Galaxy Next Generation Issues Shareholder Update after Q3 FY 2023 Earnings Report

Rhea-AI Summary

Galaxy Next Generation, Inc. issues shareholder update letter following Q3 FY 2023 earnings results. Revenues increased from ~$430K to ~$657K quarter over quarter. G&A expenses decreased from ~$1.5M to ~$670K. Net loss decreased to less than $1.5M compared to ~$3M in Q2. Cash balance increased by ~87%. Recently secured additional financing of $1M with option for additional $500K. Partnerships with AV dealers driving pipeline and sales growth. Shift towards higher margin products. Transition proving to be successful.

Positive

• Revenues increased quarter over quarter from ~$430K to ~$657K
• G&A expenses decreased from ~$1.5M to ~$670K
• Net loss decreased to less than $1.5M compared to ~$3M in Q2
• Cash balance increased by ~87%
• Recently secured additional financing of $1M with option for additional $500K
• Partnerships with AV dealers driving pipeline and sales growth
• Shift towards higher margin products
• Transition proving to be successful

Negative

• None.

Continue to Demonstrate Post Transition Improvements

TOCCOA, GA / ACCESSWIRE / June 1, 2023 / Galaxy Next Generation, Inc. (OTCQB:GAXY) ("Galaxy" or the "Company), a provider of interactive learning technology solutions and school communication platforms, is pleased to issue the following shareholder update letter following their Q3 FY 2023 earnings results, reported on May 22, 2023.

Dear Shareholders,

As we have mentioned previously, the last 9 months have been a transitional period for the company. We not only transitioned in our product offerings, but in our approach to market causing a temporary down shift in revenues in an already challenging economy. We feel that our 3^rd quarter earnings show just how lucrative these transitions will prove to be for our company in the coming months, and year. I have summarized a few highlights from our Q3 earnings in comparison to Q2. This comparison helps us showcase the positive momentum we are seeing internally as some of the implemented changes are put into effect.

To start, revenues continue to increase quarter over quarter from ~$430K in the three months ended December 2022 to ~$657K reported for the three months ended March 2023. The most notable change in our financial reporting is in relation to our G&A expenses which decreased quarter over quarter from ~$1,5M down to ~$670K. We were able to make adjustments internally to save the ~$900K in quarterly expenses while still increasing overall sales and growing our demand even greater. This along with other non-cash related transactions is what resulted in the vast improvement to the overall net loss for the quarter, decreasing to just less than $1.5M compared to the net loss in Q2 of ~$3M. Both the steady recover of our revenue numbers, and the fast decreases that we will continue to see on our expenses show both lines trending in the right direction getting us even closer to our goal of profitability in the coming quarters.

These improvements to our statement of operations are starting to make headway on our balance sheet as well, which is indicated in our cash balance increase quarter over quarter of ~87%. With the improvements continuing, we were recently able to secure additional financing from one of our long-term supporters. This investor has been with us since we first took the company public in 2018 and continues to believe in our products and their contribution into the educational technology segment. Their recent additional investment of $1M was coupled with the option to ‘call for capital' up to an additional $500K. This investment has truly given the company the security needed to continue to target our new partners and grow sales exponentially.

The recently announced partnerships have been the biggest game changer in terms of our pipeline and sales growth. With some of the largest AV dealers now carrying the ‘G2' product line, we can see how quickly we can scale revenue with the right financial backing to keep up with the demand. We currently have a pipeline exceeding over 5M with several larger opportunities closing within the next couple of weeks, all being driven by and ran through our new channel partners.

Most of the pipeline now consist primarily of our Bell, Paging, Intercom, Clock, (BPIC) and Emergency Communication products. Yet again, showing a shift from our traditional interactive flat panel sales, into the higher margin opportunities of our G2 Communicator, BPIC and G2 Secure. We captured a good bit of elevated freight and R&D expenses in this past quarter skewing our profit margin. However, this shift will eventually help us to report a profit margin upwards of 60-70% compared to the 20-25% previously maintained when primarily selling the interactive panel products only which will be the largest contributing factor to rounding out the other changes in the statement of operations and getting us to profitability quickly.

All of these factors prove that the transition, albeit difficult, was the right one to make and will allow all of us to see a successful Galaxy in the near future.

We also understand that communication from us has been slow at times over the last few months as we hammered through the daily transitional challenges, but we ALWAYS appreciate the continued support that you have shown and continue to show. It is our belief that we are through the most difficult part of the corporate changes and challenges, and we are looking forward to the next several months as we continue to build on our partner relationships and the need for our ‘G2' technology in all schools across the US.

I look forward to providing an additional update soon and look forward to the future together.

Thank you,

Magen McGahee
CFO, Galaxy Next Generation, Inc

About Galaxy Next Generation, Inc.

Galaxy Next Generation (OTCQB:GAXY) is a provider of interactive learning technology solutions that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy's products include Galaxy's own private-label interactive touch screen panel as well as numerous other national and international branded peripheral and communication devices. Galaxy's distribution channel consists of 22+ resellers across the U.S. who primarily sell the Company's products within the commercial and educational market. Galaxy does not control where resellers focus their resell efforts, although generally, the K-12 education market is the largest customer base for Galaxy products - comprising nearly 90% of Galaxy's sales.

For additional information, please visit our website at: www.galaxynext.us

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company's current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company's business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investors Contact:
IR@GalaxyNext.us
P:888-859-1274

SOURCE: Galaxy Next Generation, Inc.

View source version on accesswire.com:
https://www.accesswire.com/758518/Galaxy-Next-Generation-Issues-Shareholder-Update-after-Q3-FY-2023-Earnings-Report

FAQ

What were the Q3 FY 2023 earnings results for Galaxy Next Generation, Inc.?

Revenues increased from ~$430K to ~$657K quarter over quarter. G&A expenses decreased from ~$1.5M to ~$670K. Net loss decreased to less than $1.5M compared to ~$3M in Q2. Cash balance increased by ~87%.

Did Galaxy Next Generation secure additional financing?

Yes, they recently secured additional financing of $1M with the option for an additional $500K.

What is driving the pipeline and sales growth for Galaxy Next Generation?

Partnerships with AV dealers are driving pipeline and sales growth.

What is the company's shift towards higher margin products?

The company is shifting towards higher margin products such as the G2 Communicator, BPIC, and G2 Secure.

Is the transition proving to be successful for Galaxy Next Generation?

Yes, the transition is proving to be successful.