Galaxy Next Generation Reports 31% Revenue Growth to $2.6 Million and Significant Reductions in Operating and Net Losses for its Six Months Ended December 31, 2021 Fiscal Year 2021 Results

Reached Positive Shareholder Equity for First Time in Company's History Conference Call Scheduled for Today at 4:30pm ET

TOCCOA, GA / ACCESSWIRE / February 14, 2022 / Galaxy Next Generation, Inc. (OTCQB:GAXY), a provider of interactive learning technology solutions, today announced the Company's operating and financial results for the fiscal second quarter and six months ended December 31, 2021.

Key Financial Highlights for Six Months Ended December 31, 2021

• Revenue increased 31% to $2.6 million
• Gross profit increased 7% to $0.7 million, including a write down recorded for older inventory
• Operating loss decreased 60% to $1.9 million
• Net loss decreased 86% to $2.8 million
• Total liabilities decreased 44% to $4.9 million (from $8.8 million at June 30, 2021)
• Eliminated convertible debt which led to $0 reported derivative liability
• Cancelled and returned to treasury 50 million shares

Key Business Highlights for Three Months Ended December 31, 2021 and Subsequent to the End of the Quarter

• Launched G2 Link classroom audio system
• Received license agreement renewal from its first district to adopt its cloud-based Bell and Intercom system
• Awarded contract from Colorado Springs School for district-wide audio/visual installation

Summary Snapshot of 3 Months Financials

Summary Snapshot of 6 Months Financials

Management Commentary

"We are very pleased with our results for the first half of our fiscal year 2022 through December 31, 2021, as we continued to see increased demand for our products, which is reflected in our increased revenue," stated, Gary LeCroy, Galaxy's Chief Executive Officer. Despite the three months ended December 31, being traditionally our slowest time of year with schools being closed for the holidays, we generated more revenue than our comparative December 31, 2021 quarter and nearly as much as the previously reported June 30, 2021 quarter."

LeCroy concluded, "We believe we are still in the early stage of a major technology turnover cycle in the K-12 education market, as increased school budgeting is now being spurred by additional federal monies. President Biden has called on Congress to provide at least $130 billion in dedicated funding to schools and $350 billion in state and local relief funds to help school districts close budgets gaps. This commitment at the federal level to get schools the availability of funding should lead to increased opportunities for our in-classroom technology solutions. The way our students learn continues to evolve, and we look forward to being a major participant in it."

Galaxy's Chief Financial Officer, Magen McGahee, stated, "We are proud of our accomplishments to-date, as we have continued to reduce our operating and net losses while we accelerate our revenue growth. We are proving the scalability of our platform and business model with our improving financial condition. We reached a major milestone by crossing over to positive shareholder equity for the first time on our company's history. Our business pipeline remains robust and we are confident in being able deliver against it to be able to further our revenue growth and build shareholder value."

Shareholder Conference Call
Date: Monday, February 14, 2021
Time: 4:30 PM ET
Link: Click Here to Register

Financial Results for the Six Months Ended December 31, 2021:

Revenue for the six months ended December 31, 2021 was $2.6 million, an increase of $0.6 million or 31%, as compared to $2.0 million for the six months ended December 31, 2020. Revenues increased during the six months ended December 31, 2021 due to the increase in the customer base for interactive panels and related products as well as additional revenues from OEM customers.

Gross profit for the six months ended December 31, 2021 was $0.7 million, an increase of $0.1 million or 7%, as compared to $0.7 million for the six months ended December 31, 2020. The resulting gross margin was 28% for the six months ended December 31, 2021, compared to 34% for the six months ended December 31, 2020. Cost of sales increased from the six months ended December 31, 2021 due to increased cost incurred to support revenues related to new products and new relationships as well as an increase in freight cost. Gross profit for the six months ended December 31, 2021 included a write down of older inventory.

General and administrative expenses for the six months ended December 31, 2021 were $2.6 million, a decrease of $2.8 million or 52%, compared to $5.4 million for the six months ended December 31, 2020.

Operating loss for the six months ended December 31, 2021 was $1.9 million, a decrease of $2.8 million, or 60%, compared to $4.8 million for the six months ended December 31, 2020.

Other expenses for the six months ended December 31, 2021 were $0.9 million, a decrease of $15.2 million, compared to $16.1 million for the six months ended December 31, 2020. For the six months ended December 31, 2021, this was mainly comprised of $1.8 million positive change in fair value of derivative liability and $2.1 million interest expense. Interest expense was due to sales of our common stock to investors under the Equity Purchase Agreement and attributed to the increase in our net loss. These were all non-cash expenses and recorded in income in accordance with Generally Accepted Accounting Principles.

Net loss for the six months ended December 31, 2021 was $2.8 million, a decrease of $18.1 million, or 86%, compared to $20.9 million for the six months ended December 31, 2020. The resulting loss per share for the six months ended December 31, 2021 was ($0.0009) loss per diluted share, compared to ($0.0106) loss per diluted share for the six months ended December 31, 2020.

Non-cash contributing factors for the net loss incurred for the six months ended December 30, 2021 is as follows:

a). $13,200 and $2,776,000 represent consulting fees paid through the issuance of stock for the three months ended December 31, 2021 and 2020, respectively. $32,750 and $2,776,200 represent consulting fees paid through the issuance of stock for the six months ended December 31, 2021 and 2020, respectively.

b). Interest expenses related to the Equity Purchase Agreement of $1,890,600 and $995,000 for the three months ended December 31, 2021 and 2020, respectively. Interest expense related to the Equity Purchase Agreement of $2,143,500 and $5,001,900 for the six months ended December 31, 2021 and 2020, respectively.

c). Depreciation and amortization expenses related to intangibles and capitalized development costs of $89,461 and $90,369 for the three months ended December 31, 2021 and 2020, respectively. Depreciation and amortization expenses related to intangibles and capitalized development costs of $233,377 and $170,881 for the six months ended December 31, 2021 and 2020, respectively.

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
p888-859-1274

SOURCE: Galaxy Next Generation, Inc.