LGIQ: The Worst is Over, Revenues and Margins Should Improve Going Forward

By Lisa Thompson



Logiq (OTC:LGIQ) just reported its lowest revenue quarter since it began its business model transition at its AppLogiq division. The good news is, the worst is over and the company expects both sequential revenue improvement and gross margin improvement as the year progresses and into 2022. Both businesses should show higher sequential revenues in Q1 and higher gross margins. With a full quarter of Fixel and the Q2 addition of Rebel AI revenues, as well as organic growth, the DataLogiq business should show significant year over year growth. Combined with the AppLogiq business, total revenues should show year over year growth by Q3 2021.

The Company May Spin off AppLogiq

The wild card in 2021 is what happens to AppLogiq. With its new businesses coming on stream in Indonesia starting in Q3, the company had had a lot of interest in spinning the entire division off to shareholders as a separate entity. Management believes there is now an 80% of this happening in the next six months and it could be valued as high as $100 million. This provides yet another impetus in investing Logiq.

Logiq Closes Rebel AI Acquisition

On March 30, 2021, Logiq announced it closed the acquisition of Rebel AI, Inc. for $8.126 million comprised of $1,126,000 in cash and $7 million in stock equaling 1,032,056 shares of stock priced at $6.634. Rebel AI is an eight-person ad tech company founded in 2016 based in Boulder, Colorado that just launched its demand side platform (DSP) in January after four years of development. While it has only started to generate revenues, Logiq is optimistic that the acquisition will be accretive this year. Rebel AI should provide much higher gross margins than the DataLogiq average, and that margin is expected to increase again significantly in 2022. Assuming the company paid at most ten times 2021 revenues it should contribute near $1 million in revenues in the next 12 months. Logiq is keeping all of Rebel AI’s employees and maintaining the Colorado location.

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