Company completes profitable first quarter in spite of global pandemic
LOS ANGELES, CALIFORNIA, May 20, 2020 (GLOBE NEWSWIRE) -- GTX Corp (GTXO), a pioneer in the field of health and safety wearable technology and an Industry Wired top company to watch in 2020 today summarized its financial results for the First Quarter ended March 31, 2020.
First Quarter Financial Highlights:
- Product sales increased 63% over 2019 comparable period.
- Service income increased 31% over 2019 comparable period.
- Total operating expenses decreased 41% from 2019.
- Loss from Operations decreased 47% from 2019.
- Revenues decreased by 6% over 2019 comparable period, however, Company achieved profitability.
Management commentary: Patrick Bertagna, GTX Corp, CEO.
Like most companies the novel coronavirus disease of 2019 (“COVID-19”) had an impact on our first quarter of 2020. Our supply chains were disrupted and many of the companies we work with, including suppliers, as well as our customers experienced a slowdown in productivity. However, despite COVID-19, we still managed to largely maintain our revenues and profit margins, reduce our expenses, retire debt, and show a modest profit for the quarter. We also pivoted early and responded quickly to the global protective equipment needs. With government contracts and established manufacturing partners, GTX was able to expand its sourcing and distribution base rapidly. Along with selling Personal Protective Equipment (“PPE”), such as face masks and hand sanitizer, the Company also introduced its own line of high-quality, reusable and washable masks and other PPE equipment, such as NFC enabled smart face shields and contactless thermometers. GTX was also appointed to chair the Southern California Biomedical Coronavirus Countermeasure Task Force, which is comprised of a group of business leaders that help implement strategies and technical solutions to address containment, monitoring and testing of COVID-19.
Beginning in the first quarter of 2020, we launched our Health and Safety business unit and introduced to the market place a new patented wearable technology noise reduction system (“NRBz”) designed to protect the wearer from loud background noises, without interfering or drowning out direct verbal communication. We believe NRBz are perfect for military, law enforcement, first responders, hunters, recreational firearms users, oil and gas workers, race car drivers, motorcycle riders and even people with autism. Nearly 30 million people are exposed to dangerous noise in the workplace, costing billions in treatments and lost productivity, while the Veterans Association spends close to $1 billion a year in hearing loss disability payments. NRBz are a natural companion product to many of our safety and monitoring solutions we currently sell through our existing channels as should help open doors into new market segments identified in our strategic roadmap for 2020.
During the first quarter of 2020, following the Sri Lanka government approving their annual budget of $17.5 billion, GTX received an Official Letter and Certificate (registration number F191478) approving GTX as a registered supplier for the year 2019 and 2020 under the Ministry of Defense for categories J6, J28, J29, J44, J57, J70, RS1 and RS2 along with a notice of an initial test order. The order was successfully shipped and processed through their government systems; products are undergoing testing and we expect to receive follow on orders. Subsequently, the Sri Lanka Ministry of Defense has put out a tender for PPE in large quantities, to which GTX is responding.
During the first quarter of 2020, revenues were down by 6% predominately because we did not sign any new IP licensing agreements and did not recognize any revenues from granting intellectual property licenses to companies that are using or want to use our patented technology in the marketplace. We attribute this as a temporary setback due to COVID-19, as many companies, legal teams, and court houses were all beginning to deal with the pandemic and making plans to implement shelter-in-place policies. We expect that as the economy reopens, this segment of our business will slowly reopen as well.
Coming off a strong 2019, we took the opportunity to invest in our future, by ramping up our NFC development projects, whereby we are integrating our NFC tags with Blockchain technology and started developing a secured, scalable middleware layer that sits in-between our NFC devices and third-party backend platforms. We are now working with several partners that provide various vertical specific Blockchain, Internet of Things (“IoT”) and artificial intelligence (“AI”) backend platforms but needed a secure and seamless flow of data from hardware to backend. We expected to begin pilots of our middleware layer in the first quarter of 2020; however, due to COVID-19 many of these pilots were put on hold. As with our IP, we expect this part of our business to resume as the world comes back online. We believe moving forward there will be a greater demand for this technology as the world supply chains recognize the importance of knowing exactly where all products are in real time. We have been in discussions with many of our customers that have shown interest in piloting our track and trace NFC solution - Veritap.
During the first quarter of 2020, we continued development of our next generation miniaturized GPS tracking device, which will utilize a host of new technologies, including CatM1, NB-IoT, enhanced Wi-Fi, and Bluetooth, for better connectivity, accuracy, faster location requests and less power consumption. This new hardware platform will be small enough to be embedded into our line of wearable technology and offered as a licensed hardware platform as well. We had expected to have prototypes and go into certification and production this quarter, however again due to CODVID-19, we experienced some delays. Many of our suppliers and contractors are slowly coming back online and we are starting to resume development efforts and expect to have prototypes and go into certification in the coming months.
As part of our ongoing effort to reduce our debt and clean up our balance sheet, we sold some of our holdings in Inpixon (NASDAQ: INPX). We utilized a portion of the realized capital to pay down some of our long-term debt.
As we continue to navigate in these unprecedented times, ensuring the safety of all of our employees, establishing new social distancing guidelines and policies and working with our partners across the globe to reopen for business, productivity is starting to slowly resume, under a new normal, meaning things are moving but moving slowly. Once we have a better understanding of how our customers and suppliers weathered the pandemic, we will be better equipped to assess the long-term impact, if any. For many, it will be a defining moment in history. For all of us at GTX, amid this worldwide crisis, now more than ever we are embracing our purpose, which is clear and unwavering - we will continue to provide technology to enhance the lives of people in need and solutions for the challenges we face. For more than a decade, GTX has been at the forefront of GPS people and asset tracking, geofencing and monitoring seniors that are in a vulnerable risk group. We have a core understanding of technologies that provide health and safety and we, the GTX family, are fully committed to do our part to push ahead and deliver innovative technologies, products and services that produce a positive impact on society. To all our stakeholders, thank you for your support, stay safe, healthy and practice social distancing.
GTX Corp’s updated, full-line of PPE can be found on GTX Corp’s dedicated website www.gtxmask.com (use promocode ‘open4biz’ and get a discount on your first order).
GTX Corp (GTXO) is a pioneer in smart, mobile, and wearable GPS tracking and recovery location-based solutions designed around health and safety. Supported through a proprietary IoT enterprise monitoring platform and intellectual property portfolio, GTX offers a global end-to-end solution of hardware, software, and connectivity, and develops tracking technologies, which seamlessly integrate with consumer products and enterprise applications. GTX is known for its game-changing and 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 utilizes the latest in miniaturized, low power consumption GPS, Cellular, RF, NFC and BLE technology, enabling subscribers to track in real time the whereabouts of people or high value assets. GTX is also in the protective medical supply business and has developed innovative technology driven solutions. The company has customers in all 50 States and international distributors servicing customers in over 35 countries. The Company’s customers range from the U.S. Military, Foreign Military, public health authorities and municipalities, emergency, and law enforcement, first responders, private schools, assisted living facilities, NGOs, small business enterprises, senior care homes, and direct to consumer.
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In the UK, GTX Corp operates from its London office. Please contact: Nelson Skip Riddle
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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 considering 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.