FOMO WORLDWIDE, INC. (FOMC)·Q3 2022 Earnings Summary

Executive Summary

• FOMO Worldwide did not file a formal Q3 2022 10‑Q or hold an earnings call; instead it preannounced FY 2022 pro forma revenue “greater than $9.4M,” underpinned by a strong K‑12 demand backdrop and improving supply chains .
• Management raised FY22 revenue guidance during Q3 to $9–$10M and later indicated full‑year revenues would come in at the lower end of a $9.5–$10.5M range as accounting timing issues are corrected in H2 .
• Q2 2022 marked an inflection: $2.646M revenue, positive operating cash flow at SST, and several million dollars of backlog; company cited ESSER stimulus tailwinds and improved liquidity .
• Operational catalysts included a $1.4M collection for 269 interactive displays, ~two dozen active projects, and backlog of ~$2M scheduled into Q1–Q2 2023; risks were revenue recognition restatements, going‑concern and supplier concentration .

What Went Well and What Went Wrong

What Went Well

• K‑12 demand and funding catalysts: “ESSER Funds and CARES Act have provided substantial tailwinds to the K12 market,” with management highlighting momentum despite macro volatility .
• Commercial execution: SST collected the final amounts on a $1.4M order for 269 SMART interactive displays; backlog exiting 2022 was ~$2M with deliveries/installations scheduled into 1Q–2Q23 .
• Guidance and expansion: Management raised FY22 pro forma revenue guidance to $9–$10M in August; cited plans to expand beyond K‑12 into municipal, healthcare, enterprise, and post‑secondary markets .
  Quote: “When the global chip shortage ultimately works itself back to equilibrium, I see no reason why SST’s business cannot double or triple...” — Vik Grover, CEO .

What Went Wrong

• Restatements and controls: Board concluded Q1–Q2 2022 should no longer be relied upon due to revenue recognition errors (percentage‑of‑completion/WIP); Q1 revenue to decline ~$550–$650k, Q2 to increase ~$350–$400k, with timing corrected in Q3–Q4 .
• Going‑concern and covenant risk: Auditors expressed substantial doubt at year‑end 2021; at Q2 the company had a stockholders’ deficit of $0.92M and was in default on AR facility financial covenants (lender did not exercise remedies) .
• Supplier concentration: SST relies on a single Canadian supplier for interactive smartboards; interruption could seriously harm the business .

Financial Results

Revenue, EPS, and Margins vs Prior Periods and Estimates

Notes: Q1 2022 revenue is derived as H1 minus Q2 ($3.880M − $2.646M = $1.234M); management indicated Q1–Q2 would be restated for timing (Q1 down ~$0.55–$0.65M; Q2 up ~$0.35–$0.40M) . SPGI consensus estimates were unavailable for FOMC (no CIQ mapping) [GetEstimates error].

Segment/Revenue Disaggregation (H1 2022 context)

KPIs and Operating Metrics

Guidance Changes

No explicit guidance was provided for margins, OpEx, OI&E, tax rate, or dividends in Q3 documents .

Earnings Call Themes & Trends

(Company did not file an earnings call transcript for Q3 2022) [ListDocuments shows none].

Management Commentary

• “The ESSER Funds and CARES Act have provided substantial tailwinds to the K12 market that have made SST successful even in the face of global market volatility, geopolitical instability, rising interest rates, and inflation at 40‑year highs.” — Vik Grover, CEO .
• “The smart board business is booming in K12... I see no reason why SST’s business cannot double or triple…” — Vik Grover, CEO, on guidance raise and expansion plans .
• “We are nearing completion of our SST private company audit… will soon be sent to public company accountants for restated Form 10‑Qs… and for a fresh third quarter filing… to bring us SEC current.” — Vik Grover, CEO .
• “We have eliminated approximately 1.7 billion common shares of future dilution… intend to eliminate… 1.3 billion more common shares…” — Vik Grover, CEO (“Operation Share Recapture”) .

Q&A Highlights

• No Q3 2022 earnings call transcript or analyst Q&A was filed; the company hosted an in‑person investor meeting on Sept 16 with recorded materials to be filed under Reg FD .

Estimates Context

• Wall Street consensus estimates (S&P Global) were unavailable for FOMC due to missing CIQ mapping/coverage for the OTC ticker, so no revenue or EPS consensus comparisons can be made [GetEstimates error].

Key Takeaways for Investors

• Near‑term revenue visibility: ~$2M backlog and reduced delivery cycles should convert into revenue across Q4 2022 and Q1–Q2 2023; watch for the “fresh third quarter filing” and restated Q1–Q2 to reconcile timing .
• Structural tailwinds: ESSER/CARES funding continues to underpin K‑12 refresh cycles; management is adding sales capacity and diversifying into municipal/healthcare/enterprise and post‑secondary .
• Dilution reduction: “Operation Share Recapture” has eliminated ~1.7B CSEs and targets ~1.3B more, potentially lowering future dilution risk; monitor follow‑through on planned cancellations/returns .
• Risk management: Supplier concentration and prior control weaknesses persist; covenant defaults (unremedied) and going‑concern language warrant caution until filings are current and controls audited .
• Guidance trajectory: FY22 guidance raised in August (to $9–$10M), later guided to lower end of a $9.5–$10.5M range; December preannounce of >$9.4M pro forma suggests delivery consistent with framework; follow year‑end report for precision .
• Trading implications: Preannouncement momentum and backlog conversion could be supportive, but restatement and compliance risks (and lack of sell‑side coverage) increase volatility; catalysts include Q3/Q4 filings and audit completion .
• Medium‑term thesis: If execution continues (market expansion, backlog conversion, dilution mitigation), leverage to education tech cycles may support growth; balance sheet/liquidity and supplier diversification are gating factors .

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