($ in thousands except per share amounts)

Costar Technologies Inc (the Company) (OTC Markets Group: CSTI) announced today its financial results for the third quarter ended September 30 2022

Financial Results for the Quarter Ended September 30 2022

• Revenues of $16365 a 294% increase compared to the third quarter of 2021
• Operating expenses were up 33% to $4290 compared to $4152 in the third quarter of 2021
• GAAP net income of $665 or $040 per diluted share compared to GAAP net income of $364 or $022 per diluted share in the third quarter of 2021
• Adjusted earnings of $1002 or $060 per diluted share compared to $641 or $039 per diluted share for the quarter ended September 30 2021 Adjusted earnings a non-GAAP measure is defined below
• Adjusted EBITDA of $1363 compared to $74 for the quarter ended September 30 2021 Adjusted EBITDA a non-GAAP measure is defined below

Scott Switzer the Company's Chief Executive Officer stated Our team has done a tremendous job over the last quarter navigating supply chain issues and improving production capacity The decreased lead times enabled us to not only satisfy our customers but exceed their expectations During the quarter we attended one of our largest tradeshows where we gained valuable insights from our customers on what we are doing right and how we can better serve them in the future As we close out the year we will continue to focus on enhancing our customer experience and capitalizing on new opportunities with our existing customer base

Sarah Ryder the Company's Chief Financial Officer went on to say With supply chain and logistics challenges beginning to ease we delivered our strongest revenue quarter in over two years We enter the fourth quarter with a $63 million backlog and a continued focus on cost management and more efficiently utilizing our resources to decrease overall debt and deliver increased value to our shareholders 

The Company's independent auditors completed their analysis of the Company's financial condition The Independent Accountant's Review Report including financial statements and applicable footnote disclosures is available on our website at wwwcostartechnologiescom

Non-GAAP Financial Measures

The Company defines adjusted earnings a non-GAAP measure as net income (loss) excluding stock-based compensation amortization of acquisition-related intangible assets PPP loan forgiveness and accrual of Employee Retention Credit The Company defines adjusted EBITDA a non-GAAP measure as earnings before interest taxes depreciation amortization stock-based compensation PPP loan forgiveness and accrual of Employee Retention Credit The following tables reconcile the non-GAAP financial measures disclosed in this release to GAAP income (loss):

These reconciliations of GAAP to non-GAAP measures should be considered together with the Company's financial statements These non-GAAP measures are not meant as a substitute for GAAP but are included solely for informational and comparative purposes The Company's management believes that this information can assist investors in evaluating the Company's operational trends financial performance and cash generating capacity Management believes these non-GAAP measures allow investors to evaluate the Company's financial performance using some of the same measures as management However the non-GAAP financial measures should not be regarded as a replacement for (or superior to) corresponding similarly captioned GAAP measures

About Costar Technologies Inc

Costar Technologies Inc develops designs manufactures and distributes a range of security solution products including surveillance cameras lenses digital video recorders and high-speed domes The Company also develops designs and distributes industrial vision products to observe repetitive production and assembly lines thereby increasing efficiency by detecting faults in the production process Headquartered in Coppell Texas the Company's shares currently trade on the OTC Markets Group under the ticker symbol CSTI Costar was ranked as the 40^th largest company in a&s magazine's Security 50 for 2022 Security 50 is an annual ranking by the magazine of the world's largest security manufacturers in the areas of video surveillance access control and intruder alarms based on sales revenue

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements including statements regarding the Company's ability to grow revenue and earnings that are subject to substantial risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements including but not limited to risks related to the ability to diversify business across vertical markets secure new customer wins and launch new products You can often identify forward-looking statements by words such as believe may estimate continue anticipate intend plan expect predict potential or the negative of these terms or other comparable terminology These forward-looking statements are based on management's current expectations but they involve risks and uncertainties Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of the risks and uncertainties

You should not place undue reliance on any forward-looking statements The Company assumes no obligation to update forward-looking statements to reflect actual results changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable laws