LOUISVILLE - LogicMark, Inc. (NASDAQ:LGMK), a provider of personal emergency response systems and health communications devices, has announced a reverse stock split of its common stock at a ratio of 1-for-25. The move is aimed at complying with Nasdaq's minimum bid price requirement for continued listing on the Nasdaq Capital Market.
The company's board of directors approved the reverse stock split following a Special Meeting of Stockholders on October 1, 2024. The reverse stock split will also apply to the company's Series C preferred stock, effective simultaneously with the common stock split. The split-adjusted shares are expected to begin trading on November 19, 2024, under a new CUSIP number.
This strategic decision is intended to elevate the company's share price above the $1.00 minimum bid price as required by Nasdaq, ensuring that LogicMark remains a Nasdaq-listed entity. Chia-Lin Simmons, CEO of LogicMark, stated that the reverse split is crucial for the company to maintain its listing status and to position itself favorably for the launch of new products in the near future.
Shareholders of record will receive instructions from Nevada Agency and Transfer Company, the transfer agent, on the exchange process for stock certificates. Shareholders with shares in book-entry form or held in brokerage accounts will not need to take any action to effect the exchange of their shares following the reverse stock splits.
LogicMark emphasized its commitment to innovation in the personal emergency response systems industry, highlighting its role in incorporating two-way voice communication technology into medical alert devices. The company's products are sold through the United States Veterans Health Administration and various dealers and distributors.
The information in this article is based on a press release statement from LogicMark, Inc.
In other recent news, LogicMark, Inc. has undergone a significant corporate restructuring, issuing two new series of preferred stock, Series H Convertible Non-Voting Preferred Stock and Series I Non-Convertible Voting Preferred Stock. This development comes as part of a settlement agreement with holders of its Series B common stock purchase warrants. The Series H Preferred Stock is convertible into common stock at an initial conversion price of $0.4654 and participates in distributions and liquidation events. The Series I Preferred Stock, on the other hand, carries two votes per share and ranks junior to other preferred stock series.
In terms of financial performance, LogicMark has reported a 14% year-over-year increase in third-quarter revenue, reaching $2.7 million. This growth is partly attributed to the successful launch of its Freedom Alert Mini PERS device. However, the company also reported an adjusted EBITDA loss of $785,000 and a net loss of $1.6 million to shareholders for the quarter.
In addition to these financial developments, LogicMark is expanding its intellectual property portfolio and shifting its focus towards higher-margin software solutions. A new product launch is anticipated, showcasing the company's commitment to evolving with market demands. These are the recent developments as the company aims to capitalize on the growing caregiving and personal safety market.
InvestingPro Insights
LogicMark's decision to implement a reverse stock split comes at a critical time for the company, as reflected in recent financial data and market performance. According to InvestingPro data, LogicMark's market capitalization stands at a modest $0.98 million, underscoring the urgency of the company's efforts to maintain its Nasdaq listing.
The company's financial health presents a mixed picture. An InvestingPro Tip reveals that LogicMark holds more cash than debt on its balance sheet, which could provide some financial flexibility as it navigates this challenging period. However, another InvestingPro Tip indicates that the company is quickly burning through cash, a concern that aligns with its negative operating income of -$7.05 million for the last twelve months as of Q3 2024.
LogicMark's stock has experienced significant volatility, with a strong return of 74.11% over the last month, contrasting sharply with a 90.34% decline over the past year. This volatility is consistent with another InvestingPro Tip noting that the stock generally trades with high price volatility.
The reverse stock split strategy appears timely, given that the stock was trading at only 7.34% of its 52-week high before the announcement. With a price-to-book ratio of 0.08, LogicMark is trading at a low multiple, which could attract value investors if the company can successfully execute its turnaround plan and launch new products as mentioned by CEO Chia-Lin Simmons.
For investors seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for LogicMark, providing deeper insights into the company's financial position and market performance.
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