quarter last year. The increase in operating expenses was driven by the investment in sales personnel, higher bonuses and sales commissions, increased marketing costs, and the addition of resources to the organization to drive new product development, as well as investing in our finance and administrative infrastructure. Operating loss was $1.1 million this quarter versus an operating loss of $200,000 in the year-ago quarter. That variance is a result of the higher operating expenses. Net loss attributable to common shareholders was $1.2 million, flat with last year's quarter net loss of $1.2 million. Net loss per share for the quarter was $0.13 versus $0.22 in the same quarter last year. At quarter end, the company held $1.1 million in cash versus $12 million at the end of December of last year, and the company has no debt.

Thanks, Mark. As we wrap up the call, I want to leave you with a couple of key thoughts. As the trend to the elder segment continues to represent an increasing proportion of the total population, the $24 billion care economy will continue to expand, creating an opportunity for innovative tech companies to provide creative solutions to people who desire to age at home. LogicMark is increasingly becoming positioned to be a leader in this exciting market with our new IP and sales strategies. Our track record highlights our ability to follow through on our objectives and our ability to execute and succeed in penetrating this market, adding value to our stakeholders. At this time, I will open the call to questions. Operator?

Our first question comes from Ariana Barinstein with Alliance Global. Your line is open.

Hi, this is Ariana on for Brian. Could you share the expected timeline for new product releases and describe some of those new products specifically? When will some of your innovative new products, including the monitor services, be commercially available for sale?

Sure. Great question. Thank you, Ariana. You're going to see the first of our connected products launching into our portfolio by the end of Q3 this year. Some of the first nearly designed hardware products will probably launch by the end of Q1 of next year. We will continue to sell our best-selling products in our portfolio, which are our unconnected products. We believe there are fixed income, as well as other low-income segments, senior segments that really love and desire our products. These products last six to 12 months on a charge. They connect you directly to 911. That said, we are looking at our monitor products, and the first of these products you'll see us potentially launch as early as Q3 of this year. When we talk about building newer innovative products from a hardware perspective, we really are focused on building reference technology products in the space. By Q1, you'll see us looking at what it means to actually build an amazing first wearable product. They don't have to look like garage openers or around your neck. We believe they should be something that those who are aging, the boomers would want to wear on their bodies, and they should utilize advanced machine learning, such as fall detection. You'll see some of those products roll out. For our connected product launching in Q3, it will be a Wi-Fi product that will replace our in-home products. It will be the first to connect and bring data into the cloud so we can build on our ML technology.

Okay, great. Thank you. And then could you talk about how the supply chain challenges, if at all, are impacting the manufacturing and pricing of existing and new products?

Yeah, absolutely. I think that's a really great question. As we continue into the third year of COVID, we are continuing to see supply chain impacts overall for every company that operates in consumer electronics or utilizes any chips, which essentially includes just about every company from consumer products like ours to automakers and more. We are seeing component parts, quite candidly, skyrocket. We are definitely experiencing slowdowns in the supply chain getting the products we need to our warehouses and into manufacturing. That said, we are fortunate to be a small and nimble company. As we've mentioned in the past, we are not Apple; good or bad, we don't have to purchase a million IC chips at a time. Our small size has given us the flexibility to go into the spot market and purchase those items and actively monitor the pricing within the smart spot marketplace. So we can capture them when prices are low and warehouse them for our needs. It is impacting us to a certain degree because we had been less inventory than we were prior to this problem, as we could capture some supplies in the chain more easily. You'll see us take on a bit more inventory purchasing ahead so we can have it for our manufacturing, as the market prices fluctuate. We are also encountering increased shipping costs, which we are addressing and evaluating ways to find the best shipping partners to expedite our distribution to customers as cost-effectively as possible. We are certainly feeling the impact, like every company in every industry, but we are fortunate to be nimble as a startup. We are very conscious of some costs and demands in the supply chain; you may see us considering increasing the prices of our products.

Okay, thank you again. And my last question is, given the economic downturn, have you begun to see or expect to see any changes in demand for your products?

Yeah, and I think that's a really great question. When we look at demands for needs, the one in four Americans aged 65 hasn't changed. We don't see a slowdown in demand for our products. In fact, we expect continued growth in demand for our products because aging waits for no one. Everybody continues to age, and the need for security and safety remains regardless of economic conditions. I hope that answers your question.

Yes. Thank you so much.

I'll now turn the call back over to Chia-Lin for closing remarks.

I think we may have lost Chia-Lin. She was on a cell phone today and concerned about losing the signal. So on her behalf, I'd like to thank all of you who dialed in to listen to our call today. We look forward to continuing to provide updates on our progress at the appropriate times. Thank you all very much.

This concludes this conference call. You may now disconnect.