Logiq, Inc. (LGIQ) CEO Brent Suen on Q4 2021 Results - Earnings Call Transcript

Logiq, Inc. (OTCQX:LGIQ) Q4 2021 Earnings Conference Call April 1, 2022 10:30 AM ET

Company Participants

Brent Suen - CEO, Secretary, Principal Financial Officer & Executive Chairman

John MacNeil - COO & Director

Haig Newton - President of DataLogiq

Conference Call Participants

Tony Forte - Private Investor

Venkata Velagapudi - Research Capital Corporation

Lisa Thompson - Zacks Investment Research

Rich Marshall - Private Investor

Bill Farrand - Blue Flame Capital

Operator

Good morning, ladies and gentlemen, and thank you for joining us today to discuss the results of Logiq's fourth quarter and full year 2021 ended December 31, 2021. Joining us today are Logiq's Chief Executive Officer, Brent Suen; the President of DataLogiq, Haig Newton; and Chief Financial Officer of DataLogiq, Lionel Choong. [Operator Instructions].

I'll provide some important cautions regarding forward-looking statements made by management during today's call. I'd also like to remind everyone that today's call is being recorded and will be made available for telephone replay following the instructions provided in today's press release that was issued pre-market.

At this time, while a few more listeners are dialing in, I will read the obligatory safe harbor statement. This teleconference contains certain forward-looking statements and information as defined within the meanings of Section 27A of the Securities Act of 1933 as amended in Section 21E of Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections.

This press release also contains forward-looking statements and forward-looking information within the meaning of Canadian securities legislation that relate to Logiq's current expectations and views of future events. Any statement that expresses or involve discussions as to expectations, beliefs, plans, objectives, assumptions or forward or future events or performances often but not always through the use of the words or phrases such as will likely result, are expected to, expects, will contain, is anticipated, anticipates, believes, estimate, intends, plans, forecasts, projections, strategy, objective and outlook are not historical facts and may be forward-looking statements that may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in such forward-looking statements.

No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These such statements speak only as of the date of this teleconference. Forward-looking statements are based on a number of assumptions and are subject to a number of risks and uncertainties, which may -- which are beyond Logiq's control, which could cause actual results and events to differ materially from those that are disclosed or implied by such forward-looking statements.

In particular, without limitation, this press release contains forward-looking statements regarding our products and future services, the use and/or ongoing demand for our products and services, expectations regarding our revenue and the revenue generation potential of our products and services, our partnership and strategic alliance, potential strategic transactions, the impact of global pandemics, including COVID-19, on the demand of our products and services, industry trends, overall market growth rates, our growth strategy and continued growth of the addressable market for our products and solutions, our business plans and strategies, including without limitation, our ability to successfully negotiate and finalize purchase agreement covering the terms of such acquisition.

The structure of this transactions, timing of the transaction, the value of the success of the company's prior press release and its filings with the Securities and Exchange Commission, SEC, including its annual report on Form 10-K and any subsequent public filings and filings made pursuant to Canadian securities legislations that are available on www.sedar.com, including under the heading Risk Factors in the company's Canadian prospectus.

Logiq undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. New factors emerge from time to time, and it's not possible for Logiq to predict all of them or assess the impact of each such factor or the extent to which any factor or combination of factors may cause results to differ materially from those contained in any forward-looking statements. Any forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement.

At this time, I'd like to turn the conference over to Brent Suen, Chief Executive Officer. Please go ahead.

Brent Suen

Thanks, Keith. I wanted to thank everyone for joining us today. Apologies for any inconveniences caused from the postponement of our call from day before yesterday. We actually had 2 strongly positive corporate developments in the past 72 hours that converged concurrently with closing out the audited fiscal year in preparation for this call.

As we announced yesterday, we closed the Battle Bridge acquisition right on schedule. It's an important and exemplary deal. It is an acquisition of accretive cash flow and what we believe to be excellent synergistic business fundamentals. This is the type of deal that we plan to replicate over the year. Secondly, we also just completed a $3 million equity capital raise, strengthening our balance sheet with the liquidity to do more deals like Battle Bridge. We issued 3 million shares for approximately $3 million. Certainly, no one has been happy with the share price recently, least of all myself, having bought 145,000 shares in the open market last year at a cost average of about $3.60. Not necessarily making me the savviest stock picker but I believe it does indicate my belief in what we're doing.

I'd like to address the fourth quarter and fiscal year results and outlook and then circle back for further discussion of the Battle Bridge highlights, after which we'll open up for questions. As Keith, our operator mentioned, joining us today are Haig Newton, who is the incoming President and Chief Strategy Officer of Logiq. Haig founded Push Interactive, which we acquired a couple of years ago and have rebranded it as DataLogiq. Our Chief Operating Officer, John MacNeil, who's been working with us for 6.5 years now. And then our Chief Financial Officer, Lionel Choong, who has been with us for nearly 8 years since we started.

Although most of you have communications with me or have heard me speak on calls and interviews, I thought it's important for you to know that there are many talented people who work here. And incidentally, I just got back from our main offices in Minneapolis, where the team overviewed their growth and strategic plans, and I can readily say that this is the highest morale and sense of optimism I've seen and I'm extremely proud of the team there.

I'm happy to report this morning that Logiq posted solid fiscal year 2021 results. Our financial performance and business achievements were excellent, and we have built a solid foundation to set our business upon a good trajectory of revenue growth and margin expansion through this year and beyond. I'm also happy to say that we closed the Battle Bridge deal on schedule as per the Letter of Intent announced on February 17. And as that's the newest news, I'll discuss it before circling back to fiscal year results.

Battle Bridge is a leading boutique provider of digital brand marketing services that include what are called pay-per-click management, social media marketing, funnel creation and optimization, SEO, web design, conversion optimization and a lot more. I know that sometimes the jargon is a bit daunting in the tech sector so we'll try our best to make it simple. They have a number of big tech partner accreditations and they've been solidly visible in the trade media over the years.

We anticipate booking approximately $3 million to $4 million in revenue over the next 12 months of operations. And more importantly, we expect the acquisition will be accretive to our EBITDA numbers, adding over $1 million in EBITDA cash flow in the same time frame. We acquired the Battle Bridge assets, which include their customer lists and contracts, trade names and trademarks, marketing resources and assets, proprietary tech and processes and more, and especially their team, for $3.25 million, which the total consideration is predominantly restricted stock. And as part of this deal, we are very happy to be retaining numerous key employees with many years of digital marketing expertise.

The valuation is approximately 3x this year's EBITDA. And to put that in perspective, the average price to EBITDA on acquisitions this past year, we've seen between 8 to 10x. That's actually -- those are actually benchmarked numbers per the databases that track merger and acquisition activity. We've also seen them as high as 12 to 15x. So at 3x, it was an extremely attractive valuation. This was made possible by both our team's understanding that our valuation at Logiq is extremely attractive.

I'll add that our industry is highly fragmented and ripe for consolidation. And while every deal is different, Battle Bridge is a perfect example of the solid businesses and smart management teams that we're currently evaluating that only needs scale to reach their full potential. There are a lot of companies that we're seeing that are offered at low valuation multiples, and they saw their business go away during the pandemic and have struggled to regain their footing. We are looking at acquisitions and integrations of others. Some are much larger, some are smaller. And as we pinpoint them and move forward on them, we'll certainly let everyone know.

That reminds me of the acquisition of Push Interactive back in January 2020. Most of you all know it as DataLogiq. I wanted to speak to this because not as a pat on the back but I think as being exemplary of what strategic acquisitions can do. The team there had revenues in 2019 of $9 million. In 2020, they expanded to $15 million and then last year, contributed nearly $24 million in revenue, and at the same time, increased gross profit margin significantly. That's almost a 40% compound annual growth rate, which I think many of you will agree that, that is significant.

Again, I point this out because the importance of a business and the team's ability to execute on growth is something that is paramount. We firmly believe that the Battle Bridge acquisition, combined with Logiq, will create the same type of growth opportunity.

Going back to the fourth quarter and fiscal year, we have pivoted our business to focus on higher quality and more profitable revenue streams, and this has already more than doubled our fourth quarter gross margins to 30% from 1 year ago. We also announced record fourth quarter revenues, which also doubled over the previous year to $13.1 million and exceeded our company's January 6 pre-announcement by $800,000.

Excluding the AppLogiq business, which we have rebranded as GoLogiq, which is the spin-off, Logiq 2021 full year revenues increased 51.8% last year. Our strong revenue growth and margin expansion achieved last year demonstrates that our retooled business plan is succeeding and is still early in the phase. In 2021, we took several steps to enable much higher levels of growth and profitability on our advertising tech and marketing tech digital platforms that we expect will now allow us to scale to over $100 million in annual sales without significant capital expenditures.

While that entailed letting some low-margin customers go through attrition and shifting to somewhat longer sales cycles to close larger, higher-margin customers, we believe that, that pivot is largely behind us, and we now have an active and growing pipeline of more profitable customers with whom we will build our business by helping them build theirs.

We've also restructured our management to provide dedicated expert teams for both Logiq and GoLogiq. In the fourth quarter and in the first part of the first quarter of this year, we transferred the GoLogiq assets to Lovarra, which is currently on the OTC market. Logiq controls 97% until the spinoff of those shares is completed to our shareholders of record of December 30 last year. That will happen in another 3 months or so. And all of this frees up both companies to focus on their respective businesses and markets.

By spinning off the GoLogiq assets, it allows GoLogiq to more nimbly pursue highly scalable, profitable businesses in its underserved Southeast Asian marketplace and focus on its own higher-quality customers and revenue. We've applied to FINRA to change the name to GoLogiq and secure a new corresponding ticker symbol so it will change from Lovarra. Incidentally, FINRA is currently taking about 3 to 4 months for things as benign as name change, but that's their issue.

Additionally, the separation of Logiq and GoLogiq strengthens both ability to close strategic accretive mergers and acquisitions in fast-growing and highly fragmented industries. Logiq's acquisition criteria while screening for accretive EBITDA is specifically targeting prospects that provide excellent customer base, cross-selling and up-selling opportunities as opposed to acquisition growth driver. And I would finally add that the management team at GoLogiq, led by Matthew Brent and Chris Metcalf, are operating with a high level of discretion and will only announce things on their end when they are required to by regulators. Being on the Board of Directors there, I'm privileged to see the rapid progress and believe that shareholders will be duly impressed when things start getting announced.

COVID-19 has obviously had a depressing effect on most small businesses and their current valuations, and we see that the pursuit of strategic accretive acquisitions as a fast and logical way to gain operational and financial scale to drive growth and margin expansion while also increasing market share and penetration. Our strategic M&A pipeline of accretive acquisitions is expected to be a key catalyst for this year's revenue growth and certainly onwards, margin expansion and market share gains.

So looking ahead through 2022, we are also actively planning to create and integrate our own NFTs, nonfungible tokens. I know many of you have heard that as a buzzword. Haig Newton will speak about it. This is by no means a late-stage participation. It's something that we've been looking at for a long time. Haig and the team have been working on it and we will start to describe that as we approach the go-to-market.

At this time, I would like to turn the call over to our Chief Operating Officer, John MacNeil, who will quickly review our fourth quarter and full year 2021 results. John?

John MacNeil

Thanks, Brent. We want to leave plenty of time for Q&A so I'll go through these numbers quickly. For the fourth quarter of 2021, consolidated revenue increased 99.5% to a record of $13.1 million compared with $6.6 million in the year ago quarter as the COVID-19 impacts began fading and we shifted our focus and business mix to higher margin revenue.

For the AppLogiq segment, soon to be known as GoLogiq, our m-commerce Platform-as-a-Service contributed $6.2 million or 47.3% of fourth quarter consolidated revenue, increasing by 193.7% from $2.1 million in the year ago period. The increase was driven by the strategic shift toward higher-margin end customers and away from low-margin, high-volume white label resellers.

Turning to the DataLogiq segment. DataLogiq platform revenues contributed $6.9 million or 52.7% of consolidated revenue, increasing 55% from $4.5 million a year ago. The revenue increase was primarily due to a large increase in our data monetization business, particularly in the Medicare and home improvement verticals. Fourth quarter consolidated gross profits increased by 193.6% to $4.1 million or 31% gross margin compared to $1.4 million or 21.1% in the year-earlier quarter, so good improvement there. The gross profit improvement reflects better scale from higher revenues as well as the strategic shift to higher-margin end customer segments.

Total operating expenses increased just 9.8% to $9.4 million from $8.5 million in the year ago period, largely due to the inclusion of the operations of Rebel AI and increased sales commissions associated with higher revenues. DataLogiq operating expenses were $2.9 million in general and administrative expense, sales and marketing of $1.1 million and research and development of $3.4 million. The fourth quarter net loss was $5.3 million versus net loss of $7.1 million a year ago, so an improvement there. As of December 31, 2021, the company's cash, cash equivalents and restricted cash totaled $1.6 million.

Now moving on to our full year financial results ended December 31, 2021. Consolidated revenues decreased 1.5% to $37.3 million compared with $37.9 million for 2020 primarily due to the 37% decrease in AppLogiq revenues due to the shift away from white label app resellers and towards higher-margin and direct marketing customers. Excluding the AppLogiq business, Logiq revenues increased 51.8% to $23 million from $15.2 million for 2020. Gross profit increased a robust 73.8% to $11.1 million for a 29.6% gross margin as compared to $6.4 million and a 16.8% gross margin for 2020, so a nice improvement there.

Total operating expenses increased 53.4% to $31.6 million for the full year of 2021, up from $20.6 million in the year-earlier period, primarily from higher DataLogiq operating expenses that increased $8.5 million in the year-over-year period. Net loss was $20.1 million or $0.95 per basic and fully diluted share in the full year 2021 compared to a net loss of $14.5 million or $1.14 per basic and fully diluted share in 2020. The increase in the net loss was primarily due to the net loss from DataLogiq, higher R&D, general and administrative expense as well as stock-based compensation and an increase in depreciation and amortization, so a couple of noncash items in there.

As of the end of fiscal 2021, December 31, 2021, cash and cash equivalents totaled $1.6 million. For the full year 2022, we are targeting revenues to be in a broad range of $50 million to $75 million with variance driven by the pace of M&A closing, as Brent was referring. At the lower end of that range, we would expect to be breakeven on an EBITDA basis. On an organic basis, that is with deals that have already closed, we would expect to be EBITDA breakeven by mid-2023 and would expect to attain profitability by late 2023. Again, these expectations are based in part on our potential deal pipeline, which includes M&A, partnerships and other client relationships.

Now I would like to turn the call over to Haig Newton, who heads our DataLogiq business, and Haig is our incoming President and Chief Strategy Officer. Over to you, Haig.

Haig Newton

Thank you, John. Excellent results in Q4, and congrats to all teams on the efforts for a record quarter. I wanted to briefly touch upon what we plan to do to improve upon this success while capturing movements into the current digital transformation phase. It's an exciting time in the technology space and I'm happy to be able to discuss it with you today.

For context, our track record of success has been driven by creating harmonious relationships between both buyers and sellers that use paid advertising, creating a positive business outcome. This outcome in harmony drives everything we do at Logiq. Today, we execute this in 2 ways, which are commonly referred to as LCM, Logiq Consumer Marketplace, and LDM, Logiq Digital Marketing, within our marketing collateral. LCM is a performance-based marketing unit that generates results or buyers on a cost per lead or a cost per sale basis. We utilize a portfolio of brands in a variety of markets that create first and zero-party data. This allows Logiq to capture consumer interest or intent into these vertical markets.

LDM is a SaaS-driven digital marketing all-in-one platform that creates access or campaigns into any channel. It combines a DMP and DSP for users to amplify messaging using a client's first-party data. This allows Logiq to provide actionable data for syndication quickly and easily. Both LCM and LDM share a core element. This core includes data, insights, brands, placements and intelligence as a way to mine for those positive business outcomes. We commonly refer to this as Logiq's consumer intent core.

This flywheel of data provides us an advantage in capturing higher-quality consumer data at a lower cost through intelligently targeting consumers, activating smart campaigns and amplifying our messaging across any media channel or even within our brands and communities that we build. To put it simply, growing this core is a primary objective for Logiq in 2022. And we believe that a focus on creating actionable consumer intent will be a primary value driver for all aspects of our business.

The contribution LCM provides to Logiq are powered by our commitment to creating brands and communities, which address the pains of consumers across multiple verticals. By adding Battle Bridge, we gain a driver to grow and deepen our set of first-party brands as communities. We began working with Battle Bridge many months ago, completing an API integration and have recently launched our new brand, Quotopia, aimed at the insurtech market. This expands the reach of our lead generation team by offering the consumer deeper insights and experiences to make finding the right insurance plan easier.

Battle Bridge also brings a seasoned team of digital marketing experts with a track record of success as a growth marketing agency. With critical production and content resources from Battle Bridge, Logiq can expand our presence into larger addressable markets faster. Now Logiq can participate in an agency role as a SaaS do-it-yourself solution or in a results-based format. We look forward to working closely with the Battle Bridge team as they integrate into Logiq.

From a product perspective, we have been focusing in on going direct and closing the loop. We have launched the first iteration of our platform targeted at the SMB market and delivered leads directly to the businesses engaging with our consumers. This allows new clients to: first, independently onboard, review and acquire consumer data through a do-it-yourself web application; second, set filters and thresholds around the rate, cost and various aspects of each lead delivered; and third, engaging with both our internal machine learning algorithms and third-party scoring metrics to evaluate this prospect data in aggregate. These efforts in going direct allow Logiq to close the loop on attribution, giving both traffic generators and buyers full transparency into the consumer journey from the midstream through the consumer's request for services and products.

Transparency will enable Logiq to step forward as a market leader in regards to the pricing, quality and traceability of our results. Lastly, in from our incubation lab, we have been quietly working in Web3, using blockchain technology and nonfungible utility tokens in a marketplace format, using our zero-party data communities as a guide. Within Web3 frameworks, we see an opportunity to address the growing concerns around data privacy. We are actively exploring concepts around loyalty tokens and consumer participation in conjunction with identity wallets to deliver transparency, control and even compensation, providing fresh zero-party data to our clients.

This is just one example of the many opportunities which Logiq is actively exploring to deliver sustainable growth for Logiq's shareholders within an evolving technological and regulatory landscape. We are excited for the year ahead and continue the growth we have achieved. Brent?

Brent Suen

Thanks, Haig. And with that, Keith, let's open it up for questions, please.

Question-and-Answer Session

Operator

[Operator Instructions]. We'll take our first question from Tony Forte, Private Investor.

Tony Forte

This is an excellent conference call, Brent, and individuals at Logiq. Thank you very much, and I agree, this has been a great year for Logiq, except for one thing, the share price. My name is Tony Forte. Before I retired, I was in charge of the trading analysis division at the American Stock Exchange. During my tenure there, I had significant interaction with the SEC.

I am pretty sure that all shareholders on this call are extremely concerned about the share price of Logiq. Despite a super report, today, the stock traded down to $0.85, an all-time low, down another $0.07 on active trading of about 115,000 shares. I want to emphasize that in my opinion, there's absolutely nothing wrong with Logiq. It is one of the most undervalued stocks in the marketplace.

However, the share price is faced with continuous and substantial manipulation on a daily basis. The manipulation began in October 2021 and resulted from the Logiq offering in June of 2021. The firms who are engaging in this manipulation purchased a substantial number of the units that were sold in the offering. Following the offering, the firm sold all of their common shares and subsequently exercised approximately 50% of their warrants and sold those shares. They had unexercised warrants which were held as a hedge against a possible tender offer for Logiq.

During every trading session, the manipulating firms enter substantial offers to sell Logiq within a few minutes after the opening. I'm sure most shareholders who look at the [indiscernible] trades can see that. The orders are all computer-generated, utilizing a developed algorithm. The orders are designed to push Logiq lower so that shareholders will panic and sell their positions. As Logiq declines, additional sell orders are placed at or slightly above the last sale. The computer then generates buy orders below the last sale in an effort to cover their short positions and make a profit. This strategy can occur multiple times during each trading session.

It is extremely important for shareholders to realize that the manipulative strategy will only work if shareholders panic and sell their positions. Without shareholders selling, the manipulating firms will have no choice but to move on to another victim, which is what we hope. When the stock rallies into the $3 range, that would mean that the share price, the Canadian share price would be approximately $4. The manipulating firms will exercise their warrants, sell the shares and probably move on to another issue. They've made substantial amounts of money on this, and the money started in October of 2021 because by holding these unexercised shares as a hedge, they were able to manipulate the stock daily and they do it every single day.

They're not interested in driving the stock down $0.20, $0.30 in a session. All they're interested in doing is dropping the stock $0.03 or $0.04, have a substantial amount of offers around the last sale, which will panic shareholders into selling. They will buy the shares, make the $0.03 or $0.04 and then continue that process all the time. They are not concerned about the -- what the company is doing. I don't believe these firms even have an analyst that looks at what the companies are doing. They have a certain computer strategy. They use the computer-generated orders and they push the stock down. And they've been successful up to this point.

I know that Brent is trying to do everything possible to eliminate the manipulation and to enhance shareholder value, and I'm sure he will be successful. But in the meantime, if shareholders panic because they see the price going down, it just allows them to continue their manipulation. I personally have written letters to some of the firms, strong letters that I was told -- and I told them they were manipulating the stock and I explained how they were doing it but there was -- to no avail. They're continuing to do it.

I also wrote letters to some of the market makers accepting new orders and reminded them of the [indiscernible] customer rules of the SEC and FINRA. Some of the market makers stopped taking the orders but it is relatively easy for these firms to find a new market maker. Calling or writing to the SEC or FINRA is probably a waste of time. They do not have the manpower to check all the manipulation that occurs on the OTC market. So I don't believe they do much at all on the OTC market.

And if for some reason they were going to do it, it would take them a year or 2 to actually complete any kind of a study. The problem is, is that people that go to the SEC for a job, they go to the SEC to get it on their resume. And a year or so after, they leave the SEC and they get a job on the street for 3 or 4x the money.

So I appreciate this opportunity of talking to you. I believe this is one of the most undervalued stocks on the OTC -- marketplace in general. And I think eventually, with Brent's help, the stock will move up to the level it should be trading at. Thank you very much.

Brent Suen

Thank you, Tony. I appreciate that.

Operator

We'll take our next question from Venkata V with Research Capital.

Venkata Velagapudi

Congrats, Brent, John and Haig. This is an excellent quarter. Firstly, I want to ask about your guidance for next year. You mentioned the guidance seems to be very good, $50 million to $75 million of revenue. But how should we think about the guidance for just DataLogiq segment?

John MacNeil

Yes, Ven. I think that -- what we are -- the way I described it [indiscernible] acquisition for the DataLogiq segment. So the organic growth, which was my second comment, without those acquisitions is more or less in line with discussions that we've had, but that the inorganic growth is what we would be adding through the M&A pipeline. So that's -- that may not answer your question directly but it's -- I don't want to give too much more specifics in terms of the absolute numbers. But in terms of talking about EBITDA breakeven and things like that, I think we've given you some indication as to what we think the organic capacity is versus the capacity with M&A.

Venkata Velagapudi

Okay, excellent. And I was looking at the Battle Bridge economics. This company seems to be a really good company because they have like annual revenue around $4 million and are able to generate positive EBITDA. And when we look at, I mean, just on a stand-alone basis, DataLogiq's margins, this DataLogiq is currently at an annualized revenue of around $20 million but marginally struggling to make positive EBITDA. So what might be the difference between Battle Bridge and DataLogiq because is the difference coming from operating expenses or is there a difference in gross margin profile of both companies? How should we think about this?

John MacNeil

Yes. Battle Bridge's gross margins are better than our corporate averages. They're probably not as high as what we would see from LDM. I would say also that as a private company, it doesn't have the corporate overhead associated with public market functions that we need. So that's one reason that you see it, but we can hopefully tuck it in as it is and just gain the benefit of the EBITDA performance that you called out.

Just to be clear, the $3 million to $4 million target that was discussed is a forward look, though they have certainly done such revenue in the past and in the recent past as well. So it's -- you're basically on track there. But we expect it would be beneficial to gross margins and beneficial to the top line as well beyond what we have discussed as organic growth for DataLogiq.

Venkata Velagapudi

Okay. So the impact of Battle Bridge will be felt in the last 3 quarters of 2022, right?

John MacNeil

That is correct.

Venkata Velagapudi

Okay. Thanks a lot, John, and all the best for next quarter.

Operator

We'll take our next question from Lisa Thompson with Zacks Investment Research.

Lisa Thompson

So let's go back a -- let's go back to Battle Bridge. Just a little clarity on that. Are they bringing you new verticals or new customers? Like what is their -- what's the attraction?

Brent Suen

Well, they're most definitely bringing new customers and some of the verticals overlap, but they're, by and large, new verticals. I think one of the interesting aspects of it is that they do a significant amount of creative work that is providing more engaging content. So where we do overlap, we expect to improve that part of the engagement with the vertical. Sorry. Yes, please. [Technical Difficulty].

Operator

I believe we just lost connection.

Lisa Thompson

To whom?

Operator

I'm verifying, one moment. I believe it was Brent. One moment, I'll attempt to reconnect.

John MacNeil

But Haig, if you're on, you might want to speak to this. But Lisa, yes, we're gaining -- we're definitely gaining customers. It's accretive, both top and bottom line margins. There is some overlap but it's helpful overlap in the verticals that we are -- that we share because we want to come to more engaging content and they're experts at creating that.

Lisa Thompson

Okay, that's sounds good. So when do they get their shares or did they get them already?

John MacNeil

Well, they will have been delivered them as a result of the close of the acquisition but they would be restricted shares, so subject to a lockup and leak-out.

Lisa Thompson

So I'm just trying to figure out...

John MacNeil

Sorry, Brent. You were about to speak when I guess you got dropped so if you want...

Brent Suen

Yes. I hope you hadn't -- no problem. I hope you hadn't already covered it. I was going to also illustrate an example of where we see the additive impact of Battle Bridge. So John is correct on them bringing us new vertical participation and also additional customers.

To give an example, Battle Bridge is currently doing digital marketing services for all of their clients, but that is limited to Facebook and Google-specific ads. That does not include what's called programmatic advertising, which they believe is significantly higher than the revenue that's generated from Google and Facebook that they're covering.

The acquisition we made last year of Rebel AI brings the ability to offer programmatic advertising to the Battle Bridge clients. You combine that with what we're doing at Logiq consumer marketing and being able to offer additional services that we have in-house and that Battle Bridge is not currently doing is also an attractive upside.

So there are things that are beyond just the numbers. And I believe that what we'll see with Battle Bridge is very similar to what we saw with the acquisition of Push Interactive, now DataLogiq. Again, they went from $9 million in 2019 to nearly $24 million last year. They had huge margin improvement during that time. And I think that adding in Battle Bridge and then cross-selling and up-selling together becomes a significantly important part of our business. So hope that helps. I hope I didn't say the same thing that John did. [indiscernible]

John MacNeil

That's perfect.

Lisa Thompson

No, you didn't. That's good. Okay, so just to clarify. So now, we'll take the ending share count on December 31 and add like about 3 million for this acquisition and another 3 million for the Ionic Financing, is that correct?

John MacNeil

Correct, yes.

Lisa Thompson

So that's where we are now, okay. Because I wasn't sure when that was going to happen. Ionic, did it happen that day?

Brent Suen

Yes.

Lisa Thompson

Okay, all right. Okay. So you got to help me with the quarters here because I'm still not sure how seasonality works. So let's start with like AppLogiq, right? You did $6.2 million in the fourth quarter, which was double what you did in the third quarter. Is that seasonal or does that go up sequentially from here?

Brent Suen

That is mostly due -- yes, mostly due to enhanced commissions that salespeople had in offering a package sale with other add-ons. So I'd say that was actually quite successful, significantly more successful than we had expected. Whether or not we continue that into Q1 and 2, we'll see. We're also offering additional functionality on that platform. That rolls in, in Q2 so we may back it out a bit and then gear it up again in Q2. But that is actually in the hands of our respective team over at AppLogiq. So yes.

John MacNeil

No, I was just going to say that just to be clear that this is only going to be consolidated into LGIQ until the distribution of the shares in Lova is complete. So with that happening by the June quarter, well, expected to be happening towards the end of the June quarter into July, there may be another quarter of consolidation, I believe. And then you'll be talking only about DataLogiq. But just that -- so what you're focused on is going to be actually a conversation about Lova once the distribution of those shares takes place.

Lisa Thompson

Okay. And their revenues, are they like grand majority CreateApp because you have all those other businesses, and I'm not quite sure how significant they are?

Brent Suen

They are. They're predominantly CreateApp. And then we also launched a data analytics product -- I'm sorry, platform called Radix that the team built. So there's a little bit from that. We would expect to try to scale that up. But I think that, that's better discussed by the team there when they start to do their calls. So they're completing the year-end and they'll start to report soon so that would be a separate call.

Lisa Thompson

Okay. So DataLogiq then. I know Medicare is a big deal. Does that -- are those -- is the quarters this year still going to be seasonal or is other business making up for it? How do we look at the quarters?

Haig Newton

Well, I would think that we're going to see seasonality. Last year was unusual because they extended the enrollment period. And so we had sequential strength, which was pretty atypical as a result of the follow-through on that. So I would say that we wouldn't see that. And if you -- and I've looked at the ACA data that we can share with you if you like.

But 2021 was very front-end loaded because you had a lot of sign-ups early in 2021 and the back end, we did well. But just from a total opportunity, it was, in the fourth quarter, so-so. So my guess is that we're going to see it. There will be some upticks that we see. But seasonally speaking, it's not expected to be as strong as it was in Q4.

Lisa Thompson

Okay. So that's down sequentially just based on Medicare?

Haig Newton

That's correct, my expectation.

Lisa Thompson

Okay. And then does it stay flat or does it grow sequentially each quarter from there? Or does it pop back up again? Like what's...

Brent Suen

Yes. No, it does. I mean, one of the reasons that we've talked about acquisitions and Battle Bridge is one example and I think we discussed this a bit is that there's -- we talk about seasonality and it isn't always in the calendar. So that extended enrollment period last year kind of messed up the seasonality, if you will, by making the things extend from Q4 to Q1.

Well, now we're going back to more normal seasonality so yes, you're going to see things pick up again probably in the second quarter even, but seeing it more normally trend to Q4 again being strong in the just sort of normal cycle of things. But that's why we've been wanting to layer in all those things which are sort of countercyclical to what is sort of normal e-commerce, strong Q4, weaker Q1, which is, I think, sort of the generic view of digital spend. So that's why we're looking at other verticals, which have different seasonality than, say, Medicare does, for example.

Lisa Thompson

So is the next biggest vertical home improvement and is that also seasonal, like a strong spring or something?

Brent Suen

Well, I mean, I don't know, Haig, if you'd like to talk to the seasonality of it. I mean, there is seasonality but the seasons may not be quite as you expect. In other words, you may get a lot of indoor home improvement done in the darker days of winter than you will in the summer, but it's -- Haig, I don't know. Is there any color you'd like to provide around sort of what you expect or think the seasonality around home improvement might be?

Haig Newton

Yes, that's an excellent question. Yes, we see home improvement, at least historically, really start to ramp up in the spring. That includes roofing, windows, even interior remodels and exterior landscaping. Also, with improved insurance offerings such as auto insurance, health insurance, et cetera, those also help the seasonality.

ACA/Medicare is truly a bit of -- that is our seasonal constraint, per se, but I also believe that we're highly diversified into over 10 vertical markets. And by going deeper and offering the insights, which we talked about, we believe we'll be able to smooth out that seasonality.

John MacNeil

Yes. I think that's a good point that Haig brought up with regards to the auto insurance vertical. So we're going along in financial services and adding layers there, both going deeper but adding other things that we can offer, much as you would in home improvements, adding doors, roofs, tubs, all sorts of things that you can add. So there's a good opportunity organically, I would say, but also part of it is the acquisition strategy to smooth things out.

Lisa Thompson

All right. And John, do you have a number for what you think your operating expenses might be for this year?

John MacNeil

Well, we can take that off-line. There's some -- there's a reasonable amount of it is what I would characterize as success-based, meaning that the more successful we are with some of the new verticals, the more hiring there would be around them to support it. So I'd kind of like to take that off-line and discuss that with you in your model, if that's okay.

Lisa Thompson

All right. I was just trying to share. That's okay. We can talk about it later.

John MacNeil

Yes.

Lisa Thompson

All right. I think that's all my questions. Thank you.

Operator

We'll take our next question from Rich Marshall, Private Investor.

Rich Marshall

I think we're all trying to get the same answer here. So let's assume there's no further M&A. In the disclosure today, you said Logiq did about $23 million in revenues for the year. If we add in Battle Bridge, another $4 million, so that's about $27 million. So are we looking at about $27 million for 2022 out of Logiq without AppLogiq and some growth on top of that without any further M&A? Or is the underlying business not going to achieve that with Battle Bridge?

Brent Suen

No, it would -- is expected to be higher than that, than what you penciled out there. We expect that the organic growth of DataLogiq to continue to reflect, I won't say it was the same growth as we experienced last year, but similar.

Rich Marshall

Okay. So we do expect, without further acquisitions, DataLogiq and Battle Bridge to grow.

Brent Suen

Absolutely.

Rich Marshall

One other question here. There was a lot of shares issued out of last summer, last fall, on marketing awareness for investors, emerging market reports. I think we're now paying fees to Research Capital on a monthly basis. Was [indiscernible] engaged as a new IR? And what kind of awareness activities should we expect? Because quite frankly, if we look at the beginning of April in 2021, we're down 87% today. There's more overhead and I know everyone can talk about algorithms in our face, but something's not -- there's a disconnect here and how do we offset that at this point?

Brent Suen

That's quite complex. And I did get your e-mail the other day. We should follow up separately. But what I would say out loud is without diving too deep to what Tony Forte was describing earlier. I think it's clear that since the IPO on the NEO last year, which personally, and again, this is my personal opinion, I believe, was poorly handled, very poorly handled.

Most of the shares were placed in the hands of several funds that, as Tony pointed out and I also know by looking at our DTC list, they sold shares and used the warrants as what's called a box to short against. And the 2 market awareness initiatives that we undertook, 1 in August and then 1 in November, Rich, were met with such resistance on the sell side that it crushed both attempts. I'm probably not supposed to describe that, but really, I don't care. I'm extremely angry about it.

What I would say to also address your point, yes, those market awareness campaigns and other ancillary activities did involve shares. You won't see a replication of that this year as we figure out other larger strategic initiatives that would eliminate the pressure on the stock. Those might include something in the order of doing a registered direct IPO of DataLogiq out of the OTC listing on to the New York Stock Exchange or NASDAQ, which incidentally, we do and we have qualified on a quantitative basis for NASDAQ on everything except share price.

So unfortunately, the only thing that has hindered us has been share price. So unfortunately, these guys are currently winning but we will find a way to mitigate that. I hope I answered your question, but I'm happy to talk with you about it offline.

Rich Marshall

You answered the best you can. I appreciate it.

Operator

We'll take our next question from Bill Farrand with Blue Flame Capital.

Bill Farrand

I have three questions. My first one is a little bit of a regurgitation of what Tony started with and so I'll be short on that. I thought Tony did an excellent job. And Brent, your answer shows that you understand what's going on. Where I differ slightly with Tony is, I think the short sellers and supposed suppliers of capital to you, they're just giving you your own money. As soon as you go to them, they go to their institutional so-called investors and those guys start shorting your company. When the offering's done, they just give you your own money back.

And then since they're not really buyers, they have no long-term interest in the company. They keep selling. You're like a fatted calf that they can slaughter. And where I think -- and by the way, it's not just they, it's other short sellers. Where I think it misses the mark is it does hurt you. When you're using your stock as currency to buy other companies and buy other revenues, you do it at much lower prices.

And this [indiscernible] research or whatever the company's called, that took you public on NEO, I personally, when I run a company, I hope in the future, we'd never use them. They did you at $3 and now they have a research report that comes out valuing you at $2. Who are they loyal to? They're loyal to the capital that keeps buying their deals so they can keep making money. And I think you should ask for your investment banking fees back.

So my three questions. One, are you talking to any true buyers? Because you need true buyers, not these fake manipulators. And secondly, Brent, and I'm a friend of the company, even though I'm getting a little worked up, are you aware of any other valuations over the last period of time that you've been working so hard and doing your yeoman's job? Are there any other valuations that you're allowed to talk about with us? And then finally, my final question is what metric matters in this space in terms of if someone were to come to buy Logiq 6 months from now? What is the metric they're focusing on? Is it cash flow per share? Is it revenue per share? It certainly probably isn't profitability. So thank you for listening to me.

Brent Suen

No, I appreciate that, Bill. I'm going to do 2 things. I'm going to answer your questions very directly, and I'm sure I'm going to catch flak afterwards by counsel and IR. But at this point, I will speak to them on a personal and professional basis.

Valuations, and I will attempt to answer all 3 of your questions. But valuations are, in our space, are as low as 1x revenue, but those are for companies like FLNT, F-L-N-T, which only does what's called lead generation. We do have elements of our business that are in lead generation but our margins are higher than what you see in that sector, okay? We have elements of our business through the acquisition of Rebel and what we will be up-selling through the new Battle Bridge acquisition that are comparable with The Trade Desk and companies like Magnite where those valuations are still up at 8 to 12x revenues, revenues, not earnings, not EBITDA but 8 to 12x revenues, which -- and incidentally, The Trade Desk is 46x revenues.

So valuations are absolutely higher than where we are. Our banker benchmark has a valuation analysis of us that is very recent and it pencils out to $108 million. We had a valuation analysis done by some friends of ours that came out to $133 million. And the ways that these inputs are used, Bill, you and I could do the same thing. We can pull databases from public companies in our sector. We can apply a blended ratio. It will still come out much higher.

If you look at M&A valuations, same thing, much higher. And if you look at a discounted cash flow just based on where we are and where we're going, it will also come out higher. So in terms of valuations, are we extremely undervalued? Yes. What can we do about it to achieve those valuations? Well, outside of traditional IR or market awareness, there are some things that can be done. We have been in discussions with larger strategic buyers and we'll continue to do so. Whether or not we could attain a valuation that would be comparable to our peers is going to be a combination of what they would be willing to pay, what that would be in stock or cash and based on our market cap and share price as well.

So I hope that answered your questions. And that's a combination of personal opinion.

Bill Farrand

I think that's a terrific answer. But what -- the 1 thing because I'm kind of a rookie in your space, what is the metric to look at per share or total that would -- that you base your valuations on? Is it revenue or is it cash flow per share? Or is it -- anyway, I don't know what it is, obviously not profit because they're -- anyway, go on.

Brent Suen

It's not, it's not. There are very few companies that operate with a net profitability. What we've seen are -- so Lisa Thompson at Zacks utilizes comparables that are weighted more towards ad tech and programmatic, which we absolutely have elements of. So her target price is much higher. I believe it's in the low teens. Then over at Research Capital used more comps from the lead gen space, which are a combination of multiples of gross profit.

But I think the key to us is looking at how we evolve over this year. And even if you take a blend of lead gen and programmatic advertising and data companies, it still comes in at a multiple of revenue, Bill. So what's fair, 8 to 10.

Operator

Mr. Suen, we're back to you for closing remarks.

Brent Suen

Great. Thanks, Keith. So I just want to reiterate that 2021 was a solid year of progress for us on all fronts on the business side. Looking ahead, both Logiq and GoLogiq have strong merger and acquisition pipelines that are actively in process. And our operations are becoming much more efficient, effective and scalable, and we continue to believe our industry is extremely ripe for consolidation as we see valuation multiples at the lowest they've been at for years.

We intend to be a leader in that process, enabling us to leapfrog over the less imaginative and strategic competition and take our place as a scalable leader in a great and fast-growing industry. So thank you, all, and Keith, with that, we can wind up the call.

Operator

Thank you. Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.