LOS ANGELES CALIFORNIA, May 19, 2022,GTX Corp (OTC: GTXO) (“the Company”), a pioneer in the fields; of health & safety, wearable GPS human and asset tracking systems and personal protective medical equipment and supplies, today announced financial results for the First Quarter ended March 31, 2022 and provided the following corporate summary:
Three Month Financial Highlights
Overall Revenue decreased 27% over 2021 comparable period.
Gross Margin increased from 36% to 42% over 2021 comparable period.
Wages and benefits and professional fees both decreased by 2% over 2021 comparable period.
Reduced government loans by 31%.
Other expense decreased by 129% as we lowered accrued interest, reduced our government debt by $68,000 and eliminated losses from the extinguishment of debt.
Management commentary by Patrick Bertagna, GTX Corp CEO:
As we started seeing an end to COVID on a grand scale and a return to normal operations and staffing, the Company began mapping out its 2022 post pandemic course. Early in the quarter we sold most of our remaining PPE inventory, completed our international 4G testing and prepared for our Cat M1 LTE SmartSole launch. With businesses opening back up and overall general travel picking back up we saw a 132% increase in B2B sales and a 34% decrease in net loss. Overall revenues were down by 27% compared to the previous comparable period because we started to transition out of PPE, and we were not able to ship SmartSole preorders until the end of March and into early April. To that end we do expect our subscription revenue to start ramping back up in the second quarter as we continue to backfill orders and activate users, along with seeing continued demand for the new 4G SmartSoles with several thousand units of forecasted sales over the coming months just from our international distributors.
In early January we had a surge in orders for medical supplies which enabled us to convert paid for inventory into cash while reducing our overall protective medical supply inventory levels. We also produced and committed production for close to 500 pairs of SmartSoles, which also enabled us to convert paid for component inventory into finished product and start back filling pre-orders. We started working on a new version of our tracking app and a new e-commerce store on the Shopify platform, which will enable us to have more capabilities to sell through social media platforms such as Facebook and Instagram, process B2B orders online, along with better accounting and inventory management reporting as we start ramping up sales.
During the first quarter of 2022, we expanded our intellectual property portfolio by being issued two new patents by the United States Patent and Trademark Office (USPTO). U.S. patent number 11,272,761 which is now the 4th patent issued in the GPS SmartSole family (the “SmartSole Patent”) and U.S. patent 11,272,313 which is now the 6th patent issued in the Comm Protocol family (the “Comm Protocol Patent”).
The SmartSole Patent covers proprietary ways to protect and manufacture a GPS electronic module. It has twenty claims, two of which are independent and an open continuation for further expansion, which has already been submitted to the USPTO.
The Comm Protocol Patent also has twenty claims and is significant for several reasons; first by adding another layer to GTX’s competitive protections on device to backend server communications, which is important now and could add even more value in the future as the Company adds more biometric devices to its platform and unveils the Longevity Revolution product roadmap. Second, the Comm Protocol family has been the crown jewel of GTX’s IP licensing campaign. By adding this new patent with an open ongoing continuation (also recently filed with the USPTO), it should enhance the strength and value of the portfolio for future licensing agreements, especially as the Company expands its platform from location monitoring to location and remote patient monitoring (RPM) preventive care.
During the first quarter we began the development of a new wearable NFC product, designed to provide remote monitoring to cognitively and speech impaired individuals. We have begun testing prototypes and placed our first production run with our factory. If all goes well with the testing and the production, we expect to launch this product both B2C and B2B, sometime before the third quarter 2022. Until recently, our NFC product sales have been limited and only sold direct to consumer.
However, during the first quarter of 2022 we expanded our NFC sales into B2B channels and started providing NFC chips along with onboarding professional services to a startup company called Endstate. This company designs and manufactures high-end sneakers embedded with NFT and NFC technology that unites the experience from digital art to physical products and provides the ability to wear the sneakers in the metaverse. We have been providing Endstate with NFC chips, technology and professional services since December of 2021 leading up to their commercial rollout in Q1 2022. So far Endstate has ordered close to 700 chips from us, with delivery commencing at the end of the first quarter.
As part of our ongoing efforts to enhance our balance sheet, we reduced our short-term government loans by $68k, and eliminated all of our variable priced convertible debt, leaving only fixed price convertible debt priced above market or long term, low interest rate non-convertible debt on the balance sheet.
We remain optimistic that COVID-19 pandemic is behind us. However, we still have some inventory on hand and solid relationships with our vendors so in case there is another surge in demand we will be ready to serve our customers. But based on the current events and sales trends, our focus now is on ramping up sales of the new SmartSoles, NFC products, other medical wearable devices, A.I. and IP licensing. Health & Safety, Track & Trace were the big buzz words that came out of 2021. The population at large is placing a higher value of importance on being healthy, living better and longer. We believe we are in a good position to monetize these trends, as we keep hearing from many of our B2B customers and international distributors that they want more wearable solutions and technology. Hence, why a big part of Q1 was focused on new product development and making sure that we will have inventory on hand and in the pipeline to meet the global demand throughout 2022 and beyond.
GTX Corp is a For-Profit with Purpose Company which has an extensive line of health & safety products, a broad patent portfolio, a proud U.S. military contractor and has multiple wearable tracking products sold through its online store, Amazon and authorized resellers and distributors servicing customers across the globe.
