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II

IIOT-OXYS, Inc. (ITOX)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 marked the third consecutive quarter of sequential revenue growth, with Q4 revenue exceeding Q3; full-year 2022 revenue rose 7.9x vs 2021 and management cited OpEx down 17% and professional expenses down 47% year over year .
  • The year’s growth was driven by a six‑figure DOT bridge monitoring subcontract, a Smart Manufacturing CNC POC (targeting SaaS in 2H23), and partnerships with Aingura IIoT and Aretas; a new ElastiSense distribution agreement broadened sensor capabilities .
  • Management guided that 2023 YoY revenue growth will meet or exceed 2022 and positioned 2023 as a transition from “surviving” to “thriving”; Q1 2023 was “on track to exceed” Q4 2022 revenue .
  • Investor call catalyst: an annual/Q4 results investor conference call was held May 3, 2023; pre-submitted Q&A and replay were provided, keeping engagement elevated despite micro-cap liquidity constraints .

What Went Well and What Went Wrong

What Went Well

  • “We kept our revenue promise… our fourth quarter revenue exceeded that in the third quarter. This marks three consecutive quarters of quarter-over-quarter revenue growth” (CEO, Clifford Emmons) .
  • “2022 revenue exceeded 2021, doing so by more than seven‑fold… leadership… lowered operating expenses by 17%, and professional expenses were reduced by 47%” .
  • Smart Manufacturing momentum: “We expect this POC to quickly follow into a SaaS contract” and predictive maintenance/analytics value proposition highlighted for CNC machining customer .

What Went Wrong

  • Continued losses and going-concern risk: 2022 net loss was $1,076,881 and management disclosed substantial doubt about the ability to continue as a going concern absent funding or profitability .
  • Material weakness in internal controls (segregation of duties; oversight; documentation) persisted due to limited resources; remediation plan not fully implemented .
  • Debt risk: multiple secured notes and subsequent default status on Notes A and D as of March 1, 2023 (post-Q4); secured debt raises foreclosure risk if not cured .

Financial Results

Annual Performance (context for Q4 trajectory)

MetricFY 2021FY 2022
Revenue ($USD)$11,280 $88,904
Cost of Sales ($USD)$2,040 $10,499
Operating Expenses ($USD)$889,141 $733,071
Net Loss ($USD)$(1,063,554) $(1,076,881)
Basic/Diluted EPS ($USD)$(0.01) $(0.00)
Weighted Avg. Shares (Basic/Diluted)195,264,873 273,238,664

Quarterly Trend Direction (Q2→Q4 2022)

TopicQ2 2022Q3 2022Q4 2022
Revenue vs prior period“Q2 revenue exceeded total 2021 revenue” “Q3 revenue exceeded Q2” “Q4 revenue exceeded Q3”
Smart ManufacturingAlgorithm development revenue expected in Q3 Momentum; Industry 4.0 growth backdrop CNC POC secured; SaaS expected in 2H23
DOT Bridge MonitoringExtension driving revenue into Q3 Ongoing contribution Six‑figure subcontract; revenue through mid‑2023

Segment breakdown and formal quarterly KPIs were not disclosed in press releases/filings for Q4 2022; the company reports as a single operating entity .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue YoY GrowthFY 2022 vs FY 2021“Total 2022 revenue will approach 2019 levels; 2H > 1H” (Q3 release) Achieved: 2022 revenue +7.9x YoY; 2H > 1H; Q4 > Q3 Achieved
Revenue YoY GrowthFY 2023“Expect 2023 to exceed 2022” (Jan 30 update) “2023 YoY revenue growth will meet or exceed 2022” (Apr 26) Maintained/Expanded
Near-term RevenueQ1 2023N/A“Q1 2023 is on track to exceed Q4 2022 revenue” New positive update

No numeric guidance ranges (revenue, margins, OpEx, tax rate) were provided; commentary focused on trajectory and contract/conversion milestones .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4/Annual)Trend
AI/ML for Smart ManufacturingAlgorithm development planned; Industry 4.0 tailwinds CNC POC; targeted predictive maintenance, tool optimization; SaaS path Strengthening execution
Structural Health Monitoring (SHM)DOT extension driving revenue Six‑figure DOT subcontract; revenue through mid‑2023 Scaling in SHM
Indoor Air Quality (Aretas)Co‑marketing agreement; expected Q4 contribution Continued progress; retail sales efforts starting to show results Early traction
Partnerships/BDAingura collaboration supportive NDA with multinational Indian ESP to scale BD/engineering capacity Broader channel leverage
Macro/tariffs/regulatoryHigh-level risk disclosures only –Continued macro risk factors; penny stock/liquidity constraints Ongoing backdrop

No formal Q4 transcript was available; investor Q&A remained via pre‑submitted questions and replay link (SmallCapVoice), with a scheduled annual call May 3, 2023 .

Management Commentary

  • “We’re pleased to announce… 2022 revenue exceeded 2021… fourth quarter revenue exceeded third quarter… three consecutive quarters of increasing revenue” (CEO) .
  • “Our Smart Manufacturing CNC POC… is already yielding results… we expect a SaaS contract to follow contributing to revenue by the second half of 2023” .
  • “We were awarded a six‑figure sub‑contract… DOT bridge monitoring… we’re confident our performance will yield further extensions and expansions in the second half of the year” .
  • “The goal of the POC will be to reduce downtime and increase productivity… predictive analytics using our proprietary AI & Machine Learning algorithms” .
  • “We’re excited to sign this agreement with ElastiSense… focused on deploying rugged displacement sensors… discrete smart manufacturing processes” .
  • “This agreement [with Indian ESP] will allow us to negotiate collaborative contracts… link Digital Transformation projects at Medical Device OEMs to Smart Manufacturing projects for their Supply Chain SMEs” .

Q&A Highlights

  • Format: Pre‑submitted questions via email; no live Q&A during calls; replays hosted by SmallCapVoice .
  • Clarifications centered on revenue trajectory (2H>1H, Q4>Q3) and contract conversion timelines (DOT, CNC POC to SaaS), per press release commentary .
  • Tone: Confident on 2023 as transition year (“surviving” to “thriving”), supported by partnerships and pilots .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2022 revenue and EPS was unavailable due to data access limitations at the time of retrieval. As a result, comparison to consensus cannot be provided; estimates likely sparse for this OTC micro-cap.
  • Management’s directional commentary (“Q4 > Q3; Q1’23 on track > Q4’22”) suggests potential upward bias to near-term expectations should sell-side coverage emerge .

Key Takeaways for Investors

  • Sequential revenue momentum through Q4 (three straight QoQ increases) with 2022 revenue +7.9x YoY validates commercial traction in SHM and Smart Manufacturing; execution on DOT and CNC POC is the near-term driver .
  • 2023 revenue guide “meet or exceed” 2022, with Q1 tracking above Q4, implies continued cadence; watch conversion of CNC POC to SaaS in 2H23 and potential DOT extensions .
  • Cost discipline (OpEx −17%, professional −47%) improved operating profile despite scale; sustainability depends on revenue conversion and funding mix .
  • Partnerships (Aingura, Aretas, ElastiSense, Indian ESP) expand capacity, distribution, and solution breadth; these should shorten sales cycles and support SME adoption in medical device supply chains .
  • Risk controls: material internal control weaknesses and going-concern disclosure warrant caution; monitor remediation progress and secured debt maturities/default cures post‑Q4 .
  • Liquidity/market structure: penny stock designation and micro-cap liquidity can amplify volatility; company uses equity lines and preferred financing—dilution is a persistent consideration –.
  • Trading implications: contract announcements (DOT extensions, SaaS conversion, new POCs) and investor calls/replays are primary catalysts; absence of sell-side estimates reduces “beat/miss” signaling—price moves likely driven by execution updates .
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