NOTE 2 – LIQUIDITY AND MANAGEMENT PLANS


The Company generated an operating loss and net loss of $1,283,145 for the three
months ended March 31, 2022. As of March 31, 2022, the Company had cash and
stockholders' equity of $12,224,887 and $25,847,828, respectively. As of March
31, 2022, the Company had working capital of $12,512,012 compared to working
capital on December 31, 2021, of $13,098,049.


Given the Company's cash position on March 31, 2022, and its projected cash flow
from operations, the Company believes that it will have sufficient capital to
sustain operations for a period of one year following the date of this filing.


NOTE 3 – BASIS OF PRESENTATION


The accompanying unaudited condensed financial statements have been prepared in
accordance with U.S. generally accepted accounting principles (GAAP) and
applicable rules and regulations of the Securities and Exchange Commission (SEC)
regarding interim financial reporting. In the opinion of management, the
information herein reflects all adjustments, consisting only of normal recurring
adjustments except as otherwise noted, considered necessary for a fair statement
of results of operations, financial position, stockholders' equity, and cash
flows. The results for the interim periods presented are not necessarily
indicative of the results expected for any future period. The following
information should be read in conjunction with the audited financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 2021.


Net loss per share and all share data for the three months ending March 31,
2021, have been retroactively adjusted to reflect the reverse stock split that
occurred in October 2021, in accordance with ASC 260-10-55-12, Restatement of
EPS Data. See Note 6.


Certain prior year amounts have been reclassified for consistency with the current year’s presentation. These expense reclassifications had no impact on reported results of operations.


                                       5




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 4 – SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

USE OF ESTIMATES IN FINANCIAL STATEMENTS


The preparation of financial statements in conformity with generally accepted
accounting principles in the United States (U.S. GAAP) requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. The Company's management evaluates these
significant estimates and assumptions, including those related to the fair value
of acquired assets and liabilities, stock-based compensation, income taxes,
allowance for doubtful accounts, long-lived assets, and inventories, and other
matters that affect the financial statements and disclosures. Actual results
could differ from those estimates.


SPECIES

The Company considers all highly liquid securities with an original maturity
date of three months or less when purchased to be cash equivalents. Due to their
short-term nature, cash equivalents are carried at cost, which approximates fair
value. On March 31, 2022, and December 31, 2021, the Company had no cash
equivalents, respectively.

ALLOCATED MONEY

On March 31, 2022, and December 31, 2021, the Company had restricted cash of
$210,118 and $210,131, respectively. Restricted cash includes amounts held back
by the Company's third-party credit card processor for potential customer
refunds, claims, and disputes and held as collateral for company credit cards.


                                       6




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CREDIT RISK CONCENTRATIONS


Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash. The Company maintains its cash balances
in large well-established financial institutions located in the United States.
At times, the Company's cash balances may be uninsured or in deposit accounts
that exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits.


REVENUE RECOGNITION

The Company's revenues consist of product sales to either end customers or
distributors. The Company's revenues are derived from contracts with customers,
which are in most cases customer purchase orders. For each contract, the promise
to transfer the control of the products, each of which is individually distinct,
is considered to be the identified performance obligation. As part of the
consideration promised in each contract, the Company evaluates the customer's
credit risk. Our contracts do not have any financing components, as payment
terms are generally due Net-30 days after the invoice date. The Company's
products are almost always sold at fixed prices. In determining the transaction
price, we evaluate whether the price is subject to any refunds, due to product
returns or adjustments due to volume discounts, rebates, or price concessions to
determine the net consideration we expect to be entitled to. The Company's sales
are recognized at a point-in-time under the core principle of recognizing
revenue when control transfers to the customer, which generally occurs when the
Company ships or delivers the product from its fulfillment center to our
customers, when our customer accepts and has the legal title of the goods, and
the Company has a present right to payment for such goods. Based on the
respective contract terms, most of our contract revenues are recognized either
(i) upon shipment based on free on board (FOB) shipping point, or (ii) when the
product arrives at its destination. For the three months ended March 31, 2022,
and 2021, none of our sales were recognized over time.


SALES TO DISTRIBUTORS AND RESELLERS

Sales to certain distributors and resellers are made under terms allowing
limited rights of return of the Company's products held in their inventory or
upon sale to their end customers. The Company maintains a reserve for
unprocessed and estimated future price adjustments claims and returns as a
refund liability. The reserve is recorded as a reduction to revenue in the same
period that the related revenue is recorded and is calculated based on an
analysis of historical claims and returns over a period of time to appropriately
account for current pricing and business trends. Similarly, sales returns and
allowances are recorded based on historical return rates, as a reduction in
revenue with a corresponding reduction to cost of sales for the estimated cost
of inventory that is expected to be returned. These reserves were not material
upon the adoption of Topic 606 on January 1, 2018, nor were they material on the
Condensed Balance Sheets on March 31, 2022, and December 31, 2021.

SHIPPING AND HANDLING


Amounts billed to customers for shipping and handling are included in revenues.
The related freight charges incurred by the Company are included in the cost of
goods sold, and were $191,662 and $106,425, respectively, for the three months
ended March 31, 2022, and 2021.


ACCOUNTS RECEIVABLE

For the three months ended March 31, 2022, and 2021, the Company's revenues
primarily included shipments of the LogicMark products. The terms and conditions
of these sales provided certain customers with trade credit terms. In addition,
these sales were made to the retailers with no rights of return and are subject
to the normal warranties offered to the ultimate consumer for product defects.

Accounts receivable are stated at net realizable value. The Company regularly
reviews accounts receivable balances and adjusts the receivable reserves as
necessary whenever events or circumstances indicate the carrying value may not
be recoverable. On March 31, 2022, and December 31, 2021, the Company had an
allowance for doubtful accounts of $7,014 and $5,411, respectively.


                                       7




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVENTORY

The Company measures inventory at the lower of cost or net realizable value,
defined as estimated selling prices in the ordinary course of business, less
reasonably predictable costs of completion, disposal, and transportation.

The Company performs regular reviews of inventory quantities on hand and
evaluates the realizable value of its inventories. The Company adjusts the
carrying value of the inventory as necessary with estimated valuation reserves
for excess, obsolete, and slow-moving inventory by comparing the individual
inventory parts to forecasted product demand or production requirements. The
inventory is valued at the lower of cost or net realizable value with cost
determined using the first-in, first-out method. As of March 31, 2022, inventory
was comprised of $876,084 in finished goods on hand. As of December 31, 2021,
inventory was comprised of $1,237,280 in finished goods on hand. The Company is
required to prepay for certain inventory with certain vendors until credit terms
can be established. As of March 31, 2022, and December 31, 2021, $542,931 and
$559,938 respectively, of prepayments made for inventory are included in prepaid
expenses and other current assets on the balance sheet. An allowance for
obsolete inventory amounted to $24,868 on March 31,2022 and December 31, 2021.

LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, and other intangibles are
evaluated for impairment whenever events or changes in circumstances indicate
the carrying value of an asset may not be recoverable. When indicators exist,
the Company tests for the impairment of the definite-lived assets based on the
undiscounted future cash flow the assets are expected to generate over their
remaining useful lives, compared to the carrying value of the assets. If the
carrying amount of the assets is determined not to be recoverable, a write-down
to fair value is recorded. Management estimates future cash flows using
assumptions about expected future operating performance. Management's estimates
of future cash flows may differ from actual cash flow due to, among other
things, technological changes, economic conditions, or changes to the Company's
business operations.

PROPERTY AND EQUIPMENT
Property and equipment consisting of equipment, furniture and fixtures, and
tooling and molds are stated at cost. The costs of additions and improvements
are generally capitalized and expenditures for repairs and maintenance are
expensed in the period incurred. When items of property and equipment are sold
or retired, the related costs and accumulated depreciation are removed from the
accounts, and any gain or loss is included in income. Depreciation of property
and equipment is provided utilizing the straight-line method over the estimated
useful life of the respective asset as follows:

Equipment                   5 years
Furniture and fixtures 3 to 5 years
Tooling and molds      2 to 3 years



GOODWILL
Goodwill is reviewed annually in the fourth quarter, or when circumstances
indicate that an impairment may have occurred. The Company first performs a
qualitative assessment of goodwill impairment, which considers factors such as
market conditions, performance compared to forecast, business outlook, and
unusual events. If the qualitative assessment indicates a possible goodwill
impairment, goodwill is then quantitatively tested for impairment. The Company
may elect to bypass the qualitative assessment and proceed directly to the
quantitative test. If a quantitative goodwill impairment test is required, the
fair value is determined using a variety of assumptions including estimated
future cash flows using applicable discount rates (income approach) and
comparisons to other similar companies (market approach).


                                       8




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

OTHER INTANGIBLE ASSETS

The Company's intangible assets are related to the acquisition of LogicMark and
are included in other intangible assets in the Company's balance sheet on March
31, 2022, and December 31, 2021.

On March 31, 2022, Other intangible assets, net of amortization, are comprised
of patents of $1,978,016; trademarks of $899,599; and customer relationships of
$1,404,926. On December 31, 2021, the other intangible assets are comprised of
patents of $2,072,984; trademarks of $915,619; and customer relationships of
$1,488,044. The Company amortizes these intangible assets using the
straight-line method over their estimated useful lives which for the patents,
trademarks, and customer relationships are 11 years, 20 years, and 10 years,
respectively. During the three months ended March 31, 2022, and 2021, the
Company recorded amortization expense of $194,106 and $187,845, respectively.

As of March 31, 2022, total amortization expense estimated for the remainder of
fiscal year 2022 is $567,709, and for each of the next five fiscal years, the
total amortization expense is estimated to be as follows: 2023 - $761,815; 2024
- $761,815; 2025 - $761,815; 2026 - $618,790; and 2027- $272,235.

CONVERTIBLE INSTRUMENTS

The Company applies the accounting standards for derivatives and hedging and for
distinguishing liabilities from equity when accounting for hybrid contracts that
feature conversion options. The accounting standards require companies to
separate conversion options from their host instruments and account for them as
free-standing derivatives according to certain criteria. The criteria include
circumstances in which (i) the economic characteristics and risks of the
embedded derivative are not closely related to the economic characteristics and
risks of the host contract, (ii) the hybrid instrument that embodies both the
embedded derivative and the host contract is not re-measured at fair value under
generally accepted accounting principles with changes in fair value reported in
earnings as they occur and (iii) a separate instrument with the same terms as
the embedded derivative would be considered a derivative. The derivative is
subsequently marked to market at each reporting date based on the current fair
value, with the changes in fair value reported in the results of operations.

Conversion options with variable settlement features such as provisions to
adjust the conversion price upon subsequent issuances at exercise prices more
favorable than that in the hybrid contract generally result in their separation
from the host instrument.

The Company records, when necessary, discounts to convertible notes for the
intrinsic value of conversion options embedded in debt instruments based upon
the differences between the fair value of the underlying common stock at the
commitment date of the note transaction and the effective conversion price
embedded in the note. The debt discounts under these arrangements are amortized
over the earlier of (i) the term of the related debt using the straight-line
method which approximates the interest rate method or (ii) conversion of the
debt. The amortization of debt discount is included as interest expense included
in other income and expenses in the statements of operations.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company does not use derivatives to hedge exposures to cash flow, market, or
foreign currency risks. The Company evaluates all financial instruments to
determine if such instruments are derivatives or contain features that qualify
as embedded derivatives. Derivative financial instruments accounted for as
liabilities are initially recorded at fair value and then re-valued at each
reporting date, with changes in the fair value reported in the statements of
operations. For stock-based derivatives, the Company uses the Black-Scholes or
binomial option valuation model to value the derivatives at inception and on
subsequent valuation dates. The Company accounts for conversion features that
are embedded within the Company's convertible notes payable that do not have
fixed settlement provisions as a separate derivative. In addition, warrants
issued by the Company that do not have fixed settlement provisions are also
treated as derivatives. The classification of derivatives, including whether
such instruments should be recorded as liabilities or as equity, is evaluated at
the end of each reporting period. Derivative liabilities are classified in the
balance sheet as current or non-current based on whether net-cash settlement of
the derivative could be required within 12 months of the balance sheet date.


                                       9




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

STOCK-BASED COMPENSATION

The Company accounts for share-based awards exchanged for employee services at
the estimated grant date fair value of the award. The Company accounts for
equity instruments issued to non-employees at their fair value on the
measurement date. The measurement of stock-based compensation is subject to
periodic adjustment as the underlying equity instrument vests or becomes
non-forfeitable. Stock-based compensation charges are amortized over the vesting
period or as earned. Stock-based compensation is recorded in the same component
of operating expenses as if it were paid in cash. The Company generally issues
new shares of common stock to satisfy conversion and warrant exercises.

NET LOSS PER SHARE

Basic loss per share was computed using the weighted average number of common
shares outstanding. Diluted loss per share includes the effect of diluted common
stock equivalents. Potentially dilutive securities from the exercise of stock
options to purchase 348,284 shares of common stock and warrants to purchase
4,295,380 shares of common stock as of March 31, 2022, were excluded from the
computation of diluted net loss per share because the effect of their inclusion
would have been anti-dilutive. Potentially dilutive securities from the exercise
of stock options to purchase 36,364 shares of common stock and warrants to
purchase 937,813 shares of common stock as of March 31, 2021, were excluded from
the computation of diluted net loss per share because the effect of their
inclusion would have been anti-dilutive.

RESEARCH AND DEVELOPMENT

Research and development costs are expenditures on new market development and
related engineering costs. In addition to internal resources, the Company
utilizes functional consulting resources, third-party software, and hardware
development firms. The Company expenses all research and development costs as
incurred.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting standards that have been issued or proposed by FASB (Financial
Accounting Standards Board) or other standards-setting bodies that do not
require adoption until a future date are not expected to have a material impact
on the Company's financial statements upon adoption.

NOTE 5 – EXPENSES TO BE PROVIDED

Accrued expenses consist of the following items:

                                             March 31,       December 31,
                                                2022             2021

Salaries, social charges and holidays $79,199 $54,229
Merchant card fees

                               35,923             17,853
Professional fees                               189,174            104,500
Management incentives                           162,200            285,000
Lease liability                                  67,016             64,346
Dividends - Series C and F Preferred Stock      107,933             94,933
Other                                           124,868            228,424
Totals                                       $  766,313     $      849,285




                                       10




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 6 – EQUITY

October 2021 Reverse stock split

On October 15, 2021, the Company announced that its shareholders had approved a
reverse split of its common stock and Series C Preferred at a ratio of 1 for 10.
As a result of the reverse split, every 10 pre-split shares of common stock
outstanding and every 10 pre-split shares of Series C Preferred stock
outstanding were automatically exchanged for one new share of each without any
action on the part of the holders. The number of outstanding common shares was
reduced from approximately 88.3 million shares to approximately 8.8 million
shares, and the number of outstanding Series C preferred shares was reduced from
2,000 shares to 200 shares. The reverse stock split did not affect the total
number of shares of capital stock, including Series C Preferred Stock, that the
company is authorized to issue.

Earnings per share and all share data for the three months ended March 31, 2021have been retroactively adjusted to reflect the reverse stock split in accordance with ASC 260-10-55-12, Restatement of EPS Data.

September 2021 Offer

On September 15, 2021, the Company sold an aggregate of (i) 2,788,750 shares of
common stock, par value of $0.0001 per share, and (ii) accompanying warrants to
purchase up to an aggregate of 2,788,750 shares of Common Stock, at an exercise
price of $4.95 per share, both of which include the underwriter's full
over-allotment option to purchase an additional 363,750 shares of common stock.

The Shares and the Warrants were offered and sold to the public pursuant to the
Company's registration statement on Form S-1, as amended (File No. 333-259105),
filed by the Company with the Securities and Exchange Commission (SEC) under the
Securities Act of 1933, as amended (Securities Act), which became effective on
September 14, 2021.

The Warrants were not immediately exercisable, as the Company did not have a
sufficient number of shares of Common Stock to reserve for issuance for the
Warrants until the date (the "Initial Exercise Date") that the Company's
stockholders approved an amendment to the Company's certificate of incorporation
to affect a reverse stock split of the shares of Common Stock so that there were
a sufficient number of shares of Common Stock for issuance upon exercise of the
Warrants. The Warrants became exercisable on the Initial Exercise Date (the
effective date of the reverse stock split) and will terminate five years after
the Initial Exercise Date. The exercise price of the Warrants is subject to
customary adjustments for stock dividends, stock splits and other subdivisions,
combinations, and re-classifications, and was reset on the date of the Company's
reverse stock split to the lower of (i) the closing price per share of the
Common Stock immediately before the reverse stock split, giving effect to the
reverse stock split and (ii) the exercise price then in effect. The Warrants are
also exercisable on a cashless basis under certain circumstances, any time after
the Initial Exercise Date, pursuant to the formula outlined in the Warrants. On
October 15, 2021, after shareholder and Board approval of the reverse stock
split, the exercise price for the Warrants was adjusted to $3.956 per share, The
reverse stock split and the exercise price were retroactively reported in
accordance with ASC 260-10-55-12, Restatement of EPS Data.

On the Closing Date, the Company received gross proceeds of approximately $12.5
million, before deducting underwriting discounts and commissions and estimated
offering expenses. The Company intends to use the net proceeds from the Offering
primarily for new product development, marketing, working capital, and liability
reduction purposes.

August 2021 Offering

On August 13, 2021, the Company entered into a securities purchase agreement
with institutional accredited investors providing for an aggregate investment of
$4,000,000 for the issuance by the Company of (i) 1,333,333 shares of Series F
Convertible Preferred Stock, par value $0.0001 per share, of the Company (the
Series F Preferred Stock) convertible into shares of common stock, par value
$0.0001 per share, of the Company that is issuable upon conversion of shares of
Series F Preferred Stock; (ii) warrants, with a term of five and a half years
exercisable after February 16, 2022, to purchase an aggregate of up to 666,667
shares of Common Stock at an exercise price of $7.80 per share. The securities
issued to the investors were exempt from registration under the Securities Act
of 1933, as amended, or the Securities Act, in reliance on Section 4(a)(2)
thereof and Rule 506 of Regulation D thereunder, based on representations made
by the investors, their prior relationship with the Company, and the absence of
any general solicitation. The Company used the net proceeds from this offering
for working capital and liability reduction purposes. In the three months ended
September 30, 2021, 1,160,000 shares of Series F preferred stock were converted
into 656,604 shares of common stock. On October 15, 2021, after shareholder and
Board approval of the reverse stock split, the exercise price for the Warrants
was adjusted to $4.95 per share and was retroactively reported in accordance
with ASC 260-10-55-12, Restatement of EPS Data.


                                       11




                                 LogicMark Inc.
                    NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 6 – EQUITY (CONTINUED)


February 2021 Offering



On February 2, 2021, the Company closed a registered direct offering and
concurrent private placement pursuant to which the Company issued (i) an
aggregate of 1,476,016 shares of Series E preferred stock, convertible into up
to 295,203 shares of common stock, (ii) common stock purchase warrants to
purchase up to 100,000 shares of common stock at an exercise price of $12.30 per
share, which were exercisable immediately and had a term of five years, and
(iii) common stock purchase warrants to purchase up to 195,203 shares of common
stock at an exercise price of $12.30 per share with a term of five and one-half
years first exercisable nine months after issuance, for gross proceeds of
$4,000,003, before deducting any offering expenses. The Company used the net
proceeds from this offering for working capital and liability reduction
purposes. In February 2021, 1,476,016 shares of Series E preferred stock were
converted into 295,203 shares of common stock. Also in February 2021, the
Company recorded a deemed dividend of $1,480,801 from the beneficial conversion
feature associated with the issuance of the Series E convertible preferred
stock
and warrants.



January 2021 Warrant exchange



On January 8, 2021, the Company entered into a Warrant Amendment and Exercise
Agreement (the "Amendment") with holders (the "Holder") of a common stock
purchase warrant, dated April 4, 2019, previously issued by the Company (the
"Original Warrant").



In consideration for each exercise of the Original Warrant within 45 calendar
days of the Amendment, in addition to the issuance of the Warrant shares, the
Company agreed to deliver a new warrant to purchase shares of the Company's
common stock equal to the number of Original Warrants that the Holder exercised,
at an exercise price of $15.25 per share, which represents the average Nasdaq
Official Closing Price of the common stock for the five trading days immediately
preceding the date of the Amendment (the "New Warrants"). The Investor held
Original Warrants exercisable for up to 246,913 shares of common stock,
subsequently exercised 50,000 Original Warrants within the 45 days, and received
50,000 New Warrants in addition to the Warrant shares. The Investor may continue
to exercise the Original Warrants after 45 calendar days of the Amendment, but
will not receive New Warrants for the exercise.



Series C Preferred Stock



In May 2017, the Company authorized Series C Preferred Stock. Holders of Series
C Preferred Stock are entitled to receive dividends of 15% per year, payable in
cash. For the three months ended March 31, 2022, and 2021, the Company recorded
Series C Preferred Stock dividends of $75,000 in each period.



The Series C Preferred Stock may be redeemed by the Company at the Company's
option in cash at any time, in whole or in part, upon payment of the stated
value of the Series C Preferred Stock and unpaid dividends. If a "fundamental
change" occurs, the Series C Preferred Stock shall be immediately redeemed in
cash equal to the stated value of the Series C Preferred Stock, and unpaid
dividends. A fundamental change includes but is not limited to any change in the
ownership of at least fifty percent of the voting stock; liquidation or
dissolution, or the common stock ceases to be listed on the market upon which it
currently trades.



The holders of the Series C Preferred Stock are entitled to vote on any matter
submitted to the stockholders of the Company for a vote. One share of Series C
Preferred Stock carries the same voting rights as one share of common stock.



Redeemable equity security is to be classified as temporary equity if it is
conditionally redeemable upon the occurrence of an event that is not solely
within the control of the issuer. Upon the determination that such events are
probable, the equity security would be classified as a liability. Given the
Series C Preferred Stock contains a fundamental change provision, the security
is considered conditionally redeemable. Therefore, the Company has classified
the Series C Preferred Stock as temporary equity in the balance sheets on March
31, 2022, and December 31, 2021, until such time that events occur that indicate
otherwise.



                                       12





                                 LogicMark Inc.

                    NOTES TO CONDENSED FINANCIAL STATEMENTS

                                  (Unaudited)


NOTE 6 – EQUITY (CONTINUED)


Warrants


There was no warrant activity during the three months ended March 31, 2022. The
following table summarizes the Company's warrants outstanding and exercisable on
March 31, 2022, and December 31, 2021:


                                                                            Weighted
                                                             Weighted       Average
                                                             Average       Remaining       Aggregate
                                            Number of        Exercise         Life         Intrinsic
                                             Warrants         Price         In Years         Value
Outstanding and Exercisable at January
1, 2021                                       1,569,007     $    13.30            4.1     $ 10,850,158
Issued                                        3,897,534     $     5.26           4.77                -
Exercised                                    (1,002,307 )   $     9.07              -                -
Cancelled                                      (168,854 )   $    38.32              -                -
Outstanding and Exercisable at December
31, 2021                                      4,295,380     $     6.02           4.59                -
Outstanding and Exercisable at March 31,
2022                                          4,295,380     $     6.02           4.52                -



NOTE 7 – SHARE INCENTIVE PLANS


2017 Stock Incentive Plan



On August 24, 2017, the Company's stockholders approved the 2017 Stock Incentive
Plan (2017 SIP). The aggregate maximum number of shares of common stock that may
be issued under the 2017 SIP is limited to 10% of the outstanding shares of
common stock, calculated on the first business day of each fiscal year. Under
the 2017 SIP, options that are forfeited or terminated, settled in cash in lieu
of shares of common stock, or settled in a manner such that shares are not
issued, will again immediately become available to be issued. If shares of
common stock are withheld from payment of an award to satisfy tax obligations
concerning the award, those shares of common stock will be treated as shares
that have been issued under the 2017 SIP and will not again be available for
issuance.


During the quarter ended March 31, 2022, the Company issued 430,339 shares of
common stock vesting over periods ranging from 30 to 48 months with an aggregate
fair value of $1,331,870 to certain employees as inducement and incentive
grants. As of March 31, 2022, the unrecognized compensation cost related to
non-vested stock options is $1,087,407. During the three months ended March 31,
2021, the Company issued 13,283 shares of common stock with an aggregate fair
value of $80,456 to certain employees related to the Company's 2019, 2018, and
2017 management incentive plan. The expense for the three months ended March 31,
2022, and 2021 was $244,463 and $0 respectively.



Long-term equity incentive plan 2013



On January 4, 2013, the Company's stockholders approved the Company's Long-Term
Stock Incentive Plan (LTIP). The maximum number of shares of common stock that
may be issued under the LTIP, including stock awards, stock issued to the
Company's Board, and stock appreciation rights, are limited to 10% of the common
shares outstanding on the first business day of any fiscal year.



During the three months ended March 31, 2022, the Company issued 237,500 stock
options vesting over four years to employees with an exercise price of $3.36 and
an option for 12,500 shares with a strike price of $2.20 and a total expense of
$325,336. In addition, 27,276 fully vested stock options were granted to six
non-employee Board directors at an exercise price of $2.20. The aggregate fair
value of the shares issued to the directors was $60,000, which includes the
total expense. On March 31, 2021, the Company issued an aggregate of 2,837 stock
options to purchase shares of common stock under the LTIP to four (4)
non-employee directors for serving on the Company's board. The exercise price of
these stock options is $14.10 and stock options were fully vested at the
issuance date. The aggregate fair value of the stock options issued to the
directors was $40,000, which includes the total expense.



                                       13





                                 LogicMark Inc.

                    NOTES TO CONDENSED FINANCIAL STATEMENTS

                                  (Unaudited)


NOTE 8 – COMMITMENTS AND CONTINGENCIES


LEGAL MATTERS


From time to time, the Company may be involved in various claims and legal
actions arising in the ordinary course of our business. Other than the above,
there is no action, suit, proceeding, inquiry, or investigation before or by any
court, public board, government agency, self-regulatory organization, or body
pending or, to the knowledge of the executive officers of the Company or any of
our subsidiaries, threatened against or affecting our company, or any of our
subsidiaries in which an adverse decision could have a material adverse effect
upon our business, operating results, or financial condition.



COMMITMENTS



The Company leases office space and equipment, in the U.S., which is classified
as operating leases expiring at various dates. The Company determines if an
arrangement qualifies as a lease at the lease inception. Operating lease
liabilities are recorded based on the present value of the future lease payments
over the lease term, assessed as of the commencement date. The Company's real
estate lease, which is for office space and a fulfillment center, with a lease
term of 5 years in August 2025. The Company also leases a copier with a lease
term of 5 years, ending August 2023. The Company has elected to account for the
lease and non-lease components (insurance and property taxes) as a single lease
component for its real estate leases. Lease payments, which include lease
components and non-lease components, are included in the measurement of the
Company's lease liabilities to the extent that such payments are either fixed
amounts or variable amounts based on a rate or index (fixed in substance) as
stipulated in the lease contract. Any actual costs over such amounts are
expensed as incurred as variable lease costs.



The Company's lease agreements generally do not specify an implicit borrowing
rate, and as such, the Company uses its incremental borrowing rate to calculate
the present value of the future lease payments. The discount rate represents a
risk-adjusted rate on a secured basis and is the rate at which the Company would
borrow funds to satisfy the scheduled lease liability payment streams. The
Company entered into a new five-year lease agreement in June 2020 for a new
warehouse space located in Louisville, Kentucky. The monthly rent which
commenced in September 2020 is $6,200 per month and increases approximately 3%
annually thereafter. The ROU asset value-added because of this new lease
agreement was $279,024. The Company's ROU asset and lease liability accounts
reflect the inclusion of this lease in the Company's balance sheet as of March
31, 2022.



The Company's lease agreements include options for the Company to either renew
or early terminate the lease. Renewal options are reviewed at lease commencement
to determine if such options are reasonably certain of being exercised, which
could impact the lease term. When determining if a renewal option is reasonably
certain of being exercised, the Company considers several factors, including the
significance of leasehold improvements on the property, whether the asset is
difficult to replace, or specific characteristics unique to the lease that would
make it reasonably certain that the Company would exercise the option. In most
cases, the Company has concluded that renewal and early termination options are
not reasonably certain of being exercised by the Company and thus not included
in the Company's ROU asset and lease liability.



For the three months ended March 31, 2022, the total operating lease cost was
$24,558 and is recorded in general and administrative expenses. The operating
lease cost is recognized on a straight-line basis over the lease term. The
following summarizes (i) the future minimum undiscounted lease payments under
the non-cancelable lease for each of the next four years and thereafter,
incorporating the practical expedient to account for lease and non-lease
components as a single lease component for our existing real estate lease, (ii)
a reconciliation of the undiscounted lease payments to the present value of the
lease liabilities, and (iii) the lease-related account balances on the Company's
balance sheet as of March 31, 2022:



End of the year the 31st of December,

2022 (excluding the three-month period ended March 31, 2022) $70,239
2023

                                                        89,724
2024                                                        80,000
2025                                                        54,400
Total future minimum lease payments                      $ 294,363
Less imputed interest                                      (55,594 )

Total present value of future minimum lease payments $238,769



                                       14





                                 LogicMark Inc.

                    NOTES TO CONDENSED FINANCIAL STATEMENTS

                                  (Unaudited)

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