Logiq, Inc.

Thanks, Ali and good morning or good afternoon to everyone. Thanks for joining us today.

And we hope that everyone has been staying safe and healthy. It’s been encouraging to see that country finally opening up and life is starting to return to somewhat normal.

Earlier today, we reported revenues for our first quarter. We had an increase of 23% sequentially to $8.1 million and our gross margins improved by 990 basis points to 27.6%.

These strengthening results demonstrate our commitment to expanding gross profit margins overall and they focus on higher margin customers. Over the course of the last year, we have been able to expand and strengthen our business across all fronts.

This has included the acquisition of two leading e-commerce platforms and the formation of major partnerships. The acquisitions have accelerated our strategic mission of Logiq as a highly differentiated global provider of e-commerce solutions for small to medium sized businesses, or SMBs.

Our offerings now extend from fin-tech to mobile commerce and AI powered customer acquisition. Due to our progress with these efforts in the expansion of our platform, we are optimistic that our operations will continue to grow in 2021 and with the goal of a more diversified higher margin revenue stream.

Our customer base now includes hundreds of thousands of small to medium-sized businesses around the world. Now, as we have previously disclosed, we are in the process of listing on the NEO Exchange through an IPO.

And due to the quiet period associated with that, we will have to delay sharing some of our business development pipelines until the appropriate time. This is, of course, not something that I am personally not fond of.

However, I can say that I am more enthused about the company and our business than I have been in the entire 6-year history of Logiq. And now, I would like to turn the call over to our DataLogiq Chief Financial Officer, Rod Granero, who will take us through our financial results for the quarter.

After that, our CEO, Tom Furukawa will walk us through our recent business development initiatives with digital marketing technology, as well as provide an update on our product integration with the technology platforms, acquired from both Rebel AI and Fixel AI. I will then return with more about our operational activities and outlook for the remainder of the year.

Rod?

Thank you, Brent. Earlier today, we issued a press release with the results of our first quarter of 2021.

A copy of the release is available from the Investor Relations section of our website. We manage our business on the basis of our two reportable segments, mobile commerce enablement through our AppLogiq platform-as-a-service CreateApp and digital marketing software and consumer profile sales through our DataLogiq product offerings.

Now, starting with our statement of operations for the first quarter, our consolidated revenues for the quarter ended March 31, 2021 totaled $8.1 million compared to $15 million during the same quarter a year ago, a decrease of $6.9 million or 46.1%. Consolidated revenues were down largely due to our transition away from low margin bulk white label distributors, with our AppLogiq business and the lingering impact of COVID-19.

However, due to this strategic shift and our strengthening precedence with DataLogiq sequentially, consolidated revenues were up 22.7% and gross profit margins were up 30.8% from the previous quarter. AppLogiq contributed $2.4 million or 30.2% of our consolidated revenues in the quarter ended March 31, 2021 compared to $11.8 million for the same period a year ago, a decrease of $9.3 million or 79.3%.

Revenues decreased primarily due to management decision to transition away from bulk white label distributors to higher margin direct marketing and users. It also reflects subscription cancellations and the provision of complimentary services for clients affected by COVID-19.

Revenues increased 16% sequential from $2.1 million in the quarter ended March 31 2020. Our DataLogiq segment has experienced continued growth both sequentially and compared to the same quarter a year ago.

Its strong customer growth has helped diversify our revenue streams and offset the AppLogiq revenue decrease. For the first quarter of 2021, DataLogiq contributed $5.6 million or 69.8% of our consolidated revenues compared to $3.2 million, or 21.3% of our consolidated revenues for the same period a year ago, an increase of $2.4 million or 76.5%.

Sequentially, revenues increased from $4.5 million or 67.9% of our consolidated revenues in the previous quarter to $5.6 million, an increase of $1.1 million or 25.1%. Our consolidated gross profit for the quarter ended March 31, 2021 was $2.2 million or 27.6% of revenues compared to $2.6 million or 17.7% in the same period a year ago, a decrease of $0.4 million, or 15.8%.

The gross profit margin increased by 55.9%, mainly due to the shift to direct marketing users and lower customer acquisition costs. The gross profit decrease was primarily the result of lower revenues for the quarter as the company transitioned to higher margin business activity.

Gross margin for AppLogiq for the quarter ended March 31, 2021 increased to 30.1% from 17.7% in the same quarter a year ago. The increase in gross margin was primarily the result of our transition away from lower margin bulk white level distributors to higher margin direct marketing and users.

DataLogiq’s gross margin for the quarter ended March 31, 2021 increased to 26.4% from 17.3% in the same quarter a year ago. This strong improvement was due to an increase in our data monetization revenues, combined with a decrease in overall customer acquisition costs.

Our total operating expenses for the first quarter of 2021 increased by 15.5% to $6.3 million compared to $5.5 million in the same period a year ago. The increase in operating expenses was mainly due to increases in depreciation and amortization expense of $0.2 million, general and administrative expense of $0.9 million, and sales and marketing expense of $0.3 million offset by a decrease in the research and development expense of $0.7 million.

Our Q1 2021 consolidated net loss totaled $4.1 million or $0.25 per basic and fully diluted share as compared to a net loss of $2.8 million or $0.24 per basic and fully diluted share in the same period a year ago. AppLogiq incurred a net loss of $2.8 million in the first quarter of 2021 as compared to a net loss of $1.8 million in the same period a year ago.

This increase was due to a large – was largely due to an increase in stock-based compensation expense of approximately $0.9 million. Sequentially, the net loss for AppLogiq has decreased by 6.9%.

DataLogiq incurred a net loss of $1.3 million in the first quarter of 2021 as compared to a net loss of $1 million in the same period a year ago. Sequentially, the net loss for DataLogiq remained flat at $1.3 million.

Now, turning to our balance sheet, on March 31, 2021, our cash and cash equivalents totaled $2.8 million. This compares to $3.5 million at December 31, 2020.

We believe our current cash levels are sufficient for the foreseeable future. This wraps up our financial review.

Now, I would like to turn the call over to Tom for an update on our business development. Tom?

Alright. Thank you, Rod and thank you all for joining us today.

Before I jump into the business update, I just want to reiterate how we are successfully executing against our strategy and objectives. In DataLogiq, our continued investment in our data infrastructure continues to bear fruit.

DataLogiq revenue increased to a record $5.6 million mainly due to its growth in data monetization. In AppLogiq, we made a change to our customer acquisition strategy to focus on higher margin segments.

Gross margins for AppLogiq improved from 11.8% in Q2 2020 to a record 30.1% in Q1 2021. I just want to say I am so proud of our team for their focus and dedication and execution on the strategy.

Now to the business update. At the end of Q1, 2021, we completed our acquisition of Rebel AI technology platform, which is an innovative digital marketing technology that delivers e-commerce growth to brands and agencies.

Rebel AI platform now branded as Logiq digital marketing enables SMB businesses to more effectively compete against companies of any size. Now, this platform complements the technology we acquired from Fixel last year.

As a reminder, Fixel is an AI based algorithm used to determine a consumer’s level of an engagement for a brand’s product or service, executed without the need of a third-party cookie or personally identifiable information, or PII. This will provide the critical audience segmentation capability that adheres to the evolving regulatory and platform policies for data and consumer privacy.

Fixel has been adopted by both brands and premium publishers. The technology platform acquired from Rebel AI and Fixel are key to our product offerings especially given how the demand for AI powered e-commerce platforms is expected to rise dramatically over the next few years.

According to PwC study, more than 72% of internet marketers now consider AI as a business advantage, although to be sure, over the last year, we have become more than e-commerce services company. Through the integration of these technology platforms, we have become a serious option for SMB businesses in need of data-driven, SaaS, consumer intelligence and automated marketing technology.

The global market for marketing automation software is expected to exceed $14.1 billion by 2024 climbing at a compound annual growth rate of more than 19%. During the quarter, we launched Fixel in the Shopify e-commerce marketplace as well as for WordPress.

This is another exciting milestone for the company as we are giving advanced AI customer acquisition technology to SMBs with online stores on Shopify and WordPress. We are seeing early successes with increased installs of Fixel within these massive e-commerce platforms.

Now, I would like to talk more about Logiq digital marketing. Logiq digital marketing uses advanced data management, audience targeting and media activation across premium web, mobile and connected TV destinations.

It provides SMB brands in agencies the ability to enhance their digital marketing strategies and lower their cost of customer acquisition. The integration of Rebel AI’s team and the launch of digital marketing has completed seamlessly.

While just beginning, we are already seeing positive reactions to its value and have contracted with several leading agencies who power e-commerce marketing programs. We are now working on growing our pipeline in scaling the platform.

This includes integrating Fixel into the Logiq digital marketing platform. We see this as a key strategic driver for DataLogiq as the combination of these technologies will create a larger value proposition for our clients and improve their customer acquisition efforts.

Logiq digital marketing technology is providing value to our clients and I am excited about its potential. According to reports, as global e-commerce sales now reach upwards of $4.9 trillion in a more than $27 trillion retail industry.

It’s mainly the largest brands who are capitalizing on their fullest potential. In the U.S.

alone, the top 10 e-commerce players account for 63.2% of online sales. The SMB segment is largely unrepresented and requires better technology and services.

We, at Logiq, are playing a key role in bringing more balance to this inequity. As this market opportunity grows, we see ourselves as well positioned to provide high value, differentiated solutions to our existing and future customers.

Now, with that, I would like to turn the call over to Brent.

Thanks, Tom. So, as you all have heard, there has absolutely been great progress underway and that’s for certain.

On our last call, we outlined several key initiatives that we were working on. One was overall margin improvement and we successfully executed on this with further improvements as evidenced in our first quarter.

We also began the integration of Rebel AI’s technology platform now branded as Logiq digital marketing into DataLogiq and we are now nearly complete in only about a month since our acquisition of Rebel AI. I think on those two fronts, things that we discussed on our year end call, we successfully executed on and we feel very confident in that.

In addition to all of the things that are happening with DataLogiq, on the AppLogiq side, we continue to actively explore ways to unlock the value of our emerging markets business. This includes expansion of our current service offerings, with strategic partners with whom we remain in broader conversations.

I would also point out that we have disclosed publicly in the past that we are not only open to corporate actions we are aggressively working on them. During the quarter, we joined forces with Comviva, which is a global leader in digital financial solutions.

And together, we will be offering a digital wallet and mobile payment service platform across Indonesia, which is a country with hundreds of millions of mobile users. The services will be based on our PayLogiq digital wallet technology empowered by Comviva’s mobiquity Pay platform.

For those of you not familiar with Comviva, they currently serve over 2 billion users on their various financial platforms. Digital is increasingly becoming the preferred method for transactions and the global pandemic has only accelerated this transition.

By providing digital access to an array of financial services instantly from the convenience of one’s mobile device, we see our combined platforms enhancing the lives of many people in emerging markets, helping them grow their businesses and boosting the country’s economic activity. Also, together with KMSB, Logiq is developing micro-lending services to members of the social security agency, that provides retirement and pension plans on behalf of the Indonesian government organizations.

The micro-lending services will benefit the agency’s roughly 48 million members and over 600,000 SMBs. The partnership with Comviva allows us to extend a convenient and secured digital wallet service to the membership that is already operating at scale on a global basis.

In conclusion, DataLogiq grew in Q1, while integrating the Fixel and Rebel technology platforms, both of which are seeing initial traction, while AppLogiq is benefiting from a much more focused direct selling effort. And all of these things are increasing – I am sorry, have increased our gross margins as indicated in our Q1 results.

So overall, we are extremely pleased with the progress we have made. And we believe we have just begun with the growth strategy that we outlined last year.

As we look ahead in 2021, we will continue to look for ways to take advantage of the market trends driving the phenomenal growth of e-commerce worldwide. Now, with that, let’s open the call to questions.

Ali, please go ahead with the instructions.

Good afternoon. I love when a plan comes together.

How are you, Lisa?

Good. So, I have a couple of bunch of quick question then a few others.

So, first off, when we get the 10-Q?

Later today. I hope that’s not a forward-looking statement.

Yes, we will follow on time today.

Okay, good. And how many shares are outstanding right now as of today?

About 18.4 million fully diluted.

Okay. And what do you think the cash burn is going to be going forward?

Lisa, I am going to have to turn that over to John MacNeil, our Chief of Staff who though I know you spoke with in the past? John, I am giving this to you.

John, please…

Hi, Lisa. I don’t think we are going to be making the – I am sorry, can you hear me?

Yes.

Yes, hi, Lisa. I don’t think we can make much in the way of forward-looking statements, but what I can say is that we have had a number of items which are associated with either our NEO application at some of the acquisitions and whatnot that have rolled from Q4 Q1.

Those I don’t believe will be recurring. And then beyond that, it will be a question of leverage, but we don’t really have.

We can’t really give you much guidance beyond that, but we can probably breakout what the one-timers were offline.

Okay. Well, when I see the 10-Q, it will help too.

Understood.

Alright. So I just wanted to confirm, do you still believe that the revenues, quarterly revenues and gross margins will be increasing sequentially throughout the year?

Again…

Go ahead, John, please.

I am sorry. Sorry.

No, no, not at all.

Again, the forward-looking comments, we are under a pretty strict quiet period continuing here at this point, but…

Alright.

But yes, we would expect that we are going to be growing.

Okay, I’d have to try.

Yes.

Okay. So let me just talk more about business.

First off, can you speak – explain in English what strong growth in data monetization of DataLogiq means?

I think that’s a Tom question.

That’s a Tom question.

Yes, sure. Yes, I can take that one.

So your question is what does data monetization actually mean?

Yes.

Is that the question? Yes.

So I mean, there is multiple different ways we monetize data. One of which could be where we run our marketing campaign to entice people to sign up for a product or a service.

And now once we identify those folks that are very much have signaled to us that they are interested, then we would as a form of data, we would then sell that to someone who wants to acquire that customer. It’s sort of in the kind of prior years you would kind of call it as legion.

But for us it’s a bit more advanced than that, because there is so much more data that we are mining. There is engagements.

There is specific on PII stuff that we look into. But at the end of the day, we help our clients find customers so they can sell them stuff.

Okay, that helps. Thank you.

And what does the DataLogiq pipeline look like? How is it progressing from say last quarter?

Yes, I think this sort of falls into that forward-looking statement category. I think the statements that we made were, we have launched it and it’s really providing value to customers.

I think that’s the best I can say that I think you can kind of infer from there.

Alright. Well, let me try this one.

How about – can you talk about how you are selling Fixel technology to Shopify people? And is your marketing going to change over the course of the year of how you try to find customers?

Yes, on the SMB side, it is a little bit different than like a typical software company where you hire big name salespeople across big cities, right. This is more of a launching on to a platform and it’s a service that if you go into the Shopify app store today, you can look it up and you will find it.

It’s very simple to install. The pricing is very clear cut.

And what’s – if it’s integrated, for example, it’s integrated to Shopify, so you don’t have to like install custom code or make sure that your IT guys understand what this code goes where, it’s already pre-installed in networks in terms of the data and the engagement information that’s going to give you as a brand. And that’s what’s really mean about it.

So if you are a Shopify storeowner, just go in and you can search for like digital marketing or retargeting audience segmentation, something like that and Fixel comes up. And it’s really you can install it very quickly and start using it.

Okay, so that’s pretty scalable. Nobody has to do anything.

Yes, it’s very stable. Yes.

Right. So then you get good visibility, do you like see downloads everyday or how do you know how things are going?

Yes, we do. So Shopify, as the Shopify partner, we get downloads everyday.

We get usage, we get how much people are spending on it and we can also reach out to them and see how things are going.

So in general then, what do you think your visibility is? I know you are not going to say anything about anything.

But at this point in time, like how well do you know what this quarter is going to look like given the way your business runs?

I don’t know, it’s John or Brent, I might have to have you guys take that. Is it like a huge – John, do you know like every week where you are or…

Yes. I mean, from that perspective, like visibility, yes and we know, everyday where we are.

Okay.

Yes.

That’s one good thing I have had. It’s a digital marketing business in the platform.

Yes. Yes.

Yes, I would echo what Tom was saying is that we have, in other words, we are where we are in the quarter. We do see what we are doing as we go along.

So we know depending on the point in the quarter how far we have gotten, etcetera. So we have good visibility as to that.

The question as to what we know going forward, obviously, we can’t be specific, but there are some parts of our business, which will have longer term contracts, but much of our business is as you see the download what’s happening kind of thing. So, it’s – there isn’t an enormous amount of long-term contract that we have from at any given time, it’s not like we have big bulk long-term contracts that we have signed up.

Okay, that’s good to know. And so my last question is, when is this deal supposed to close?

This is a question on the IPO.

Yes. We are talking with Brent.

Brent, he would take that.

Sure, sure. Okay.

That is one thing I can’t answer. It’s – it was press release that our investment bank research capital formerly known as Mackie Research Capital.

There has been questions about that wanting to know why we didn’t know the name of our investment banker? But it is one of the things.

They are targeting the first week of June and they are right now they are in the core building phase.

Okay, thank you. That’s all my questions.

Thanks, Lisa.

Yes. Thank you, Lisa.

Hi, guys. Great quarter.

My question I think is going to go to Brent. I believe he oversees Indonesian region.

There was a lot of activity announced today. I saw at multiple news channels in Indonesia, about Gojek merging with Tokopedia for their IPO.

Now, with all this activity going on in Indonesia, is the company – are you able to say is the company on negotiations to sell that branch, spin it off? Is there active?

I know the company has partnered currently with ShopeePay for the EasyGo. Is there a lot of activity going on behind the scenes?

Can you share?

Yes. Let me do my best to answer the question.

There has been a tremendous amount of activity. So Grab is merging with the Altimeter, it’s SPAC at a $40 billion valuation.

Gojek and Tokopedia are merging. And what we will see there as well will either be an IPO here in the U.S.

and then concurrently in Indonesia or they will go into a SPAC as well. I know that there are discussions with every unicorn valued company in Southeast Asia, with Wall Street, investment banks, or SPAC owners.

Within the context of that there has been a tremendous amount of discussion and outreach to second and third tier sized participants in the region and we have been part of that. We have disclosed in the past, as I indicated earlier, that we are very open to strategic discussions.

If it unlocks value and increases the footprint? Absolutely.

I can’t be specific, but I can say that the pace of discussions with the activity from Grab and Gojek and Tokopedia, among many others, has absolutely increased significantly. And so we are seeing that as well.

Thank you. I have another question.

I am – another private investor had this question that he wanted me to ask it straight up. With the IPO coming on rather quickly, has the company been in contact with institutions that may buy on the open market afterwards?

And one institution in specific was the ARK Fund with Cathie Wood? The gentleman want to know, could the company – can the company reach out?

Can you guys market to them prior to the IPO? Thank you.

John, you want take that or I can?

If you would take that, please?

Okay. Yes, sure, sure.

Okay. And I will try not forward-looking.

But as part of research capital’s book-building exercise and marketing exercise, both their institutional desk and their retail sales force are in front of potential IPO investors, whether or not they buy into the open market is certainly dependent upon their enthusiasm, which we don’t have insight into. As far as institutions go, they probably cover ARK Fund.

I can’t say who we have spoken with, but I think that research capital is in front of the appropriate funds that invest in our segment and our market cap size. So, I hope that helps.

That does. Thank you.

And one last question from the same investor, he wanted me to ask, will the company start doing more aggressive campaigns marketing themselves in front of institutional investors after the IPO if I may ask that?

John, can I say you think about that?

I think that if I may answer, I would say that we will speak as much as we are allowed to and we are not allowed to speak very much at the moment. So clearly, they are…

Understood. Understood.

But John, are you guys going to get out there after the IPO when you can speak – when you?

That’s a forward-looking statement, Chris. I am sorry, but…

Okay, fair enough.

We are restricted from what we can say at the moment, that’s all I can say.

Fair enough. Thank you.

Well, maybe I can answer it. Yes, maybe I can answer it a different way, Chris and I am sure that I see all the names of the attendees here.

I think everyone knows us pretty well. In our normal course of business, we are quite active in outreach and we have a number of people who help us in introductions.

So I would not anticipate that to change. So I hope that gives you a little more color without giving any color.

Thank you. Thank you.

It does. Thank you very much, guys.

Great. Thanks, Chris.

Thanks. I want to thank everyone for taking the time for joining our call today.

And I hope that the takeaways from our discussion, is that our first quarter was about as upbeat as we could be given the IPO quiet period. We absolutely executed on the things that we said we would.

And I can’t say that we will continue to do so, because I am not supposed to say that. But with sequential revenue and margin expansion, as our talked about, goals, we absolutely executed on them.

Product offerings now extend for mobile commerce to fin-tech solutions and AI-powered customer acquisition for SMBs. Having been here for the duration of the company, I never imagined that we would be where we are in terms of corporate structure and product and service offerings.

It’s incredibly exciting. And I wish everyone could see things from my perspective, but hopefully soon.

We are addressing the critical challenges that this segment faces in the business of e-commerce and we believe that we are in the right place at the right time with the right service offerings. We are pursuing the strategies that we have mapped out and we believe we have created an extremely strong foundation for our growth in 2021 and beyond and I look forward to keeping everyone updated on our progress.