GTX Corp Reports Second Quarter 2021 Financial Results and Corporate Summary Update

Rhea-AI Summary

GTX Corp (OTC: GTXO) reported a 31% decrease in overall revenue for Q2 2021 compared to the same period last year. However, cash on hand rose by 72%, and significant reductions in both debt and liabilities were noted, including a 33% decrease in debt levels. The company saw a 286% increase in its customer base and made notable advancements in its GPS SmartSole product development. Despite a downturn in revenue primarily due to supply chain issues, management is optimistic about future demand for their products, particularly in PPE due to COVID-19.

Positive

• 72% increase in cash on hand compared to Q2 2020.
• Debt reduced by 33% from the previous year.
• 286% increase in the customer base compared to the same period in 2020.
• Significant development progress made on GPS SmartSole module.

Negative

• 31% decrease in overall revenue compared to Q2 2020.
• Inability to ship SmartSoles before the end of June due to supply chain delays.

LOS ANGELES CALIFORNIA, Aug. 18, 2021 (GLOBE NEWSWIRE) -- 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 Second Quarter ended June 30, 2021 and provided the following corporate summary:

Second Quarter Financial Highlights

• Overall Revenue decreased 31% over 2020 comparable period. 
• Cash on Hand increased 72% or $180k over 2020 comparable period.
• Wages & Benefits decreased 26% over 2020 comparable period.
• COGS decreased 32% from 2020 comparable period.
• Current Debt & Liabilities reduced by $462k or 13% over 2020 comparable period.
• Debt reduced by $366k or 33% over 2020 comparable period.
• Stockholders’ deficit decreased $646k or 22% from 2020 comparable period.
• Did not take on any new debt.

Second Quarter 2021 Business Highlights and Developments

• Significant development progress made on 4G GPS SmartSole module.
• Pre-ordered thousands of components in preparation for SmartSole production.
• Increased our customer base 286% over 2020 comparable period.
• Increased our Alexa Google Search Engine Rankings by approximately 50%.
• Signed 3 new collaboration agreements.
• Increased marketing budget for B2B outreach.

Management commentary by Patrick Bertagna, GTX Corp CEO:

At the end of the first quarter, we anticipated that we most likely could no longer accurately predict how long the Personal Protection Equipment (“PPE”) part of our business would remain in strong demand, and based on current events and sales trends, we planned to slowly transition out of many PPE products over the coming months and only focus on the strong sellers, while ramping up for the launch of our new GPS SmartSoles, NFC Blockchain platform and other medical wearables. To that end we expected revenues to slip a little, which they did, but this transition period would give us an opportunity to work on our marketing, keep expenses low, explore new products to bring to market, form new strategic alliances, and continue working on improving our balance sheet, all of which we did. What we didn’t expect to see beginning in July, was a dramatic increase in demand for PPE due to the Delta Variant and newly imposed government regulations including mandating kids attending K-12 school to wear masks. COVID taught us one thing and that is to have backup plans and ours were in place. We maintained adequate levels of inventory and when the demand came back, we were prepared and able to supply all our customers at almost the same pace of 2020.

This surge could be a temporary four-six-week spike, or could perhaps last longer, but with the recent noticeable increase in PPE sales over the past several weeks, we restarted our marketing efforts for antibody test kits, KN95 masks, sanitizers, UV disinfectant products and other PPE, while bringing in new inventory daily to meet the increased demand. This continued demand for essential medical supplies and equipment will enable us to maintain our cash flow, continue to add new customers, and expand our brand visibility, while we prepare for the new SmartSole launch. The cross-marketing pollination is actually working out very well for us, many of our B2B prospects for our tracking solutions such as schools, assisted living facilities government and military institutions are now also able to buy PPE from us.

During the second quarter 2021, we finalized the hardware design 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 accuracy, faster location requests and less power consumption. We started testing with our wireless partners both in the U.S. and in Europe and deployed a lot of resources into finalizing our firmware in preparation for certification and production.

Due to the global chip shortage and continuing supply chain delays, we began ordering components for our SmartSoles in early 2021 and finished ordering all of our components during the second quarter of 2021. Many of our suppliers had over 20-week lead times or very high minimum order quantities (“MOQ”), but we are happy to report that we did manage to order enough components and receive all of them for our first production run and still have enough components on order for several more production runs for the rest of the year. Despite the multitude of factors which we do not control (i.e. COVID peaks and ebbs, global supply chain issues, chip shortages, etc.), it has been a very challenging and slow process to this point, and a big reason why our Q2 revenues were down, as we were just unable to ship any SmartSoles before the end of June. However, we continue to receive pre-orders every day and are confident we will begin to fulfill them as we roll out our launch in the third quarter, barring any unforeseen issues with production and certification.

The testing so far has been very promising, and we believe this will be our best GPS tracking device in over a decade. The amount of engineering and testing that went into this development has been far more extensive than any other device we have built in the past. The silver lining behind the supply delays, gave us an opportunity to extend our testing period and to experiment with different components and board configurations, which so far is yielding very favorable results. One example we are seeing is consistent 3-5 days of battery life, which is a 200% improvement over our previous devices. As of right now, we are oversold, and continue to receive pre-orders daily, which means we will most likely maintain a backlog of orders until early 2022, which is when Qualcomm executives expect the chip shortage to be over and see supply chains come back to normal.

On the business development front, we signed several collaboration agreements and have begun working with our partners on developing new products in the tracking, biometrics, and block chain arena. We signed agreements with Tulsa labs, Portum and GBT Technologies. While we are still in the early stage of exploring different product concepts, we are making some progress and expect to have a more detailed roadmap by the end of the third quarter, which we will discuss further, in our upcoming video interview scheduled next week.

During the second quarter 2021, we took a closer look at our marketing and outreach campaigns and because schools and assisted living facilities could potentially buy both PPE and tracking solutions from us, we ramped up our domestic B2B outreach programs and increased our marketing budget which we expect will generate more B2B U.S. sales in the second half of 2021 and continuing into 2022.

On the balance sheet front, we continued to reduce our debt and outstanding payables, took on no new debt and pre-paid for a lot of component inventory for our SmartSoles, enabling us to start production without the need to raise any new money.

In summation, as we continue to navigate through the pandemic and address some challenges, we are continuing to grow product sales, add more customers and shareholders, while decreasing our debt and liabilities. We want all our stakeholders to know that our state of the union is holding up strong.

GTX Corp is a For-Profit with Purpose Company which has an extensive line of health & safety products, patent portfolio, is 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.

About GTX Corp GTX Corp (OTC: GTXO) is a pioneer in smart, mobile and wearable GPS tracking and recovery location-based solutions, 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 two-way GPS tracking technologies, which seamlessly integrate with consumer products and enterprise applications. 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 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’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 U.S. Military Government contractor. Other customers include public health authorities and municipalities, emergency and law enforcement, private schools, assisted living facilities, NGOs, small business enterprises, senior care homes, and consumers.
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Disclaimer: GTX Corp does not warrant or represent that the unauthorized use of materials drawn from the content of this document will not infringe rights of third parties who are not owned or affiliated by GTX Corp. Further GTX Corp cannot be held responsible or liable for the unauthorized use of this document’s content by third parties unknown to the company.

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.

FAQ

What were GTX Corp's Q2 2021 financial results?

GTX Corp reported a 31% decrease in revenue for Q2 2021 compared to the previous year.

How much did GTX Corp reduce its debt in Q2 2021?

The company reduced its debt by 33% compared to Q2 2020.

What business developments occurred for GTX Corp in Q2 2021?

GTX signed three new collaboration agreements and saw a 286% increase in its customer base.

What impact did supply chain issues have on GTX Corp?

Supply chain challenges prevented GTX from shipping SmartSoles before the end of June, contributing to a revenue decline.

What is the status of GTX Corp's GPS SmartSole product?

Development progress on the GPS SmartSole module has been significant, with pre-orders being received daily.