Executive Summary

Q1 2023 revenue declined 7% year over year to $0.55M, but gross margin improved to 28% from 12%; operating loss narrowed materially on lower G&A, while the net loss widened primarily due to a non‑cash increase in derivative liabilities fair value .
Liquidity and going concern remain the central risks: cash was $0.12M, working capital deficit was $7.51M, A/R credit facility balance rose to $1.44M, and auditors flagged substantial doubt; lender waived covenant defaults through May 31, 2023 while financing options are pursued .
Strategic positives: regained SEC current status, affirmed Diamond status with SMART Technologies (key vendor), expanded beyond K‑12 into enterprise/LMS and signed multiple LOIs—potential catalysts if financing executes, but all are contingent on capital raising .
No Q1 2023 earnings call transcript or formal guidance; management used “FOMO HOUR” investor updates; no Wall Street consensus available via S&P Global for this OTC micro‑cap—estimate comparisons are not possible (S&P Global data unavailable).

What Went Well and What Went Wrong

What Went Well
- Gross margin expanded to 28% in Q1 2023 (vs. 12% LY), driven by lower cost of sales and mix (installation services 19% of revenue vs. 8% LY) .
- G&A fell 55% YoY (to $0.55M) largely from lower share/warrant‑for‑service expense—improving operating loss trajectory despite lower sales .
- Management completed complex restatements, regained SEC current status, and affirmed SMART Technologies Diamond status, which preserves pricing, referrals, and competitive positioning; quote: “the foundation is now in place to finish what we started” .
What Went Wrong
- Revenue fell 7% YoY to $0.55M as clean air product revenues dropped to zero and smartboard sales decreased; customer concentration remained high (top two customers 44% of sales) .
- Net loss widened to $(3.79)M, driven by a $3.46M non‑cash increase in derivative liabilities fair value and higher interest expense; basic/diluted EPS was $(0.0004) .
- Liquidity tightened: cash $0.12M, current liabilities $8.89M, derivative liabilities ballooned to $4.44M; auditors cited substantial doubt and debt covenant defaults (waived temporarily) .

Financial Results

Revenue, EPS, margins (oldest → newest)

Metric	Q1 2022	Q1 2023
Revenue ($USD)	$592,291	$552,328
Gross Profit ($USD)	$71,444	$154,757
Gross Profit Margin (%)	12%	28%
Net Loss ($USD)	$(1,825,808)	$(3,789,102)
EPS, basic/diluted ($)	$(0.0002)	$(0.0004)

Segment/revenue mix (disaggregation)

Revenue Stream	Q1 2022 ($)	% of Revenue	Q1 2023 ($)	% of Revenue
Smart boards & installation	$531,076	90%	$447,668	81%
Installation services (labor only)	$48,490	8%	$104,660	19%
Clean air technology products	$12,725	2%	$0	0%
Total	$592,291	100%	$552,328	100%

Liquidity and balance‑sheet KPIs (point‑in‑time)

KPI	Dec 31, 2022	Mar 31, 2023
Cash ($)	$96,954	$119,149
Accounts Receivable, net ($)	$1,682,654	$914,817
Inventory, net ($)	$382,457	$262,441
Deferred Revenue ($)	$578,354	$275,247
A/R Credit Facility Balance ($)	$1,276,467	$1,440,262
Convertible Notes, net ($)	$645,006	$676,206
Derivative Liabilities ($)	$981,766	$4,437,172
Working Capital Deficit ($)	$(3,425,835)	$(7,511,148)

Estimates comparison (S&P Global)

Consensus Revenue (Q1 2023): Not available via S&P Global for this issuer (no mapping found).
Consensus EPS (Q1 2023): Not available via S&P Global for this issuer (no mapping found).

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q1 2023	N/A	No quantitative guidance provided	N/A
Margins	FY/Q1 2023	N/A	No quantitative guidance provided	N/A
OpEx/Tax/OI&E	FY/Q1 2023	N/A	No quantitative guidance provided	N/A
Segment specifics	FY/Q1 2023	N/A	No quantitative guidance provided	N/A
Capital return	FY/Q1 2023	N/A	No dividends/buybacks disclosed	N/A

Management offered qualitative direction on strategy, financing, and M&A pipeline, but no numeric guidance ranges were issued .

Earnings Call Themes & Trends

No formal Q1’23 earnings call transcript was found; management held weekly “FOMO HOUR” investor sessions and issued multiple 8‑Ks/press releases. Themes below synthesize Q‑2 (Mar 27, 2023), Q‑1 (Mar 31, 2023), and current period (Apr 18, 2023) disclosures.

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period (Q1 2023)	Trend
SEC compliance / reporting	Regained SEC reporting compliance; restated 1Q22/2Q22 and filed 3Q22; OTC Pink Current relisting expected	10‑K filed, SEC current status affirmed	Improving
K‑12 demand / backlog	Record backlog at SST; K‑12 drove 2022 growth	Continued strength; Diamond vendor status reaffirmed	Stable to positive
Vendor status (SMART Technologies)	Key source; Diamond reseller status noted	Vendor fully paid; Diamond status affirmed, unlocking pricing/referrals	Positive
Pivot to enterprise/LMS	Outlined LMS/content/compliance M&A funnel	Active LOIs and purchase agreements in LMS/training/content; exploring signage, modular construction	Expanding
Financing / credit lines	A/R facility increased to $1.5M; working on additional financing	Covenant defaults waived through May 31, 2023; ongoing lender discussions	Mixed: access with waivers
Clean tech businesses	Reorganized/impairments in 2021; limited traction	Rebranding and cross‑sell referenced; no Q1 revenue	Weak

Management Commentary

“This process [10‑K filing and accounting overhaul]… consumed our limited resources… Despite that… SST still reported significant revenue growth at near record levels… I can state with extreme confidence that the foundation is now in place to finish what we started…” — Vik Grover, CEO .
Strategy: broaden beyond K‑12 into enterprise via LMS, training, and compliance; pursue acquisitions to achieve scale .
Operations: Diamond status with SMART reaffirmed, preserving pricing and referrals; prior past‑due vendor balance reduced to $0 enabling full facility availability .

Q&A Highlights

No Q1 2023 earnings call transcript available. Management hosted weekly investor “FOMO HOUR” sessions on Discord to provide updates; transcripts referenced but not present in the document set reviewed .

Estimates Context

S&P Global/Capital IQ consensus estimates for Q1 2023 revenue and EPS were not available for FOMC (no SPGI mapping). As a result, we cannot quantify beats/misses versus Street. We attempted to retrieve “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for Q1 2023 but the data provider returned no mapping for this ticker (S&P Global data unavailable).

Key Takeaways for Investors

Margin normalization: despite a 7% revenue decline, gross margin improved to 28% (from 12%) on mix (higher installation services) and lower cost of sales; this supports the thesis that execution, not demand, drove Q1 profitability improvements .
Non‑cash volatility dominates P&L: the expanded net loss was primarily driven by a $3.46M derivative liability fair‑value increase and higher interest, not core operations; monitor capital structure developments closely .
Liquidity risk remains elevated: minimal cash, rising A/R borrowings, large current liabilities, and going concern warning; lender waivers provide time but not resolution—near‑term financing is the key catalyst .
Vendor and channel positioning improved: SMART Diamond status reaffirmation and vendor facility availability could aid order fulfillment and pricing competitiveness as school budgets and enterprise demand cycle through 2023 .
Strategy pivot could diversify revenue: active LOIs in LMS/training/signage/modular construction broaden end‑markets beyond K‑12; execution depends on financing and integration capacity .
Concentration and small‑cap risks: top customers were 44% of Q1 revenue; supply reliance on a single OEM; debt covenant history—these constrain valuation and increase volatility .
Trading setup: near‑term stock moves likely hinge on financing outcomes, proof of enterprise/LMS wins, and sustaining margins while stabilizing the balance sheet .

Notes on primary sources and availability:

We searched for and read Q1 2023 8‑K Item 2.02 press releases and found filings dated Mar 27, 2023; Mar 31, 2023; and Apr 18, 2023—these covered FY2022 and strategic updates rather than a Q1 earnings press release .
We read the full Q1 2023 Form 10‑Q (filed May 18, 2023) for detailed financials and MD&A -.
No Q1 2023 earnings call transcript or other press releases were found in the period; we also checked for 2022 quarterly 10‑Qs and did not find Q3/Q4‑specific transcripts or Q4‑only quarterly P&L; prior‑quarter (Q4 2022) comparisons are therefore limited to point‑in‑time balance sheet and annual disclosures -.

FOMO WORLDWIDE, INC. (FOMC)·Q1 2023 Earnings Summary