Revenue increased 28%, Product Sales increased 49%, Subscribers increased 20%
LOS ANGELES CALIFORNIA, April 18, 2019 (GLOBE NEWSWIRE) -- GTX Corp (OTCQB: GTXO) (“the Company”), a pioneer in the field of wearable GPS, people and asset tracking Location-Based Services (LBS) and Real-Time Location Systems (RTLS), today announced a summary for the year ended December 31, 2018.
2018 Financial Highlights
- Overall Revenue increased 28% over 2017 comparable period.
- Product Sales increased 49% over 2017 comparable period.
- International Subscribers increased 21% over 2017 comparable period.
- Domestic Subscribers increased 19% over 2017 comparable period.
- Military Sales increased 322% over 2017 comparable period.
- Gross Margin, excluding IP, increased from 50% to 67% from 2017.
- Loss from Operations decreased 1% from 2017.
- Cash used in Operations reduced 34% from 2017.
Management commentary: Patrick Bertagna, GTX Corp CEO.
As highlighted above, we had solid double-digit increases or decreases in the major metrics we measure – overall revenues and product revenues increased, total subscribers both domestic and international increased, gross margins increased, while we decreased our cost of operations and cash used. These continuing trends are certainly positive and importantly our revenues were evenly spread out, with approximately 33% B2B (Wholesale Distributors and Enterprise Institutions), 25% B2C (consumers and government agencies who buy on the behalf of consumers), 33% Military and Law Enforcement and 9% IP. This highlights that our multi-prong revenue approach is working and now we need to scale. Three years ago, we had no IP revenue, two years ago, we had no military revenue, but in 2018 and already in 2019 we are demonstrating we can add and grow new business and revenue streams.
During 2018, the Company significantly expanded its military business, continued expanding its B2B sales channels internationally and domestically, signed up new distributors, began new pilot programs, tested and launched new products, further advanced its work with George Mason University under their grant program and identified over 100 companies to contact as part of our IP licensing initiative. We expect to sign at least 4 or 5 IP licenses in the first half of 2019, however, due to the confidential nature of these negotiations and legal proceedings, we are limited in making public announcements and are bound to confidentiality agreements. We will be disclosing whatever information we can in our 10Q’s beginning in Q1 2019.
We hit the ground running and kicked off 2018, with the Company’s GPS SmartSoles appearing on the popular television show Keeping Up with the Kardashians, which has been a staple for the E! Network for over a decade, drawing in millions of viewers every show. This was a significant boost for our SmartSole brand and helped pave the way for the launch of a smaller, lower cost hardware platform that is now used in our SmartSole line and OEM business. Our production costs dropped by approximately 65% which in turn enabled us to not only increase our margins but also to lower our wholesale pricing, allowing for bigger margins for our distributors.
The new hardware enabled us to come out with a size small SmartSole which opened up a new children’s market and the new hardware platform was also used in our new Invisabelt Tracker, designed for even younger children and toddlers, which we launched in June 2018 in the U.S. market. Invisabelt sales are just starting to ramp up but we expect to introduce the product to our international distributors in 2019, which should further increase our numbers and add to our subscriber base. In addition, to being smaller and lower cost the electronics have several new firmware features such as Air Travel Mode, Speed Mode, a larger battery and rapid charging. As with all new technology, we had to make certain technical adjustments, which unfortunately caused us to pause production in the fourth quarter of 2018. The technical issues have now been resolved and production is back up and running, however, we were not able to ship as much of the new hardware platform and fulfil all of our orders in the 4th quarter. We notified all of our customers and distributors and besides a temporary setback in some product delivery, no business was lost – only delayed – in recognizing Q4 revenue. Notwithstanding, we still managed to finish out the year with a 49% increase in product sales.
In Europe, our SmartSole business partners had a few significant breakthroughs. In the U.K., their National Health Services (NHS) began undergoing pilot programs of our GPS SmartSoles in Dorset, England and as of year-end 2018, the NHS was conducting tests in five municipalities. There are close to 850,000 people in the U.K. that have some sort of dementia and according to several British news agencies, once the NHS completes its trials, expected in 2019, they have secured close to $4 million dollars for this program and, if successful, they plan to roll it out country-wide.
Another breakthrough was in Norway where our distributor SafeCall was awarded a coveted two-year contract to supply the municipality of Oslo, Norway with wearable GPS devices along with a 24/7 cloud service center to assist in remote monitoring and look after people with cognitive disabilities. The Norwegian Government identified two target groups that will receive the fully subsidized solution, first, elderly people with dementia and cognitive impairment who still live independently, and children or adolescents with disabilities, especially who are the most “at risk” and therefore would benefit from using wearable GPS technology. Our distributors in Sweden, Germany and Denmark are also reporting noticeable progress with local and federal agencies and we expect to see continued increases in SmartSole sales and subscription activations across Europe throughout 2019. Several distributors are reporting 30% to 40% increases in their sales and activations over the past four months.
We also brought on a new distributor in Canada, Red Dot, based in Ottawa and in the U.S. we began selling our GPS SmartSoles and Take-Along Trackers through Senior.com located in Orange County, CA. Senior.com is the foremost internet resource exclusively focused on empowering its senior community, of over 1.7 million, and is a one-stop-shop for seniors and their families.
Domestically we continued to add more government disability assistance agencies and Police Departments. We are now eligible in eleven States, which have implemented programs that can order SmartSoles and provide full reimbursement for the families for both the product and the recurring service charges. We also went to Capitol Hill and had meetings with Rep. Mike Doyle (D-PA), Rep. Chris Smith (R-NJ), Rep. Maxine Waters (D-CA), Sen. Klobuchar (D-MN), Sen. Grassley (R-IA) and Sen. Chuck Schumer (D-NY) to discuss Kevin and Avonte’s Law – S. 2070 which will authorize the appropriation of $2 million annually over the 2018–2022 period for DOJ to make grants to state and local governments and nonprofit organizations to support programs and GPS tracking technology to locate missing persons with dementia or developmental disabilities. Working with government agencies is a slow process but we made steady progress throughout 2018 and now have in several of the eleven States, more than one agency, department or field office buying from us, which means we are penetrating both horizontally across more States and agencies, while also increasing vertically, deeper within multiple departments within each State.
Our military business increased 322% over the previous year and throughout 2018, GTX successfully delivered multiple orders to Edwards Air Force base and was under contract to provide additional replacement parts and equipment along with support and maintenance services, which is expected to continue in 2019. In February of 2018, we began speaking to and conducted an onsite visit, in order to evaluate and asses the needs of Hill Air Force base, located in Utah. We are very pleased to report we recently received a new contract from this base and expect to begin delivery as early as next month. As a result of having now been awarded several military contracts from different bases and being an approved U.S. military contractor, we have begun dialogue with Military branches from three foreign countries. The process is slow and there is a tremendous amount of bureaucracy to get through along with language, cultural and compliance barriers, but we are starting to make progress. In order to further our government business we formulated a strategic alliance with KGH, Inc. and brought Dr. Kathleen Kiernan as an advisor in order to help us build out and grow our government and military business both domestically and abroad.
In August of 2018, we put our collaboration with Veristride on hold due to some intellectual property conflicts and their need to divert resources from R&D to sales and marketing. GTX management still strongly believes in this project and market and subsequently in September of 2018 signed an M.O.U with Kinesis Health Technologies, LTD. to explore the integration of their Gait technology inside the GTX SmartSole footwear platform along with the reselling and marketing of their Gait technology throughout the U.S. An estimated 2.8 million older people are treated in emergency rooms for fall injuries each year in the U.S. The business value of analyzing walking patterns through gait technology is significant in fall risk detection and prediction. Despite extensive preventive efforts, falling continues to be a major problem for seniors both at home and in community living facilities. Being able to accurately predict falls, strokes or early onset of dementia by wearing a smart non-intrusive footwear device can offer significant advancements in senior care and wellness, making this a high priority development and go to market initiative for the Company in 2019.
As the trend to use technological innovations to help seniors live longer and more fulfilling lives continues to grow around the world (generally referred to as the Aging 2.0 movement), we strive to forge new strategic alliances that will help us grow into the future. One such partner, George Mason University’s College of Health and Human Services successfully completed its Phase II machine learning wandering prediction research utilizing the GTX SmartSoles, IoT platform and data. As part of a the GTX collaboration agreement with George Mason, which began in fall of 2016 and is expected to continue well into 2020, the University studied wandering habits in elderly people with Alzheimer’s and dementia, and used data from a sample of 338 GPS trackers used during the trial. The research and results will be made available to GTX, which will explore deploying the prediction algorithms into its backend monitoring platform, adding another layer of technology, IP and overall value to its wander assistive wearable GPS tracking products and services.
As part of the plan to up-list to the OTCQB Venture Exchange as well as realize a more attractive share price, the Company effected a reverse split (the “Reverse Split”) of its outstanding common stock at a ratio of 1-for-75. The Reverse Split was part of a corporate initiative in order to enhance the Company’s public profile and qualify for an up list to the OTCQB.
On October 31, 2018, the Company received approval to be up listed to the OTCQB Venture Market and GTXO shares began to trade on the OTCQB Venture Market. To qualify GTX had to be current in their reporting and undergo an annual verification and management certification process and maintain a share price of over $.01. Investors are now able to find Real-Time quotes and market information for the Company on www.otcmarkets.com. Also in October 2018, the Company created a long-term employment retention bonus plan and issued 39,500,000 restricted common shares, which have a 3-year vesting period and were only issued to eligible, employees, directors and advisors who have been with the Company for at least 7 years and must stay with the Company for an additional three years. The Company can buy back the shares at par, from anyone that stops working for the company, prior to their vesting period.
As always, we want to thank all of our stakeholders, who continue to support us.
GTX Corp is a For-Profit with Purpose Company that owns and licenses more than 85 patents, is a U.S. military contractor, manufactures many of its products in the USA, and has multiple consumer products in the marketplace that are all available on the Company’s online store, on Amazon, and through authorized resellers and distributors across the globe.
Consumer Purchase of GPS SmartSoles
GTX Corp (GTXO) is a pioneer in smart, mobile and wearable GPS tracking and recovery location based products, supported through a proprietary IoT enterprise monitoring platform. GTX offers a global end-to-end solution of hardware, software and connectivity. GTX Corp develops 2 way GPS tracking technologies which seamlessly integrate with consumer products and enterprise applications. GTX Corp utilizes the latest in miniaturized, low power consumption GPS, Cellular, RF and BLE technology enabling subscribers to track in real time the whereabouts of people or high value assets through a complete end to end - customizable transceiver module, wireless connectivity gateway, smart phone Apps, middleware, and IoT portal. Headquartered in Los Angeles, California, GTX is known for its award-winning patented GPS SmartSole® - Think Dr. Scholl’s meets LoJack, the world’s first invisible wearable technology tracking device created for those at risk of wandering due to Alzheimer’s, dementia, autism and traumatic brain injury. GTX Corp’s business model is built around technology innovation and holds over 85 patents with many issued patents in the area of GPS tracking. The company has international distributors servicing customers in over 35 countries and is a US Military Government contractor. Other customers include public health authorities and municipalities, emergency and police authorities, private companies, public and private senior care homes, and consumers.
GTX Corp is an equal opportunity employer with a history of employing a diverse workforce and US veterans; makes many of its products in the USA, is a member of the United Nations Global Compact and Trust 2 Protect partnership. The Company doesn’t just make and sell the best GPS tracking products, they deliver innovative, miniaturized, low power consumption wearable tech that provides safety, security and peace of mind at the touch of a button. GTX puts the "Where" in Wearable Tech.
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GTX Corp United Kingdom
In the UK, GTX Corp operates from its London office. For more information, please contact:
Nelson Skip Riddle
Email: nsriddle@gtxcorp.com
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Forward Looking Statements
This news release contains forward-looking statements. The terms and phrases “expects,” “would,” “will,” “believes,” and similar terms and phrases are intended to identify these forward-looking statements. Forward-looking statements are based on estimates and assumptions made by GTX in light of its experience and its perception of current conditions and expected future developments, as well as other factors that GTX believes are appropriate in the circumstances. Many factors could cause GTX’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements. Certain risk factors that may cause actual results to differ are set forth in GTX’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (which may be obtained on the SEC Website). These factors should be considered carefully, and readers should not place undue reliance on GTX’s forward-looking statements. GTX has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.