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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
☒
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FORM 10-K
For the Fiscal Year Ended December 31, 2022
OR
☐
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-37564
BOXLIGHT CORPORATION
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of
incorporation or organization)
8211
(Primary Standard Industrial
Classification Code Number)
46-4116523
(I.R.S. Employer
Identification Number)
2750 Premiere Pkwy #900
Duluth, Georgia 30097
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (678) 367-0809
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Ticker Symbol(s)
Name of each exchange on which registered
Common Stock, $0.0001 par value
BOXL
The Nasdaq Stock Market LLC
Securities registered pursuant to section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☐
☒
Accelerated filer
Smaller reporting company
Emerging growth company
☐
☒
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the
average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter was $43,784,486.
Indicate by check mark if the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The number of shares outstanding of the registrant’s common stock on March 13, 2023 was 74,774,556.
Certain portions of the registrant’s Definitive Proxy Statement for the 2023 Annual Meeting of the Stockholders, which will be filed within 120 days of December 31,
2022.
DOCUMENTS INCORPORATED BY REFERENCE
Table of Contents
BOXLIGHT CORPORATION
TABLE OF CONTENTS
PART I
Business
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4.
Properties
Legal Proceedings
Mine Safety Disclosures
Item 5.
PART II
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 6.
Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Financial Statements and Supplementary Data
Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11.
Item 12.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14.
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Principal Accountant Fees and Services
Item 15.
Item 16.
Exhibits, Financial Statement Schedules
Form 10–K Summary
PART IV
SIGNATURES
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FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K (including the section regarding Management’s Discussion and Analysis and
Results of Operations) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
These statements are based on our management’s belief and assumptions and on information currently available to our
management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these
statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Forward-looking statements include statements concerning the following:
● our possible or assumed future results of operations;
● our business strategies;
● our ability to attract and retain customers;
● our ability to sell additional products and services to customers;
● our cash needs and financing plans;
● our competitive position;
● our industry environment;
● our potential growth opportunities;
● expected technological advances by us or by third parties and our ability to leverage them;
● our inability to predict, adapt to, or anticipate the duration or long-term economic and business consequences of the
ongoing conflict between Ukraine and Russia or the COVID-19 pandemic;
● our ability to protect the Company against cybersecurity risks and threats;
● our ability to maintain the listing of our securities on a national securities exchange;
● the effects of future regulation; and
● our ability to protect or monetize our intellectual property.
In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,”
“intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or
other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking
statements, because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond
our control and which could materially affect results. Factors that may cause actual results to differ materially from current
expectations include, among other things, those listed in the reports we file with the SEC. Actual events or results may vary
significantly from those implied or projected by the forward-looking statements due to these risk factors. No forward-looking
statement is a guarantee of future performance. You should read this Annual Report on Form 10-K, the documents that we
reference in this Annual Report on Form 10-K and the documentation we have filed as exhibits thereto with the Securities and
Exchange Commission, or the SEC, with the understanding that our actual future results and circumstances may be materially
different from what we expect.
Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the
statements are made, and we undertake no obligation to update forward-looking statements if these beliefs, estimates and
opinions or other circumstances should change, except as may be required by applicable law. Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity,
performance or achievements.
Unless the context otherwise requires, the terms “the Company,” “we,” “us,” and “our” in this report refer to Boxlight
Corporation and its consolidated direct and indirect subsidiaries, and the term “Boxlight” refers to Boxlight Inc., a Washington
corporation and a wholly owned subsidiary of Boxlight Corporation. The terms “year” and “fiscal year” refers to our fiscal year
ending December 31st.
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ITEM 1. BUSINESS
PART I
We are a technology company that develops, sells and services interactive solutions predominantly for the global
education market, but also for the corporate and government sectors. We are seeking to become a worldwide leading innovator
and integrator of interactive products and software solutions and improve collaboration and effective communication in meeting
environments. We currently design, produce and distribute interactive technologies including our interactive and non-interactive
flat panel displays, LED video walls, media players, classroom audio and campus communication, cameras and other
peripherals for the education market and non-interactive solutions including flat panels, LED video walls and digital signage.
We also distribute science, technology, engineering and math (or “STEM”) products, including our 3D printing and robotics
solutions, and our portable science lab. All products are integrated into our classroom software suite that provides tools for
whole class learning, assessment and collaboration. In addition, we offer professional training services related to our technology
to our U.S. educational customers. To date, we have generated the majority of our revenue in the U.S. and internationally from
the sale of interactive displays and related software to the educational market. We have sold our solutions into more than 70
countries and into more than 1.5 million classrooms and meeting spaces. We sell our products and software through more than
1,000 global reseller partners. We believe we offer the most comprehensive and integrated line of interactive display solutions,
audio products, peripherals and accessories, software and professional development for schools and enterprises on the market
today. The majority of our products are backed by nearly 30 years of research and development.
Advances in technology and new options for the introduction of technology into the classroom have forced school
districts to look for solutions that allow teachers and students to bring their own devices into the classroom, provide school
districts with information technology departments with the means to access data with or without internet access, handle higher
demand for video, as well as control cloud and data storage challenges. Our design teams are able to quickly customize systems
and configurations to serve the needs of clients so that existing hardware and software platforms can communicate with one
another. Our goal is to become a single source solution to satisfy the needs of educators around the globe and provide a holistic
approach to the modern classroom.
We pride ourselves in providing industry-leading service and support and have received numerous product awards:
● In 2022, Boxlight received Awards from various industry publications including Overall EdTech Company of the Year
in the EdTech Breakthrough Awards, Tech and Learning Best of Show for ISTELive 22, multiple awards from Tech &
Learning’s Back to School Awards of Excellence, 4 awards for new products from THE Journal, multiple awards from
Tech and Learning for Mimio, Clevertouch and FrontRow solutions and the Campus Technology New Product of the
Year award for CleverLive digital signage.
● In 2021, Boxlight received Tech & Learning’s 2021 Awards of Excellence ‐ Best Tools for Back to School, in both
Primary and Secondary levels for: MimioConnect® blended learning platform, MimioSTEM solutions, Boxlight‐EOS
Professional Development Learning Solutions, and our ProColor interactive flat panel. Clevertouch was awarded for
Best Business Growth and Corporate Social Responsibility by InAVation Awards and 4 AV Awards for Product,
Manufacturer, Distributor, and Channel Team of the Year.
● In 2020, UX Pro won Collaboration Innovation of the Year from AV News Awards, Best in Show for InfoComm
Awards, AvTechnology Europe, and “Best of Show” at ISE. IMPACT Plus won Innovation Design, high-quality,
functionality, ergonomics and ecology from Plus X Awards in Germany, Collaboration Innovation from AV News
Awards, Best in Show at InfoComm from Tech & Learning magazine, Best at Show at InfoComm from Installation
magazine and best at ISE Show from Installation.
● In 2019, Clevertouch won Interactive Display of the Year at AV Magazine’s AV Awards, Keiba Awards, Best of Show
from Installation and best of Show for IMPACT Plus at Best of Show Tech&Learning awards, as well as the Pro
Series Technology for Conferencing and Collaboration at the Innovation Awards, and the AV Display Innovation of
the Year at the AV News Awards.
Over the past three years, the COVID-19 pandemic has had a significant impact on economies worldwide, resulting in
workforce and travel restrictions, and supply chain and production disruptions across many sectors. While factors have had a
significant impact on our supply chain, the financial performance of our business has actually improved substantially since the
last quarter of 2020 and we anticipate that trend will continue throughout 2023 as demand for our products and solutions in the
education, government and
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corporate sectors increase. Indeed, we believe that the COVID-19 pandemic has accelerated the move toward unified
communications, thus creating greater demand for our products and solutions.
For more detail, please refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations for discussion of specific impacts on seasonality and liquidity and capital resources.
Our Company
Boxlight Corporation was incorporated in Nevada on September 18, 2014 for the purpose of acquiring technology
companies that sell interactive products into the education market. As of the date of this Annual Report, we have six
subsidiaries, consisting of Boxlight Inc., a Washington State corporation, Boxlight Australia, PTY LTD, an Australian
Company, Sahara Holdings Limited, an England and Wales corporation, Boxlight Latinoamerica, S.A. DE C.V. (“BLS”) and
Boxlight Latinoamerica Servicios, S.A. DE C.V., (“BLA”), both incorporated in Mexico, and EOSEDU, LLC, an Arizona
limited liability company (“EOS”). BLS and BLA are currently inactive. Our Sahara Holding Limited subsidiary has eight
directly and indirectly owned subsidiaries located in the United States, the United Kingdom, the Netherlands, Belgium, Sweden,
Finland and Germany, and our subsidiary Boxlight Inc., in turn, has four directly and indirectly owned subsidiaries located in
the United States, Northern Ireland, Canada and Denmark. See the Boxlight Corporation organization chart on page 8 below.
On December 31, 2021, we acquired FrontRow Calypso LLC, a California company and a leader in classroom and
campus communication solutions for the education market.
On March 23, 2021, we acquired Interactive Concepts BV, a company incorporated and registered in Belgium and a
distributor of interactive technologies (Interactive) and subsequently renamed to Sahara Presentation Systems (Interactive)
Europe BV. The company has been Boxlight’s key distributor in Belgium and Luxembourg.
On September 24, 2020, the Company acquired Sahara Holdings Ltd., a leader in distributed AV products and a
manufacturer of multi-award-winning touchscreens and digital signage products, including the globally renowned Clevertouch
brand. Headquartered in the United Kingdom, Sahara and its subsidiaries have a strong presence in the EMEA interactive flat
panel display (IFPD) market selling into education, health, government, military and corporate sectors.
On April 17, 2020, we acquired MyStemKits Inc. (“MyStemKits”). MyStemKits is in the business of developing,
selling and distributing 3D printable science, technology, engineering and math curriculums incorporating 3D printed project
kits for education, and owns the right to manufacture, market and distribute Robo 3D branded 3D printers and associated
hardware for the global education market.
On March 12, 2019, we acquired Modern Robotics Inc. (“MRI”), based in Miami, Florida. MRI is engaged in the
business of developing, selling and distributing science, technology, engineering and math (STEM), robotics and programming
solutions to the global education market.
On August 31, 2018, we purchased EOS, an Arizona limited liability company owned by Daniel and Aleksandra Leis.
EOS is in the business of providing technology consulting, training, and professional development services to create sustainable
programs that integrate technology with curriculum in K-12 schools and districts.
On June 22, 2018, we acquired Qwizdom, Inc. and its subsidiary Qwizdom UK Limited (together, the “Qwizdom
Companies”). The Qwizdom Companies develop software and hardware solutions that are quick to implement and designed to
increase participation, provide immediate data feedback, and, most importantly, accelerate and improve comprehension and
learning. The Qwizdom Companies have offices outside Seattle, WA and Belfast, Northern Ireland and deliver products in more
than 40 languages to customers around the world through a network of partners.
On May 9, 2018, we acquired Cohuborate, Ltd., a United Kingdom corporation based in Lancashire, England.
Cohuborate produces, sells and distributes interactive display panels designed to provide new learning and working experiences
through high-quality technologies and solutions through in-room and room-to-room multi-device multi-user collaboration.
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On December 20, 2018, Cohuborate Ltd. transferred all of its assets and liabilities to Qwizdom UK Limited and
changed its name to Qwizdom UK Limited. On December 20, 2018, Qwizdom UK Limited changed its name to Boxlight
Group Ltd. On January 24, 2019, we merged Qwizdom, Inc. with and into Boxlight, Inc.
The businesses previously conducted by Cohuborate Ltd. and Qwizdom UK Limited are now operated by the Boxlight
Group Ltd., a wholly owned subsidiary of Boxlight, Inc.
On May 9, 2016, we acquired Genesis. Genesis Collaboration LLC, a Georgia limited liability company (“Genesis”), is
a value-added reseller of interactive learning technologies, selling into the K-12 education market in Georgia, Alabama, South
Carolina, northern Florida, western North Carolina and eastern Tennessee. Genesis also sells our interactive solutions into the
business and government markets in the United States. Effective August 1, 2016, Genesis was merged into our Boxlight Inc.
subsidiary.
On April 1, 2016, we acquired Mimio LLC, a Delaware limited liability company (“Mimio”). Mimio designs, produces
and distributes a broad range of Interactive Classroom Technology products primarily targeted at the global K-12 education
market. Mimio’s core products include interactive projectors, interactive flat panel displays, interactive touch projectors,
touchboards and MimioTeach, which can turn any whiteboard interactive within 30 seconds. Mimio’s product line also includes
an accessory document camera, teacher pad for remote control and an assessment system. Manufacturing is by ODMs and
OEMs in Taiwan and China. Mimio products have been deployed in over 600,000 classrooms in dozens of countries. Mimio’s
software is provided in over 30 languages. Effective October 1, 2016, Mimio was merged into our Boxlight Inc. subsidiary.
For a description of the terms of our recent acquisitions see “Management’s Discussion and Analysis of Financial
Condition and Results of Operations – Recent Acquisitions” elsewhere in this Annual Report.
The organizational structure of our companies is as follows:
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Our Markets
The global interactive technology education industry is undergoing a significant transition, as primary and secondary
school districts, colleges and universities, as well as governments, corporations and individuals around the world are
increasingly recognizing the importance of using technology to more effectively educate, communicate and collaborate. Across
the globe, state governments along with local communities continue to make sustained investments in education.
The K-12 education sector represents one of the largest industry segments. The US sector is comprised of
approximately 15,600 public school districts across the 50 states and 132,000 public and private elementary and secondary
schools. In addition to its size, the U.S. and certain EMEA K-12 education markets are highly decentralized and are
characterized by complex content adoption processes. We believe this market structure underscores the importance of scale and
industry relationships and the need for broad, diverse coverage across states, districts and schools. Even while we believe certain
initiatives in the education sector, such as the Common Core State Standards, a set of shared math and literacy standards
benchmarked to international standards, have increased standardization in K-12 education content, we believe significant state
standard specific customization still exists, and we believe the need to address customization provides an ongoing need for
companies in the sector to maintain relationships with individual state and district policymakers and expertise in state-varying
academic standards.
According to FutureSource Consulting Ltd., the U.S. display market is expected to reach $37 billion in 2022 and
increase to $49 billion in 2026 while the global display market is forecast to approximate $10.5 trillion in 2022 while holding
constant at approximately $9.8 trillion for 2023 through 2026. While the education sector has historically represented the
majority of displays sold, growth in the corporate sector continue to outpace the education sector with sales to the corporate
sector expected to reach approximately 47% of the global display market in 2026. The growth in both the education and
corporate sectors provides the Company with significant growth opportunities. In addition, the display market is highly
fragmented allowing the Company to position itself for increased market share in each of these sectors.
According to “All Global Market Education & Learning,” an industry publication, the market for hardware products is
growing due to increases in the use of interactive whiteboards and simulation-based learning hardware. Educational institutions
have become more receptive to the implementation of high-tech learning tools. The advent of technology in the classroom has
enabled multi-modal training and varying curricula. In general, technology-based tools help develop student performance when
integrated with the curriculum. The constant progression of technology in education has helped educators create classroom
experiences that are interactive, developed and collaborative.
Our Opportunity
We believe that our Connected Classroom™ solution uniquely positions Boxlight to be the leading provider of EdTech
products within our categories in the global education technology market. Our holistic solution of hardware, software, content
and professional development improves learning progression by increasing student engagement and timely interventions.
Coupled with our innovations, we have a strong brand, operations and supply-chain; our channel into the US and EMEA
remains strong and the global market is growing year-on-year; with our global 24/7 technical and customer services team which
retains a high satisfaction rating.
Globally it is widely acknowledged that long-term economic growth is closely correlated to investment in education
and educational technology, thus sustaining long-term growth in the market, even during periods of economic downturn. Further
details of our solution and favorable macro-economic analysis are set forth below:
Growth in U.S. K-12 Market Expenditures
Significant resources are being devoted to primary and secondary education, both in the United States and abroad. As
set forth in the Executive Office of the President, Council of Economic Advisers report, U.S. education expenditure has been
estimated at approximately $1.3 trillion (~6% of U.S. GDP), with K-12 education accounting for close to half ($625 billion) of
this spending. Global spending is roughly triple U.S. spending for K-12 education.
The market for K-12 services and technology has historically grown above the pace of inflation, averaging 7.2%
growth annually since 1969. Deviations around this mean occur during periods of economic growth and recession causing peaks
and troughs in the K-12 market, albeit below other sectors.
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HolonIQ reported in the Global EdTech Venture Capital Report that there has been some $32 billion in venture capital
investment in the education/technology sector in the last decade (approximately 33% within the US) and predicts nearly triple
that investment through to 2030. Further, the Report estimates that the global “expenditure on education and training from
governments, parents, individuals and corporates continues to grow to historic levels and is expected to reach USD $10 trillion
by 2030.”
Increasing Focus on Accountability and the Quality of Student Education
U.S. K-12 education has come under significant political scrutiny in recent years, with findings that American students
rank far behind other global leaders in international tests of literacy, math and science, with the resulting conclusion that the
current state of U.S. education severely impairs the United States’ economic, military and diplomatic security as well as broader
components of America’s global leadership. We believe this scrutiny will cause there to be increased investment into the
education sector.
Trends in Tech-Savvy Education
While industries from manufacturing to health care have adopted technology to improve their results, according to
Stanford Business School in its Trends in Tech-Savvy Education, the education field remains heavily reliant on “chalk and talk”
instruction conducted in traditional settings; however, that is changing as schools and colleges adopt virtual classrooms, data
analysis, online games, highly customized coursework, and other cutting-edge tools to help students learn.
New Technologies
The delivery of digital education content is also driving a substantial shift in the education market. In addition to
interactive flat panels, other technologies are being adapted for educational uses on the Internet, mobile devices and through
cloud-computing, which permits the sharing of digital files and programs among multiple computers or other devices at the
same time through a virtual network. We intend to be a leader in the development and implementation of these additional
technologies to create effective digital learning environments.
Growth in the E-learning Market
According to the “E-learning Market – Global Outlook and Forecast 2020-2025,” the e-learning market is expected to
display significant growth opportunities in the next five years. While the growth curve is uniform in terms of the number of
users, the same is not the case by revenues; the average cost of content creation and delivery with the same is undergoing a
consistent decline. However, the advent of cloud infrastructure, peer-to-peer problem solving, open content creation, and rapid
expansion of the target audience has enabled e-learning providers to rein in economies of choice and offer course content at a
competitive price. While the growth prospects of the e-learning market remain stable, the rise of efficient sub-segments is
changing the learning and training landscape gradually.
Vendors are also focusing on offering choices on the course content at competitive prices to gain the share in the global
e-learning market. The exponential growth in the number of smartphone users and internet connectivity across emerging
markets is driving the e-learning market in these regions. The introduction of cloud-based learning and Augmented/Virtual
reality mobile-based learning is likely to revolutionize the e-learning market during the forecast period.
Major vendors are introducing technology-enabled tools that can facilitate user engagement, motivate learners, and
help in collaborations, thereby increasing the market share and attracting new consumers to the market. The growing popularity
of blended learning that enhances the efficiency of learners will drive the growth of the e-learning market. The e-learning
market is expected to generate revenue of $65.41 billion by 2023, growing at a compounded annual growth rate of 7.07% during
the forecast period.
Our Portfolio
We currently offer products within the following categories:
● Front-of-Class Display (Mimio and Clevertouch brands)
● FrontRow Classroom Audio and IP-based school-wide communication systems for bells, paging, intercom, and
alerting
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● STEM
● Educational Software & Content (Mimio Connect, LYNK Whiteboard, OKTOPUS, MimioStudio)
● Peripherals and Accessories
● Professional Development
The Boxlight portfolio of solutions is designed to create dynamic teaching, learning, and presentation experiences.
When integrated, our innovative solutions provide opportunity for a holistic approach to in-person or virtual learning
experiences, meetings and professional learning, campus wide communication, or any situation where presentation, interaction,
or engagement occurs.
Front-of-Class Display Category
Boxlight offers a choice of Interactive Flat Panel Displays (IFPD), Interactive Whiteboards (IWB), and Non-Interactive
Flat Panel Displays. Each comes with licensed copies of our software, access to prepared content and Professional Development
modules. There are upsell opportunities for our software and Professional Development modules.
Clevertouch, IMPACT Plus
The IMPACT Plus interactive LED flat panels delivers a truly intuitive experience and is available in four sizes 55”,
65”, 75” and 86”. With 4K resolution, 20 points of touch and built collaboration screen sharing with touchback capabilities,
IMPACT Plus is built with teacher requirements for a new generation of front of class displays. Running Android 8 with an
optional slot in PC, Clevertouch is designed to run and fit into any technology set up. Standard features include built in line
array microphones for distance learning, proximity sensors that boot up the screen or shuts down the screen when the room is
not in use, built in app store with hundreds of educational apps, enhanced USB-C connectivity and device charging, cloud
accounts to log into personal settings and cloud drives; built in digital signage, to display messaging a cloud-based LYNX
Whiteboard for lesson planning and deployment and Snowflake software. Every screen runs Over-the-Air (OTA) updates and
comes with Mobile Device Management to run diagnostics on each screen.
Clevertouch, IMPACT
The Clevertouch IMPACT is the perfect all-around solution for the modern classroom. Featuring high precision
technology, LYNX Whiteboard, Cleverstore, and Snowflake – IMPACT helps save time lesson planning with lots of resources.
Available in three sizes 65”, 75” and 86”, each panel is 4K with 20 points of touch, comes with an optional slot in PC and runs
on Android 8. All IMACT screens, have Cleverstore which has hundreds of educational apps to keep young minds learning.
Also included is the cloud-based LYNX Whiteboard for lesson planning and deployment and Snowflake software as standard.
Every screen runs OTA updates and comes with Mobile Device Management to run diagnostics on each screen.
Clevertouch UX Pro
UX Pro interactive LED flat panels are designed for the modern meeting space and is available in four sizes - 55”, 65”,
75” and 86”. With 4K resolution, 20 points of touch and built-in collaboration screen sharing with touchback capabilities, the
UX Pro is built around meeting requirements with Stage software to enable remote meetings in which participants can annotate
on documents, while the launcher will give instant access to favorite unified communication apps at the touch of a button.
Running Android 8 with an optional slot in PC, the UX Pro is designed to run and fit into any technology set up. Key features
include built-in line array microphone for meetings; proximity sensors that boot up the screen or shuts down the screen when the
room is not in use; enhanced USB-C connectivity and device charging; cloud accounts to log into personal settings and cloud
drives; built-in digital signage to display messages; every screen runs OTA updates and comes with Mobile Device Management
to run diagnostics on each screen; and Clevershare to enable instant screen sharing through the app or dongle to engage and
enhance collaboration.
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Clevershare
Clevershare allows users to share content with any device from either the dongle and the USB C connection or the
Clevershare app. Up to 50 devices can connect with the Clevertouch screen and share content – images, video, and audio with
touch-back for two-way control. The presenter has full control over what is shared and can show up to four device screens
simultaneously, increasing collaboration and participation within every session.
CleverLive Digital Signage
CleverLive is a unique cloud-based cloud management platform (or CMP) for managing all Clevertouch device
endpoints, designed to customize the user interface based on device functionality, CleverLive combines simplicity of use with
feature rich functionality. The platform comes as standard with 200+ editable templates enabling a mix of multimedia content.
Features include built-in presentation creation tools for designing bespoke layouts, wayfinding screens and touch interfaces,
scheduling, grouping, instant emergency messaging, and QR code creation and display for an audience interactive experience.
Rounding off the unique features is the built-in Cleverstore from which users can download apps for their touch screens.
Clevertouch CM Series
The CM Series non-touch large format professional display for meeting presentations and digital signage is available in
six sizes - 43′′, 49′′, 55′′, 65′′, 75′′, 86′′. This 4K UHD, non-touch meeting room collaboration screen has wireless display
connectivity and RS232 control for professional meeting room integration with control systems. The built-in Android system
includes the CleverLive app for managing digital signage content of full screen capacity or can be packaged with a Clevertouch
Media Player to enhance digital signage playout multimedia functionality. With 16/7 display, the CM Series has a built-in
scheduler to manage on/off timing of messages, including instant messaging when needed. The CleverLive digital signage
feature sets this display apart from screens in the marketplace.
Clevertouch Live Rooms
Live Rooms is a room booking solution that simplifies the meeting room booking process. Live Rooms features a 10”
tablet that is manufactured with integrated room booking and digital signage software to deliver a powerful product to a busy
marketplace. The tablet features red and green LED side lighting for instant availability recognition and is capable of at-the-
source and calendar (O365 and ME) room booking with instant updates, to prevent booking overlaps. With analytics that
identify users, rooms booked, frequencies and more, Live Rooms offers a smart room booking solution that, when not in use,
can also serve as digital signage and provide send instant messages for emergency alerts.
Clevertouch PRO V4
As the enterprise-level media player, the PRO V4 allows organizations to engage with their audience 24/7 or deploy
dedicated messages via power scheduling for startup/shutdown and auto reboots. A slimline design, power boosting WIFI
connectivity, and both HDMI and DisplayPort Outputs enables connection to multiple screens, the PRO V4 can be connected to
a kiosk or UX Pro for touch interaction or a non-touch screen for feature-rich digital signage. The PRO V4 can connect to
Clevertouch physical button technology for managing emergency and instant messaging away from the CMP. With multimedia-
zoned presentation playout, the PRO V4 can livestream web pages and URL KPIs, text, images, videos, posters, RSS Feeds,
social media content, audio, and more.
Clevertouch PICO MK5
PICO MK 5 is a mid-range media player with 24/7 playout capability, WIFI connectivity, and is designed for
multimedia-zoned presentations with text, images, videos, posters, RSS Feeds, social media content, and audio.
CleverWall
CleverWall is an all-in-one intelligent display solution, for enriched interaction in large spaces, lecture halls, meeting
rooms, and more. This videowall solution is available in nine sizes – 120", 138”, 150”, 165”, 180”, 199”, 220”, 249”, and 299”,
the latter three being ultra-wide options or larger spaces like lecture halls. The large displays with in-built audio system and 178-
degree viewing angle
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create an immersive user experience that is unmatched. Its plug-and-play design – one button on/off and smart remote control –
make this LED solution user-friendly. Standard features include built-in Android technology, realtime wireless screen-sharing
from up to four devices simultaneously, synchronized annotating from multiple devices, and syncing with CleverLive accounts
for messaging (instant and scheduled) to all displays for campus or location-wide communication.
MimioPro 4
MimioPro Series 4 adds power to any learning ecosystem – a true Connected Classroom. The MimioPro 4 is a
touchscreen UHD HDR display with 20 points of touch, digital passive pen and eraser, and comes in three sizes – 65”, 75” and
86”. Its natural user interface and rich features support teachers to effectively and efficiently realize learning objectives. For
example, in Windows Ink compliant applications such as Office 365, the passive digital pen draws, the eraser block erases
digital ink (while cleaning the glass), and touches provide gestures without having to use the software’s user interface. The
MimioPro 4 has a custom inbuilt Android 11 Launcher tailored for an interactive large screen and comes with:
LYNX whiteboarding app to create and capture outcomes, share content, collaborate, and distribute ad-hoc content via cloud
services through a dynamic QR code; CleverShare mirroring app used on all models of Boxlight Interactive Flat Panel Displays
that allows teachers to orchestrate up to six simultaneous displays across Windows, Chrome OS, Android and iOS, and casting
of the MimioPro 4 to all the devices in a classroom; NDMS (Network Device Management Systems), a cloud-based device
management system to remotely manage displays, troubleshoot, message, and schedule; and CleverStore – app store which
houses curated Android applications that are safe for teachers to install onto the display.
Mimio DS Series Non-Interactive Display
The Mimio DS Series displays are high-definition displays that feature enhanced color calibration, precise picture
quality adjustment, flicker-free and anti-glare viewing and are available in six sizes – 43", 55”, 65”, 75”, 86”, and 98”. The
Mimio DS series runs on Android 11 with seamless OTA upgrading, includes a quad-core CPU, 4 GB of RAM, and an invisible
IR receiver. Connectivity is made easy with multi-functional USB Type-C ports that enable 4K audio and video transmission,
network connections, charging external devices, and provide access to external microphone and camera. The displays can be
orientated vertically or horizontally and tilt up to 15-degree for easy viewing from high places. Multiple displays can daisy
chain via HDMI ports, up to 3 by 3, and create a larger, unified display through screen splicing. The displays come with the
CleverLive management and digital signage platform for enhanced control of content on all displays.
MimioWall
MimioWall LED all-in-one display solution isdesigned to enrich any space, including classrooms, entryways, hallways,
shared spaces, and more. Available in nine different sizes (120” - 299”) including three ultra-wide screen options, the 4K UHD
Android digital display and built-in speakers provide users an exceptional and immersive experience. Key features include
integrated design with no external devices; 3-in-1 board that integrates power supply, a receiving card, and hub board; smart
remote-control access to settings; plug-and-play system with one button on/off; and unified hardware. MimioWall enables users
to screen-share wirelessly to/from up to four devices (smartphones, tablets, laptops) simultaneously. Also comes with
CleverLive digital signage platform to deliver campus- and site-wide communication of information, announcements, and
emergency alerts.
MimioTeach Interactive Whiteboard
MimioTeach is one of our best known and longest-lived products. Hundreds of thousands of MimioTeach portable
digital interactive whiteboard systems and its predecessor models are used in classrooms around the world. MimioTeach can
turn any whiteboard (retrofit) into an interactive whiteboard in as little as 30 seconds. This portable product fits into a tote bag
with room for a small desktop projector, which is attractive to teachers who move from classroom to classroom. For schools
where “change is our normal,” MimioTeach eliminates the high cost of moving fixed-mount implementations.
MimioFrame Touch Kit
MimioFrame can turn a projection (dry erase) board into an Interactive Whiteboard in 10-15 minutes. Millions of
classrooms already have a conventional whiteboard and a non-interactive projector. MimioFrame uses infrared (IR) technology
embedded in the four sides of the frame to turn that non-interactive combination into a modern 10touch-interactive Digital
Classroom. No drilling or cutting is required, MimioFrame easily and quickly attaches with industrial-strength double-sided
tape.
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Classroom Audio and School-wide Communication Category
Juno
Juno® is the towering standard of sound quality that reinforces a teacher’s voice so that every student gets a FrontRow
seat. Juno sets up in minutes — and yet evenly fills the classroom with the kind of exciting, multi-layered stereo sound typical
of larger installed systems. Juno is superior to other products in the classroom audio category, offering premium features such as
feedback suppression, digital EQ, Bluetooth, and teacher voice priority. Juno is also uniquely expandable, with the ability to add
modules for additional microphones, speakers, analog page override, and Conductor compatibility for networked campus
communication.
EzRoom
EzRoom™ is an integrated AV solution designed for larger capital projects such as technology retrofits or new school
construction. A highly customizable solution, EzRoom offers wall and ceiling mountable enclosures with pre-installed options
customized for a school’s needs, simplifying the installation process for AV integrators (resellers). EzRoom is an “everything
but the display” solution, providing sound reinforcement, microphones, speakers, AV control devices, AV wall plates, and
networked cameras. The depth and breadth of the solution necessitates a service layer of pre-sale and post-sale support for the
channel, supplied by FrontRow architectural/engineering consultant liaisons, providing design support, and the FrontRow
Technical Services Group, offering system commissioning and customization. EzRoom can use FrontRow’s SmartIR
transmission technology or take advantage of FrontRow’s latest wireless voice technology – ELEVATE – that boasts the benefits
of digital RF (Radio Frequency) microphone systems, combined with flexible programmability and ease-of-use features found
nowhere else. The ELEVATE teacher microphone can be used as a wearable alert device, notifying administrators of urgent
situations in the classroom.
Lyrik
The Lyrik™ amplification solution is a small yet portable system for instruction and audio media to be heard
anywhere; from the classroom to the bus line, or even online. The tower has an integrated rechargeable battery and can be
connected to a computer or other auxiliary audio source either directly using cables or wirelessly using Bluetooth®. Weighing
less than 10 pounds, Lyrik is designed to be taken anywhere voice reinforcement is needed whether on campus or off.
Conductor
The Conductor™ School Communication System is an IP-based, campus-wide communication and control solution
that allows administrators to manage their day-to-day operations with Bells, Paging, Intercom, and Alerts. Built on a client-
server architecture that utilizes a school’s existing network, Conductor streams digital audio directly to FrontRow ezRoom and
Juno Connect equipped classrooms, and interfaces with legacy analog paging systems for common areas to provide
comprehensive audio coverage for announcements and alerts. The recently introduced Attention! feature integrates the
CleverLive digital signage service with Conductor to synchronize audio with visual alerts to Clevertouch and Mimio interactive
panels to maximize the impact of school-wide or zone-specified communications.
STEM Category
Through the acquisitions of Modern Robotics, Robo3D and MyStemKits, Boxlight has added to its portfolio a growing
category of STEM (science, technology, engineering, and math) products.
Mimio MyBot
The Mimio MyBot system bridges the gap between learning about robotics in the classroom and the application of
robotics in the real world. The intuitive and accessible system helps students develop core skills in programming, engineering,
and robotics. We provide a system to facilitate learning and ignite a passion in students with the freedom and flexibility to build,
code, and test new and unique models. Mimio MyBot allows students to explore and learn freely while removing common
obstacles such as requiring network infrastructure changes or expensive workstations.
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Robo3D
Robo E3, and the Robo E3 Pro are smart, safe, and simple 3D printers that come with access to over 300+ lessons of
3D printable STEM curriculum, replacement materials and accessories.
MyStemKits
MyStemKits offers hundreds of standards-driven lesson plans, activities, assessments, and Design Challenges for
grades K-12 math and science teachers. High-quality lessons plans are developed and studied by The Florida Center for
Research in Science. Technology, Engineering, and Mathematics (FCR-STEM), which is part of one of the nation’s oldest and
most productive university-based education research organizations.
MimioView document camera
Boxlight’s MimioView 350U is a 4K document camera that is integrated with MimioStudio to make the combination
easy to use with a single cable connection that carries power, video, and control. MimioView 350U is fully integrated into our
MimioStudio software solution and is controlled through MimioStudio’s applications menu. With two clicks, the teacher or user
can turn on, auto-focus, and illuminate the included LED lights for smooth high-definition images.
Educational Software Category
The Mimio suite of software and applications is a combination of titles from acquisitions of Mimio, Qwizdom, and
Sahara (Clevertouch) - leading brands in the IWB and Formative Assessment Software Categories, and since then capabilities
have been built upon that IP. The premise of our software is to provide the “glue” that integrates the hardware to provide a
Connected Classroom; help educators inform their decisions in the classroom, through more systematic data about their
students’ performance and behaviors; make learning more engaging, interactive, accessible, and innovative; and support
teachers in becoming more efficient in planning, preparation, reporting and analysis, and effective in instruction and assessment.
MimioStudio Interactive Instructional Software
MimioStudio Interactive Instructional Software enables the creation, editing, and presentation of interactive
instructional lessons and activities. These lessons and activities can be presented and managed from the front of the classroom
using any of Boxlight’s front-of-classroom display systems including MimioTeach, ProColor Interactive LED panels, MimioPro
4, and MimioFrame. MimioStudio can also be operated using a mobile device such as an iPad or tablet that fully replicates the
front-of-classroom display generated by MimioStudio. Operation with a mobile device is enabled via the three-user license for
MimioMobile, provided with the MimioStudio license that accompanies all front-of-classroom devices from Mimio.
MimioMobile Collaboration and Assessment Application
The introduction of MimioMobile, a software accessory for MimioStudio, in 2014 introduced a new era of fully
interactive student activities that are directly and immediately able to be displayed on the front-of-classroom interactive displays
through MimioStudio.
MimioMobile allows fully interactive activities to be pushed to student classroom devices. The students can manipulate
objects within the activities, annotate “on top” of them, and even create completely new content on their own handheld devices.
MimioMobile also enables assessment using mobile devices. The teacher can create multiple choice, true\false, yes\no, and text
entry assessment questions. The students can respond at their own pace and their answers are stored within MimioStudio from
which the teacher can display graphs showing student results. This “continuous assessment” provides formative assessment that
can help guide the teacher as to whether to re-teach the material if understanding is low or move forward in the lesson. We
believe that this interactive and student dependent instructional model can dramatically enhance student outcomes.
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OKTOPUS Instructional and Whiteboarding Software
Designed specifically for touch-enabled devices, OKTOPUS Interactive Instructional Software enables the creation,
editing, and presentation of interactive instructional lessons and activities. More than 70 interactive widgets, tools, and
classroom game modes make it simple and fun to run ad-hoc or pre-planned sessions. Similar to MimioStudio, these lessons and
activities can be presented and managed from the front of the classroom using any of Boxlight’s front-of-classroom display
systems.
Notes+ Collaboration and Assessment Application
Notes+ is a software accessory for use with OKTOPUS Software or a PPT plugin that allows students to view and
interact with the teacher presentation during a live class session. Students can answer questions, annotate, request help, and
share content with the main display from nearly any mobile device or laptop. Question types supported include multiple choice,
multiple mark, yes/no, true/false, sequencing, numeric and text response.
GameZones Multi-student Interactive Gaming Software
GameZones allows up to four students to work simultaneously on a touch screen or tablet to complete interactive
‘game style’ activities. The solution is extremely simple and easy to use and includes over 150 educational activities.
MimioConnect Student Engagement Platform
MimioConnect is an online student engagement platform that combines innovative lesson building and instructional
tools to create an active learning environment. Teachers can create interactive content and assessments from scratch, import
existing lessons and content, or draw from 10,000+ premade digital lessons in the lesson library. Built-in tools for collaboration,
instant polling, assessment, student monitoring and management, make classroom teaching and discussion more impactful.
Other modes extend usage outside of the classroom, allowing students to complete homework or review daily lessons at their
own pace. MimioConnect also integrates deeply with all the major LMS (Learning Management System). Users can sign in and
access assignments through their LMS, use existing rosters, and pass data back to the LMS. MimioConnect helps teachers and
students connect, collaborate, and learn more effectively from anywhere, making it a perfect solution for inside and outside the
classroom. A MimioConnect Classroom license (lifetime) and MimioConnect Pro license (1 year) accompanies all front-of-
classroom Boxlight displays.
LYNX
Designed for interactive displays, LYNX Whiteboard is a free-to-use lesson building app, enabling student
collaboration and allowing teachers to bring vibrancy to their lessons with a built-in media search. In addition, LYNX
Whiteboard provides searchable images, gifs and videos, allowing users to drag content into whiteboard presentations, all in a
safe search enabled environment. With teacher favorites, such as Rainbow Pen and Spotlight included, as well as interactive
learning tools, LYNX Whiteboard is packed with features to make lessons flow seamlessly.
Peripherals and Accessories
We offer a line of peripherals and accessories, mobile carts, installation accessories, and adjustable wall-mount
accessories that complement our entire line of interactive LED flat panels and audio solutions.
LessonCam Instructional Camera
The FrontRow LessonCam is a high-definition Pan, Tilt, Zoom (PTZ) instructional camera with 12x optical zoom,
enabling dynamic and engaging remote-only, hybrid, or asynchronous learning. LessonCam integrates with the FrontRow
ezRoom and Juno classroom audio systems with popular video conferencing solutions such as Microsoft Teams, Microsoft
Skype, Zoom, Google Meet, and Cisco Webex. LessonCam is a stand-out educational tool for teachers who want to engage with
students wherever they are learning.
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Clever Peripherals
Our ever growing suite of Clevertouch products includes a variety of Clever Peripherals such as OPS PC modules,
which is a windows i5 and i7 modular PC, and our sensor module which plugs into the Clevertouch screens and measures
temperature, humidity CO2 and air quality as well as an NFC.RFID sensor for logging into screens. In addition, we also offer
our Clever Connect device that allows users to mirror directly to the screen. These and other Clever Peripherals continue to
enhance the user experience of our Clevertouch displays.
Boxlight-EOS Professional Development
Mimio strives to provide the best tools to help teachers improve student outcomes. Through our subsidiary, EOS
Education, we can extend our commitment to schools and districts by providing a rich portfolio of classroom training,
professional development, and educator certification. EOS Education provides engaging and differentiated professional
development for teachers to ensure that every student benefits from the technology tools available in their classrooms and
schools. Programs can be customized, building comfort, confidence, and competence using the specific hardware and software
platforms available to each teacher.
EOS Education unique professional learning experiences are:
● Teacher-centric - We help teachers use the technology they have access to for their specific instructional purposes—we
go beyond just point and click.
● Hands-on - Teachers have an opportunity to practice new technical skills during sessions.
● Differentiated - Adjusted to current skills, knowledge, and teachers’ in-classroom practices.
● Job-embedded - Grounded in day-to-day teaching to be relevant, engaging, and practical to implement.
● Student context - Introducing technology tools to students and how to engage them with purpose.
Integration Strategy
We plan to centralize our business management for all acquisitions through an enterprise resource planning (ERP)
system which offers streamlined subsidiary integration utilizing a multi-currency platform. We have strengthened and refined
the process to drive front-line sales forecasting to factory production. Through the ERP system, we have synchronized five
separate accounting and customer relationship management systems through a cloud-based interface to improve inter-company
information sharing and allow management of the Company to have immediate access to snapshots of the performance of each
of our subsidiaries in a common currency. As we grow, organically or through acquisition, we plan to quickly integrate each
subsidiary or division into the Company to allow for clearer and earlier visibility of performance to enable for timely and
effective business decisions.
Logistics (Suppliers)
Logistics is currently provided in the US by our Lawrenceville, Georgia facility and internationally by the Sahara team
in London. Together these teams manage multiple third-party logistics partners throughout the world (3PL’s). These 3PL
partners allow Boxlight to provide affordable freight routes and shorter delivery times to our customers by providing on-hand
inventory in localized markets. Contract manufacturing for Boxlight products is through original design manufacturer (ODM)
and original equipment manufacturer (OEM) partners according to Boxlight’s specific engineering specifications and utilizing
IP developed and owned by Boxlight. Boxlight’s factories for ODM and OEM are located in the USA, Taiwan, China and
Germany.
Technical Support and Service
The Company currently has its core technical support and service centers located near Atlanta, GA, London, England,
and Belfast, Northern Ireland. Additionally, the Company’s technical support division is responsible for the repair and
management of customer service cases, resulting in more than 60% of the Company’s customer service calls ending in
immediate closure of the
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applicable service case. We accomplish this as a result of the familiarity between our products and having specialized customer
service technicians hired internally and with key partners in certain international markets.
Sales and Marketing
Our sales force consists of 53 account managers in EMEA including an EMEA sales director, 43 regional account
managers in the US including our Vice President Sales US, four sales heads based in Canada, one in Latin America and one in
Australia. Our marketing team consists of our Vice President of Marketing Communications, a marketing coordinator, an
education specialist, and a graphic designer. Our sales force and marketing teams primarily drive sales of all Boxlight products
(including our Mimio, Clevertouch, FrontRow and EOS brands) throughout North, Central and South America, Europe, the
Middle East and Asia. In addition, we go to market through an indirect channel distribution model and utilize traditional value-
added resellers and support them with training to become knowledgeable about the products we sell. We currently have
approximately 800 resellers.
We believe we offer the most comprehensive product portfolio in today’s education technology industry, along with
best-in-class service and technical support. Our award-winning, interactive classroom technology and easy to use line of
classroom hardware and software solutions provide schools and districts with the most complete line of progressive, integrated
classroom technologies available worldwide.
We are also developing our Corporate, Higher Education and Government solutions and have separate sales teams in
both the US and EMEA focused on these areas. Our expectation is that over time opportunity in these areas will expand to be as
large or potentially larger than our K-12 Education business.
Competition
The interactive education industry is highly competitive and characterized by frequent product introductions and rapid
technological advances that have substantially increased the capabilities and use of interactive flat panels and interactive
whiteboards. Interactive displays, since the time they were first introduced, have evolved from a high-cost technology that
involves multiple components requiring professional installers, to a one-piece technology that is available at increasingly
reduced-price points and affords simple installations. With lowered technology entry barriers, we face heated competition from
other interactive display developers, manufacturers and distributors. We compete with other developers, manufacturers and
distributors of interactive displays and personal computer technologies, tablets, television screens and smart phones, such as
Smart Technologies, Promethean, ViewSonic, Dell Computers, Samsung, Panasonic and ClearTouch.
Even with these competitors, the market presents new opportunities in responding to demands to replace outdated and
failing interactive displays with more affordable and simpler solution interactive displays. Our ability to integrate our
technologies and remain innovative and develop new technologies desired by our current and potential new contract
manufacturing customers will determine our ability to grow our contract manufacturing divisions. In addition, we have begun to
see expansion in the market to sales of complementary products that work in conjunction with the interactive technology,
including software, audio solutions, data capture and tablets.
Employees
As of December 31, 2022, we had the following distribution of employees:
Operations
Sales & Marketing
Administration
Total
44
98
45
187
None of our employees are represented by labor organizations. We consider our relationship with our employees to be
excellent. A majority of our employees have entered into non-disclosure and non-competition agreements with us or our
operating subsidiaries.
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Recent Financing
On December 31, 2021, the Company and substantially all of its direct and indirect subsidiaries, including Boxlight,
FrontRow, and Sahara as guarantors, entered into a maximum four-year $68.5 million term loan credit facility, dated December
31, 2021 (the “Credit Agreement”), with WhiteHawk Finance LLC, as lender (the “Lender”), and WhiteHawk Capital Partners,
LP, as collateral agent (“the Collateral Agent”). Under the terms of the Credit Agreement, the Company received an initial term
loan of $58.5 million on December 31, 2021 (the “Initial Loan”) and obtained a delayed draw facility of up to $10 million (the
“Delayed Draw”). The Initial Loan and the Delayed Draw are collectively referred to as the Term Loans. The “Term Loans”
bear interest at the LIBOR rate plus 10.75%; provided that after June 30, 2022, if the Company’s Senior Leverage Ratio (as
defined in the Credit Agreement) is less than 2.25, the interest rate would be reduced to LIBOR plus 10.25%. Such terms are
subject to the Company maintaining a borrowing base in terms compliant with the Credit Agreement.
The proceeds of the Initial Loan were used to finance the Company’s acquisition of FrontRow, and pay off all
indebtedness owed to our then lenders. The terms of the Credit Agreement and related loans are described in more detail in the
section entitled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations.” Of the Initial
Loan, $8.5 million, was subject to repayment on February 28, 2022, with quarterly principal payments of $625,000 and interest
payments commencing March 31, 2022 and the $40.0 million remaining balance plus any Delayed Draw loans becoming due
and payable in full on December 31, 2025.
In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 528,169 shares of Class A
common stock (the “Shares”), which Shares were registered pursuant to our existing shelf registration statement and were
delivered to the Lender in January 2022, (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to
increase to the extent of 3% of any Series B and Series C convertible preferred stock converted into Class A common stock),
exercisable at $2.00 per share (the “Warrant”), which Warrant may be subject to repricing on March 31, 2022 based on the
arithmetic volume weighted average prices for the 30 trading days prior to March 31, 2022, in the event our stock is then trading
below $2.00 per share, (iii) a 3% fee of $1,800,000 and (iv) a $500,000 original issue discount. In addition, the Company agreed
to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred agency fees, legal fees and
other costs in connection with the execution of the Credit Agreement. Based on the arithmetic volume weighted average prices
of the Company’s Class A common stock for the 30 trading days prior to March 31, 2022, the exercise price of the Warrant was
reduced to $1.19 per share and the shares increased to 3,434,103. On July 22, 2022, the Company entered into a Securities
Purchase Agreement with an accredited institutional investor. According to the terms of the WhiteHawk agreement, this
purchase agreement triggered a reduction of the exercise price of the warrants. The warrants were repriced to $1.10 and shares
increased to 3,715,075.
On March 29, 2022, the Company received a notice from the collateral agent, alleging, among other things, defaults as
a result of (i) failure to repay $8.5 million of the facility by February 28, 2022, (ii) non-compliance with the borrowing base
resulting in the Company being in an over advance position under the Credit Agreement, and (iii) failure to timely provide
certain reports and documents. As a result, all accrued and unpaid interest owed under the Term Loan, became subject to a post-
default interest rate equal to the highest interest rate allowed for under the Credit Agreement plus 2.50% until such time as the
events of default were either waived or cured.
In February 2022, WhiteHawk and the Company agreed in principle to an extension of the February 2022
Payment. Pursuant to amendment to the Credit Agreement, dated April 4, 2022, the Collateral Agent and Lender agreed to
extend the terms of repayment of the $8.5 million originally due on February 28, 2022 until February 28, 2023 and waive and/or
otherwise extend compliance with certain other terms of the Credit Agreement in order to allow the Loan Parties adequate time
to comply with such terms. In July 2022, the Company and WhiteHawk agreed that the notice had inadvertently included the
default with respect to the failure to repay $8.5 million of the facility. As a result, notwithstanding the notice, both WhiteHawk
and the Company have agreed that the Company was not in default in making the February 2022 Payment to WhiteHawk.
The principal elements of the April amendment included (a) an extension of time to repay $8.5 million of the principal
amount of the term loan from February 28, 2022 to February 28, 2023, and (b) forbearance on $3,500,000 in over advances until
May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forth in the Credit
Agreement. In such connection, the Loan Parties have obtained credit insurance on certain key customers whose principal
offices are located in the European Union and Australia as, without the credit insurance, their accounts owed to the Loan Parties
had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the
Collateral Agent to enforce security interests on such
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accounts. In addition, the Lender and Collateral Agent agreed to (i) reduce, through September 30, 2022, the minimum cash
reserve requirement for the Loan Parties, (ii) reduce the interest rate by 50 basis points (to LIBOR plus 9.75%) after delivery of
the Loan Parties’ September 30, 2023 financial statements, subject to the Loan Parties maintaining 1.75 EBITDA coverage
ratio, and (iii) waive all prior Events of Default under the Credit Agreement. In conjunction with the amendment to the Credit
Agreement, the parties entered into an amended and restated fee letter (the “Fee Letter”) pursuant to which the parties agreed to
prepayment premiums of (i) 5% for payments made on or before December 31, 2022, (ii) 4% for payments made between
January 1, 2023 and December 31, 2023, and (iii) 2% for payments made between January 1, 2024 and December 31, 2025.
Furthermore, the parties agreed that no prepayment premiums would be payable with respect to the first $5.0 million paid under
the Term Loan, any payments made in relation to the $8.5 million due on or before February 28, 2023, any required
amortization payments under the Credit Agreement and any mandatory prepayments by way of ECF or casualty events.
On June 21, 2022, the Company and substantially all of its direct and indirect subsidiaries (together with the Company,
the “Loan Parties”), entered into a second amendment (the “Second Amendment”) to the four-year term loan credit facility,
originally entered into December 31, 2021 and as amended on April 4, 2022, with the Collateral Agent and Lender. The Second
Amendment to the Credit Agreement was entered into for purposes of the Lender funding a $2.5 million delayed draw term loan
and adjusting certain terms to the Credit Agreement, including adjusting the Applicable Margin (as defined in the Second
Amendment) to 13.25% for LIBOR Rate Loans and 12.25% for Reference Rate Loans, increasing the definition of change of
control from 33% voting power to 40% voting power, requiring the Company to engage a financial advisor, and allowing
additional time, until July 15, 2022, for the Company to come into compliance with certain borrowing base requirements set
forth in the Second Amendment to the Credit Agreement, among other adjustments.
ITEM 1A. RISK FACTORS
An investment in our securities involves a high degree of risk. You should carefully consider all of the risks described
below, together with the other information contained in this Annual Report on Form 10-K, including our financial statements
and related notes, before making a decision to invest in our securities. If any of the following events occur, our business,
financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities
could decline, and you could lose all or part of your investment.
Summary Risk Factors
Some of the factors that could materially and adversely affect our business, financial condition, results of operations
and cash flows include, but are not limited to, the following:
● Unfavorable global economic or political conditions, including the ongoing conflict between Russia and Ukraine may
adversely affect our business, financial condition, results from operations, or the businesses of our suppliers, vendors
and logistics partners;
● our inability to predict or anticipate the duration or adapt to the long-term economic and business consequences of a
global pandemic linked to the COVID-19 pandemic or any future pandemics;
● our inability to predict or adapt to the unstable market and economic conditions of the global economy;
● our ability to continue to attract and retain customers;
● our ability to sell additional products and services to customers;
● our ability to raise funds in a timely fashion and successfully manage cash flow needs and financing plans;
● our ability to successfully maintain a competitive position in our industry and market;
● our ability to manage our business and sell our products within a changing and evolving industry environment;
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● our ability to locate and leverage potential growth opportunities;
● our ability to achieve expected technological advances by us or by third parties and our ability to leverage them;
● our ability to integrate our business acquisitions fully and successfully into Boxlight’s existing business and platform;
● the effects of future regulation; and
● our ability to protect and monetize our intellectual property.
Risks Related to Our Business, Operations and Financial Condition
Unfavorable global economic or political conditions, including the ongoing conflict between Russia and Ukraine may
adversely affect our business, financial condition, or results of operations.
Our results of operations could be adversely affected by general conditions in the global economy and in the global
financial markets. Inflation rates, particularly in the United States, have increased recently to levels not seen in years. Increased
inflation may result in increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to
access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve has raised, and may again
raise, interest rates in response to concerns about inflation. Increases in interest rates, especially if coupled with reduced
government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and
heightening these risks, which may impact our ability to raise additional capital in the future. The March 2023 failure of Silicon
Valley Bank and its potential near- and long-term effects on the overall banking industry, may also adversely affect our
operations and stock price. In addition, U.S. and global markets are experiencing volatility and disruption following the
escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine.
On February 24, 2022, a full-scale military invasion of Ukraine by Russian troops began. Although the length and
impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine has led to market disruptions, including
significant volatility in commodity prices, credit and capital markets, as well as supply chain disruptions. While neither Ukraine
nor Russia is a key supplier of ours, the scope, intensity, duration and outcome of the ongoing war is uncertain and its
continuation or escalation could have a material adverse effect on our business due to the general impact on the global supply
chain and prices of certain commodities. While we presently have no business or direct trade relationships with entities located
in Russia or Ukraine, the ongoing conflict between Russia and Ukraine could potentially cause supply chain disruptions that
could disrupt our business should any of our end-suppliers rely on supplies, products or shipments from those regions.
In response to the war, the United States, other North Atlantic Treaty Organization (“NATO”) member states, as well as
non-member states, have announced targeted economic sanctions on Russia, certain Russian citizens and enterprises. Any
continuation or escalation of the war may trigger a series of additional economic and other sanctions. Certain companies have
experienced negative reactions from their investors, employees, customers, or other stakeholders as a result of their action or
inaction related to the war between Russia and Ukraine. We continue to monitor the reactions of our investors, employees,
customers and other stakeholders and, as of the date of this report, have neither experienced any material adverse financial
impacts nor suffered from the loss of key customers or employees.
In addition, the risk of cybersecurity incidents has increased in connection with the ongoing war, driven by
justifications such as retaliation for the sanctions imposed in conjunction with the war, or in response to certain companies’
continued operations in Russia. For example, the war has been accompanied by cyberattacks against the Ukrainian government
and other countries in the region. It is possible that these attacks could have collateral effects on additional critical infrastructure
and financial institutions globally, which could adversely affect our operations and could increase the frequency and severity of
cyber-based attacks against our information technology systems. While we have taken actions to mitigate such potential risks,
the proliferation of malware from the war into systems unrelated to the war or cyberattacks against U.S. companies in retaliation
for U.S. sanctions against Russia or U.S. support of Ukraine, could also adversely affect our operations.
We insure ourselves against many types of risks; however, while this insurance may mitigate certain of the risks
associated with general market disruptions, including the risk related to the banking system and the ongoing war in Ukraine, our
level of insurance
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may not cover all losses we could incur. The potential effects of these conditions could have a material adverse effect on our
business, results of operations and financial condition.
War, terrorism, other acts of violence, changing circumstances related to the COVID-19 Pandemic or potential effects of
future pandemics, are unpredictable and could adversely affect our business operations and the market for our products.
War, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic, may affect the
markets in which the Company operates, the Company’s customers, the Company’s delivery of products and customer service,
and could have a material adverse impact on our business, results of operations, or financial conditions.
The Company’s business may be adversely affected by instability, disruption or destruction in a geographic region in
which it operates, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or man-made
disasters, including famine, food, fire, earthquake, storm or pandemic events and spread of disease (including the COVID-19
outbreak which commenced in 2020). Such events may cause customers to suspend their decisions on using the Company’s
products and services, make it impossible to attend or sponsor trade shows or other conferences in which our products and
services are presented to customers and potential customers, cause restrictions, postponements and cancellations of events that
attract large crowds and public gatherings such as trade shows at which we have historically presented our products, and give
rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of
goods or services, commitments to develop new products. These events also pose significant risks to the Company’s personnel
and to physical facilities, transportation and operations, which could materially adversely affect the Company’s financial results.
While conditions surrounding the COVID-19 pandemic seem to have stabilized, there is nonetheless a risk related to
modification of the traditional classroom setting, similar to what occurred during 2020 to 2021 when many classrooms were all
virtual, that may result in reduced demand for our classroom solutions, including reduced demand for our interactive displays
due to extended or indefinite distance and digital learning.
There is also a risk of reduced borrowing with our factoring and purchase order financing facilities, as well as risk of
inability to raise additional capital.
We generate a substantial portion of our revenue from the sale of our display products, and any significant reduction in sales
of these products would materially harm our business.
For the year ended December 31, 2022, we generated approximately 80% of our revenues from sales of our interactive
display products, consisting of interactive flat panels and whiteboards. A decrease in demand for our interactive displays would
significantly reduce our revenue. If any of our competitors introduces attractive alternatives to our interactive displays, we could
experience a significant decrease in sales as customers migrate to those alternative products.
Our business is subject to seasonal fluctuations, which may cause our operating results to fluctuate from quarter-to-quarter
and adversely affect our working capital and liquidity throughout the year.
Our revenues and operating results normally fluctuate as a result of seasonal variations in our business, driven largely
by the purchasing cycles of the educational market. Traditionally, the bulk of expenditures by school districts occur in the
second and third calendar quarters after receipt of budget allocations. We expect quarterly fluctuations in our revenues and
operating results to continue. These fluctuations could result in volatility and adversely affect our cash flow. As our business
grows, these seasonal fluctuations may become more pronounced. As a result, we believe that sequential quarterly comparisons
of our financial results may not provide an accurate assessment of our financial position.
Our working capital requirements and cash flows are subject to fluctuation, which could have an adverse effect on our
financial condition.
Our working capital requirements and cash flows have historically been, and are expected to continue to be, subject to
quarterly and yearly fluctuations, depending on a number of factors. Factors which could result in cash flow fluctuations
include:
● the level of sales and the related margins on those sales;
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● the collection of receivables;
● the timing and size of purchases of inventory and related components; and
● the timing of payment on payables and accrued liabilities.
If we are unable to manage fluctuations in cash flow, our business, operating results and financial condition may be
materially adversely affected. For example, we may be unable to make required interest payments on our indebtedness.
We operate in a highly competitive industry.
We are engaged in the interactive education industry. We face substantial competition from developers, manufacturers
and distributors of interactive learning products and solutions, including interactive flat-panel displays, interactive whiteboards
and micro-computer data logging products and any new product we may offer in the future. The industry is highly competitive
and characterized by frequent product introductions and rapid technological advances that have substantially increased the
capabilities and use of interactive flat-panel displays, interactive whiteboards, and micro-computer-based logging technologies
and combinations of them. We face increased competition from companies with strong positions in certain markets we serve,
and in new markets and regions we may enter. These companies manufacture and/or distribute new, disruptive or substitute
products that compete for the pool of available funds that previously could have been spent on interactive displays and
associated products.
Many of these competitors have, and our potential competitors may have, significantly greater financial and other
resources than we do and have spent, and may continue to spend, significant amounts of resources to try to enter or expand their
presence in the market. In addition, low-cost competitors have appeared in China and other countries. We may not be able to
compete effectively against these current and future competitors. Increased competition or other competitive pressures have and
may continue to result in price reductions, reduced margins or loss of market share, any of which could have a material adverse
effect on our business, financial condition or results of operations.
Some of our customers are required to purchase equipment by soliciting proposals from several sources and, in some
cases, are required to purchase from the lowest bidder. While we attempt to price our products competitively, based upon the
relative features they offer, our competitors’ prices and other factors, we are often not the lowest bidder and, in such cases, may
lose sales.
Competitors may be able to respond to new or emerging technologies and changes in customer requirements more
effectively and faster than we can or devote greater resources to the development, promotion and sale of products than we can.
Current and potential competitors may establish cooperative relationships among themselves or with third parties, including
through mergers or acquisitions, to increase the ability of their products to address the needs of customers. If these interactive
display competitors or other substitute or alternative technology competitors acquire significantly increased market share, it
could have a material adverse effect on our business, financial condition or results of operations.
If we are unable to continually enhance our products and to develop, introduce and sell new technologies and products at
competitive prices and in a timely manner, our business will be harmed.
The market for interactive learning and collaboration solutions is still emerging and evolving. It is characterized by
rapid technological change and frequent new product introductions, many of which may compete with, be considered as
alternatives to or replace our interactive displays. For example, we have recently observed significant sales of tablet computers
by competitors to school districts in the U.S. whose technology budgets could otherwise have been used to purchase interactive
displays. Accordingly, our future success will depend upon our ability to enhance our products and to develop, introduce and
sell new technologies and products offering enhanced performance and functionality at competitive prices and in a timely
manner.
The development of new technologies and products involves time, substantial costs and risks. Our ability to
successfully develop new technologies will depend in large measure on our ability to maintain a technically skilled research and
development staff and to adapt to technological changes and advances in the industry. The success of new product introductions
depends on a number of factors, including timely and successful product development, market acceptance, the effective
management of purchase commitments and inventory levels in line with anticipated product demand, the availability of
components in appropriate quantities and costs to meet anticipated demand, the risk that new products may have quality or other
defects and our ability to manage distribution and production
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issues related to new product introductions. If we are unsuccessful in selling the new products that we develop and introduce, or
any future products that we may develop, we may carry obsolete inventory and have reduced available working capital for the
development of other new technologies and products.
If we are unable, for any reason, to enhance, develop, introduce and sell new products in a timely manner, or at all, in
response to changing market conditions or customer requirements or otherwise, our business will be harmed.
We may not be successful in our strategy to increase sales in the business and government market.
The majority of our revenue has been derived from sales to the education market. Our business strategy contemplates
expanding our sales in both the education market, as well as to the business and government training sectors. However, to date,
there has not been widespread adoption of interactive displays and collaboration solutions in the business and government
market, and these solutions may fail to achieve wide acceptance in this market. Successful expansion into the business and
government markets will require us to augment and develop new distribution and reseller relationships, and we may not be
successful in developing those relationships. In addition, widespread acceptance of our interactive solutions may not occur due
to lack of familiarity with how our products work, the perception that our products are difficult to use and a lack of appreciation
of the contribution they can make in the business and government markets. In addition, the Boxlight brands are less recognized
in these markets as compared to the education market. A key part of our strategy to grow in the business and government market
is to develop strategic alliances with companies in the unified communications and collaboration sector, and there can be no
assurance that these alliances will help us to successfully grow our sales in this market.
Furthermore, our ability to successfully grow in the business and government market depends upon revenue and cash
flows derived from sales to the education market. As the education market represents a significant portion of our revenue and
cash flow, we utilize cash from sales in the education market for our operating expenses. If we cannot continue to augment and
develop new distributor and reseller relationships, market our brand, develop strategic alliances and innovate new technologies,
we may not be successful in our strategy to grow in the business and government market.
As a result of market saturation, our future sales of interactive displays in developed markets may slow or decrease.
As a result of the high levels of penetration in developed markets, the education market for interactive displays in the
U.S., U.K. and Australia may have reached saturation levels. Future sales growth in those markets and other developed markets
with similar penetration levels may, as a result, be difficult to achieve, and our sales of interactive displays may decline in those
countries. If we are unable to replace the revenue and earnings, we have historically derived from sales of interactive displays to
the education market in these developed markets, whether through sales of additional products, sales in other underserved
markets, such as Africa, Latin America and Asia, sales in the business and government market or otherwise, our business,
financial condition and results of operations may be materially adversely affected.
We face significant challenges growing our sales in foreign markets.
For our products to gain broad acceptance in all markets, we may need to develop customized solutions specifically
designed for each country in which we seek to grow our sales and to sell those solutions at prices that are competitive in that
country. For example, while our hardware requires only minimal modification to be usable in other countries, our software and
content require significant customization and modification to adapt to the needs of foreign customers. Specifically, our software
will need to be adapted to work in a user-friendly way in several languages and alphabets, and content that fits the specific needs
of foreign customers (such as, for example, classroom lessons adapted to specific foreign curricula) will need to be developed. If
we are not able to develop, or choose not to support, customized products and solutions for use in a particular country, we may
be unable to compete successfully in that country and our sales growth in that country will be adversely affected. We cannot
assure you that we will be able to successfully develop or choose to support customized solutions for each foreign country in
which we seek to grow our sales or that our solutions, if developed, will be competitive in the relevant country.
Growth in many foreign countries will require us to price our products competitively in those countries. In certain
developing countries, we have been and may continue to be required to sell our products at prices significantly below those that
we are currently charging in developed countries. Such pricing pressures could reduce our gross margins and adversely affect
our revenue.
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Our customers’ experience with our products will be directly affected by the availability and quality of our customers’
Internet access. We are unable to control broadband penetration rates, and, to the extent that broadband growth in emerging
markets slows, our growth in international markets could be hindered.
In addition, we will face lengthy and unpredictable sales cycles in foreign markets, particularly in countries with
centralized decision making. In these countries, particularly in connection with significant technology product purchases, we
have experienced recurrent requests for proposals, significant delays in the decision-making process and, in some cases,
indefinite deferrals of purchases or cancellations of requests for proposals. If we are unable to overcome these challenges, the
growth of our sales in these markets would be adversely affected, and we may incur unrecovered marketing costs, impairing our
profitability.
Our suppliers may not be able to always supply components or products to us on a timely basis and on favorable terms, and
as a result, our dependency on third party suppliers has adversely affected our revenue and may continue to do so.
We do not manufacture any of the products we sell and distribute and, therefore, rely on our suppliers for all products
and components and depend on obtaining adequate supplies of quality components on a timely basis with favorable terms. Some
of those components, as well as certain complete products that we sell are provided to us by only one key supplier or contract
manufacturer. We are subject to disruptions in our operations if our sole or limited supply contract manufacturers decrease or
stop production of components and products, or if such suppliers and contract manufacturers do not produce components and
products of sufficient quantity. Alternative sources for our components are not always available. Many of our products and
components are manufactured overseas, so they have long lead times, and events such as local disruptions, natural disasters or
political conflict may cause unexpected interruptions to the supply of our products or components. In addition, we do not have
written supply agreements with our suppliers. Although we are endeavoring to enter into written agreements with certain of our
suppliers, we cannot assure that our efforts will be successful. Furthermore, due to the impacts of the COVID-19 pandemic the
company may experience material adverse impacts on its supply chain.
We rely on highly skilled personnel, and, if we are unable to attract, retain or motivate qualified personnel, we may not be
able to operate our business effectively.
Our success depends in large part on continued employment of senior management and key personnel who can
effectively operate our business, as well as our ability to attract and retain skilled employees. Competition for highly skilled
management, technical, research and development and other employees is intense in the high-technology industry and we may
not be able to attract or retain highly qualified personnel in the future. In making employment decisions, particularly in the high-
technology industry, job candidates often consider the value of the equity awards they would receive in connection with their
employment. Our long-term incentive programs may not be attractive enough or perform sufficiently to attract or retain
qualified personnel.
If any of our employees leaves us, and we fail to effectively manage a transition to new personnel, or if we fail to
attract and retain qualified and experienced professionals on acceptable terms, our business, financial condition and results of
operations could be adversely affected.
Our success also depends on our having highly trained financial, technical, recruiting, sales and marketing personnel.
We will need to continue to hire additional personnel as our business grows. A shortage in the number of people with these
skills or our failure to attract them to our company could impede our ability to increase revenues from our existing products and
services, ensure full compliance with federal and state regulations, or launch new product offerings and would have an adverse
effect on our business and financial results.
We may have difficulty in entering into and maintaining strategic alliances with third parties.
We have entered into and we may continue to enter into strategic alliances with third parties to gain access to new and
innovative technologies and markets. These parties are often large, established companies. Negotiating and performing under
these arrangements involves significant time and expense, and we may not have sufficient resources to devote to our strategic
alliances, particularly those
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with companies that have significantly greater financial and other resources than we do. The anticipated benefits of these
arrangements may never materialize and performing under these arrangements may adversely affect our results of operations.
We use resellers and distributors to promote and sell our products.
Substantially all our sales are made through resellers and distributors. Industry and economic conditions have the
potential to weaken the financial position of our resellers and distributors. Such resellers and distributors may no longer sell our
products, or may reduce efforts to sell our products, which could materially adversely affect our business, financial condition
and results of operations. Furthermore, if our resellers and distributors’ abilities to repay their credit obligations were to
deteriorate and result in the write-down or write-off of such receivables, it would negatively affect our operating results and, if
significant, could materially adversely affect our business, financial condition and results of operations.
In addition, our resellers and most of our distributors are not contractually required to sell our products exclusively and
may offer competing interactive display products, and therefore we depend on our ability to establish and develop new
relationships and to build on existing relationships with resellers and distributors. We cannot assure that our resellers and
distributors will act in a manner that will promote the success of our products. Factors that are largely within the control of those
resellers and distributors but are important to the success of our products include:
● the degree to which our resellers and distributors actively promote our products;
● the extent to which our resellers and distributors offer and promote competitive products; and
● the quality of installation, training and other support services offered by our resellers and distributors.
In addition, if some of our competitors offer their products to resellers and distributors on more favorable terms or have
more products available to meet their needs, there may be pressure on us to reduce the price of our products, or those resellers
and distributors may stop carrying our products or de-emphasize the sale of our products in favor of the products of these
competitors. If we do not maintain and continue to build relationships with resellers and distributors our business will be
harmed.
If our electronic data is compromised, our business could be significantly harmed.
We and our business partners maintain significant amounts of data electronically in locations around the world. This
data relates to all aspects of our business, including current and future products under development, as well as certain customer,
consumer, supplier, partner and employee data. We maintain systems and processes designed to protect this data, but
notwithstanding such protective measures, there is a risk of intrusion, cyber-attacks or tampering that could compromise the
integrity and privacy of this data. In addition, we provide confidential and proprietary information to our third-party business
partners in certain cases where doing so is necessary to conduct our business. While we obtain assurances from those parties that
they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the
protections of such data by third parties, nonetheless those partners may also be subject to data intrusion or otherwise
compromise the protection of such data. Any compromise of the confidential data of our customers, consumers, suppliers,
partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our
information technology systems or other means could substantially disrupt our operations, harm our customers, consumers,
employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially
significant costs and liabilities and result in a loss of business that could be material.
A failure to keep pace with developments in technology could impair our operations or competitive position.
Our business continues to demand the use of sophisticated systems and technology. These systems and technologies
must be refined, updated and replaced with more advanced systems on a regular basis in order for us to meet our customers’
demands and expectations. If we are unable to do so on a timely basis or within reasonable cost parameters, or if we are unable
to appropriately and timely train our employees to operate any of these new systems, our business could suffer. We also may not
achieve the benefits that we anticipate from any new system or technology, such as fuel abatement technologies, and a failure to
do so could result in higher than anticipated costs or could impair our operating results.
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An information security incident, including a cybersecurity breach, could have a negative impact to the Company’s business
or reputation
To meet business objectives, the Company relies on both internal information technology (IT) systems and networks,
and those of third parties and their vendors, to process and store sensitive data, including confidential research, business plans,
financial information, intellectual property, and personal data that may be subject to legal protection. The extensive information
security and cybersecurity threats, which affect companies globally, pose a risk to the security and availability of these IT
systems and networks, and the confidentiality, integrity and availability of the Company’s sensitive data. The Company
continually assesses these threats and makes investments to increase internal protection, detection and response capabilities, as
well as ensure the Company’s third-party providers have required capabilities and controls to address these risks. To date, the
Company has not experienced any material impact to the business or operations resulting from information or cybersecurity
attacks; however, because of the frequently changing attack techniques, along with the increased volume and sophistication of
the attacks, there is the potential for the Company to be adversely impacted. This impact could result in reputational,
competitive, operational or other business harm as well as financial costs and regulatory action. The Company maintains
cybersecurity insurance in the event of an information security or cyber incident; however, the coverage may not be sufficient to
cover all financial losses.
Risks Related to our Industry and Regulations.
Decreases in, or stagnation of, spending or changes in the spending policies or budget priorities for government funding of
schools, colleges, universities, other education providers or government agencies may have a material adverse effect on our
revenue.
Our customers include primary and secondary schools, colleges, universities, other education providers and, to a lesser
extent, government agencies, each of which depends heavily on government funding. The effects and duration of the COVID-19
pandemic, which has resulted in worldwide disruptions in supply chains and economic recession, are as yet unknown. We
anticipate that the COVID-19 pandemic and resulting economic recession could cause a substantial disruption in, decrease or
stagnation of, spending and budget priorities for government funding of schools, colleges, universities and other education
providers and government agencies. The economy had only recently experienced a similar disruption from the worldwide
recession of 2008 and subsequent sovereign debt and global financial crisis, which resulted in substantial declines in the
revenues and fiscal capacity of many national, federal, state, provincial and local governments. Like in the 2008 financial crisis,
where many of those governments have reacted to the decreases in revenues by cutting funding to educational institutions, we
anticipate that governments and governmental entities will react similarly to the economic crisis and resulting decreases in
revenue caused by the COVID-19 pandemic by cutting funding to educational institutions. If our products are not a high priority
expenditure for such institutions, or if such institutions allocate expenditures to substitute alternative technologies, we could lose
revenue.
Any additional decrease in, stagnation of or adverse change in national, federal, state, provincial or local funding for
primary and secondary schools, colleges, universities, or other education providers or for government agencies that use our
products could cause our current and prospective customers to further reduce their purchases of our products, which could cause
us to lose additional revenue. In addition, a specific reduction in governmental funding support for products such as ours could
also cause us to lose revenue.
If our products fail to comply with consumer product or environmental laws, it could materially affect our financial
performance.
Because we sell products used by children in classrooms and because our products are subject to environmental
regulations in some jurisdictions in which we conduct business and sell our products, we are and will be required to comply
with a variety of product safety, product testing and environmental regulations, including compliance with applicable laws and
standards with respect to lead content and other child safety and environmental issues. If our products do not meet applicable
safety or regulatory standards, we could experience lost sales, diverted resources and increased costs, which could have a
material adverse effect on our financial condition and results of operations. Events that give rise to actual, potential or perceived
product safety or environmental concerns could expose us to government enforcement action or private litigation and result in
product recalls and other liabilities. In addition, negative consumer perceptions regarding the safety of our products could cause
negative publicity and harm our reputation.
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Risks Related to our Foreign Operations.
We are subject to risks inherently related to our foreign operations.
Sales outside the US represented 46% of our revenues for the year ended December 31, 2022. We have committed, and
may continue to commit, significant resources to our international operations and sales and marketing activities.
Our significant foreign operations subject us to several risks related to these international business activities that may
increase costs, lengthen sales cycles and require significant management attention. International operations carry certain risks
and associated costs, such as the complexities and expense of administering a business abroad, complications in compliance
with, and unexpected changes in regulatory requirements, foreign laws, international import and export legislation, trading and
investment policies, exchange controls, tariffs and other trade barriers, difficulties in collecting accounts receivable, potential
adverse tax consequences, uncertainties of laws, difficulties in protecting, maintaining or enforcing intellectual property rights,
difficulty in managing a geographically dispersed workforce in compliance with diverse local laws and customs, and other
factors, depending upon the country involved. Moreover, local laws and customs in many countries differ significantly and
compliance with the laws of multiple jurisdictions can be complex, difficult and costly. We cannot assure that risks inherent in
our foreign operations will not have a material adverse effect on our business.
We must comply with the Foreign Corrupt Practices Act.
We are required to comply with the United States Foreign Corrupt Practices Act, which prohibits U.S. companies from
engaging in bribery of or other prohibited payments to foreign officials for the purpose of obtaining or retaining business and
requires that we maintain adequate financial records and internal controls to prevent such prohibited payments. Our international
operations are managed by the Sahara team who are required to comply with the UK Bribery Act 2010 which goes further than
current US legislation where the Bribery Act is not limited to foreign officials but also includes customers and includes all form
of inducement and incentives; the same standard is expected of all our Sahara employees of other European countries where
similar legislation is in force under EU-Law Corruption, extortion, bribery, pay-offs, theft and other fraudulent practices may
occur in countries where we do business. If our competitors engage in these practices, they may receive preferential treatment
from personnel of some companies, giving our competitors an advantage in securing business or from government officials who
might give them priority in obtaining new business, which would put us at a disadvantage. If our employees or other agents are
found to have engaged in such practices, we could suffer severe penalties.
Our worldwide operations will subject us to income taxation in many jurisdictions, and we must exercise significant
judgment to determine our worldwide financial provision for income taxes. That determination ultimately is an estimate,
and, accordingly, we cannot assure that our historical income tax provisions and accruals will be adequate.
We are subject to income taxation in the United States and numerous other jurisdictions. Significant judgment is
required in determining our worldwide provision for income taxes. In the ordinary course of our business, there are many
transactions and calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are
reasonable, we cannot assure you that the final determination of any tax audits and litigation will not be materially different
from that which is reflected in our historical income tax provisions and accruals. Should additional taxes be assessed against us
as a result of an audit or litigation, there could be a material adverse effect on our current and future results and financial
condition.
Certain of our subsidiaries provide products to and may from time to time undertake certain significant transactions
with us and our other subsidiaries in different jurisdictions. In general, cross border transactions between related parties and, in
particular, related party financing transactions, are subject to close review by tax authorities. Moreover, several jurisdictions in
which we operate have tax laws with detailed transfer pricing rules that require all transactions with nonresident related parties
to be priced using arm’s-length pricing principles and require the existence of contemporaneous documentation to support such
pricing. A tax authority in one or more jurisdictions could challenge the validity of our related party transfer pricing policies. If
in the future any taxation authorities are successful in challenging our financing or transfer pricing policies, our income tax
expense may be adversely affected and we could become subject to interest and penalty charges, which may harm our business,
financial condition and operating results.
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If we are unable to ship and transport components and final products efficiently and economically across long distances and
borders, our business would be harmed.
We transport significant volumes of components and finished products across long distances and international borders.
Any increases in our transportation costs, as a result of increases in the price of oil or otherwise, would increase our costs and
the final prices of our products to our customers. In addition, any increases in customs or tariffs, as a result of changes to
existing trade agreements between countries or otherwise, could increase our costs or the final cost of our products to our
customers or decrease our margins. Such increases could harm our competitive position and could have a material adverse effect
on our business. The laws governing customs and tariffs in many countries are complex and often include substantial penalties
for non-compliance. Disputes may arise and could subject us to material liabilities and have a material adverse effect on our
business.
If our procedures to ensure compliance with export control laws are ineffective, our business could be harmed.
Our extensive foreign operations and sales are subject to far reaching and complex export control laws and regulations
in the United States and elsewhere. Violations of those laws and regulations could have material negative consequences for us
including large fines, criminal sanctions, prohibitions on participating in certain transactions and government contracts,
sanctions on other companies if they continue to do business with us and adverse publicity.
We will be exposed to fluctuations in foreign currencies that may materially adversely affect our results of operations.
Our reporting currency is the U.S. dollar. Sahara Holdings Ltd. consolidates results using the British pound (with
principal functional currencies in British pound, Euro and U.S. dollar) and Boxlight Latin America uses the Mexican Peso as
functional currency to report revenue and expenses. As a result, we will be exposed to foreign exchange rate fluctuations when
we translate the financial statements of our group companies into U.S. dollars in consolidation. If there is a change in foreign
currency exchange rates, the translation of any of the group companies financial statements into U.S. dollars will lead to a
translation gain or loss which is recorded as a component of other comprehensive income. In addition, we may have certain
monetary assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency. To the
extent the U.S. dollar strengthens or weakens against the certain foreign currencies then the translation of foreign currency
denominated transactions will result in a change to reported revenue, operating expenses and net income for subsidiary
operations. We have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may
do so in the future. The availability and effectiveness of any hedging transaction may be limited, and we may not be able to
successfully hedge fully our exchange rate risks.
We monitor our foreign exchange exposures, and these activities mitigate, but do not eliminate, our exposure to
exchange rate fluctuations. As a result, exchange rate fluctuations may materially adversely affect our operating results in future
periods.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and
results of operations.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions,
including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth,
increases in unemployment rates, increases in inflation rates and uncertainty about economic stability. Any such volatility and
disruptions may have adverse consequences on us or the third parties upon who we rely.
Risks Related to Our Intellectual Property and Technology
Defects in our products can be difficult to detect before shipment. If defects occur, they could have a material adverse effect
on our business.
Our products are highly complex and sophisticated and, from time to time, have contained and may continue to contain
design defects or software “bugs” or failures that are difficult to detect and correct in advance of shipping.
The occurrence of errors and defects in our products could result in loss of, or delay in, market acceptance of our
products, including harm to our brand. Correcting such errors and failures in our products could require significant expenditure
of capital by us. In addition, we are rapidly developing and introducing new products, and new products may have higher rates
of errors and defects than
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our established products. The Boxlight Group has historically provided product warranties between one and five years, and the
failure of our products to operate as described could give rise to warranty claims. The consequences of such errors, failures and
other defects and claims could have a material adverse effect on our business, financial condition, results of operations and our
reputation.
We may not be able to obtain patents or other intellectual property rights necessary to protect our proprietary technology and
business.
Our commercial success depends to a significant degree upon our ability to develop new or improved technologies and
products, and to obtain patents or other intellectual property rights or statutory protection for these technologies and products in
the United States and other countries. We will seek to patent concepts, components, processes, designs and methods, and other
inventions and technologies that we consider have commercial value or that will likely give us a technological advantage.
Boxlight own rights in patents and patent applications for technologies relating to interactive displays and other complementary
products in the United States and other countries such as Germany, Mexico, Israel, Japan, Taiwan and China. Despite devoting
resources to the research and development of proprietary technology, we may not be able to develop technology that is
patentable or protectable. Patents may not be issued in connection with pending patent applications, and claims allowed may not
be sufficient to allow them to use the inventions that they create exclusively. Furthermore, any patents issued could be
challenged, re-examined, held invalid or unenforceable or circumvented and may not provide sufficient protection or a
competitive advantage. In addition, despite efforts to protect and maintain patents, competitors and other third parties may be
able to design around their patents or develop products similar to our products that are not within the scope of their patents.
Finally, patents provide certain statutory protection only for a limited period of time that varies depending on the jurisdiction
and type of patent. The statutory protection term of certain of our material patents may expire soon and, thereafter, the
underlying technology of such patents can be used by any third-party including competitors.
Prosecution and protection of the rights sought in patent applications and patents can be costly and uncertain, often
involve complex legal and factual issues and consume significant time and resources. In addition, the breadth of claims allowed
in our patents, their enforceability and our ability to protect and maintain them cannot be predicted with any certainty. The laws
of certain countries may not protect intellectual property rights to the same extent as the laws of the United States. Even if our
patents are held to be valid and enforceable in a certain jurisdiction, any legal proceedings that we may initiate against third
parties to enforce such patents will likely be expensive, take significant time and divert management’s attention from other
business matters. We cannot assure that any of the issued patents or pending patent applications will provide any protectable,
maintainable or enforceable rights or competitive advantages to us.
In addition to patents, we will rely on a combination of copyrights, trademarks, trade secrets and other related laws and
confidentiality procedures and contractual provisions to protect, maintain and enforce our proprietary technology and
intellectual property rights in the United States, the United Kingdom, Mexico, Australia, Malaysia, Canada, Turkey Sweden,
Finland, Germany, Holland, and China. However, our ability to protect our brands by registering certain trademarks may be
limited. In addition, while we will generally enter into confidentiality and nondisclosure agreements with our employees,
consultants, contract manufacturers, distributors and resellers and with others to attempt to limit access to and distribution of our
proprietary and confidential information, it is possible that:
● misappropriation of our proprietary and confidential information, including technology, will nevertheless occur;
● our confidentiality agreements will not be honored or may be rendered unenforceable;
● third parties will independently develop equivalent, superior or competitive technology or products;
● disputes will arise with our current or future strategic licensees, customers or others concerning the ownership,
validity, enforceability, use, patentability or registrability of intellectual property; or
● unauthorized disclosure of our know-how, trade secrets or other proprietary or confidential information will occur.
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● we cannot assure that we will be successful in protecting, maintaining or enforcing our intellectual property rights. If
we are unsuccessful in protecting, maintaining or enforcing our intellectual property rights, then our business,
operating results and financial condition could be materially adversely affected, which could:
● adversely affect our relationships with current or future distributors and resellers of our products;
● adversely affect our reputation with customers;
● be time-consuming and expensive to evaluate and defend;
● cause product shipment delays or stoppages;
● divert management’s attention and resources;
● subject us to significant liabilities and damages;
● require us to enter into royalty or licensing agreements; or
● require us to cease certain activities, including the sale of products.
If it is determined that we have infringed, violated or are infringing or violating a patent or other intellectual property
right of any other person or if we are found liable in respect of any other related claim, then, in addition to being liable for
potentially substantial damages, we may be prohibited from developing, using, distributing, selling or commercializing certain
of our technologies and products unless we obtain a license from the holder of the patent or other intellectual property right. We
cannot assure that we will be able to obtain any such license on a timely basis or on commercially favorable terms, or that any
such licenses will be available, or that workarounds will be feasible and cost-efficient. If we do not obtain such a license or find
a cost-efficient workaround, our business, operating results and financial condition could be materially adversely affected, and
we could be required to cease related business operations in some markets and restructure our business to focus on our
continuing operations in other markets.
Our business may suffer if it is alleged or determined that our technology or another aspect of our business infringes the
intellectual property of others.
The markets in which we will compete are characterized by the existence of many patents and trade secrets and also by
litigation based on allegations of infringement or other violations of intellectual property rights. Moreover, in recent years,
individuals and groups have purchased patents and other intellectual property assets for the purpose of making claims of
infringement to extract settlements from companies like ours. Also, third parties may make infringement claims against us that
relate to technology developed and owned by one of our suppliers for which our suppliers may or may not indemnify us. Even if
we are indemnified against such costs, the indemnifying party may be unable to uphold its contractual obligations and
determining the extent such of such obligations could require additional litigation. Claims of intellectual property infringement
against us or our suppliers might require us to redesign our products, enter into costly settlements or license agreements, pay
costly damage awards or face a temporary or permanent injunction prohibiting us from marketing or selling our products or
services. If we cannot or do not license the infringed intellectual property on reasonable terms or at all, or substitute similar
intellectual property from another source, our revenue and operating results could be adversely impacted. Additionally, our
customers and distributors may not purchase our offerings if they are concerned that they may infringe third party intellectual
property rights. Responding to such claims, regardless of their merit, can be time consuming, costly to defend in litigation,
divert management’s attention and resources, damage our reputation and cause us to incur significant expenses. The occurrence
of any of these events may have a material adverse effect on our business, financial condition and operating results.
If we are unable to anticipate consumer preferences and successfully develop attractive products, we might not be able to
maintain or increase our revenue or achieve profitability.
Our success depends on our ability to identify and originate product trends as well as to anticipate and react to
changing demands and preferences of customers in a timely manner. If we are unable to introduce new products or technologies
in a timely manner or our new products or technologies are not accepted by our customers, our competitors may introduce more
attractive products which
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would adversely impact our competitive position. Failure to respond in a timely manner to changing consumer preferences
could lead to, among other things, lower revenues and excess inventory positions of outdated products.
We may be unable to keep pace with changes in technology as our business and market strategy evolves.
We will need to respond to technological advances and emerging industry standards in a cost-effective and timely
manner in order to remain competitive. The need to respond to technological changes may require us to make substantial,
unanticipated expenditures. There can be no assurance that we will be able to respond successfully to technological change.
Risks Related to Our Class A Common Stock
We may not be able to maintain a listing of our Class A common stock on Nasdaq Capital Market, or Nasdaq.
Because our Class A common stock is listed on Nasdaq, we must meet certain financial and liquidity criteria to
maintain such listing. At present, we are in the second 180-day compliance period provided by Nasdaq relating to our failure to
maintain the $1.00 minimum bid price requirement (the “Minimum Bid Price”). This second 180-day compliance period
expires on July 3, 2023. In order to regain compliance, we must regain the $1.00 Minimum Bid Price and trade at $1.00 or
higher for 10 consecutive days. If we do not organically regain the Minimum Bid Price within that period, we will need to seek
stockholder approval to conduct a reverse stock split. If we fail to regain compliance, or otherwise violate or fail to meet any
Nasdaq listing requirements, our Class A common stock may be delisted. In addition, our Board may determine that the cost of
maintaining our listing on a national securities exchange outweighs the benefits of such listing. A delisting of our Class A
common stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our Class A common stock and
could have an adverse effect on the market price of, and the efficiency of the trading market for, our Class A common stock. In
the event our stock is delisted from Nasdaq, whether by choice or otherwise, the delisting of our Class A common stock could
significantly impair our ability to raise capital and stockholder value.
Future sales of our Class A common stock could adversely affect our share price, and any additional capital raised by us
through the sale of equity or convertible debt securities may dilute your ownership in BOXL and may adversely affect the
market price of our Class A common stock.
We believe that our existing working capital, expected cash flow from operations and other available cash resources
will enable us to meet our working capital requirements for at least the next 12 months. However, the development and
marketing of new products and the expansion of distribution channels require a significant commitment of resources. From time
to time, we may seek additional equity or debt financing to finance working capital requirements, continue our expansion,
develop new products or make acquisitions or other investments. In addition, if our business plans change, general economic,
financial or political conditions in our industry change, or other circumstances arise that have a material effect on our cash flow,
the anticipated cash needs of our business, as well as our conclusions as to the adequacy of our available sources of capital,
could change significantly. Any of these events or circumstances could result in significant additional funding needs, requiring
us to raise additional capital. If additional funds are raised through the issuance of equity shares, preferred shares or debt
securities, the terms of such securities could impose restrictions on our operations and would reduce the percentage ownership
of our existing stockholders. If financing is not available on satisfactory terms, or at all, we may be unable to expand our
business or to develop new business at the rate desired and our results of operations may suffer.
The market price of our Class A common stock may be volatile, which could cause the value of our common stock to
fluctuate and possibly decline significantly.
The market price of our Class A common stock may be highly volatile and subject to wide fluctuations. In 2022, the
price of our Class A common stock declined from $1.41 on January 4, 2022 to $0.31 per share on December 30, 2022. As of
March 13, 2023, our Class A common stock closed at $0.48 per share. In addition, our financial performance, government
regulatory action, tax laws and market conditions in general, including the ongoing COVID-19 pandemic and its resulting
impact on the economy at large, could have a significant impact on the future market price of our Class A common stock. Some
of the factors that could negatively affect our share price or result in fluctuations in the price of our common stock include:
● our operating and financial performance and prospects;
● our quarterly or annual earnings or those of other companies in our industry;
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● the public’s reaction to our press releases, our other public announcements and our filings with the SEC;
● changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our Class A
common stock or the stock of other companies in our industry;
● the failure of analysts to cover our Class A common stock;
● strategic actions by us or our competitors, such as acquisitions or restructurings;
● announcements by us, our competitors or our vendors of significant contracts, acquisitions, joint marketing
relationships, joint ventures or capital commitments;
● new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
● changes in accounting standards, policies, guidance, interpretations or principles;
● announcements by third parties or governmental entities of significant claims or proceedings against us;
● new laws and governmental regulations, or other regulatory developments, applicable to our industry;
● changes in general conditions in the United States and global economies or financial markets, including both social
and economic conditions resulting from the ongoing COVID-19 pandemic, war, incidents of terrorism or responses to
such events;
● changes in government spending levels on education;
● changes in key personnel;
● sales of common stock by us, members of our management team or our stockholders;
● the granting or exercise of employee stock options or other equity awards;
● the volume of trading in our Class A common stock; and
● the realization of any risks described in this section under the caption “Risk Factors”
Furthermore, the stock market has recently experienced extreme volatility that, in some cases, has been unrelated or
disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may
adversely affect the market price of our Class A common stock, regardless of our actual operating performance.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we
were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive
management from our business regardless of the outcome of such litigation.
Our Articles of Incorporation, Bylaws and Nevada law may have anti-takeover effects.
Our Articles of Incorporation authorize the issuance of common stock and preferred stock. Each share of Class A
common stock entitles the holder to one vote on all matters to be voted upon by stockholders, and the Class B common stock
has no vote, except as required by law. In addition, our board of directors (“Board”) has the authority to issue additional shares
of preferred stock and to determine the price, rights, preferences, privileges and restrictions of those shares without any further
vote or action by the stockholders. The rights of the holders of common stock will be subject to, and may be adversely affected
by, the rights of the holders of any preferred stock that may be issued in the future. The ability of our Board to issue additional
shares of preferred stock could make it more difficult for a third party to acquire a majority of our voting stock. Other provisions
of our Bylaws also may have the effect of discouraging,
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delaying or preventing a merger, tender offer or proxy contest, which could have an adverse effect on the market price of our
Class A common stock.
In addition, certain provisions of Nevada law applicable to our company could also delay or make more difficult a
merger, tender offer or proxy contest involving our company, including Sections 78.411 through 78.444 of the Nevada Revised
Statutes, which prohibit a Nevada corporation from engaging in any business combination with any “interested stockholder” (as
defined in the statute) for a period of two years unless certain conditions are met. In addition, our senior management is entitled
to certain payments upon a change in control and certain of the stock options and restricted shares we have granted provide for
the acceleration of vesting in the event of a change in control of our company.
We have no intention of declaring dividends in the foreseeable future.
The decision to pay cash dividends on our Class A common stock rests with our Board and will depend on our
earnings, unencumbered cash, capital requirements and financial condition. We do not anticipate declaring any dividends in the
foreseeable future, as we intend to use any excess cash to fund our operations. Investors in our Class A common stock should
not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our Class A
common stock to earn a return on their investment.
If securities or industry analysts do not publish research or reports about us, or if they adversely change their
recommendations regarding our Class A common stock, then our stock price and trading volume could decline.
The trading market for our Class A common stock will be influenced by the research and reports that industry or
securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports
about us, the market for our Class A common stock could be severely limited and our stock price could be adversely affected. In
addition, if one or more analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the
financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to
cover us adversely change their recommendations regarding our Class A common stock, our stock price could decline.
We may be exposed to risks relating to evaluations of controls required by Sarbanes-Oxley Act of 2002.
Pursuant to Sarbanes-Oxley Act of 2002, our management is required to report on, and our independent registered
public accounting firm is required to attest to, the effectiveness of our internal control over financial reporting. Although we
prepare our financial statements in accordance with accounting principles generally accepted in the United States, our internal
accounting controls may not meet all standards applicable to companies with publicly traded securities. If we fail to implement
any required improvements to our disclosure controls and procedures, we may be obligated to report control deficiencies and
our independent registered public accounting firm may not be able to certify the effectiveness of our internal controls over
financial reporting. In either case, we could become subject to regulatory sanction or investigation. Further, these outcomes
could damage investor confidence in the accuracy and reliability of our financial statements.
If we fail to develop, implement and maintain an effective system of internal control over financial reporting, the accuracy
and timing of our financial reporting in future periods may be adversely affected.
The Sarbanes-Oxley Act and related rules and regulations require that management report annually on the effectiveness of our
internal control over financial reporting and assess the effectiveness of our disclosure controls and procedures on a quarterly
basis. Effective internal controls are necessary for us to provide timely and reliable financial reports and effectively prevent
fraud. We have identified control deficiencies that constituted a material weakness in our internal controls and procedures in the
past and may experience a material weakness in future years. If we fail to maintain adequate internal controls, our financial
statements may not accurately reflect our financial condition. Any material misstatements could require a restatement of our
consolidated financial statements, cause us to fail to meet our reporting obligations or cause investors to lose confidence in our
reported financial information, leading to a decline in the market value of our securities.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our corporate headquarters is located at 2750 Premiere Parkway, Duluth, GA, 30097 in an office space of
approximately 12,000 square feet, for which we pay approximately $23,000 per month as rent pursuant to a rental agreement.
Our corporate headquarters house our administrative offices. The Company leases warehouse space in Lawrenceville, GA, for
approximately $13,000 per month.
We also maintain offices in Scottsdale, Arizona and Utica, NY in the U.S., and in Dartford, London, Leeds and
Livingston and Belfast in the U.K. for sales, marketing, technical support and service staff. In addition, we also maintain sales,
marketing and technical support offices in Apeldoorn, Netherlands, Anzegem, Belgium, Helsinki, Finland, Oskarshamn Kalmar,
Sweden, and Düsseldorf, Germany.
ITEM 3. LEGAL PROCEEDINGS
From time to time we are party to litigation matters occurring in the ordinary course of our business. As of the date of
this Annual Report, however, there are no material pending or threatened legal or governmental proceedings relating to our
Company to which we are a party, and to our knowledge there are no material proceedings to which any of our directors,
executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock commenced trading on the Nasdaq Capital Market, or Nasdaq, under the symbol “BOXL” on
November 30, 2017. Prior to that time, our common stock was not traded on any exchange or quoted on any over the counter
market.
Holders
As of March 13, 2023, we had 378 holders of record of our common stock and 74,774,556 shares of common stock
issued and outstanding.
Dividends
We have never paid cash dividends on our Class A common stock. Holders of our Class A common stock are entitled to
receive dividends, if any, declared and paid from time to time by the board of directors out of funds legally available. At present,
we intend to retain any earnings for the operation and expansion of our business and do not anticipate paying cash dividends on
our common stock in the foreseeable future. Any future determination as to the payment of cash dividends will depend upon
future earnings, results of operations, capital requirements, our financial condition and other factors that our board of directors
may consider.
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Securities Authorized for Issuance Under Equity Compensation Plans
Equity Incentive Plans
The Company has issued grants under two equity incentive plans, both of which have been approved by the Company’s
shareholders: (i) the 2014 Equity Incentive Plan, as amended (the “2014 Plan”), pursuant to which a total of 6,390,438 shares of
the Company’s Class A common stock have been approved for issuance, and (ii) the 2021 Equity Incentive Plan (the “2021
Plan”), pursuant to which a total of 5,000,000 shares of the Company’s Class A common stock have been approved for issuance.
Upon approval of the 2021 Plan in June 2021, any shares remaining for issuance under the 2014 Plan were cancelled, and all
future grants were issued under the 2021 Plan. The 2021 Plan allows for issuance of shares of our Class A common stock,
whether through restricted stock, restricted stock units, options, stock appreciation rights or otherwise, to the Company’s
officers, directors, employees and consultants. As of December 31, 2022, a total of approximately 2.3 million shares remained
available for issuance under the 2021 Plan.
The following table provides information as of December 31, 2022 about our equity compensation plans and
arrangements.
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Plan category
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights (1)
5,383,586
983,321
6,366,907
Weighted-
average
exercise price of
outstanding
options,
warrants and
rights
$1.61
Number of
securities
remaining
available for
future issuance
under equity
compensation plans
2,293,933
-
2,293,933
(1) Includes 2,725,400 equity incentive grants issued to Sahara employees in conjunction with our acquisition of Sahara
Presentation Systems.
Recent Sales of Unregistered Securities
During the year ended December 31, 2022, we sold 943,442 shares of Class A common stock to cover tax withholdings
for restricted stock vesting.
On December 31, 2021, in connection with the WhiteHawk Credit Agreement, we issued to WhiteHawk (i) 528,169
shares of Class A common stock, which shares were registered pursuant to our existing shelf registration statement, and (ii) a
warrant to purchase 2,043,291 shares of Class A common stock (subject to increase to the extent of 3% of any Series B and
Series C convertible preferred stock converted into Class A common stock), originally exercisable at $2.00 per share (the
“Warrant”). Based on the arithmetic volume weighted average prices of the Company’s Class A common stock for the 30
trading days prior to March 31, 2022, the exercise price of the Warrant was reduced to $1.19 per share and the shares increased
to 3,434,103.
On July 22, 2022, the Company entered into a Securities Purchase Agreement with an accredited institutional investor.
According to the terms of the WhiteHawk agreement, this purchase agreement triggered a reduction of the exercise price of the
warrants and a revaluation of the derivative liability. The warrants were repriced to $1.10 and shares increased to 3,715,075.
As partial consideration for our purchase of Sahara Holdings Ltd. (“Sahara”), on September 25, 2020, the Company
issued 1,586,620 shares of Series B convertible redeemable preferred stock (the “Series B Preferred Stock”) and 1,320,850
shares of Series C convertible redeemable preferred stock (the “Series C Preferred Stock”). The fair value of the preferred
shares issued was $16.5 million and $12.4 million for the Series B Preferred Stock and Series C Preferred Stock, respectively.
Such shares were issued pursuant to an exemption from registration pursuant to Rule 506(b) of Regulation D of the Securities
Act of 1933. See further discussion of the features of the preferred shares in Note 12.
On March 24, 2021, we entered into a share redemption and conversion agreement with the former Sahara shareholders
who own approximately 96% of our Series B and Series C preferred stock. Under the agreement, we agreed to redeem and
purchase from
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such preferred stockholders on or before June 30, 2021 all of the shares of Series B preferred stock for £11.5 million being the
stated or liquidation value of the Series B preferred stock plus (b) accrued dividends from January 1, 2021 to the date of
purchase. In addition, the holders of 96% of the Series C preferred stock agreed to convert those shares into 7.6 million shares
of our Class A Common Stock at a conversion price of $1.66 per share. Former Sahara shareholders agreed to extend the share
redemption and conversion agreement until December 31, 2021. We did not complete the conversion and redemption by
December 31, 2021, and the agreement terminated without liability by any party.
On January 26, 2021, we entered into an agreement with Everest Display Inc., a Taiwan corporation (“EDI”), and
EDI’s subsidiary, AMAGIC Holographics Inc., a California corporation (“AMAGIC”), pursuant to which $1,983,436 in
accounts payable owed by us to EDI was settled in exchange for our issuance of 793,375 shares (the “2021 Shares”) of its
Class A common stock to AMAGIC at a $2.50 per share purchase price. The 2021 Shares were issued to AMAGIC pursuant to
an exemption from registration provided by Rule 506 of Regulation D under Section 4(a)(2) of the Securities Act.
Use of Proceeds
None.
Issuer Purchases of Equity Securities
None.
ITEM 6. [Reserved]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis should be read in conjunction with our financial statements and
the related notes thereto included elsewhere herein. The Management’s Discussion and Analysis (“MD&A”) contains forward-
looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions.
Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,”
“plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions
(“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These
forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially
from those expressed or implied by the forward-looking statements in this form. Our actual results and the timing of events
could differ materially from those anticipated in these forward-looking statements as a result of several factors.
Historical results may not indicate future performance. Our forward-looking statements reflect our current views about
future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual
results to differ materially from those contemplated by these statements. We undertake no obligation to publicly update or revise
any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date
hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of
activity, performance, or achievements.
Overview
We are a technology company that develops, sells and services interactive solutions predominantly for the global
education market, but also for the corporate and government sectors. We are seeking to become a worldwide leading innovator
and integrator of interactive products and software solutions and improve collaboration and effective communication in meeting
environments. We currently design, produce and distribute interactive technologies including our interactive and non-interactive
flat panel displays, LED video walls, media players, classroom audio and campus communication, cameras and other
peripherals for the education market and non-interactive solutions including flat panels, LED video walls and digital signage.
We also distribute science, technology, engineering and math (or “STEM”) products, including our 3D printing and robotics
solutions, and our portable science lab. All products are
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integrated into our classroom software suite that provides tools for whole class learning, assessment and collaboration. In
addition, we offer professional training services related to our technology to our U.S. educational customers. To date, we have
generated the majority of our revenue in the U.S. and internationally from the sale of interactive displays and related software to
the educational market. We have sold our solutions into over 70 countries and into over 1.5 million classrooms and meeting
spaces. We sell our products and software through more than 1,000 global reseller partners. We believe we offer the most
comprehensive and integrated line of interactive display solutions, audio products, peripherals and accessories, software and
professional development for schools and enterprises on the market today. The majority of our products are backed by nearly
30 years of research and development.
Advances in technology and new options for the introduction of technology into the classroom have forced school
districts to look for solutions that allow teachers and students to bring their own devices into the classroom, provide school
districts with information technology departments with the means to access data with or without internet access, handle higher
demand for video, as well as control cloud and data storage challenges. Our design teams are able to quickly customize systems
and configurations to serve the needs of clients so that existing hardware and software platforms can communicate with one
another. Our goal is to become a single source solution to satisfy the needs of educators around the globe and provide a holistic
approach to the modern classroom.
Recent Acquisitions
On December 31, 2021, the Company acquired FrontRow Calypso LLC, a California company and a leader in
classroom and campus communication solutions for the education market. While purchase accounting was applied to the
acquired assets and assumed liabilities of FrontRow, the fiscal 2021 revenues and the results of operations of FrontRow are not
included in our consolidated financial statements for the year ended December 31, 2021 as a result of the year-end acquisition
date.
On March 23, 2021, the Company acquired Interactive Concepts BV, a company incorporated and registered in
Belgium and a distributor of interactive technologies (“Interactive”). Prior to the acquisition, the company had been Boxlight’s
key distributor in Belgium and Luxembourg.
Our Acquisition Strategy and Challenges
Our growth strategy includes acquiring assets and technologies of companies that have products, technologies, industry
specializations or geographic coverage that extend or complement our existing business. The process to undertake a potential
acquisition is time-consuming and costly. Prior to completing any acquisition, we expect to expend significant resources to
undertake business, financial and legal due diligence on our potential acquisition targets, as a result, and there is no guarantee
that we will complete any acquisition that we pursue.
We believe we can achieve significant cost-savings by merging the operations of the companies we acquire and after
their acquisition leverage the opportunity to reduce costs through the following methods:
● Staff reductions – consolidating resources, such as accounting, marketing and human resources.
● Economies of scale – improved purchasing power with a greater ability to negotiate prices with suppliers.
● Improved market reach and industry visibility – increase in customer base and entry into new markets.
As a result, we believe that an analysis of the historical costs and expenses of our Target Sellers (a company that is the
subject of an attempted acquisition) prior to their acquisition will not provide guidance as to the anticipated results after
acquisition. We anticipate that we will be able to achieve significant reductions in our costs of revenue and selling and, general
and administrative expenses from the levels currently incurred by the Target Sellers operating independently, thereby increasing
our EBITDA and cash flows.
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Components of our Results of Operations and Financial Condition
Revenue
The Company’s sales of interactive devices, including panels, whiteboards and other interactive devices generally
include hardware maintenance services, a license to software, and the provision of related software maintenance. In most cases,
interactive devices are sold with hardware maintenance services.
The Company’s installation, training and professional development service include third-party products and services
and are generally sold separately from the Company’s products.
Cost of revenue
Our cost of revenue is comprised of the following:
● third-party logistics costs;
● costs to purchase components and finished goods directly;
● inbound and outbound freight costs and duties;
● costs associated with the repair of products under warranty;
● write-downs of inventory carrying value to adjust for excess and obsolete inventory and periodic physical inventory
counts;
● cost of professionals to deliver the professional development training; and
● customs expense.
We outsource some of our warehouse operations and order fulfillment and we purchase products from related entities
and third parties. Our product costs vary directly with volume and based on the costs of underlying product components as well
as the prices we negotiate with our contract manufacturers. Shipping costs fluctuate with volume as well as with the method of
shipping chosen in order to meet customer demand. As a global company with suppliers centered in Asia and customers located
worldwide, we have used, and may in the future use, air shipping to deliver our products directly to our customers. Air shipping
is more costly than sea or ground shipping or other delivery options and it is rarely used as a result. The Company did not
experience material delays in shipping during 2022 or 2021 that materially negatively impacted our revenues, however, we have
faced specific supply chain challenges related to certain component shortages and increased cost of global shipping and
margins.
Gross profit and gross profit margin
Our gross profit and gross profit margin have been, and may in the future be, influenced by several factors including:
product, channel and geographical revenue mix; changes in product costs related to the release of newer models; component,
contract manufacturing and supplier pricing, foreign currency exchange and most recently, increased shipping costs due to the
pandemic and global unrest. As we primarily procure our product components and manufacture our products in Asia, our
suppliers incur many costs, including labor costs, in other currencies. To the extent that exchange rates move unfavorably for
our suppliers, they may seek to pass these additional costs on to us, which could have a material impact on our future average
selling prices and unit costs. Gross profit and gross profit margin may fluctuate over time based on the factors described above.
Operating expenses
We classify our operating expenses into two categories: research and development and general and administrative.
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Research and development. Research and development expense consists primarily of personnel related costs, prototype
and sample costs, design costs and global product certifications mostly for wireless certifications.
General and administrative. General and administrative expense consists of personnel related costs, which include
salaries, as well as the costs of professional services, such as accounting and legal, facilities, information technology,
depreciation and amortization and other administrative expenses. General and administrative expense may fluctuate as
a percentage of revenue, notably in the second and third quarters of our fiscal year when we have historically experienced our
highest levels of revenue.
Other income (expense), net
Other income (expense), net primarily consists of interest expense associated with our debt financing arrangements,
gains (losses) on the settlements of debt and trade payable obligations exchanged for common shares, and the effects of changes
in the fair value of derivative liabilities.
Income tax expense
We are subject to income taxes in the United States, United Kingdom, Mexico, Sweden, Finland, Holland and Germany
where we do business. The United Kingdom, Mexico, Sweden, Finland, Holland and Germany have a statutory tax rate different
from that in the United States. Additionally, certain of our international earnings are also taxable in the United States.
Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the absorption of
foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws. We regularly
assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S. Internal Revenue
Service, or IRS, and other tax authorities to determine the adequacy of our income tax reserves and expense. Should actual
events or results differ from our current expectations, charges or credits to our income tax expense may become necessary. Any
such adjustments could have a significant impact on our results of operations.
Operating Results – Boxlight Corporation
For the years ended December 31, 2022 and 2021
Revenues. Total revenues for the year ended December 31, 2022 were $221.8 million as compared to $185.2 million
for the year ended December 31, 2021, resulting in a 19.8% increase. The increase in revenues was primarily a result of our
acquisition of FrontRow in December 2021 and increased demand for our solutions in both the U.S. and EMEA markets.
Excluding FrontRow revenues, revenues increased $11.0 million or 5.9%, for the year ended December 31, 2022 as compared to
the year ended December 31, 2021.
Cost of Revenues. Cost of revenues for the year ended December 31, 2022 was $156.9 million as compared to $138.7
million for the year ended December 31, 2021, resulting in an 13.2% increase. The increase in cost of revenues was primarily
due to the growth in revenues associated with the acquisition of FrontRow in December 2021. Excluding cost of revenues
associated with FrontRow, cost of revenues for Boxlight increased by $5.1 million or 3.7%, to $143.8 million. The increase in
cost of revenues, excluding FrontRow, was primarily due to the growth in revenues across all markets partially offset by lower
manufacturing and freight and shipping costs.
Gross Profit. Gross profit for the year ended December 31, 2022 was $64.9 million as compared to $46.5 million for
the year ended December 31, 2021. Gross profit margin increased from 25.1% for the year ended December 31, 2021 to 29.2%
for the year ended December 31, 2022 due to decreased manufacturing and freight and shipping expenses over the prior year
following the height of the COVID-19 pandemic and higher margins associated with sales from FrontRow products.
General and Administrative Expense. General and administrative expense for the year ended December 31, 2022
was $59.3 million and 26.8% of revenue as compared to $47.3 million and 25.6% of revenue for the year ended December 31,
2021. The increase primarily resulted from additional costs associated with the FrontRow acquisition. Excluding FrontRow,
general and administrative expense for the year ended December 31, 2022 was $50.7 million and 25.8% of revenue.
Research and Development Expense. Research and development expense was $2.5 million or 1.1% of revenue for
the year ended December 31, 2022 as compared to $1.8 million or 1.0% of revenue for the year ended December 31, 2021.
Research and
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development expense primarily consists of costs associated with development of proprietary technology. The increase in
research and development expense was primarily driven by an increase in contract services related to software development.
Other income (expense), net. Other expense for the year ended December 31, 2022 was $6.7 million as compared to
$7.9 million for the year ended December 31, 2021. Other expense decreased by $1.2 million, primarily due to a change in fair
value of derivative liabilities due to a decrease in the Company’s stock price. The decrease was partially offset by an increase in
interest expense.
Net loss. The net loss attributable to common shareholders was $5.0 million and $14.7 million for the year ended
December 31, 2022 and 2021, respectively, after deducting fixed dividends to Series B preferred shareholders of $1.3 million in
each year and the fair value revaluation deemed contribution of $367 thousand following the redemption amendment with the
Series B shareholders in the second quarter of 2021.
To provide investors with additional insight and allow for a more comprehensive understanding of the information used
by management in its financial and decision-making surrounding operations, we supplement our consolidated financial
statements presented on a basis consistent with U.S. generally accepted accounting principles (“GAAP”) with EBITDA and
Adjusted EBITDA, both non-GAAP financial measures of earnings.
EBITDA represents net income (loss) before income tax expense, interest expense, net, and depreciation and
amortization expense. Adjusted EBITDA represents EBITDA, adjusted for stock compensation expense and non-recurring
expenses changes and changes in fair value of derivative liabilities, purchase accounting impact for fair valuing inventory and
deferred revenue, and net (gain) loss on settlement of debt. Our management uses EBITDA and Adjusted EBITDA as financial
measures to evaluate the profitability and efficiency of our business model. We use these non-GAAP financial measures to
assess the strength of the underlying operations of our business. These adjustments, and the non-GAAP financial measure that is
derived from them, provide supplemental information to analyze our operations between periods and over time. We find this
especially useful when reviewing results of operations, which include large non-cash amortizations of intangibles assets from
acquisitions. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial
measures prepared in accordance with GAAP.
The following table contains reconciliations of net losses to EBITDA and adjusted EBITDA for the periods presented.
Reconciliation of net loss for the years ended
December 31, 2022 and 2021 to EBITDA and Adjusted EBITDA
(in thousands)
Net loss
Depreciation and amortization
Interest expense
Income tax expense
EBITDA
Stock compensation expense
Change in fair value of derivative liabilities
Purchase accounting impact of fair valuing inventory
Purchase accounting impact of fair valuing deferred revenue
Net (gain) loss on settlement of debt
Adjusted EBITDA
Discussion of Effect of Seasonality on Financial Condition
2022
2021
(3,743)
9,129
9,923
49
15,358
3,313
(2,591)
1,496
2,229
(856)
18,949
$
$
$
(13,802)
7,177
3,382
3,310
67
4,060
(13)
60
2,980
4,940
12,094
$
$
$
Certain accounts on our balance sheets are subject to seasonal fluctuations. As our business and revenues grow, we
expect these seasonal trends to be reduced. The bulk of our products are shipped to our educational customers prior to the
beginning of the school year, usually in July, August or September. To prepare for the upcoming school year, we generally build
up inventories during the second quarter of the year. Therefore, inventories tend to be at the highest levels at that point in time.
In the first quarter of the year, inventories tend to decline significantly as products are delivered to customers and we do not
need the same inventory levels during the first quarter. Accounts receivable balances tend to be at the highest levels in the third
quarter, in which we record the highest level of sales.
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We have been very proactive, and will continue to be proactive, in obtaining contracts during the fourth and first
quarters or each year in order to help offset the seasonality of our business.
Liquidity and Capital Resources
As of December 31, 2022, we had cash and cash equivalents of $14.6 million, a working capital position of $62.8
million, and a current ratio of 2.29. This financial position represents an improvement from a year ago at December 31, 2021
when we had a working capital position of $53.8 million and $17.9 million of cash and cash equivalents.
For the year ended December 31, 2022, we had net cash provided by operating activities of $1.2 million. For the year
ended December 31, 2021, we had net cash used in operating activities of $2.3 million. The change in cash from operating
activities primarily relates to increases in operating income in 2022 compared to 2021. For the year ended December 31, 2022
and 2021, we had net cash used in investing activities of $1.2 million and $34.0 million, respectively. The decrease in cash used
in investing activities primarily relates to the purchase of FrontRow that occurred in 2021, partially offset by an increase in
purchases of Property and Equipment. In addition, for the year ended December 31, 2022, we had net cash used in financing
activities of $5.1 million. For the year ended December 31, 2021, we had net cash provided by financing activities of $41.1
million. The decrease in cash from financing activities primarily relates to a decrease in net proceeds and principal repayments
of debt of $54.5 million and a decrease in debt issuance costs of $3.3 million, partially offset by an increase in proceeds from
common stock of $4.3 million.
In addition to the cash flows generated by our ongoing operating activities we financed our operations during 2022
with our current Credit Facility with WhiteHawk and in 2021 with a $20.0 million tranche of debt funded by our previous
lender, and from a pre-existing accounts receivable financing arrangement with another lender who purchases 85% of the
eligible accounts receivable of the Company, up to $6.0 million, with the right of recourse. We closed these credit lines in
December 2021 and replaced them with our Credit Facility with WhiteHawk. Our accounts receivable and our ability to borrow
against accounts receivable provides an additional source of liquidity as cash payments are collected from customers in the
ordinary course of business. Our accounts receivable balance fluctuates throughout the year based on the seasonality of the
business.
Our cash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual
obligations with respect to facility leases and other operating leases. We lease all our office facilities. We expect to make future
payments on existing leases from cash generated from operations. We have limited credit available from our major vendors and
are required to prepay a percentage of our inventory purchases, which further constrains our cash liquidity.
The Company had an accumulated deficit of $65.0 million as of December 31, 2022 and net cash provided by
operations of $1.2 million for the year ended December 31, 2022.
Recent Financing
WhiteHawk Finance LLC
To finance the acquisition of FrontRow, the Company and substantially all of its direct and indirect subsidiaries,
including Boxlight and FrontRow as guarantors, entered into a maximum $68.5 million term loan credit facility, dated
December 31, 2021 (the “Credit Agreement”), with WhiteHawk Finance LLC, as lender (the “Lender”), and WhiteHawk
Capital Partners, LP, as collateral agent. The Company received an initial term loan of $58.5 million on December 31, 2021 (the
“Initial Loan”) and was provided with a subsequent delayed draw facility of up to $10 million that may be provided for
additional working capital purposes under certain conditions (the “Delayed Draw”). The Initial Loan and Delayed Draw are
collectively referred to as the “Term Loans.” The proceeds of the Initial Loan were used to finance the Company’s acquisition of
FrontRow, pay off all indebtedness owed to the Company’s then existing lenders, Sallyport Commercial Finance, LLC and Lind
Global Asset Management, LLC, pay related fees and transaction costs, and provide working capital. Of the Initial Loan, $8.5
million was subject to repayment on February 28, 2022, with quarterly principal payments of $625,000 and interest payments
commencing March 31, 2022 and the $40.0 million remaining balance plus any Delayed Draw loans becoming due and payable
in full on December 31, 2025. The Term Loans bear interest at the LIBOR rate plus 10.75%; provided that after March 31, 2022,
if the Company’s Senior Leverage Ratio (as defined in the Credit Agreement) is less than 2.25, the interest rate would be
reduced to LIBOR plus 10.25%. Such terms are subject to the Company maintaining a borrowing base in terms compliant with
the Credit Agreement.
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In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 528,169 shares of Class A
common stock (the “Shares”), which Shares were registered pursuant to its existing shelf registration statement and were
delivered to the Lender in January 2022, (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to
increase to the extent of 3% of any Series B and Series C convertible preferred stock converted into Class A common stock),
exercisable at $2.00 per share (the “Warrant”), which Warrant was subject to repricing on March 31, 2022 based on the
arithmetic volume weighted average prices for the 30 trading days prior to September 30, 2022, in the event the Company’s
stock is then trading below $2.00 per share, (iii) a 3% fee of $1,800,000, and (iv) a $500,000 original issue discount. In
addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred
agency fees, legal fees and other costs in connection with the execution of the Credit Agreement totaling approximately $1.7
million. Under the terms of the warrant issued to WhiteHawk on December 31, 2021, the exercise price of the warrants would
reprice if the stock price on March 31, 2022 was less than the original exercise price, at which time the number of warrants
would also be increased proportionately, so that after such adjustment the aggregate exercise price payable for the increased
number of warrant shares would be the same as the aggregate exercise price previously in effect. The warrants repriced on
March 31, 2022 to $1.19 per share and the shares increased to 3,434,103.
On July 22, 2022, the Company entered into a Securities Purchase Agreement with an accredited institutional investor.
According to the terms of the WhiteHawk agreement, this purchase agreement triggered a reduction of the exercise price of the
warrants and a revaluation of the derivative liability. The warrants were repriced to $1.10 and warrant shares increased to
3,715,075.
On March 29, 2022, the Company received a notice from the collateral agent, alleging, among other things, defaults as
a result of (i) failure to repay $8.5 million of the facility by February 28, 2022, (ii) non-compliance with the borrowing base
resulting in the Company being in an over advance position under the Credit Agreement, and (iii) failure to timely provide
certain reports and documents. As a result, all accrued and unpaid interest owed under the Term Loan, became subject to a post-
default interest rate equal to the highest interest rate allowed for under the Credit Agreement plus 2.50% until such time as the
events of default were either waived or cured. In February 2022, WhiteHawk and the Company agreed in principle to an
extension of the February 2022 Payment. Pursuant to amendment to the Credit Agreement, dated April 4, 2022, the Collateral
Agent and Lender agreed to extend the terms of repayment of the $8.5 million originally due on February 28, 2022 until
February 28, 2023 and waive and/or otherwise extend compliance with certain other terms of the Credit Agreement in order to
allow the Loan Parties adequate time to comply with such terms. In July 2022, the Company and WhiteHawk agreed that the
notice had inadvertently included the default with respect to the failure to repay $8.5 million of the facility. As a result,
notwithstanding the notice, both WhiteHawk and the Company have agreed that the Company was not in default in making the
February 2022 Payment to WhiteHawk.
The principal elements of the April amendment included (a) an extension of time to repay $8.5 million of the principal
amount of the term loan from February 28, 2022 to February 28, 2023, and (b) forbearance on $3,500,000 in over advances until
May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forth in the Credit
Agreement. In such connection, the Loan Parties have obtained credit insurance on certain key customers whose principal
offices are located in the European Union and Australia as, without the credit insurance, their accounts owed to the Loan Parties
had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the
Collateral Agent to enforce security interests on such accounts. In addition, the Lender and Collateral Agent agreed to (i)
reduce, through September 30, 2022, the minimum cash reserve requirement for the Loan Parties, (ii) reduce the interest rate by
50 basis points (to LIBOR plus 9.75%) after delivery of the Loan Parties’ September 30, 2023 financial statements, subject to
the Loan Parties maintaining 1.75 EBITDA coverage ratio, and (iii) waive all prior Events of Default under the Credit
Agreement. In conjunction with the amendment to the Credit Agreement, the parties entered into an amended and restated fee
letter (the “Fee Letter”) pursuant to which the parties agreed to prepayment premiums of (i) 5% for payments made on or before
December 31, 2022, (ii) 4% for payments made between January 1, 2023 and December 31, 2023, and (iii) 2% for payments
made between January 1, 2024 and December 31, 2025. Furthermore, the parties agreed that no prepayment premiums would be
payable with respect to the first $5.0 million paid under the Term Loan, any payments made in relation to the $8.5 million due
on or before February 28, 2023, any required amortization payments under the Credit Agreement and any mandatory
prepayments by way of ECF or casualty events.
On June 21, 2022, the Company and substantially all of its direct and indirect subsidiaries (together with the Company,
the “Loan Parties”), entered into a second amendment (the “Second Amendment”) to the four-year term loan credit facility,
originally entered into December 31, 2021 and as amended on April 4, 2022 (the “Credit Agreement”), with the Collateral
Agent and Lender.
The Second Amendment to the Credit Agreement was entered into for purposes of the Lender funding a $2.5 million
delayed draw term loan and adjusting certain terms to the Credit Agreement, including adjusting the Applicable Margin (as
defined in the Second
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Amendment) to 13.25% for LIBOR Rate Loans and 12.25% for Reference Rate Loans, increasing the definition of change of
control from 33% voting power to 40% voting power, requiring the Company to engage a financial advisor, and allowing
additional time, until July 15, 2022, for the Company to come into compliance with certain borrowing base requirements set
forth in the Second Amendment to the Credit Agreement, among other adjustments.
Lind Global Marco Fund and Lind Global Asset Management
On February 4, 2020, the Company and Lind Global Macro Fund, LP (“LGMF”) entered into a securities purchase
agreement pursuant to which the Company received $750,000 in exchange for the issuance to Lind of (1) an
$825,000 convertible promissory note, payable at an 8% interest rate, compounded monthly, (2) certain shares of restricted
Class A common stock valued at $60,000, calculated based on the 20-day volume average weighted price of the Class A
common stock for the period ended February 4, 2020, and (3) a commitment fee of $26,250. The Note was to mature over 24
months, with repayment commencing on August 4, 2020, after which time the Company made monthly payments of
$45,833 plus interest by issuing shares of Class A common stock. The commitment fee in the amount of $26,025 was paid to
LGMF, along with legal fees in the amount of $15,000. The Company paid LGMF $60,000 for closing fees by
issuing 44,557 shares of Class A common stock. During the year ended December 31, 2021, the Company paid principal of
$1.1 million and interest of $32,000 by issuing a total of 671,000 shares Class A common stock with an aggregate value of
$1.5 million to Lind Global and recognized a loss extinguishment of debt of approximately $430,000. On December 31, 2021,
the LGMF convertible note was paid in full.
On September 21, 2020, the Company and Lind Global Asset Management, LLC (“Lind Global”) entered into a
securities purchase agreement (the “Lind SPA”) pursuant to which the Company received $20.0 million in exchange for the
issuance to Lind Global of (1) a $22.0 million convertible promissory note, payable at a 4% interest rate, compounded monthly,
(2) 310,399 shares of restricted Class A common stock valued at $900,000, calculated based on the 20-day volume average
weighted price of the Class A common stock for the period ended September 21, 2020, and (3) a commitment fee of $400,000.
The convertible note was to mature over 24 months, with repayment commencing on November 22, 2020, after which time the
Company became obligated to make monthly payments of $1.0 million, plus interest. Interest accrued during the first two
months of the note, after which time the interest payments, including accrued interest was paid monthly in either conversion
shares. The commitment fee in the amount of $40,000 was paid to Lind Global, along with legal fees in the amount of
$20,000 The Company paid Lind Global a total of $500,000 in closing fees consisting of commitment and legal fees, by
issuing 310,399 shares of Class A common stock. The shares of Class A common stock issuable to Lind under the convertible
note were registered pursuant to our effective shelf registration statement on Form S-3.
During the year ended December 31, 2021, as payment for the Lind Global convertible notes, the Company repaid
principal of $12.0 million and interest of $584,000 to Lind Global by issuing a total of 7.2 million shares Class A common stock
with an aggregate value of $15.9 million to Lind and recognized a $3.3 million loss.
Paycheck Protection Program Loan
On May 22, 2020, the Company received loan proceeds of $1.1 million under the Paycheck Protection Program.
During 2021, the Company applied for forgiveness in the amount of $836 thousand. On March 2, 2022, we received a decision
letter from the lender that the forgiveness application had been approved, leaving a remaining balance of $173 thousand to be
paid. The Company received a payment schedule from its lender on May 5, 2022, extending the payoff date until May 2025.
The amount remaining on the loan at December 31, 2022 was $127 thousand.
Everest Display, Inc.
On January 26, 2021, the Company entered into an agreement with EDI and EDI’s subsidiary, AMAGIC, settling
$1,983,436 in accounts payable owed by the Company to EDI for 793,375 shares of Class A common stock. During the year
ended December 31, 2021, the Company recognized a $357 thousand gain.
Accounts Receivable Financing – Sallyport Commercial Finance
On September 30, 2020, Boxlight Inc. and EOS EDU LLC entered into an asset-based lending agreement with
Sallyport Commercial Finance, LLC (“Sallyport”). Sallyport agreed to purchase 90% of the eligible accounts receivable of the
Company during the Term with a right of recourse back to the Company if the receivables are not collectible. Advances against
this agreement accrue
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interest at the rate of 3.50% in excess of the highest prime rate publicly announced from time to time with a floor of 3.25%. In
addition, the Company was required to pay a daily audit fee of $950 per day.
On July 20, 2021, Boxlight and Sallyport amended the Accounts Receivable Agreement (the “ARC Amendment”) for
purposes of increasing the Maximum Facility Limit Amount (as defined in the ARC Amendment) to $13,000,000, as well as
increasing the minimum monthly sales from $1,250,000 to $3,000,000. In exchange for entry into the ARC Amendment,
Boxlight agreed to a fee of $50,000, representing one percent of the increased Maximum Facility Limit Amount. Other terms of
the Accounts Receivable Agreement remained unchanged. On August 6, 2021, Boxlight and Sallyport entered into an additional
amendment of the Accounts Receivable Agreement (the “Second ARC Amendment”), which further increased the Maximum
Facility Limit Amount to $15,000,000. In exchange for entry into the Second ARC Amendment, Boxlight agreed to a fee of
$20,000, representing one percent of the increased Maximum Facility Limit Amount. Other terms of the Accounts Receivable
Agreement remain unchanged. Following the Company’s entry into the Credit Facility with WhiteHawk, on December 31,
2021, all indebtedness to Sallyport was satisfied in full.
Off Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, results of operations or liquidity and capital resources.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles
accepted in the United States. In connection with the preparation of our financial statements, we are required to make
assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities,
revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience,
current trends and other factors that management believes to be relevant at the time our consolidated financial statements are
prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our
financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot
be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be
material.
Our significant accounting policies are discussed in detail in Note 1 to the accompanying consolidated financial
statements, and briefly summarized below. We believe that the following accounting estimates are the most critical to aid in
fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex
judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain:
1. Revenue Recognition
2. Business Acquisitions
3. Goodwill and Intangible assets
4. Share-based Compensation
5. Derivative Warrant Liabilities
6.
Income Taxes
REVENUE RECOGNITION
In accordance with the FASB’s Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with
Customers) (“Topic 606”), the Company recognizes revenue at the amount to which it expects to be entitled when control of the
products or services is transferred to its customers. Control is generally transferred when the Company has a present right to
payment and the significant risks and rewards of ownership of products or services are transferred to its customers. Product
revenue is derived from the sale of interactive panels, audio and communication equipment and related software and accessories
to distributors, resellers, and end
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users. Service revenue is derived from hardware maintenance services, product installation, training, software maintenance, and
subscription services.
The Company’s sales of interactive devices, including panels, whiteboards, audio and communication equipment and
other interactive devices generally include hardware maintenance services, a license to software, and the provision of related
software maintenance. Interactive devices are generally sold with hardware maintenance services with terms ranging from 36-
60 months. Software maintenance includes technical support, product updates on a when and if available basis, and error
correction services. At times, non-interactive projectors are also sold with hardware maintenance services with terms ranging
from 36-60 months. The Company also licenses software independently of its interactive devices, in which case it is bundled
with software maintenance, and in some cases, subscription services that include access to on-line content, access to
replacement parts, and cloud-based applications. The Company’s software subscription services provide access to content and
software applications on an as needed basis over the Internet, but do not provide the right to take delivery of the software
applications.
The Company’s product sales, including those with software and related services, generally include a single payment
up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the
Company’s expectations and historical experience. For most of the Company’s product sales, control transfers, and therefore,
revenue is recognized when products are shipped at the point of origin. When the Company transfers control of its products to
the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping
and handling activities as a fulfillment cost rather than a performance obligation. For other software product sales, control is
transferred when the customer receives the related access code or interactive hardware since the customer’s access code or
connection to the interactive hardware activates the software license at which time the software is made available to the
customer. For the Company’s software maintenance, hardware maintenance, and subscription services, revenue is recognized
ratably over time as the services are provided since time is the best output measure of how those services are transferred to the
customer.
The Company’s installation, training and professional development services are generally sold separately from the
Company’s products. Control of these services is transferred to our customers over time with hours/time incurred in providing
the service being the best depiction of the transfer of services since the customer is receiving the benefit of the services as the
work is performed.
For contracts with multiple performance obligations, each of which represent promises within a contract that are
distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices
(“SSPs”).
BUSINESS ACQUISITIONS
The Company’s business acquisitions are accounted for as a business combination, in accordance with Topic 350
“Business Combinations,” which requires, among other things, that assets acquired, and liabilities assumed be recognized at
their estimated fair values as of the acquisition date on the consolidated balance sheet. Transaction costs are expensed as
incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill.
Income taxes, where applicable, are recognized and measured in accordance with Topic 740, Accounting for Income Taxes. For
transactions occurring on or after January 1, 2021, contract liabilities acquired in a business combination are recognized and
measured in accordance with Topic 606. Determining the fair value of assets acquired and liabilities assumed requires
management to use significant judgement and estimates, including the selection of valuation methodologies, estimates of future
revenue, costs and cash flows, and discount rates.
GOODWILL AND INTANGIBLE ASSETS
Goodwill represents the cost in excess of the fair value of the net assets of acquired businesses. Goodwill is not
amortized and is not deductible for tax purposes. Under ASC Topic 350 “Business Combinations,” we have an option to perform
a “qualitative” assessment of the Company to determine whether further impairment testing is necessary. If an entity believes, as
a result of its qualitative assessment, that it is more-likely-than-not that the fair value of the business is less than carrying
amount, the quantitative impairment test is required. Otherwise, no further testing is required. If we determine that the Company
meets these criteria, we perform a qualitative assessment. In this qualitative assessment, we consider the following items:
macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events. In
addition, we assess whether the most recent fair value determination results in an amount that exceeds the carrying amount of
the Company. Based on these assessments, we determine whether the likelihood that a current fair value determination would be
less than the current carrying amount is not more likely than not.
44
Table of Contents
Because the qualitative assessment is an option, we may bypass it for any reporting unit in any period as begin our
analysis with the quantitative impairment test. We may elect to perform a quantitative impairment test based on the period of
time that has passed since the most recent determination of fair value, even when we do not believe that it is more-likely-than-
not that the fair value of the business is less than carrying amount.
In analyzing goodwill for potential impairment in the quantitative impairment test, we use a combination of the income
and market approaches to estimate the fair value. Under the income approach, we calculate the fair value based on estimated
future discounted cash flows. The assumptions we use are based on what we believe a hypothetical marketplace participant
would use in estimating fair value. Under the market approach, we estimate the fair value based on market multiples of revenue
or earnings before interest, income taxes, depreciation and amortization for benchmark companies. If the fair value exceeds
carrying value, then no further testing is required. However, if the fair value were to be less than carrying value, we would then
determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the goodwill
exceeded its implied value.
Intangible assets are amortized using the straight-line method over their estimated period of benefit. We evaluate the
recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates of
useful lives or that indicate that impairment exists. No material impairments of intangible assets have been identified during any
of the periods presented. Intangible assets are tested for impairment on an annual basis, and between annual tests if indicators of
potential impairment exist, using a fair-value-based approach.
SHARE-BASED COMPENSATION
The Company estimates the fair value of each stock option compensation award at the grant date by using the Black-
Scholes option pricing model; the fair value of each restricted stock unit awarded is the market price of the underlying shares at
the date of grant. The fair value determined represents the cost for the award and is recognized over the vesting period during
which an employee is required to provide service in exchange for the award. Accordingly, stock compensation expense is
recognized based on the estimated fair value of the awards which is amortized as compensation expense on a straight-line basis
over the vesting period. Total expense related to the award is reduced by the fair value of the options that are forfeited by the
employees that leave the Company prior to vesting.
DERIVATIVE WARRANT LIABILITIES
The Company classifies common stock purchase warrants as equity if the contracts (i) require physical settlement or
net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement
or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to
net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a
choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset
provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting
date to determine whether a change in classification between equity and liabilities is required.
The Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification
as equity instruments due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole
control of the Company. Such warrants are measured at fair value at each reporting date, and the changes in fair value are
included in determining net income for the period.
INCOME TAXES
The Company follows the asset and liability method of accounting for income taxes pursuant to the pertinent guidance
issued by the FASB. Deferred income taxes are recorded to reflect the estimated future tax effects of differences between the
financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected
to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to
the amount management considers more likely than not to be realized. Such valuation allowances are recorded for the portion of
the deferred tax assets that are not expected to be realized based on the levels of historical taxable income and projections for
future taxable income over the periods in which the temporary differences will be deductible.
45
Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company,” this item is not required.
46
Table of Contents
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 57)
Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2022 and 2021
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022 and 2021
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021
Notes to Consolidated Financial Statements
Page
F-1
F-4
F-5
F-6
F-7
F-8
47
Table of Contents
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Boxlight Corporation
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Boxlight Corporation and its subsidiaries (the
“Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations and
comprehensive loss, changes in stockholders’ equity and cash flows for each of the years in the two-year period
ended December 31, 2022, and the related notes and financial statement schedule II (collectively referred to as the
“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for
each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles
generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Critical Audit Matter – Fair Value of Derivative Liabilities
As described in Notes 1 and 10, the Company has issued warrants to purchase common stock which feature net
cash settlement provisions or do not have fixed settlement provisions because their conversion and exercise prices
may be lowered under certain conditions. The warrants are derivative liabilities and are remeasured at fair value at
each reporting date using a Monte Carlo simulation technique. Changes in fair value are included in operations each
period. As of
F-1
Table of Contents
December 31, 2022, the Company estimated the fair value to be $472 thousand and recognized a $2.6 million
change in fair value in operations for the year ended December 31, 2022.
We identified the fair value of the liability-classified warrants as a critical audit matter. The principal considerations
for that determination were the unobservable inputs used in the Company’s valuation technique are highly
subjectivity and involves higher measurement uncertainty. This required a high degree of auditor effort, including
specialized skills and knowledge, and significant auditor judgment in evaluating the fair value of the warrants. The
primary procedures we performed to address this critical audit matter included:
● We obtained an understanding of management’s process for determining the unobservable inputs for the
fair value measurement.
● Utilizing a valuation specialist, we evaluated the significant assumptions and methods utilized in developing
the fair value, including:
o We evaluated the reasonableness of the Company’s measurement technique and significant
assumptions and inputs.
o We verified developed an independent calculation of the risk-free rate and volatility and compared
our rates to those used by management.
o We performed independent simulations using a Monte Carlo technique to determine the fair value
of the warrants and test the accuracy of management’s valuation technique and application.
Critical Audit Matter – Equity-Classified Warrants
As described in Note 12, the Company issued certain warrants and prefunded warrants in connection with a
securities purchase agreement to issue and sell 7.0 million shares of the Company’s common stock. The Company
evaluated whether the warrants and pre-funded warrants were in the scope of ASC Topic 480 Distinguishing
Liabilities from Equity, which discusses the accounting for instruments with characteristics of both liabilities and
equity. The guidance in Topic 480, and the resulting liability classification, is applicable to instruments when certain
criteria are met. Based on its analysis, the Company concluded that the warrants, and pre-funded warrants did not
meet any of the criteria to be subject to liability classification and are therefore classified as equity.
We identified the classification of the warrants as a critical audit matter. The principal considerations for that
determination included the complexity and effort required in identifying all relevant features of and obligations under
the instruments for evaluation against the criteria for classification. This required a high degree of auditor effort,
including specialized skills and knowledge, and significant auditor judgment in evaluating the features of and
obligations under the warrants and the determination of whether such features meet the criteria for liability-
classification.
The primary procedures we performed to address this critical audit matter included:
● We obtained an understanding of management’s process for identifying and evaluating the critical terms of
the warrant agreements in determining the classification.
● With the assistance of professionals in our firm that have specialized skills and knowledge in accounting for
debt and equity instruments:
o We evaluated management’s analysis and conclusions regarding the relevant provisions and
features of the warrants in light of relevant guidance and the criteria for classification.
o We read the securities purchase agreement and underlying warrant agreements comprising the
offering to identify the relevant features and settlement provisions for our evaluation.
o We independently evaluated the relevant features and settlement provisions of the warrants under
relevant guidance considering the criteria for liability-classification.
F-2
Table of Contents
Critical Audit Matter – Goodwill Impairment Assessment
As described in Note 1, in analyzing goodwill for potential impairment in the quantitative impairment test, the
Company uses a combination of the income and market approaches to estimate the fair value. Under the income
approach, the Company calculates the fair value based on discounted estimated future cash flows. Under the
market approach, the Company estimates the fair value based on the market multiples of revenue or earnings
before interest, income taxes, depreciation, and amortization for benchmark companies.
We identified the quantitative impairment test of goodwill as a critical audit matter. The principal considerations for
that determination included the judgement involved in assessing management’s impairment test of goodwill due to
the measurement uncertainty involved in determining the fair value of equity for the reporting units. In particular, the
fair value estimates are sensitive to changes in assumptions such as discount rates, expected future cash flows,
long-term growth rates, and comparable company earnings multiples.
The primary procedures we performed to address this critical audit matter included:
● We obtained an understanding of management’s process for assessing goodwill impairment and performing
the qualitative goodwill impairment test, including management’s process for developing assumptions used
in the income and market approaches to estimate the fair value of reporting units.
● We evaluated management’s revenue growth rates, margins, and cash flows to current industry and
economic trends, while also considering the current and future business, customer base, and product mix.
● We assessed management’s process for estimating revenue growth and margins by comparing past
projections to actual performance.
● With the assistance of our valuation professionals with specialized skills and knowledge, we evaluated the
models, valuation methodology, and significant assumptions used in the income and market approaches to
estimate the fair values.
● We tested management’s reconciliation of the fair value of equity of the reporting units to the market
capitalization of the Company.
/s/ FORVIS, LLP (Formerly, Dixon Hughes Goodman LLP)
We have served as the Company’s auditor since 2018.
Atlanta, Georgia
March 16, 2023
F-3
Table of Contents
Boxlight Corporation
Consolidated Balance Sheets
As of December 31, 2022 and 2021
(in thousands except share and per share amounts)
ASSETS
Current assets:
Cash and cash equivalents
Accounts receivable – trade, net of allowances
Inventories, net of reserves
Prepaid expenses and other current assets
Total current assets
Property and equipment, net of accumulated depreciation
Operating lease right of use asset
Intangible assets, net of accumulated amortization
Goodwill
Other assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
Short-term debt
Operating lease liabilities, current
Deferred revenues, current
Derivative liabilities
Other short-term liabilities
Total current liabilities
Deferred revenues, non-current
Long-term debt
Deferred tax liabilities, net
Operating lease liabilities, non-current
Other long-term liabilities
Total liabilities
Commitments and contingencies (Note 15)
Mezzanine equity:
Preferred Series B, 1,586,620 shares issued and outstanding
Preferred Series C, 1,320,850 shares issued and outstanding
Total mezzanine equity
December 31,
December 31,
2022
2021
$
$
$
$
$
$
14,591
31,009
58,211
7,433
111,244
1,733
4,350
52,579
25,092
397
195,395
36,566
845
1,898
8,308
472
386
48,475
15,603
43,778
4,680
2,457
—
114,993
16,146
12,363
28,509
17,938
29,573
51,591
9,444
108,546
1,073
—
65,532
26,037
248
201,436
33,638
9,804
—
7,575
3,064
667
54,748
13,952
42,137
8,449
—
340
119,626
16,146
12,363
28,509
Stockholders’ equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 and 167,972 shares issued
and outstanding, respectively
Common stock, $0.0001 par value, 200,000,000 shares authorized; 74,716,696 and 63,821,901 Class A
shares issued and outstanding at December 31, 2022 and 2021, respectively
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive (loss) income
Total stockholders’ equity
—
—
7
117,843
(65,043)
(914)
51,893
6
110,867
(61,300)
3,728
53,301
Total liabilities and stockholders’ equity
$
195,395
$
201,436
See Accompanying Notes to Financial Statements.
F-4
Table of Contents
Boxlight Corporation
Consolidated Statements of Operations and Comprehensive Loss
For the Years Ended December 31, 2022 and 2021
(in thousands, except per share amounts)
Revenues, net
Cost of revenues
Gross profit
Operating expense:
General and administrative expenses
Research and development
Total operating expense
Income (loss) from operations
Other income (expense):
Interest expense, net
Other expense, net
Gain (loss) on settlement of liabilities, net
Change in fair value of derivative liabilities
Total other expense
Loss before income taxes
Income tax expense
Net loss
Fixed dividends - Series B Preferred
Deemed contribution -Series B Preferred
Net loss attributable to common stockholders
Comprehensive loss:
Net loss
Other comprehensive loss:
Foreign currency translation adjustment
Total comprehensive loss
Net loss attributable to common stockholders
Net loss per common share – basic and diluted
$
2022
221,781
156,913
64,868
$
2021
185,177
138,652
46,525
59,337
2,482
61,819
47,270
1,826
49,096
3,049
(2,571)
(9,923)
(267)
856
2,591
(6,743)
(3,694)
(49)
(3,743)
(1,269)
—
(5,012)
(3,743)
(4,642)
(8,385)
$
$
(3,382)
(20)
(4,532)
13
(7,921)
(10,492)
(3,310)
(13,802)
(1,269)
367
(14,704)
(13,802)
(1,464)
(15,266)
(5,012)
(14,704)
(0.07)
$
(0.23)
$
$
$
$
Weighted average number of common shares outstanding – basic and diluted
69,153
58,849
See Accompanying Notes to Financial Statements.
F-5
Table of Contents
Boxlight Corporation
Consolidated Statements of Changes in Stockholders’ Equity
For the Years Ended December 31, 2022 and 2021
(in thousands except share amounts)
Series A
Preferred Stock
Class A
Common Stock
Shares Amount Shares
Additional Accumulated Other
Paid-in
Amount Capital
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Balance, December 31, 2020
Shares issued for:
Conversion of liabilities
Stock options exercised
Acquisition
Debt issuance costs
Vesting of restricted stock units
Warrant redemption, net
Stock compensation
Foreign currency translation
Fixed dividends for preferred shareholders
Deemed contribution for preferred shareholders
Net loss
Balance, December 31, 2021
Shares issued for:
Stock options exercised
Acquisition
Debt issuance costs
Vesting of restricted stock units
Securities purchase agreement
Warrant redemption, net
Issuance of warrants and prefunded warrants
Stock compensation
Foreign currency translation
Fixed dividends for preferred shareholders
Net loss
167,972
$
— 53,343,518
$
6
$ 86,768
$
5,192
$
(47,498)
$ 44,468
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
8,697,166
492,460
142,882
—
916,682
229,193
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
19,080
415
404
660
—
382
4,060
—
(1,269)
367
—
—
—
—
—
—
—
—
(1,464)
—
—
—
— 19,080
415
—
404
—
660
—
—
—
—
382
4,060
—
(1,464)
—
(1,269)
—
—
367
(13,802)
(13,802)
167,972
— 63,821,901
6
110,867
3,728
(61,300)
53,301
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
296,841
230,770
528,169
2,486,075
7,000,000
352,940
—
—
—
—
—
—
—
—
—
1
—
—
—
—
—
—
81
150
—
—
2,352
—
2,349
3,313
—
(1,269)
—
—
—
—
—
—
—
—
—
(4,642)
—
—
—
—
—
—
—
—
—
—
—
—
(3,743)
81
150
—
—
2,353
—
2,349
3,313
(4,642)
(1,269)
(3,743)
Balance, December 31, 2022
167,972
$
— 74,716,696
$
7
$ 117,843
$
(914)
$
(65,043)
$ 51,893
See Accompanying Notes to Financial Statements.
F-6
Table of Contents
Boxlight Corporation
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2022 and 2021
(in thousands)
Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of debt discount and issuance cost
Bad debt expense
(Gain) loss on settlement of liabilities
Changes in deferred tax assets and liabilities
Change in allowance for sales returns and volume rebate
Change in inventory reserve
Change in fair value of derivative liability
Shares issued for interest payment on notes payable
Stock compensation expense
Depreciation and amortization
Change in right of use assets and lease liabilities
Changes in operating assets and liabilities:
Accounts receivable – trade
Inventories
Prepaid expenses and other current assets
Other assets
Accounts payable and accrued expenses
Other short-term liabilities
Deferred revenues
Other liabilities
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Asset acquisition
Cash paid to settle earnout obligations
Purchases of furniture and fixtures, net
Net cash used in investing activities
Cash flows from financing activities:
Net proceeds from issuance of common stock and warrants, net of issuance costs
Proceeds from issuances of short-term debt
Proceeds from exercise of options and warrants
Principal payments on debt
Discount on notes payable
Proceeds from long term debt
Debt issuance costs
Payments of fixed dividends to Series B Preferred stockholders
Proceeds from issuance of common stock
Other Share based payments
Net cash (used in) provided by financing activities
Effect of foreign currency exchange rates
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of the period
Cash and cash equivalents, end of the period
Supplemental cash flow disclosures:
Cash paid for income taxes
Cash paid for interest
Non-cash investing and financing transactions:
Shares issued to settle accounts payable
Shares issued for closing fees related to outstanding notes payable – Lind Global
Exercise of warrants
Shares issued for asset acquisition
Deemed contribution from Series B Preferred Stock
2022
2021
$
(3,743)
$
(13,802)
2,158
266
(856)
(3,776)
316
(68)
(2,591)
—
3,313
9,129
8
(3,800)
(10,272)
1,602
(161)
5,756
256
3,965
(312)
1,190
(100)
—
(1,106)
(1,206)
4,700
—
—
(11,141)
—
2,500
—
(1,269)
84
$
$
2,132
425
3,345
788
1,145
250
(13)
617
4,060
7,175
—
(6,427)
(20,998)
(2,470)
(158)
17,948
344
4,318
(1,009)
(2,330)
(33,604)
(119)
(285)
(34,008)
—
54,225
—
(66,912)
(500)
58,500
(3,324)
(1,269)
428
(5,126)
$
41,148
1,795
(3,347)
17,938
14,591
1,615
8,342
—
—
—
150
—
$
$
$
$
$
$
$
$
(332)
4,478
13,460
17,938
1,476
1,497
1,626
17,454
350
403
367
$
$
$
$
$
$
$
$
$
$
$
See Accompanying Notes to Financial Statements.
F-7
Table of Contents
Notes to Consolidated Financial Statements
Boxlight Corporation
NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
COMPANY HISTORY AND RECENT ACQUISITIVE GROWTH
Boxlight Corporation (the “Company”) was incorporated in the State of Nevada on September 18, 2014 with its
headquarters in Atlanta, Georgia for the purpose of becoming a technology company that sells interactive educational products.
The Company designs, produces and distributes interactive technology solutions predominantly to the education market.
On December 31, 2021, the Company acquired FrontRow Calypso LLC, a California company and a leader in
classroom and campus communication solutions for the education market.
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of Boxlight Corporation and its wholly
owned subsidiaries. Intercompany transactions and account balances among all of affiliated entities have been eliminated.
In the opinion of management, the consolidated financial statements reflect all adjustments, which are normal and
recurring in nature and necessary for fair financial statement presentation.
ESTIMATES AND ASSUMPTIONS
The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles
(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of certain assets and
liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Significant
estimates include estimates of reserves for inventory obsolescence; the recoverability of deferred tax assets; the fair value of
warrants; the initial fair value of preferred stock, the fair value and recoverability of intangible assets and goodwill; the fair
value of stock compensation; the fair values of assets acquired; the relative stand-alone selling prices of goods and services; and
variable consideration.
COMPREHENSIVE INCOME
Comprehensive income (loss) reflects the change in equity during the year except those resulting from investments by
and distributions to stockholders, and is comprised of all components of net income (loss) and foreign currency translation
adjustments.
FOREIGN CURRENCIES
The Company’s reporting currency is the U.S. dollar.
The U.S. dollar is the currency of the primary economic environment in which it operates and is generally the currency
in which the Company’s business generates and expends cash. Subsidiaries with different functional currencies, translate their
assets and liabilities into U.S. dollars at the exchange rates in effect as of the balance sheet date. Revenues and expenses are
translated into U.S. dollars at the average exchange rates for the year. The resulting translation adjustments are included in
accumulated other comprehensive income (loss), a separate component of equity (deficit). Foreign exchange gains and losses
arise from transactions denominated in currencies other than the functional currency. Gains and losses on those foreign currency
transactions are included in determining net income (loss) for the period in which the exchange rates change.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid short-term investments purchased with an original maturity of three months
or less to be cash equivalents. These investments are carried at cost, which approximates fair value. The Company maintains
cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured
limits of $250,000 for banks
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located in the U.S. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed
to any risk of loss on its cash bank accounts.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts receivable are stated at contractual amounts, net of an allowance for doubtful accounts. The allowance for
doubtful accounts represents management’s estimate of the amounts that ultimately will not be realized in cash. The Company
reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical payment trends, the age of
receivables and knowledge of the individual customers. When the analysis indicates, management increases or decreases the
allowance accordingly. However, if the financial condition of our customers were to deteriorate, additional allowances might be
required.
INVENTORIES
Inventories are stated at the lower of cost or net realizable value and include spare parts and finished goods. Inventories
are primarily determined using specific identification and the first-in, first-out (“FIFO”) cost methods. Cost includes direct cost
from the Current Manufacturer (“CM”) or Original Equipment Manufacturer (“OEM”), plus material overhead related to the
purchase, inbound freight and import duty costs.
The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns
necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value.
Consideration is given to several quantitative and qualitative factors, including current pricing levels and the anticipated need
for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic
conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of
products in inventory, as well as changes in consumer preferences, market and economic conditions.
PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and depreciated using the straight-line method over the estimated life of the
asset. Repairs and maintenance are charged to expense as incurred.
LONG–LIVED ASSETS
Long-lived assets to be held and used or disposed of other than by sale are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount may not be recoverable. When required, impairment losses on
assets to be held and used or disposed of other than by sale are recognized based on the fair value of the asset. Long-lived assets
to be disposed of by sale are reported at the lower of carrying amount or fair value less cost to sell.
BUSINESS COMBINATIONS
Transactions in which the Company acquires or obtains control of one or more businesses are accounted for as business
combinations in accordance with Topic 805, Business Combinations, which requires, among other things, that assets acquired,
and liabilities assumed be recognized at their estimated fair values as of the acquisition date on the balance sheet. Income taxes,
where applicable, are recognized and measured in accordance with Topic 740, Accounting for Income Taxes. For transactions
occurring on or after January 1, 2021, contract liabilities acquired in a business combination are recognized and measured in
accordance with Topic 606, Revenue from Contracts with Customers (“Topic 606”). Determining the fair value of assets
acquired and liabilities assumed requires management to use significant judgement and estimates, including the selection of
valuation methodologies, estimates of future revenue, costs and cash flows, and discount rates. Transaction costs are expensed
as incurred. Any excess consideration transferred over the assigned values of net assets acquired would be recorded as goodwill.
The amounts of revenue and earnings of the acquiree since the acquisition date are included in the consolidated statements of
operations and comprehensive loss for the reporting period.
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GOODWILL
Goodwill represents the cost in excess of the fair value of the net tangible and intangible assets of acquired businesses,
and represents implied synergies expected of the completed business combinations. Goodwill is not amortized and is not
deductible for tax purposes.
Under Topic 350, Intangibles—Goodwill and Other, the Company has an option to perform a “qualitative” assessment
to determine whether quantitative impairment testing is necessary. If, as a result of a qualitative assessment, it is more-likely-
than-not that the fair value of the business is less than carrying amount, quantitative impairment testing is required. Otherwise,
no further testing is necessary. If the Company performs a qualitative assessment, the Company considers the following criteria:
macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events. In
addition, the Company assesses whether the most recent fair value determination resulted in an amount that significantly
exceeded the carrying amount of the Company. Based on these assessments, the Company determines whether the likelihood
that a current fair value determination would be less than the current carrying amount is not more likely than not.
Because the qualitative assessment is an option, the Company may bypass it for any reporting unit in any period and
begin the analysis using a quantitative impairment test. The Company may also elect to perform a quantitative impairment test
based on the period of time that has passed since the most recent determination of fair value, even when the Company does not
believe that it is more-likely-than-not that the fair value of the business is less than carrying amount.
In analyzing goodwill for potential impairment in the quantitative impairment test, the Company uses a combination of
the income and market approaches to estimate the fair value. Under the income approach, the Company calculates the fair value
based on estimated future discounted cash flows. The assumptions used are based on what the Company believes a hypothetical
marketplace participant would use in estimating fair value. Under the market approach, the Company estimates the fair value
based on market multiples of revenue or earnings before interest, income taxes, depreciation, and amortization for benchmark
companies. If the fair value exceeds carrying value, then no further testing is required. However, if the fair value were to be less
than carrying value, the Company would then determine the amount of the impairment charge, if any, which would be the
amount that the carrying value of the goodwill exceeded its implied value. No goodwill impairments have been identified and
recognized during any of the periods presented.
We test goodwill annually for impairment during the fourth quarter. During the year ended December 31, 2022, we
began performing the annual impairment test as of October 1, compared to December 31 in previous years. This facilitates the
overall coordination and timing of our annual financial statement close cycle and the preparation of our annual report. The
change to the testing date did not represent a material change to our method of applying the accounting principle in light of
requirements to monitor goodwill throughout the reporting period.
Since the acquisition of FrontRow Calypso LLC occurred December 31, 2021, the Company believes that the carrying
amount does not exceed the fair value for the reporting unit. Goodwill arising from the FrontRow Calypso LLC acquisition was
not included in the goodwill impairment testing for 2022.
INTANGIBLE ASSETS
Intangible assets are amortized using the straight-line method over their estimated period of benefit and presented net
of accumulated amortization. The Company reviews the carrying amounts of intangible assets for impairment whenever an
event or change in circumstances indicates that the carrying amount of the assets may not be recoverable. The Company
measures the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash
flows the Company expects the asset to generate. Impairment is measured by the amount in which the carrying value of the asset
exceeds its fair value. In addition, the Company periodically evaluates the estimated remaining useful lives of long-lived
intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of
amortization.
DERIVATIVE TREATMENT OF STOCK PURCHASE WARRANTS
The Company classifies common stock purchase warrants as equity if the contracts (i) require physical settlement or
net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement
or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to
net cash settle the
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contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-
cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an
asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine
whether a change in classification between equity and liabilities is required.
The Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification
as equity instruments due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole
control of the Company. Such warrants are measured at fair value at each reporting date, and the changes in fair value are
included in determining net income for the period. See Note 10 “Derivative Liabilities” for more information.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company’s financial instruments primarily include cash, accounts receivable, warrants, accounts payable and debt.
Due to the short-term nature of cash, accounts receivables and accounts payable, the carrying amounts of these assets and
liabilities approximate their fair value. Debt approximates fair value due to either the short-term nature or recent execution of
the debt agreement. The amount of consideration received is deemed to be the fair value of long-term debt net of any debt
discount and issuance cost.
Warrants and contingent consideration for acquired businesses are recorded at fair value on a recurring basis.
Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly
transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest
priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The
fair value hierarchy is as follows:
Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has
the ability to access at the measurement date.
Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either
directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the
asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally
from or corroborated by market data by correlation or other means.
Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value
measurement and unobservable (supported by little or no market activity).
Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value
measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires
judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value
hierarchy levels.
The following tables set forth, by level within the fair value hierarchy, the Company’s financial liabilities that were
accounted for at fair value on a recurring basis as of December 31, 2022 and 2021 (in thousands):
Description
Derivative liabilities - warrant instruments
Description
Derivative liabilities - warrant instruments
Markets for
Identical
Assets
(Level 1)
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Carrying
Value as of
December 31,
2022
—
—
472
$
472
Markets for
Identical
Assets
(Level 1)
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Carrying
Value as of
December 31,
2021
$
— $
— $
3,064
$
3,064
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See Note 10 for discussion of the valuation techniques and inputs and reconciliation of the opening and closing
balances of the fair value of warrants.
The following tables reconcile opening and closing balances of contingent consideration for which fair value is based
on level 3 inputs (in thousands).
Balance, December 31, 2020
Amount paid
Balance, December 31, 2021
Amount paid
Balance, December 31, 2022
$
$
Amount
119
(119)
—
—
—
NET INCOME (LOSS) PER COMMON SHARE
Basic net income (loss) per common share is computed by dividing net income (loss) available to common
shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation,
options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock were
considered to be common stock equivalents. Diluted net income (loss) per common share is determined using the weighted-
average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents.
The dilutive effect of convertible instruments is determined using the if-converted method, presuming share settlement. Under
the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting common shares
are included in the denominator of the diluted calculation for the entire period being presented. In periods when losses are
reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive. For the year ended December 31, 2022, potentially dilutive securities that were not included in
the diluted per share calculation because they would be anti-dilutive comprise 3.9 million shares from options to purchase
common shares and 2.4 million of unvested restricted shares, 10.8 million shares issuable upon exercise of warrants.
Additionally, potentially dilutive securities of 17.8 million shares from the assumed conversion of preferred stock are excluded
from the denominator because they would be anti-dilutive. For the year ended December 31, 2021, potentially dilutive securities
that were not included in the diluted per share calculation because they would be anti-dilutive comprise 4.1 million shares from
options to purchase common shares, unvested restricted shares of 2.0 million and 2.1 million shares issuable upon exercise of
warrants. Additionally, potentially dilutive securities of 17.8 million shares from the assumed conversion of preferred stock are
excluded from the denominator because they would be anti-dilutive.
REVENUE RECOGNITION
In accordance with Topic 606 Revenue from Contracts with Customers, the Company recognizes revenue at the
amount to which it expects to be entitled when control of the products or services is transferred to its customers. Control is
generally transferred when the Company has a present right to payment and the title and the significant risks and rewards of
ownership of products or services are transferred to its customers. Product revenue is derived from the sale of interactive panels,
audio and communication equipment and related software and accessories to distributors, resellers, and end users. Service
revenue is derived from hardware maintenance services, product installation, training, software maintenance, and subscription
services.
Nature of Products and Services and Related Contractual Provisions
The Company’s sales of interactive devices, including panels, audio and communication equipment and other
interactive devices generally include hardware maintenance services, a license to software, and the provision of related software
maintenance. Interactive devices are generally sold with hardware maintenance services with terms of approximately 36-60
months. Software maintenance includes technical support, product updates on a when and if available basis, and error correction
services. At times, non-interactive panels are also sold with hardware maintenance services with terms of approximately 60
months. The Company also licenses software independently of its interactive devices, in which case it is bundled with software
maintenance, and in some cases, subscription services that include access to on-line content, and cloud-based applications. The
Company’s software subscription services provide
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access to content and software applications on an as needed basis over the Internet, but do not provide the right to take delivery
of the software applications.
The Company’s product sales, including those with software and related services, generally include a single payment
up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the
Company’s expectations and historical experience. For most of the Company’s product sales, control transfers, and therefore,
revenue is recognized when products are shipped at the point of origin. When the Company transfers control of its products to
the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping
and handling activities as a fulfillment cost rather than a performance obligation. For many of the Company’s software product
sales, control is transferred when shipped at the point of origin since the software is installed on the interactive hardware device
in advance of shipping. For other software product sales, control is transferred when the customer receives the related access
code or interactive hardware since the customer’s access code or connection to the interactive hardware activates the software
license at which time the software is made available to the customer. For the Company’s software maintenance, hardware
maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the
best output measure of how those services are transferred to the customer.
The Company’s installation, training and professional development services are generally sold separately from the
Company’s products. Control of these services is transferred to our customers over time with hours/time incurred in providing
the service being the best depiction of the transfer of services since the customer is receiving the benefit of the services as the
work is performed.
For the sale of third-party products and services where the Company obtains control of the products and services before
transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company
considers multiple factors when determining whether it obtains control of the third-party products and services including, but
not limited to, evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the
responsibility for ensuring acceptability of the product or service. The Company has not historically entered into transactions
where it does not take control of the product or service prior to transfer to the customer.
The Company excludes all taxes assessed by a governmental agency that are both imposed on and concurrent with the
specific revenue-producing transaction from revenue (for example, sales and use taxes). In essence, the Company is reporting
these amounts collected on behalf of the applicable government agency on a net basis as though they are acting as an agent. The
taxes collected and not yet remitted to the governmental agency are included in accounts payable and accrued expenses in the
accompanying consolidated balance sheets.
Significant Judgments
For contracts with multiple performance obligations, each of which represent promises within a contract that are
distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices
(“SSPs”). The Company’s products and services included in its contracts with multiple performance obligations generally are
not sold separately and there are no observable prices available to determine the SSP for those products and services. Since
observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of
the performance obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating
SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances
related to each performance obligation including, when applicable, the estimated cost to provide the performance obligation,
market trends in the pricing for similar offerings, product-specific business objectives, and competitor or other relevant market
pricing and margins. Because observable prices are generally not available for the Company’s performance obligations that are
sold in bundled arrangements, the Company does not apply the residual approach to determining SSP.
The Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of
contracts that are executed in the same manner, contain the same performance obligations, and are priced in a consistent manner.
The Company believes that the application of the portfolio approach produces the same result as if they were applied at the
contract level.
Contract Balances
The timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences
can result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets.
Fees for
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the Company’s product and most service contracts are fixed, except as adjusted for rebate programs when applicable, and are
generally due within 30-60 days of contract execution. Fees for installation, training, and professional development services are
fixed and generally become due as the services are performed. The Company has an established history of collecting under the
terms of its contracts without providing refunds or concessions to its customers. The Company’s contractual payment terms do
not vary when products are bundled with services that are provided over multiple years. In these contracts where services are
expected to be transferred on an ongoing basis for several years after the related payment, the Company has determined that the
contracts generally do not include a significant financing component. The upfront invoicing terms are designed 1) to provide
customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when
the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the
customer continues to use the related services, so that the customer will receive the optimal benefit from the products over their
lives. Additionally, the Company has elected the practical expedient to exclude any financing component from consideration for
contracts where, at contract inception, the period between the transfer of services and the timing of the related payment is not
expected to exceed one year.
The Company has an unconditional right to consideration for all products and services transferred to the customer. That
unconditional right to consideration is reflected in accounts receivable in the accompanying consolidated balance sheets in
accordance with Topic 606. Contract liabilities are reflected in deferred revenue in the accompanying consolidated balance
sheets and reflect amounts allocated to performance obligations that have not yet been transferred to the customer related to
software maintenance, hardware maintenance, and subscription services. The Company has no material contract assets on
December 31, 2022 or 2021. During the years ended December 31, 2022 and 2021, the Company recognized $7.5 million and
$5.6 million, respectively, of revenue that was included in the deferred revenue balance as of December 31, 2021 and
December 31, 2020, respectively.
Variable Consideration
The Company’s otherwise fixed consideration in its customer contracts may vary when refunds or credits are provided
for sales returns, stock rotation rights, price protection provisions, or in connection with certain other rebate provisions. The
Company generally does not allow product returns other than under assurance warranties or hardware maintenance contracts.
However, the Company, on a case-by-case basis, will grant exceptions, mostly “buyer’s remorse” where the distributor or
reseller’s end customer either did not understand what they were ordering, or determined that the product did not meet their
needs. An allowance for sales returns is estimated based on an analysis of historical trends. In very limited situations, a
customer may return previous purchases held in inventory for a specified period of time in exchange for credits toward
additional purchases. The Company provides rebates to certain customers based on the achievement of certain sales targets. The
provision for rebates is estimated based on customers’ contracted rebate programs and our historical experience of rebates paid.
The Company includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of
the fee and it is probable there will not be a significant reversal. These estimates are generally made using the expected value
method based on historical experience and are measured at each reporting date. There was no material revenue recognized in
2022 related to changes in estimated variable consideration that existed at December 31, 2021.
Remaining Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit
of accounting within the contract. The transaction price is allocated to each distinct performance obligation and recognized as
revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The
Company identifies performance obligations at contract inception so that it can monitor and account for the obligations over the
life of the contract. Remaining performance obligations represent the portion of the transaction price in a contract allocated to
products and services not yet transferred to the customer. As of December 31, 2022 and 2021, the aggregate amount of the
contractual transaction prices allocated to remaining performance obligations was $23.9 million and $21.5 million, respectively.
The Company expects to recognize revenue on approximately 33% of the remaining performance obligations in 2023, 27% in
2024, 21% in 2025, 13% in 2026, with the remainder recognized thereafter.
In accordance with Topic 606, the Company has elected not to disclose the value of remaining performance obligations
for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services
performed (for example, a time-and-materials professional services contract). In addition, the Company has elected not to
disclose the value of remaining performance obligations for contracts with performance obligations that are expected, at contract
inception, to be satisfied over a period that does not exceed one year.
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Disaggregated Revenue
The Company disaggregates revenue based upon the nature of its products and services and the timing and in the
manner which it is transferred to the customer. Although all products are transferred to the customer at a point in time, hardware
and some software is pre-installed on the interactive device are transferred at the point of shipment, while some software is
transferred to the customer at the time the hardware is received by the customer or when software product access codes are
delivered electronically to the customer. All service revenue is transferred over time to the customer; however, professional
services are generally transferred to the customer within a year from the contract date as measured based upon hours or time
incurred while software maintenance, hardware maintenance, and subscription services are generally transferred 3- 5 years from
the contract execution date as measured based upon the passage of time.
Product revenues:
Hardware
Software
Service revenues:
Professional services
Maintenance and subscription services
Contract Costs
Year Ended
December 31,
(in thousands)
2022
2021
$
$
206,770
4,306
2,638
8,067
221,781
$
$
171,780
4,102
1,419
7,876
185,177
The Company capitalizes incremental costs to obtain a contract with a customer if the Company expects to recover
those costs. The incremental costs to obtain a contract are those that the Company incurs to obtain a contract with a customer
that it would not have otherwise incurred if the contract were not obtained (e.g., a sales commission). The Company capitalizes
the costs incurred to fulfil a contract only if those costs meet all the following criteria:
● The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify.
● The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future.
● The costs are expected to be recovered.
Certain sales commissions incurred by the Company were determined to be incremental costs to obtain the related
contracts, which are deferred and amortized ratably over the estimated economic benefit period. For these sales commissions
that are incremental costs to obtain where the period of amortization would have been recognized over a period that is one year
or less, the Company elected the practical expedient to expense those costs as incurred. Commission costs that are deferred are
classified as current or non-current assets based on the timing of when the Company expects to recognize the expense and are
included in prepaid and other assets and other assets, respectively, in the accompanying consolidated balance sheets. Total
deferred commissions at December 31, 2022 and 2021 and the related amortization for 2022 and 2021 were less than $300,000.
The Company has not historically incurred any material fulfilment costs that meet the criteria for capitalization.
Bill and Hold Arrangements
From time to time the Company enters custodial bill and hold arrangements with customers. Each arrangement is
reviewed, and revenue is recognized only when the following criteria have been met: (1) the reason for the bill-and-hold
arrangement is substantive (2) the product is identified as the customer’s asset (3) the product is ready for delivery to the
customer (4) there must be a fixed schedule for delivery (5) the seller cannot use the product or direct the product to another
customer. At December 31, 2022, $3.2 million of revenue was recognized for goods that will be delivered to a customer during
the first quarter of 2023.
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WARRANTY RESERVE
For customers that do not purchase hardware maintenance services, the Company generally provides warranty
coverage on panels and accessories, batteries and computers. This warranty coverage ranges from 2-5 years, and the Company
establishes a liability for estimated product warranty costs, included in other short-term liabilities in the consolidated balance
sheets, at the time the related product revenue is recognized. The warranty obligation is affected by historical product failure
rates and the related use of materials, labor costs and freight incurred in correcting any product failure. Should actual product
failure rates, use of materials, or other costs differ from the Company’s estimates, additional warranty liabilities could be
required, which would reduce its gross profit.
RESEARCH AND DEVELOPMENT EXPENSES
Research and development costs are expensed as incurred and consist primarily of personnel related costs, prototype
and sample costs, design costs, and global product certifications mostly for wireless certifications.
INCOME TAX
An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes
arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and
expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and
laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that
some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
STOCK-BASED COMPENSATION
The Company estimates the fair value of each stock option compensation award at the grant date by using the Black-
Scholes option pricing model; the fair value for each restricted stock unit award is the market price of the underlying shares at
the date of grant. The fair value determined represents the cost for the award and is recognized on a straight-line basis over the
vesting period during which an employee is required to provide service in exchange for the award. Total expense is reduced by
the previously recognized compensation expense for options that are forfeited prior to vesting when the forfeiture occurs.
LEASES
The Company has entered into various operating leases for certain office, support locations and vehicles with terms
extending through February 2027. Generally, these leases have initial lease terms of five years or less.
Prior to the adoption of Accounting Standards Update ("ASU") No. 2016-02 "Leases” (Topic 842) on January 1, 2022,
the Company recorded the difference between the rent paid and the straight-line rent expense as a deferred rent liability within
accrued expenses and other current liabilities and other liabilities.
Subsequent to the adoption of Topic 842, operating lease assets and liabilities are reflected within operating lease
assets, operating lease liabilities, current, and operating lease liabilities, non-current, on the consolidated balance sheets.
Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent
the Company’s obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at
commencement date based on the present value of lease payments over the lease term. Many of the leases have one or more
lease renewal options. The exercise of lease renewal options is at our sole discretion. The Company does not consider exercise
of any lease renewal options reasonably certain. Certain of our lease agreements contain early termination options. No renewal
options or early termination options have been included in the calculation of the operating right-of-use assets or operating lease
liabilities. Certain of our lease agreements provide for periodic adjustments to rental payments for inflation. As the majority of
the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the commencement
date in determining the present value of lease payments. The incremental borrowing rate is based on the term of the lease. In
connection with the adoption of Topic 842, the Company used incremental borrowing rates on January 1, 2022 for operating
leases that commenced prior to that date. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
For these short-term leases, lease expense is recognized on a straight-line basis over the lease term.
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SUBSEQUENT EVENTS
We reviewed all material events through the date of these consolidated financial statements were issued for subsequent
event disclosure consideration as described in Note 17.
NEW ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Pronouncements
The Company adopted Topic 842, as amended, which requires that lessees and lessors recognize lease assets and lease
liabilities on the balance sheet and disclose key information about leasing arrangements. The Company elected the modified
retrospective approach which it applied on January 1, 2022, and therefore have not restated comparative periods. The Company
elected certain relief options offered in ASU 2016-02 including the package of practical expedients, and the option not to
recognize right-of-use assets and lease liabilities that arise from short-term leases (i.e., leases with terms of twelve months or
less). The Company also elected the practical expedient to not separate lease and non-lease components, which allows it to
account for lease and non-lease components as a single component. Finally, the Company elected not to apply the hindsight
practical expedient to determine the lease term for existing leases.
The Company’s operating leases relate primarily to office space. As a result of the adoption of ASU 2016-02, the
Company recognized an operating lease right-of-use ("ROU") asset of $3.8 million and a current operating lease liability
of approximately $1.6 million and a long-term operating lease liability of approximately $2.3 million as of January 1, 2022,
with no impact on the Company’s Consolidated Statement of Operations and Comprehensive Loss or Consolidated Statement of
Cash Flows. The ROU asset and operating lease liabilities are recorded as separate line items in the Consolidated Balance Sheet.
The Company adopted ASU 2021-06, “Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-
10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses” to amend SEC paragraphs in the
Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10786, Amendments to Financial Disclosures
about Acquired and Disposed Businesses. Among other changes, the final rule modifies the significance tests and improves the
disclosure requirements for (1) acquired or to be acquired businesses, (2) real estate operations, and (3) pro forma financial
information. In addition, the final rule includes amendments to financial disclosures specific to smaller reporting companies
(SRCs). There is no immediate impact on the Company’s financial statements due to the adoption of this standard.
The Company early adopted (as of January 1, 2021) ASU No. 2020-06, “Accounting for Convertible Instruments and
Contracts in an Entity’s Own Equity.” The new guidance simplifies the accounting for certain convertible instruments and for
contracts in an entity’s own equity. Key provisions include the elimination of the “cash conversion” guidance and the “beneficial
conversion feature” guidance in ASC Subtopic 470-20, (Debt with Conversion and Other Options), as well as a simplification of
the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification
by removing certain conditions in ASC Subtopic 815-40-25. Since the beneficial conversion feature is eliminated by this
guidance, it will not be recorded for our Series B preferred stock.
The amendments in ASU 2020-06 further revise the guidance in ASC Topic 260, “Earnings Per Share,” to require
entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. In addition, entities
must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For
the years ended December 31, 2022 and 2021, the Company has calculated diluted earnings per share using the if-converted
method.
The Company early adopted (as of January 1, 2021) ASU No. 2021-08, “Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers,” (“ASU 2021-08”), which amends the guidance in ASC Topic 805, “Business
Combinations,” to require that “an entity (acquirer) recognize, and measure contract assets and contract liabilities acquired in a
business combination in accordance with Topic 606, rather than at fair value.” At the acquisition date, an acquirer would
account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an
acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts. The
Company applied the guidance in this ASU to the FrontRow acquisition that was completed on December 31, 2021.
The Company adopted ASU No. 2019-12, “Income Taxes” (ASU 740): “Simplifying the Accounting for Income
Taxes.” The new guidance eliminates the need for an organization to analyze whether the following apply in a given period:
(1) the exception to the
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incremental approach for intraperiod tax allocation; (2) the exceptions to accounting for basis differences when there are
ownership changes in foreign investments; and (3) the exception in interim periods income tax accounting for year-to-date
losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income
tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a
government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not
subject to tax, (4) enacted changes in tax laws in interim periods and (5) certain income tax accounting for employee stock
ownership plans and affordable housing projects. The standard became effective for the Company on January 1, 2021 and did
not have a material impact on the financial statements.
Recent Accounting Pronouncements not yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments Credit Losses” (Topic 326): Measurement of
Credit Losses on Financial Instruments. The new guidance replaces the incurred loss methodology with the current expected
credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable to
financial assets measured at amortized cost, including trade accounts receivable. It also applies to off-balance sheet credit
exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar
instruments) and net investments in leases recognized by a lessor in accordance with Topic 842. This new guidance changes the
impairment model for most financial assets and certain other instruments. The ASU is not effective until fiscal years beginning
after December 15, 2022, and interim periods within that fiscal year. The Company’s trade receivable terms are short term in
duration and historically losses on accounts receivable have not been significant; write-offs were approximately $243,000 for
the year ended December 31, 2022. Accordingly, the Company does not expect the adoption to have a material impact on the
Company’s financial statements.
There were various other accounting standards and interpretations issued recently, some of which may be applicable to
the Company but none of which are expected to a have a material impact on our financial position, operations, or cash flows.
NOTE 2 –BUSINESS ACQUISITIONS
The acquisitions described below were accounted for as business combinations which require, among other things, that
assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Deferred income
taxes are recognized and measured in accordance with Topic 740 “Accounting for Income Taxes”. Transaction costs are
expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired would be
recorded as goodwill.
FrontRow Calypso LLC.
On December 31, 2021, the Company, and its wholly owned subsidiary, Boxlight, Inc, acquired 100% of the
membership interests of FrontRow Calypso LLC, a Delaware limited liability company (“FrontRow”) in exchange for payment
of $34.7 million to Phonic Ear Inc. and Calypso Systems LLC, the equity holders of FrontRow.
Based in Petaluma, California, FrontRow makes technology that improves communication in learning environments,
including developing network-based solutions for intercom, paging, bells, mass notification, classroom sound, lesson sharing,
AV control and management. FrontRow also has offices in Toronto, Copenhagen, Brisbane, Hamilton (UK) and Shenzhen.
To finance the acquisition of FrontRow, the Company entered into a term loan credit facility, with WhiteHawk Finance
LLC, as lender and WhiteHawk Capital Partners, LP, as collateral agent. See Note 9 “Debt.”
The assets acquired and liabilities assumed were recorded at their estimated fair values at the acquisition date.
Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and
estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates,
and selection of comparable companies. The Company engaged the assistance of an independent third-party valuation specialist
to determine certain fair value measurements related to acquired assets. The excess consideration over the net fair values of the
assets acquired and liabilities assumed was recognized as goodwill.
The fair value or net realizable value of inventories at the date of acquisition was determined using a “top-down”
approach based upon the estimated sales value, less a reasonable profit margin and less the estimated costs to dispose of the
inventory, including
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selling costs and other disposal costs such as freight. The fair value of accounts receivable acquired in connection with the
acquisition approximated the contractual amount due from customers at that date.
The acquired contract liabilities of FrontRow have been recognized and measured in accordance with Topic 606.
The following table summarizes the estimated acquisition date fair values of the net assets acquired and liabilities
assumed, and the estimate of the fair value of consideration paid:
(in thousands)
Assets acquired:
Cash
Accounts receivable
Inventories
Prepaid expenses
Property and equipment
Total assets acquired
Accounts payable and accrued expenses
Deferred revenue
Other liabilities
Total liabilities assumed
Net tangible assets acquired
Identifiable intangible assets:
Customer relationships
Trademarks
Technology
Non-compete
Total intangible assets subject to amortization
Goodwill
Total net assets acquired
Consideration paid:
Cash
$
$
$
$
2,752
3,381
10,240
883
348
17,604
(1,501)
(1,225)
(12)
(2,738)
14,866
8,195
3,244
5,036
391
16,866
2,920
34,652
34,652
The following table presents the useful lives over which the acquired intangible assets will be amortized on a straight-
line basis, which approximates the pattern by which the related economic benefits of the assets are consumed:
Customer relationships
Trademarks
Technology
Non-compete agreements
Estimated
Weighted Average
Life (years)
8
10
8
3
Goodwill is primarily attributable to synergies expected from the acquisition and the assembled workforce. The
Company incurred a total of $500,700 in acquisition-related costs and expensed all such costs incurred during the period in
which the service was received. Acquisition related costs are included in general and administrative expenses in the
Consolidated Statement of Operations and Comprehensive Loss. The results of operations of FrontRow are included in the
Consolidated Statement of Operations and Comprehensive Loss beginning at the acquisition date. There was no impact to the
Consolidated Statement of Operations and
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Comprehensive Loss for the year ended December 31, 2021 since the acquisition was consummated on December 31, 2021. For
the year ended December 31, 2022, revenue and net income from FrontRow were $24.8 million and $0.8 million, respectively.
Pro Forma Financials
The following unaudited pro forma information reflects our consolidated results of operations as if the acquisition of
FrontRow had taken place on January 1, 2021. The unaudited pro forma information is not necessarily indicative of the results
of operations that the Company would have reported had the acquisition actually occurred at the beginning of these periods nor
is it necessarily indicative of future results. The unaudited pro forma financial information does not reflect the impact of future
events that may occur after the acquisition, including, but not limited to, anticipated costs savings from synergies or other
operational improvements. The nature and amount of any material, nonrecurring pro forma adjustments directly attributable to
the business combination are included in the pro forma revenue and net earnings reflected below.
Revenues, net
Net loss attributable common shareholders
Interactive Concepts
Year ended December 31,
2021
(in thousands)
As Reported
$
$
185,177
(14,704)
$
$
(Unaudited)
(in thousands)
Pro Forma
214,636
(12,868)
On March 23, 2021, the Company acquired 100% of the outstanding shares of Interactive Concepts BV, a company
incorporated and registered in Belgium and a distributor of interactive technologies (“Interactive”), for total consideration of
approximately $3.3 million in cash, common stock and deferred consideration. The Company has been Boxlight’s key
distributor in Belgium and Luxembourg.
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The following table summarizes the estimated acquisition date fair values of the net assets acquired and liabilities
assumed, and the estimate of the fair value of consideration paid:
Assets acquired:
Cash
Accounts receivable
Inventories
Property and equipment
Total assets acquired
Accounts payable and accrued expenses
Deferred tax liability
Total liabilities assumed
Net tangible assets acquired
Identifiable intangible assets:
Tradename
Customer relationships
Total intangible assets subject to amortization
Goodwill
Total net assets acquired
Consideration paid:
Cash
Deferred cash consideration
Common shares issued
Total consideration paid
(in thousands)
$
$
$
$
1,647
1,045
191
37
2,920
(821)
(230)
(1,051)
1,869
220
745
965
439
3,273
1,795
1,075
403
3,273
NOTE 3 – ACCOUNTS RECEIVABLE - TRADE
Accounts receivable consisted of the following at December 31, 2022 and 2021 (in thousands):
Accounts receivable – trade
Allowance for doubtful accounts
Allowance for sales returns and volume rebates
Accounts receivable - trade, net of allowances
2022
2021
$
$
33,198
(414)
(1,775)
31,009
$
$
31,053
(405)
(1,075)
29,573
Write-offs of accounts receivable was approximately $243,000 and $525,000 for the years ended December 31, 2022
and 2021, respectively.
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NOTE 4 – INVENTORIES
Inventories consisted of the following at December 31, 2022 and 2021 (in thousands):
Finished goods
Spare parts
Reserve for inventory obsolescence
Advanced shipping costs
Inventories, net
2022
2021
$
$
56,583
775
(531)
1,384
58,211
$
$
51,346
260
(599)
584
51,591
The Company wrote off inventories of approximately $1.2 million and $0.6 million for the years ended December 31,
2022 and 2021, respectively.
NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following at December 31, 2022 and 2021 (in thousands):
Prepayments to vendors
Prepaid licenses and other
Prepaid expenses and other current assets
2022
2021
$
$
4,131
3,302
7,433
$
$
7,739
1,705
9,444
Prepaid expenses and other current assets as of December 31, 2022 are net of reserves related to vendor receivables of
$0.8 million. There were no reserves related to vendor receivables as of December 31, 2021.
NOTE 6 – PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at December 31, 2022 and 2021 (in thousands):
Building
Building improvements
Leasehold improvements
Office equipment
Software
Other equipment
Construction in progress
Property and equipment, at cost
Accumulated depreciation
2022
2021
$
$
200
14
450
1,057
88
678
14
2,501
(768)
Property and equipment, net of accumulated depreciation
$
1,733
$
200
14
176
467
88
335
85
1,365
(292)
1,073
For the years ended December 31, 2022 and 2021, the Company recorded depreciation expense of $484,000 and
$156,000, respectively.
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NOTE 7 – INTANGIBLE ASSETS AND GOODWILL
Intangible assets and goodwill consisted of the following at December 31, 2022 and 2021 (in thousands):
INTANGIBLE ASSETS
Patents
Customer relationships
Technology
Domain
Non-compete
Tradenames
Intangible assets, at cost
Accumulated amortization
Intangible assets, net of accumulated amortization
GOODWILL
Beginning Balance
Goodwill acquired during the period
Change due to foreign currency translation
Impairment
Ending Balance
Useful lives
2022
2021
4-10 years
8-15 years
3-5 years
7 years
8-15 years
2-10 years
$
$
$
$
182
52,736
8,943
14
391
12,769
75,035
(22,456)
52,579
26,037
—
(945)
—
25,092
$
$
$
$
182
55,158
8,901
14
391
13,085
77,731
(12,199)
65,532
22,742
3,359
(64)
—
26,037
As of December 31, 2022, the company had $25.1 million of goodwill, of which none was allocated to a reporting unit
with a negative carrying amount. The company’s goodwill has an indefinite useful life and is tested for impairment annually. For
the years ended December 31, 2022 and 2021, the Company recorded amortization expense of $8.6 million and $7.0 million,
respectively. Changes to gross carrying amount of recognized intangible assets and goodwill due to translation adjustments were
approximately ($3.1) million and $3.2 million as of December 31, 2022 and 2021, respectively.
Expected future amortization expense for intangible assets as of December 31, 2022 is as follows (in thousands):
2023
2024
2025
2026
2027
Thereafter
Total
$
$
8,857
7,916
7,804
7,290
6,886
13,826
52,579
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NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable consisted of the following at December 31, 2022 and 2021 (in thousands):
Accounts payable
Accrued expense
Other
Accounts payable and other liabilities
NOTE 9 – DEBT
2022
2021
$
$
30,719
5,306
541
36,566
$
$
The following comprises debt on December 31, 2022 and 2021 (in thousands):
Debt – Third Parties
Paycheck Protection Program
Note payable - Whitehawk
Total debt
Less: Discount and issuance costs
Current portion of debt
Long-term debt
Total debt (net of discount and issuance costs)
Debt - Third Parties:
WhiteHawk Finance LLC
2022
2021
$
$
$
127
49,906
50,033
5,410
845
43,778
44,623
$
$
$
25,714
6,440
1,484
33,638
1,009
58,500
59,509
7,568
9,804
42,137
51,941
In order to finance the acquisition of FrontRow, the Company and substantially all of its direct and indirect
subsidiaries, including Boxlight and FrontRow as guarantors, entered into a maximum $68.5 million term loan credit facility,
dated December 31, 2021 (the “Credit Agreement”), with WhiteHawk Finance LLC, as lender (the “Lender”), and WhiteHawk
Capital Partners, LP, as collateral agent. The Company received an initial term loan of $58.5 million on December 31, 2021 (the
“Initial Loan”) and was provided with a subsequent delayed draw facility of up to $10 million that may be provided for
additional working capital purposes under certain conditions (the “Delayed Draw”). The Initial Loan and Delayed Draw are
collectively referred to as the “Term Loans.” The proceeds of the Initial Loan were used to finance the Company’s acquisition of
FrontRow, pay off all indebtedness owed to the Company’s then existing lenders, Sallyport Commercial Finance, LLC and Lind
Global Asset Management, LLC, pay related fees and transaction costs, and provide working capital. Of the Initial Loan, $8.5
million was subject to repayment on February 28, 2022, with quarterly principal payments of $625,000 and interest payments
commencing March 31, 2022 and the $40.0 million remaining balance plus any Delayed Draw loans becoming due and payable
in full on December 31, 2025. The Term Loans bear interest at the LIBOR rate plus 10.75%; provided that after March 31, 2022,
if the Company’s Senior Leverage Ratio (as defined in the Credit Agreement) is less than 2.25, the interest rate would be
reduced to LIBOR plus 10.25%. Such terms are subject to the Company maintaining a borrowing base in terms compliant with
the Credit Agreement.
In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 528,169 shares of Class A
common stock (the “Shares”), which Shares were registered pursuant to the Company’s existing shelf registration statement and
were delivered to the Lender in January 2022, (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to
increase to the extent of 3% of any Series B and Series C convertible preferred stock being converted into Class A common
stock), exercisable at $2.00 per share (the “Warrant”), which Warrant was subject to repricing on March 31, 2022 based on the
arithmetic volume weighted average prices for the 30 trading days prior to September 30, 2022, in the event the Company’s
stock is then trading below $2.00 per share, (iii) a 3% fee of $1,800,000, and (iv) a $500,000 original issue discount. In
addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred
agency fees, legal fees, and other costs in connection with the execution of the Credit Agreement totaling approximately $1.7
million. Under the terms of the warrant issued to WhiteHawk on December 31, 2021, the exercise price of the warrants would
reprice if the stock price on March 31, 2022 was less than the original exercise price, at which
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time the number of warrants would also be increased proportionately, so that after such adjustment the aggregate exercise price
payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect. The
warrants repriced on March 31, 2022 to $1.19 per share and the shares increased to 3,434,103.
On July 22, 2022, the Company entered into a Securities Purchase Agreement with an accredited institutional investor.
According to the terms of the WhiteHawk agreement, this purchase agreement triggered a reduction of the exercise price of the
warrants and a revaluation of the derivative liability. The warrants were repriced to $1.10 and shares increased to 3,715,075.
On March 29, 2022, the Company received a notice from the collateral agent, alleging, among other things, defaults as
a result of (i) failure to repay $8.5 million of the facility by February 28, 2022, (ii) non-compliance with the borrowing base
resulting in the Company being in an over advance position under the Credit Agreement, and (iii) failure to timely provide
certain reports and documents. As a result, all accrued and unpaid interest owed under the Term Loan, became subject to a post-
default interest rate equal to the highest interest rate allowed for under the Credit Agreement plus 2.50% until such time as the
events of default were either waived or cured. In February 2022, WhiteHawk and the Company agreed in principle to an
extension of the February 2022 Payment. Pursuant to amendment to the Credit Agreement, dated April 4, 2022, the Collateral
Agent and Lender agreed to extend the terms of repayment of the $8.5 million originally due on February 28, 2022 until
February 28, 2023 and waive and/or otherwise extend compliance with certain other terms of the Credit Agreement in order to
allow the Loan Parties adequate time to comply with such terms. In July 2022, the Company and Whitehawk agreed that the
notice had inadvertently included the default with respect to the failure to repay $8.5 million of the facility. As a result,
notwithstanding the notice, both WhiteHawk and the Company have agreed that the Company was not in default in making the
February 2022 Payment to WhiteHawk.
The principal elements of the April amendment included (a) an extension of time to repay $8.5 million of the principal
amount of the term loan from February 28, 2022 to February 28, 2023, and (b) forbearance on $3,500,000 in over advances until
May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forth in the Credit
Agreement. In such connection, the Loan Parties have obtained credit insurance on certain key customers whose principal
offices are located in the European Union and Australia as, without the credit insurance, their accounts owed to the Loan Parties
had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the
Collateral Agent to enforce security interests on such accounts. In addition, the Lender and Collateral Agent agreed to (i)
reduce, through September 30, 2022, the minimum cash reserve requirement for the Loan Parties, (ii) reduce the interest rate by
50 basis points (to LIBOR plus 9.75%) after delivery of the Loan Parties’ September 30, 2023 financial statements, subject to
the Loan Parties maintaining 1.75 EBITDA coverage ratio, and (iii) waive all prior Events of Default under the Credit
Agreement. In conjunction with the amendment to the Credit Agreement, the parties entered into an amended and restated fee
letter (the “Fee Letter”) pursuant to which the parties agreed to prepayment premiums of (i) 5% for payments made on or before
December 31, 2022, (ii) 4% for payments made between January 1, 2023 and December 31, 2023, and (iii) 2% for payments
made between January 1, 2024 and December 31, 2025. Furthermore, the parties agreed that no prepayment premiums would
be payable with respect to the first $5.0 million paid under the Term Loan, any payments made in relation to the $8.5 million
due on or before February 28, 2023, any required amortization payments under the Credit Agreement and any mandatory
prepayments by way of ECF or casualty events.
On June 21, 2022, the Company and substantially all of its direct and indirect subsidiaries (together with the Company,
the “Loan Parties”), entered into a second amendment (the “Second Amendment”) to the four-year term loan credit facility,
originally entered into December 31, 2021 and as amended on April 4, 2022 (the “Credit Agreement”), with the Collateral
Agent and Lender. The Second Amendment to the Credit Agreement was entered into for purposes of the Lender funding a $2.5
million delayed draw term loan and adjusting certain terms to the Credit Agreement, including adjusting the Applicable Margin
(as defined in the Second Amendment) to 13.25% for LIBOR Rate Loans and 12.25% for Reference Rate Loans, increasing the
definition of change of control from 33% voting power to 40% voting power, requiring the Company to engage a financial
advisor, and allowing additional time, until July 15, 2022, for the Company to come into compliance with certain borrowing
base requirements set forth in the Second Amendment to the Credit Agreement, among other adjustments. As of December 31,
2022 and 2021, the Company was in compliance with all covenants and borrowing base requirements.
During the year ended December 31, 2022, the Company paid the $8.5 million due on February 28, 2023. During the
year ended December 31, 2022, the Company repaid total principal of $10.4 million (inclusive of the $8.5 million) and interest
of $8.3 million to WhiteHawk.
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Lind Global Marco Fund and Lind Global Asset Management
During the year ended December 31, 2021, the Company repaid principal of $12.0 million and interest of $584
thousand, to Lind Global by issuing a total of 7.2 million shares of Class A common stock with an aggregate value of $15.9
million to Lind Global and recognized a loss on extinguishment of debt of approximately $3.3 million. Any outstanding debt
owed to Lind Global was repaid in full on December 31, 2021 following the Company’s receipt of the Initial Loan from
WhiteHawk.
Paycheck Protection Program Loan
On May 22, 2020, the Company received loan proceeds of $1.1 million under the Paycheck Protection Program.
During 2021, the Company applied for forgiveness in the amount of $836 thousand. On March 2, 2022, the Company received
a decision letter from the lender that the forgiveness application had been approved, leaving a remaining balance of $173
thousand to be paid. The Company received a payment schedule from our lender on May 5, 2022, extending the payoff date
until May 2025. The amount remaining on the loan at December 31, 2022 was $127 thousand.
Everest Display, Inc.
On January 26, 2021, the Company entered into an agreement with EDI and EDI’s subsidiary, AMAGIC, settling
$1,983,436 in accounts payable owed by the Company to EDI for 793,375 shares of Class A common stock. During the year
ended December 31, 2021, the Company recognized a $357 thousand gain on the settlement of the accounts payable.
Accounts Receivable Financing – Sallyport Commercial Finance
On September 30, 2020, Boxlight Inc. and EOS EDU LLC entered into an asset-based lending agreement with
Sallyport Commercial Finance, LLC (“Sallyport”). Sallyport agreed to purchase 90% of the eligible accounts receivable of the
Company during the Term with a right of recourse back to the Company if the receivables are not collectible. Advances against
this agreement accrue interest at the rate of 3.50% in excess of the highest prime rate publicly announced from time to time with
a floor of 3.25%. In addition, the Company is required to pay a daily audit fee of $950 per day. On July 20, 2021, Boxlight and
Sallyport amended the Accounts Receivable Agreement (the “ARC Amendment”) for purposes of increasing the Maximum
Facility Limit Amount to $13,000,000, as well as increasing the minimum monthly sales from $1,250,000 to $3,000,000. In
exchange for entry into the ARC Amendment, Boxlight agreed to a fee of $50,000, representing one percent of the increased
Maximum Facility Limit Amount. Other terms of the Accounts Receivable Agreement remain unchanged. On August 6, 2021,
Boxlight and Sallyport entered into an additional amendment of the Accounts Receivable Agreement (the “Second ARC
Amendment”), which further increased the Maximum Facility Limit Amount to $15,000,000. In exchange for entry into the
Second ARC Amendment, Boxlight agreed to a fee of $20,000, representing one percent of the increased Maximum Facility
Limit Amount. Other terms of the Accounts Receivable Agreement remain unchanged. Any outstanding debt owed to Sallyport
was repaid in full on December 31, 2021 following the Company’s receipt of the Initial Loan from WhiteHawk.
Debt - Related Parties:
Note Payable - STEM Education Holdings, Pty
On April 17, 2020, the Company acquired MyStemKits and STEM Education Holdings, Pty, an Australian corporation
(“STEM”), the largest online collection of K-12 STEM curriculum for 3D Purchase consideration for the acquisition of STEM
included a note payable in the of $350,000. The note was payable in four equal installments of $87,500 on July 31, 2020,
October 31, 2020, January 31, 2021 and April 30, 2021. Parties acknowledged that potential adjustments may be made to the
installment payments due on July 31, 2020 and October 31, 2020 in the event the actual gross revenue of MyStemKits is
materially below budget. Accordingly, and as agreed between Boxlight and the STEM sellers the note payable was adjusted to
$175,000 and was paid off in September 2021.
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Debt Maturity
Principal repayments to be made during the next five years on the Company’s outstanding debt facilities at December
31, 2022 are as follows (in thousands):
2023
2024
2025
2026
2027
Total
$
$
2,680
2,681
44,672
—
—
50,033
NOTE 10 – DERIVATIVE LIABILITIES
At December 31, 2022 and December 31, 2021, the Company had warrants that contain net cash settlement provisions
or do not have fixed settlement provisions because their conversion and exercise prices may be lowered under certain
conditions. The Company concluded that the warrants should be accounted for as derivative liabilities. The Company used a
third party to determine the fair value of the derivative liabilities at December 31, 2022 and 2021, and they used a Monte Carlo
Simulation model to determine the fair value. Key assumptions used are as follows:
Common stock issuable upon exercise of warrants
Market value of common stock on measurement date
Exercise price
Risk free interest rate (1)
Expected life in years
Expected volatility (2)
Expected dividend yields (3)
Common stock issuable upon exercise of warrants
Market value of common stock on measurement date
Exercise price
Risk free interest rate (1)
Expected life in years
Expected volatility (2)
Expected dividend yields (3)
December 31, 2022
$
$
3,715,075
0.31
1.10
4.02 %
4 years
83.6 %
— %
December 31, 2021
$
$
2,043,291
1.38
2.00
1.25 %
5 years
79.3 %
— %
(1) The risk-free interest rate was determined using the applicable Treasury Bill as of the measurement date.
(2) The historical trading volatility for 2022 and 2021 was based on historical fluctuations in stock price for Boxlight and
certain peer companies.
(3) The Company does not expect to pay a dividend in the foreseeable future.
The following table shows the change in the Company’s derivative liabilities for the years ended December 31, 2022
and 2021:
Balance, December 31, 2021
Exercise of warrants
Issuance of warrants
Change in fair value of derivative liabilities
Balance, December 31, 2022
F-27
Amount
(in thousands)
3,064
(1)
—
(2,591)
472
$
$
Table of Contents
Balance, December 31, 2020
Exercise of warrants
Issuance of warrants
Change in fair value of derivative liabilities
Balance, December 31, 2021
Amount
(in thousands)
363
(348)
3,064
(15)
3,064
$
$
The change in fair value of derivative liabilities includes losses from exercise price modifications.
NOTE 11 – INCOME TAX
Pretax income (loss) resulting from domestic and foreign operations is as follows (in thousands):
United States
Foreign
Other Foreign Jurisdictions
Total pretax book loss
2022
2021
(2,569) $
(2,707)
1,582
(3,694) $
(18,130)
6,032
1,606
(10,492)
$
$
The components of income tax expense at December 31, 2022 and December 31, 2021, are as follows (in thousands):
Current:
Federal
State
Foreign
Total Current
Deferred:
Federal
State
Foreign
Total Deferred
Total
2022
2021
$
$
$
$
$
1,491
138
1,399
3,028
$
$
(85)
$
—
(2,894)
(2,979)
49
$
$
—
62
2,722
2,784
—
—
526
526
3,310
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Table of Contents
The reconciliation of the provision for income taxes at the United States Federal statutory rate compared to the
Company’s income tax expense (benefit) as reported is as follows (in thousands)
Loss before income taxes
Income tax benefit computed at the statutory rate
State income taxes-net of federal tax benefit
Foreign tax rate differential
Loss on debt settlement
Section 162(m) compensation
FX Adjustment
GILTI Inclusion
Meals
Stock compensation
Amortization
PPP loan
Non-deductible expenses
Prior period true ups – temporary differences
Rate changes and differentials
Change in valuation allowance
2022
$
(3,694) $
2021
(10,492)
(776)
73
(19)
—
61
—
160
39
83
11
(179)
186
197
(651)
864
(2,203)
49
(107)
788
168
(265)
102
12
(75)
(4)
—
(10)
(35)
2,193
2,697
Income tax expense
$
49
$
3,310
Tax effects of temporary differences at December 31, 2022 and December 31, 2021 are as follows (in thousands):
Deferred tax assets:
Fixed assets
Allowance for bad debts
Inventory
R&D amortization
Accrued expenses
Deferred revenue
Stock compensation
Net lease asset
Other
Interest expense limitation
Net operating loss carry-forwards
Deferred tax assets (liabilities)
Valuation allowance
Deferred tax assets, net
Deferred tax liabilities:
Fixed assets
Intangible assets
Accrued expenses
Prepaid expenses
Other
Deferred tax liabilities
Deferred tax liabilities, net
F-29
2022
2021
$
$
$
$
$
$
— $
507
294
413
—
5,600
1,209
1
203
3,751
7,282
19,260
(14,084)
5,176
2022
(24)
(8,603)
(752)
(169)
(308)
(9,856)
(4,680)
$
$
$
$
$
13
442
192
—
—
4,232
645
—
—
1,903
8,165
15,592
(11,294)
4,298
2021
—
(11,452)
(413)
(137)
(745)
(12,747)
(8,449)
Table of Contents
The Company operates in the United States, United Kingdom and other jurisdictions. Income taxes have been provided
based upon the tax laws and rates of the countries in which operations are conducted and income is earned. The cumulative U.S.
Federal net operating losses carryforward on tax basis income was approximately $23.5 million and $29.9 million at
December 31, 2022 and 2021, respectively, of which $4.6 million will expire between 2029 and 2037 and $18.9 million will
carryforward indefinitely. The cumulative U.S. state net operating losses carryforward was approximately $45.8 million and
$28.8 million on December 31, 2022 and 2021, respectively. The cumulative foreign net operating losses carryforward was $1.8
million and $2.6 million on December 31, 2022 and 2021, respectively.
The legacy Boxlight entities are in a net deferred tax asset position in the United States, the United Kingdom, and other
jurisdictions, primarily driven by the aforementioned net operating losses. The recoverability of these deferred tax assets
depends on the Company’s ability to generate taxable income in the jurisdiction to which the carryforward applies. It also
depends on specific tax provisions in each jurisdiction that could impact utilization. For example, in the United States, a change
in ownership, as defined by federal income tax regulations, could significantly limit the Company's ability to utilize our U.S. net
operating loss carryforwards. Additionally, because U.S. tax laws limit the time during which the net operating losses generated
prior to 2018 may be applied against future taxes, if the Company fails to generate U.S.taxable income prior to the expiration
dates the Company may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes. The
Company has evaluated both positive and negative evidence as to the ability of its legacy entities in each jurisdiction to generate
future taxable income. Based on its long history of cumulative losses in those jurisdictions, it believes it is appropriate to
maintain a full valuation allowance on the net deferred tax asset of its legacy Boxlight entities at December 31, 2022 and 2021.
The change in its valuation allowance during 2022 is approximately $0.6 million.
The Sahara entities have recorded a net deferred tax liability, which is primarily driven by the net deferred tax liability
on the intangibles for which it does not have tax basis. This includes the deferred tax liability recorded during 2021 for the
acquisition of Interactive Concepts. The Company does not qualify for any consolidated filing positions in any of these
countries, so there is no ability to net the deferred tax liabilities of the Sahara companies against the deferred tax assets of the
legacy Boxlight companies. Therefore, the net deferred tax liability of $4.7 million at December 31, 2022 is primarily based on
the Sahara acquired entities.
The tax years from 2009 to 2022 remain open to examination in the U.S. federal jurisdictions to which the Company is
subject. The Company has not identified any uncertain tax positions at this time.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted. The
CARES Act includes provisions, among others, addressing the carryback of net operating losses for specific periods, refunds of
alternative minimum tax credits, temporary modifications to the limitations placed on the tax deductibility of net interest
expenses, and technical amendments for qualified improvement property. Additionally, the CARES Act provides for various
payroll incentives, including Payroll Protection Program (“PPP”) loans, refundable employee retention tax credits, and the
deferral of the employer-paid portion of social security payroll taxes. The Company received a $1.1 million loan under the PPP,
of which over $0.8 million was forgiven in March 2022 under the requirements of the program. The remaining amount owed
will be paid back in May 2022. No other provisions of the CARES Act had a material impact on the Company’s tax provision.
On December 27, 2020, the Consolidated Appropriations Act of 2021 - including the COVID-related Tax Relief Act of
2020 - was enacted. It included a provision that any expenses paid using forgiven PPP loan proceeds would be fully deductible.
This has been reflected in the Company’s tax provision.
Effective January 1, 2022, for U.S. tax purposes research and development costs, including software development
costs, are required to be capitalized and will be deductible over five years for costs incurred domestically and over fifteen years
for costs incurred in a foreign country. Additionally, the first year of amortization requires that amortization begin with the
midpoint of the taxable year. As of December 31, 2022, the Company has recorded a deferred tax asset of $0.4 million related to
capitalized research and development costs.
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Table of Contents
NOTE 12 – EQUITY
Preferred Shares
The Company’s articles of incorporation, as amended on December 15, 2016, provide that the Company is authorized
to issue 50,000,000 shares of preferred stock consisting of: 1) 250,000 shares of non-voting Series A preferred stock, with a par
value of $0.0001 per share; 2) 1,200,000 shares of voting Series B preferred stock, with a par value of $0.0001 per share; 3)
270,000 shares of voting Series C preferred stock, with a par value of $0.0001 per share; and 4) 48,280,000 shares of “blank
check” preferred stock as may be designated from time to by the Company’s board of directors.
Issuance of preferred shares
Series A Preferred Stock
At the time of the Company’s initial public offering, 250,000 shares of the Company’s non-voting convertible Series A
preferred stock were issued to Vert Capital for the acquisition of Genesis. All of the Series A preferred stock was convertible
into 398,406 shares of Class A common stock. On August 5, 2019, 82,028 of these preferred shares were converted into 130,721
shares of Class A common stock.
Series B Preferred Stock and Series C Preferred Stock
On September 25, 2020, in connection with the acquisition of Sahara, the Company issued 1,586,620 shares of Series B
Preferred Stock and 1,320,850 shares of Series C Preferred Stock. The Series B Preferred Stock has a stated and liquidation
value of $10.00 per share and pays a dividend out of the earnings and profits of the Company at the rate of 8% per annum,
payable quarterly. The Series B Preferred Stock is convertible into the Company’s Class A common stock at a conversion price
of $1.66 which was the closing price of BOXL’s Class A common stock on the Nasdaq stock market on September 25, 2020 (the
“Conversion Price”) either (i) at the option of the holder at any time after January 1, 2024 or (ii) automatically upon the
Company’s Class A common stock trading at 200% of the Conversion Price for 20 consecutive trading days (based on a volume
weighted average price). The Series C Preferred Stock has a stated and liquidation value of $10.00 per share and is convertible
into the Company’s Class A common stock at the Conversion Price either (i) at the option of the holder at any time after
January 1, 2026 or (ii) automatically upon the Company’s Class A common stock trading at 200% of the Conversion Price for
20 consecutive trading days (based on a volume weighted average price).
To the extent not previously converted into the Company’s Class A common stock, the outstanding shares of Series B
Preferred Stock shall be redeemable at the option of the Holders at any time or from time to time commencing on January 1,
2024, upon thirty (30) days prior written notice to the Holders, for a redemption price, payable in cash, equal to sum of (a) Ten
($10.00) multiplied by the number of shares of Series B Preferred Stock being redeemed (the “Redeemed Shares”), plus (b) all
accrued and unpaid dividends, if any, on such Redeemed Shares. The Series C Preferred Stock is also subject to redemption on
the same terms commencing January 1, 2026. The aggregate estimated fair value of the Series B and C Preferred Stock of $28.5
million was included as part of the total consideration paid for the purchase of Sahara.
On March 24, 2021, the Company entered into a share redemption and conversion agreement with certain holders of
Series B and Series C preferred stock (the “Redemption Agreement”) which allows the Company to redeem and repurchase
each such stockholder’s shares of Series B preferred stock on or before June 30, 2021 for the stated or liquidation value of
approximately £11.5 million (or approximately $15.9 million) plus accrued dividends from January 1, 2021 to the date of
purchase. Such stockholders hold 96% of the Series C preferred stock. Upon redemption, the Series C shares held by such
stockholders would convert into approximately 7.6 million shares of Class A Common Stock at the stated conversion price of
$1.66 per share.
On June 14, 2021, the Company entered into an amendment to the Redemption Agreement (the “Amended Redemption
Agreement”) for purposes of extending the completion date to on or before December 31, 2021. In addition, the Amended
Redemption Agreement changed the definition of “Redemption Payments” such that the redemption payment schedule would
begin on or before May 31, 2021, for the quarter then ended and continue quarterly until the date of completion.
Regarding these amendments, the Company applied the accounting guidance from ASC Subtopic 470-50, “Debt
Modifications and Extinguishments,” pertaining to determining whether an amendment to an equity-classified preferred share is
an extinguishment or
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modification, and concluded that the Amended Redemption Agreement on June 14, 2021, as it effected the Series B Preferred
Stock, resulted in an extinguishment of the original equity instruments subject to redemption agreement. Accordingly, the Series
B Preferred Stock subject to the Amended Redemption Agreement was recorded at its fair value as of June 14, 2021, and a
$367,000 deemed contribution was credited to additional-paid-in-capital. With the Redemption Agreement, the Series B
Preferred Stock includes a beneficial conversion feature, but in accordance with ASC Subtopic 470-20, since it is dependent
upon contingencies that are not solely in the control of the holder, the beneficial conversion feature was not recognized for
accounting purposes. Since we early adopted (as of January 1, 2021) ASU No. 2020-06, “Accounting for Convertible
Instruments and Contracts in an Entity’s Own Equity,” which includes a key provision eliminating the beneficial conversion
feature guidance in ASC Subtopic 470-20, we have not recorded the beneficial conversion feature.
The Series B Preferred Stock has been recorded at its estimated fair value on the date of issuance of approximately
$16.1 million, which includes the conversion and redemption features as they have not been bifurcated from the host
instruments.
The Series C Preferred Stock has been recorded at its estimated fair value on the date of issuance of approximately
$12.4 million, which includes the redemption features as they have not been bifurcated from the host instrument.
As the redemption features in the Series B Preferred Stock and Series C Preferred Stock are not solely with the control
of the Company, the Company has classified the Series B Preferred Stock and Series C Preferred Stock in temporary equity on
the Company’s consolidated balance sheet.
Common Stock
The Company’s common stock consists of 150,000,000 shares of Class A voting common stock and 50,000,000 shares
of Class B non-voting common stock. Class A and Class B common stock have the same rights except that Class A common
stock is entitled to one vote per share while Class B common stock has no voting rights. Upon any public or private sale or
disposition by any holder of Class B common stock, such shares of Class B common stock shall automatically convert into
shares of Class A common stock. As of December 31, 2022, and December 31, 2021, the Company had 74,716,696 and
63,821,901 shares of Class A common stock issued and outstanding, respectively. No Class B shares were outstanding at
December 31, 2022 and December 31, 2021.
Issuance of common stock
Securities Purchase Agreement
On July 22, 2022, the Company, entered into a Securities Purchase Agreement with an accredited institutional investor
pursuant to which the Company agreed to issue and sell, in a registered direct offering directly to the Investor, 7.0 million
shares of the Company’s Class A common stock, par value $0.0001 per share (“Common Stock”), pre-funded warrants (the
“Pre-Funded Warrants”) to purchase 352,940 shares of Common Stock at an exercise price of $0.0001 per share, which Pre-
Funded Warrants were issued in lieu of shares of Common Stock to ensure that the Investor did not exceed certain beneficial
ownership limitations, and warrants to purchase an aggregate of 7,352,940 shares of Common Stock at an exercise price of
$0.68 per share (the “Warrants”, and collectively with the Pre-Funded Warrants and the Shares, the “Securities”). The Securities
were sold at a price of $0.68 per share for total gross proceeds to the Company of $5.0 million, before deducting estimated
offering expenses, and excluding the exercise of any Warrants or Pre-Funded Warrants. The Pre-Funded Warrants were
exercisable immediately and the Warrants will be exercisable six months after the date of issuance and will expire five and a
half years from the date of issuance. As such, the net proceeds to the Company from the offering, after deducting placement
agent’s fees and estimated expenses payable by the Company and excluding the exercise of any Warrants or Pre-Funded
Warrants was $4.6 million of which the proceeds net of issuance costs were allocated based on the relative fair values of the
instruments, warrants and prefunded warrants; $2.4 million was allocated to common stock, $2.2 million was allocated to
warrants and $118 thousand was allocated to the pre-funded warrants. On August 9, 2022, the Investor exercised the prefunded
warrants.
F-32
Table of Contents
The Company evaluated whether the Warrants, Pre-Funded Warrants and/or Shares were in the scope of ASC Topic
480 “Distinguishing Liabilities from Equity,” which discusses the accounting for instruments with characteristics of both
liabilities and equity. The guidance in Topic 480, and the resulting liability classification, is applicable to such instruments when
certain criteria are met. Based on its analysis, the Company concluded that the Warrants, Pre-Funded Warrants and Shares did
not meet any of the criteria to be subject to liability classification under Topic 480 and are therefore classified as equity.
Credit Facility
In conjunction with its receipt of the WhiteHawk loan, the Company issued to WhiteHawk 528,169 shares of Class A
common stock, which were registered pursuant to the Company’s existing shelf registration statement and were delivered to the
WhiteHawk in January 2022.
Debt Conversion
During the year ended December 31, 2021, the Company issued 7.9 million shares of Class A common stock in lieu of
$13.7 million in principal and interest payments due in relation to notes payable to Lind Global. These conversion transactions
resulted in a $3.8 million loss on the settlement of debt obligations.
Accounts Payable and Other Liabilities Conversion
During the year ended December 31, 2021, the Company issued 793,375 shares of Class A common stock with an
aggregate value of $1.6 million to Everest Display, Inc. to convert $2.0 million in accounts payable owed, resulting in a gain of
$356,700 from settlement of liabilities.
Conversion of Restricted Stock Units
During the year ended December 31, 2022 and 2021, respectively, 2,489,075 and 916,682 restricted stock units vested
and were converted into Class A common stock.
Exercise of Stock Options
There were 296,841 options to purchase common stock that were exercised during the year ended December 31, 2022.
There were 492,460 options to purchase common stock exercised during the year ended December 31, 2021.
Exercise of Warrants
During the year ended December 31, 2022, pre-funded warrants to purchase 352,940 shares of Common Stock at an
exercise price of $0.001 per share were exercised. During the year ended December 31, 2021, 295,000 warrants were exercised
with an exercise price of $0.42.
Other
On March 23, 2021, the Company acquired 100% of the outstanding shares of Interactive Concepts BV, a company
incorporated and registered in Belgium and a distributor of interactive technologies (“Interactive”), for total consideration of
approximately $3.3 million in cash, common stock and deferred consideration. The company has been Boxlight’s key distributor
in Belgium and Luxembourg. The company issued 142,882 shares of Class A Common Stock, in conjunction with the purchase
of Interactive.
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Table of Contents
NOTE 13 – STOCK COMPENSATION
Grants made under the Equity Incentive Plans must be approved by the Company’s board of directors. The total
number of underlying shares of the Company’s Class A common stock available for grant to directors, officers, key employees
and consultants of the Company or a subsidiary of the Company under the Company’s 2021 Equity Incentive Plan was
5,000,000 shares.
The 2021 Equity Incentive Plan was approved by the Company’s Board on April 12, 2021 and approved by the
shareholders at the Company’s 2021 Annual Shareholders Meeting held on June 25, 2021.
Stock Options
Under our Equity Incentive Plans, an employee may receive an award of stock grants that provides the opportunity in
the future to purchase the Company’s shares at the market price of our stock on the date the award is granted (strike price). The
options become exercisable over a range of immediately vested to four-year vesting periods and expire five years from the grant
date, unless stated differently in the option agreements, if they are not exercised. We record compensation expense based on the
estimated fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period.
Accordingly, total expense related to the award is reduced by the fair value of options that are forfeited by employees that leave
the Company prior to vesting.
Following is a summary of the option activities during the years ended December 31, 2022 and 2021:
Outstanding, December 31, 2020
Granted
Exercised
Cancelled
Outstanding, December 31, 2021
Granted
Exercised
Cancelled
Outstanding, December 31, 2022
Exercisable, December 31, 2022
Weighted
Average
Remaining
Contractual
Weighted
Average
Number of
Units
4,850,784
Exercise Price Term (in years)
3.51
$
— $
$
$
$
$
$
$
$
$
1.76
—
0.84
1.01
1.92
1.12
0.25
2.59
1.61
1.90
2.17
1.77
2.29
(492,460)
(304,208)
4,054,116
1,221,744
(296,841)
(1,063,142)
3,915,877
2,782,384
The Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option
pricing model. The Company used the following inputs to value warrants issued during the year ending December 31, 2022
using the Black Scholes option valuation method: market value on measurement date of $0.00 to $0.91; exercise price of
$0.13 to $5.01; risk free interest rate of 1.45% to 2.87%; expected term, 3 to 4 years; expected volatility, ranging
from 49% to 148% and expected dividend yield of 0%.
As of December 31, 2022 and December 31, 2021, the stock options had an intrinsic value of approximately
$18 thousand and $1.9 million, respectively.
On May 3, 2022, the Boxlight board of directors adopted a resolution, in exchange for a three-year non-compete
agreement, to grant Mark Elliott, a member of the board and former CEO of the Company, an extension for one year, of
previously granted stock options to purchase a total of 577,675 shares of Class A common stock, par value $0.001 per share,
which had expired on January 12, 2022. The stock price on the remeasurement date was $1.04 and the incremental
compensation recognized was approximately $314 thousand.
On June 13, 2022, the Boxlight board of directors granted Greg Wiggins, Chief Financial Officer, stock options
for 150,000 shares of the Company’s Class A common stock will vest in equal quarterly installments over a four-year term
commencing on July 5, 2022.
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Table of Contents
On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with
Michael Pope, the Chairman and Chief Executive Officer, extending Mr. Pope’s term of employment with the Company. Under
the terms of the agreement, Mr. Pope received a grant 494,069 options to purchase Class A Common Stock, which are valued at
approximately $420 thousand.
There were no issuances of stock options in 2021.
Restricted Stock Units
Under our Equity Incentive Plans, the Company may grant restricted stock units (“RSUs”) to certain employees,
contractors and non-employee directors. Upon granting the RSUs, the Company records a fixed compensation expense equal to
the fair market value of the underlying shares of RSUs granted on a straight-line basis over the requisite services period for the
RSUs. Compensation expense related to the RSUs is reduced by the fair value of units that are forfeited by employees that leave
the Company prior to vesting. The restricted stock units vest over a range of immediately vested to four-year vesting periods in
accordance with the terms of the applicable RSU grant agreement.
The following is a summary of the restricted stock activities during the years ended December 31, 2022 and 2021.
Outstanding, December 31, 2020
Granted
Vested
Forfeited
Outstanding, December 31, 2021
Granted
Vested
Forfeited
Outstanding, December 31, 2022
2022 Grants
Weighted
Average
Grant Date Fair
Value
$
$
$
$
$
$
$
$
$
1.62
2.81
2.18
1.66
1.81
1.19
1.63
1.34
1.38
Number of Units
2,721,347
1,019,583
(1,498,495)
(268,491)
1,973,947
2,477,675
(1,583,525)
(437,067)
2,431,030
On January 25, 2022, the Company granted an aggregate of 40,000 RSUs to new employees. The RSUs vest over four
years and the aggregate fair value of the shares was approximately $44 thousand.
On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with
Michael Pope, the Chairman and Chief Executive Officer, extending Mr. Pope’s term of employment with the Company. Under
the terms of the agreement, Mr. Pope received a grant of 163,637 RSU’s, valued at approximately $180 thousand, and vesting
over three years.
On February 24, 2022, following approval by the Company’s board of directors, the Company’s senior management
issued a total of 1,771,950 RSUs under the terms of Amendment No. 2 to the Boxlight Corporation 2014 Stock Incentive Plan,
vesting over four years, as long-term incentive awards to its employees in the U.S. and Europe. The aggregate fair value of the
shares was $2.1 million.
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Table of Contents
On March 21, 2022, the Company granted an aggregate of 348,840 RSUs to its board members. These RSUs vest
ratably over one year and had an aggregated fair value of approximately $450 thousand on the grant date.
On May 26, 2022, the company granted 73,565 RSUs to a company owned and controlled by Karel Callens named
OLORI. Mr. Callens performs certain sales and marketing functions in our EMEA markets. These RSUs vested and were issued
directly to OLORI, and such common stock issuable upon vesting of the RSUs will be reserved for issuance directly out of the
authorized shares of Class A common stock and not out of the Company’s equity incentive plan.
2021 Grants
On February 24, 2021, the Company granted an aggregate of 130,547 RSUs to its board members. These RSUs vest
ratably over one year and had an aggregated fair value of approximately $374,000 on the grant date.
In addition, on March 20, 2021, the Company granted an aggregate of 875,245 shares of restricted common stock to
Michael Pope, the Company’s CEO and Chairman, pursuant to his employment agreement. These shares were issued pursuant
to the 2014 Equity Incentive Plan, vest ratably over one year, are issued monthly as they vest, and had an aggregated fair value
of approximately $2.5 million on the grant date.
Warrants
The following is a summary of the warrant activities during the years ended December 31, 2022 and 2021:
Outstanding, December 31, 2020
Granted
Exercised
Outstanding, December 31, 2021
Granted
Exercised
Outstanding, December 31, 2022
Exercisable, December 31, 2022
2022 Warrants
Number of
Units
$
365,000
$
2,043,291
(295,000) $
$
2,113,291
7,705,880
$
(352,940) $
$
9,466,231
$
71,250
Weighted
Average
Remaining
Contractual
Weighted
Average
Exercise Price Term (in years)
1.27
—
—
0.94
1.44
2.00
0.45
2.00
0.65
0.01
0.68
0.70
5.25
2.56
On July 22, 2022, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an
accredited institutional investor (the “Investor”) pursuant to which the Company agreed to issue and sell, in a registered direct
offering directly to the Investor, 7.0 million shares (the “Shares”) of the Company’s Class A common stock, par value
$0.0001 per share (“Common Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase 352,940 shares of
Common Stock at an exercise price of $0.0001 per share, which Pre-Funded Warrants were issued in lieu of shares of Common
Stock to ensure that the Investor did not exceed certain beneficial ownership limitations, and warrants to purchase an aggregate
of 7,352,940 shares of Common Stock at an exercise price of $0.68 per share (the “Warrants”, and collectively with the Pre-
Funded Warrants and the Shares, the “Securities”). The Securities were sold at a price of $0.68 per share for total gross proceeds
to the Company of $5.0 million (the “Offering”), before deducting estimated offering expenses, and excluding the exercise of
any Warrants or Pre-Funded Warrants. The Pre-Funded Warrants were exercisable immediately and the Warrants will be
exercisable six months after the date of issuance and will expire five and a half years from the date of issuance. As such, the net
proceeds to the Company from the Offering, after deducting placement agent’s fees and estimated expenses payable by the
Company and excluding the exercise of any Warrants or Pre-Funded Warrants was $4.6 million of which the proceeds net of
issuance costs were allocated based on the relative fair values of the instruments, warrants and prefunded warrants; $2.4 million
was allocated to common stock, $2.2 million was allocated to warrants and $118 thousand was allocated to the pre-funded
warrants. The net proceeds received by the Company will be used for working capital purposes.
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2021 Warrants
On December 31, 2021, the Company granted WhiteHawk, Inc., 2,043,291 warrants, in conjunction with the issuance
of a loan credit facility to the Company. The warrants had an exercise price of $2.00 per share and include a provision that
allows for the exercise price to be adjusted based on the Company’s stock price as of March 31, 2022. The expiration period for
these warrants is five years from the issuance date. The warrants had an aggregated fair market value of approximately $3.1
million on the grant date.
Stock compensation expense
For the years ended December 31, 2022 and 2021, the Company recorded the following stock compensation expense
which is included in general and administrative expense in the Company’s consolidated statement of operations and
comprehensive loss (in thousands):
Stock options
Restricted stock units
Warrants
Total stock compensation expense
2022
2021
$
$
805
2,505
3
3,313
$
$
660
3,399
1
4,060
As of December 31, 2022, there was approximately $4.0 million of unrecognized compensation expense related to
unvested options, RSU’s, and warrants, which will be amortized over the remaining vesting period. Of that total, approximately
$2.0 million is estimated to be recorded as compensation expense in 2023.
NOTE 14 – OTHER RELATED PARTY TRANSACTIONS
Management Agreements
On November 1, 2022, the Company entered into a consulting agreement with Mark Elliott, former CEO of Boxlight
and a current member of the board of directors. The agreement is for Mr. Elliott to provide sales, marketing, management and
related consulting services to assist the Company in sourcing and entering into agreements with one or more customers to
provide products and services for specified school districts. The Company will pay Mr. Elliott a fixed payment of $4,000 per
month and commissions equal to 15% of gross profit derived by the Company based on total purchase order revenue. The
agreement, unless renewed or extended will expire on December 31, 2023.
On January 31, 2018, the Company entered into a management agreement (the “Management Agreement”) with an
entity owned and controlled by our CEO and Chairman, Michael Pope. The Management Agreement is separate and apart from
Mr. Pope’s employment agreement. The Management Agreement is effective as of the first day of the same month that
Mr. Pope’s employment with the Company terminates, and for a term of 13 months, Mr. Pope will provide consulting services to
the Company including sourcing and analyzing strategic acquisitions, assisting with financing activities, and other services. As
consideration for the services provided, the Company will pay a management fee equal to 0.375% of the consolidated net
revenues of the Company, payable in monthly installments, not to exceed $250,000 in any calendar year. At his option, Mr. Pope
may defer payment until the end of each year and receive payment in the form of shares of Class A common stock of the
Company.
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Operating Lease Commitments
The Company has entered into various operating leases for certain office, support locations and vehicles with terms
extending through December 2027. Generally, these leases have initial lease terms of five years or less. Many of the leases have
one or more lease renewal options. The exercise of lease renewal options is at its sole discretion. The Company does not
consider exercise of any lease renewal options reasonably certain. Certain of the Company’s lease agreements contain early
termination options. No renewal options
F-37
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or early termination options have been included in the calculation of the operating right-of-use assets or operating lease
liabilities. Certain of the Company’s lease agreements provide for periodic adjustments to rental payments for inflation. As the
majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the
commencement date in determining the present value of lease payments. The incremental borrowing rate is based on the term of
the lease. In connection with the adoption of Topic 842, the Company used incremental borrowing rates on January 1, 2022 for
operating leases that commenced prior to that date. Leases with an initial term of 12 months or less are not recorded on the
balance sheet. For these short-term leases, lease expense is recognized on a straight-line basis over the lease term. At December
31, 2022, the Company had no leases classified as finance leases. The Company is not a lessor in any lease arrangement.
Operating lease expense was $2.1 million and $2.3 million for the year ended December 31, 2022 and 2021,
respectively. Variable lease costs and short-term lease cost were not material for the year ended December 31, 2022. Cash paid
for amounts included in the measurement of lease liabilities was $2.4 million for the year ended December 31, 2022. During the
year ended December 31, 2022, the Company obtained new operating lease right-of-use assets totaling $1.8 million.
Future minimum lease payments of the Company’s operating leases with a term over one year subsequent to
December 31, 2022 are as follows:
Year ending December 31,
2023
2024
2025
2026
2027
Thereafter
Less imputed interest
Total
(in thousands)
1,995
1,313
1,099
743
246
6
(1,046)
4,356
$
$
The weighted-average remaining lease term is 3.2 years and the weighted-average discount rate is 15.5%.
On January 19, 2022, the Company signed a lease agreement for 64 months for approximately 12,000 feet of space for
its new corporate headquarters in Duluth, Georgia. The Company will occupy the building on approximately May 15, 2022. The
lease will replace the space previously rented by the Company for its headquarters in Lawrenceville, Georgia.
On February 4, 2022, the Company signed a lease agreement for 60 months for 24,000 feet of warehouse space in
Lawrenceville, Georgia to begin March 1, 2022. The lease will replace the space previously rented by the Company.
For the year ended December 31, 2021, if the annual amounts for these leases were added to the table above, the
minimum lease payments would increase by approximately $2.7 million.
Purchase Commitments
The Company is legally obligated to fulfill certain purchase commitments made to vendors that supply materials used
in the Company’s products. At December 31, 2022 the total amount of such open inventory purchase orders was $56.2 million.
Legal Proceedings
From time to time, the Company is involved in routine litigation and legal proceedings in the ordinary course of its
business, such as, employment matters and contractual disputes. Currently, there is no pending litigation or proceedings that the
Company’s management believes will have a material effect, either individually or in the aggregate, on its business or financial
condition.
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NOTE 16 – CUSTOMER AND SUPPLIER CONCENTRATION
Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases.
The Company’s revenues were concentrated with a few customers for the years ended December 31, 2022 and 2021:
Total revenues
from the customers
as a percentage of
total revenues
for the year ended
December 31,
2022
Accounts
receivable from
the customers as of
December 31,
2022
(in thousands)
Total revenues
from the customer
as a percentage of
total revenues
for the year ended
December 31,
2021
Accounts
receivable from
the customers as of
December 31,
2021
(in thousands)
18 % $
5 % $
8,468
469
11 % $
4 % $
3,245
1,223
Customer
1
2
The loss of the significant customers or the failure to attract new customers could have a material adverse effect on our
business, results of operations and financial condition.
The Company’s purchases were concentrated among a few vendors for the years ended December 31, 2022 and 2021:
Total purchases
from the vendors
as a percentage of
total cost of
revenues for
the year ended
December 31,
2022
Accounts payable
(prepayment) to
the vendors as of
December 31,
2022
(in thousands)
Total purchases
from the vendors
as a percentage
of total cost of
revenues for
the year ended
December 31,
2021
Accounts payable
(prepayment) to
the vendors as of
December 31,
2021
(in thousands)
56 % $
4 % $
24,029
705
16 % $
4 % $
(1,185)
(805)
Vendor
1
2
The Company believes there are numerous other suppliers that could be substituted should for the above suppliers
become unavailable or non-competitive.
NOTE 17 – SUBSEQUENT EVENTS
On February 14, 2023, the board of directors of Boxlight Corporation approved the Company’s establishment of a
share repurchase program (the “Repurchase Program”) authorizing the Company to purchase up to $15.0 million of the
Company’s Class A common stock. Pursuant to the Repurchase Program, the Company may, from time to time, repurchase its
Class A common stock in the open market, in privately negotiated transactions or by other means, including through the use of
trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in accordance with
applicable securities laws and other restrictions. The timing and total amount of any repurchases made under the Repurchase
Program will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock
prices, and other considerations. The authorization expires on January 26, 2027, may be suspended or discontinued at any time,
and does not obligate the company to acquire any amount of Class A common stock.
As previously disclosed, we received a deficiency letter from the Listing Qualifications Department (the "Staff") of the
Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that, for the preceding 30 consecutive business days, the closing
bid price for the Company's Class A common stock (the "Common Stock") was trading below the minimum $1.00 per share
requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Bid Price
Requirement").
In accordance with Nasdaq Rules, the Company was provided with an initial period of 180 calendar days, or until
January 2, 2023 (the ("Initial Grace Period"), to regain compliance with the Bid Price Requirement. Because the Initial Grace
Period was coming to an end and the Company had not yet regained compliance, in December 2022, the Company submitted a
request to Nasdaq to obtain an additional 180-day grace period (the "Additional Grace Period") to regain compliance with the
Bid Price Requirement. On January 3, 2023, the Company received formal approval from Nasdaq granting it an additional 180
days, or until July 3, 2023 (the “Compliance Date”), to regain compliance with the Bid Price Requirement.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On June 1, 2022, the Company was notified by Dixon Hughes Goodman LLP ("DHG"), the Company's independent
registered public accounting firm, that DHG was merging with BKD, LLP ("BKD"), and that following their merger, their
combined entities would operate under the name FORVIS, LLP (“FORVIS”). The audit committee of the Company’s board of
directors approved the engagement of FORVIS, the successor in the merger of DHG and BKD, as the Company’s independent
registered public accounting firm, effective June 1, 2022.
DHG’s audit report on the consolidated financial statements of the Company for the year ended December 31, 2021 did
not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or
accounting principles.
During the Company’s two most recent fiscal years ended December 31, 2021 and 2020 and through June 2, 2022, the
Company has not had any “disagreements” (as such term is defined in Item 304 of Regulation S-K) with DHG on any matter of
accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not
resolved to the satisfaction of DHG, would have caused DHG to make reference to the subject matter of the disagreement in its
reports on the Company’s consolidated financial statements for such periods.
During the Company’s two most recent fiscal years and through June 2, 2022, there were no “reportable events” (as
such term is defined in Item 304 of Regulation S-K).
On June 2, 2022, the Company provided FORVIS, as successor to DHG, with a copy of the Current Report on Form 8-
K filed on June 2, 2022 (the “Form 8-K”) and has requested that FORVIS furnish it with a letter addressed to the U.S. Securities
and Exchange Commission stating whether or not FORVIS agrees with the Company’s statements in the Form 8-K . A copy of
the letter dated June 2, 2022 furnished by FORVIS in response to that request was filed as Exhibit 16.1 to the Form 8-K filed
with the SEC on June 2, 2022.
ITEM 9A. CONTROLS AND PROCEDURES
As required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), under the
supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures and
internal control over financial reporting as of the end of the period covered by this Annual Report.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that
are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that
information is accumulated and communicated to management, including the principal executive and financial officer as
appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial
officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this Annual
Report (“Evaluation Date”), pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our principal
executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and
procedures were not effective due to material weaknesses described in our report on internal control over financial reporting
below.
Notwithstanding the existence of the material weaknesses, we believe that the consolidated financial statements
included in this report fairly present in accordance with U.S. GAAP, in all material respects, our financial condition, results of
operations and cash flows for the periods presented in this Annual Report.
Limitations on the Effectiveness of Controls
A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of
controls can provide
49
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absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure
controls and procedures are designed to provide reasonable assurance of achieving its objectives.
Management’s Report on Internal Control Over Financial Reporting
Our principal executive officer and our principal accounting and financial officer are responsible for establishing and
maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).
Management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31,
2021. In making this assessment, management used the criteria described in Internal Control-Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon such assessment and
due to the existence of the material weaknesses in our internal control over financial reporting described below, our principal
executive officer and our principal accounting and financial officer have concluded that, as of December 31, 2022, our internal
control over financial reporting was not effective.
● Our written policies and procedures over accounting transaction processing and period end financial close and
reporting are limited which has resulted in ineffective oversight in the establishment of proper monitoring controls
over accounting and financial reporting.
● We lacked sufficient review of certain financial transactions, such that a proper review had not been performed by
someone other than preparer, and that process documentation is lacking for review and monitoring controls over
accounting and financial reporting.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable and
not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control
systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions, regardless of how remote.
In light of the material weakness described above, we performed additional analysis and other post-closing procedures
to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we
believe that the consolidated financial statements included in this report fairly present in accordance with U.S. GAAP, in all
material respects, our financial condition, results of operations and cash flows for the periods presented in this Annual Report.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting during the three months ended
December 31, 2022 that has materially affected, or is reasonably likely to materially affect, the company’s internal control over
financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of
Stockholders.
ITEM 11 EXECUTIVE COMPENSATION
The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of
Stockholders and is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of
Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of
Stockholders.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item will be included in our definitive proxy statement for the 2023 Annual Meeting of
Stockholders.
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Table of Contents
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
PART IV
Schedule II
Valuation and Qualifying Accounts
(in thousands)
Balance at
beginning of
period
Additions
Charge
(Credit) to
Cost and
Expense
Charged to
Other
Accounts
$
$
$
$
473
473
405
405
$
$
$
$
425
425
239
239
$
$
$
$
Deductions (a)
Balance at
end of
period
$
$
$
$
-
-
493
493
230
230
$
$
$
$
405
405
414
414
Year Ended December 31, 2021
Allowance for doubtful accounts
Total allowance deducted from assets
Year Ended December 31, 2022
Allowance for doubtful accounts
Total allowance deducted from assets
(a) Write-offs, net of recoveries
Exhibit
No.
3.1
Description of Exhibit
Eleventh Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.5 to the
Registration Statement on Form S-1 (File No. 333-204811) filed on December 15, 2016).
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
Amended and Restated Bylaws adopted June 24, 2021 (incorporated by reference to Exhibit 3.1 to the Current
Report on Form 8-K filed on June 24, 2021).
Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 in the
Registration Statement on Form S-1 (Reg. No. 377-00845) filed on June 9, 2015).
Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (incorporated by
reference to Exhibit 4.1 to the Registration Statement on Form S-1/A (Reg. No 333-204811) filed on December 28,
2015.
Operating Agreement of EOSEDU, LLC, dated September 17, 2018, by and between the Boxlight Corporation and
EOSEDU, LLC dated September 17, 2018 (incorporated by reference to Exhibit 4.8 to Amendment No. 1 to the
Registration Statement on Form S-1 (Reg. No. 333-226068) filed on September 24, 2018).
Form of Certificate of Designations for Series B Convertible Preferred Stock (incorporated by reference to Exhibit
4.1 to the Current Report on Form 8-K filed September 25, 2020).
Form of Certificate of Designations for Series C Convertible Preferred Stock (incorporated by reference to Exhibit
4.2 to the Current Report on Form 8-K filed September 25, 2020).
Form of Amended and Restated Certificate of Designations for Series B Convertible Preferred Stock (incorporated
by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the period ended September 30, 2020).
Form of Amended and Restated Certificate of Designations for the Series C Convertible Preferred Stock
(incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q for the period ended September 30,
2020).
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Table of Contents
4.8
4.9
4.10
4.11
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Form of Warrant, dated December 31, 2021, issued to WhiteHawk Finance LLC (incorporated by reference to
Exhibit 4.1 to the Current Report on Form 8- K filed January 5, 2022).
Description of Securities.*
Form of Pre-Funded Warrant, dated July 22, 2022, issued to an accredited institutional investor (incorporated by
reference to Exhibit 4.1 to the Current Report on Form 8- K filed July 26, 2022).
Form of Warrant, dated July 22, 2022, issued to an accredited institutional investor (incorporated by reference to
Exhibit 4.2 to the Current Report on Form 8- K filed July 26, 2022).
Trademark Assignment dated May 27, 2016, between Herbert Myers, Boxlight Corporation and Boxlight Inc.
(incorporated by reference to Exhibit 10.6 in the Registration Statement on Form S-1 (Reg. No. 33-204811 filed on
May 13, 2016).
Share Purchase Agreement, dated as of May 10,2016 by and among Boxlight Holdings, Inc., Boxlight Corporation,
Boxlight, Inc., Boxlight Latinoamerica, S.A. DE C.V. Boxlight Latinoamerica, Servicios S.A. DE C.V. Everest
Display Inc. and Guang Feng International Ltd. (incorporated by reference to Exhibit 10.1 in the Registration
Statement on Form S-1 (Reg. No. 333-204811) filed on May 13, 2016.
$2,000,000 Convertible Promissory Note of Boxlight Corporation to Mim Holdings, dated as of April 1, 2016
(Incorporated by reference to Exhibit 10.14 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed
on May 13, 2016).
Amendment No. 2 to Membership Interest Purchase Agreement, effective June 30, 2016 among Skyview Capital,
LLC, Mimio LLC, MIM Holdings, LLC and Boxlight Corporation (incorporated by reference to Exhibit 10.30 in the
Registration Statement on Form S-1 (Reg. No. 333-204811) filed on December 15, 2016).
Amendment No. 3 to Membership Interest Purchase Agreement, effective August 3, 2016 among Skyview Capital,
LLC, Mimio LLC, MIM Holdings, LLC and Boxlight Corporation (incorporated by reference to Exhibit 10.34 in the
Registration Statement on Form S-1 (Reg. No. 333-204811) filed on August 12, 2016).
Promissory Note, issued June 3, 2016 between Boxlight, Inc. and AHA Inc. Co Ltd. (Incorporated by reference to
Exhibit 10.32 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on July 11, 2016).
Form of Loan and Security Agreement with Hitachi Capital America Corp (incorporated by reference to Exhibit
10.33 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on August 12, 2016).
Loan and Security Agreement, dated September 28, 2016, between Boxlight Inc., Crestmark Bank and Mimio LLC
(incorporated by reference to Exhibit 10.35 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed
on January 12, 2017).
Amendment 1 to Share Purchase Agreement and Option Agreement, dated May 10, 2016 by and Among Everest
Display, Inc., GuangFeng International, Ltd., Boxlight Holdings, Boxlight Corporation, Boxlight Inc., Boxlight
Latinoamerica S.A. and Boxlight Latinoamerica Servicios, S.A. DE C.V. (incorporated by reference to Exhibit 10.36
in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on October 28, 2016).
10.10
Subscription Agreement between K Laser International Co., Ltd. And Boxlight Corporation for $1,000,000 equity
investment at $5.60 per share (incorporated by reference to Exhibit 10.37 in the Registration Statement on Form S-1
(Reg. No. 333-204811) filed on October 28, 2016).
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Table of Contents
10.11
10.12
10.13
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
$2,000,000 Convertible Promissory Note, dated September 29,2016 between Boxlight Corporation and Everest
Display, Inc. (incorporated by reference to Exhibit 10.38 in the Registration Statement on Form S-1 (Reg. No. 333-
204811) filed on October 28, 2016).
Notice of Default dated December 28, 2015 – Skyview Capital (incorporated by reference to Exhibit 10.39 in the
Registration Statement on Form S-1 (Reg. No. 333-204811) filed on January 12, 2017).
Account Sale and Purchase Agreement, dated September 5, 2017 between Sallyport Commercial Finance LLC and
Boxlight Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on
September 11, 2017).
Stock Purchase Agreement and Exhibits, date May 9, 2018 among Boxlight Corporation, Cohuborate Ltd. and the
shareholders of Cohuborate, Ltd. (incorporated by reference to Exhibit 10.20 to the Registration Statement on Form
S-1 (Reg. No. 333-226068) filed on July 5, 2018).
$500,000 Promissory Note, dated May 16, 2018, from Boxlight Corporation to Harbor Gates Capital, LLC
(incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-1 (Reg. No. 333-226068) filed
on July 5, 2018).
Membership Interest Purchase agreement, dated as of September 17, 2018, by and among the Boxlight Corporation,
Daniel Leis, Aleksandra Leis and EOSEDU, LLC (incorporated by reference to Exhibit 10.24 in Amendment No. 1
to the Registration Statement on Form S-1 (Reg. No. 333-226068) filed on September 24, 2018).
Employment agreement, dated September 1, 2018, by and between Boxlight Corporation and Aleksandra Leis
(incorporated by reference to Exhibit 10.25 to Amendment No. 1 to the Registration Statement on Form S-1(Reg.
No. 333-226068) filed on September 24, 2018).
Employment agreement, dated September 1, 2018, by and between Boxlight Corporation and Daniel Leis
(incorporated by reference to Exhibit 10.26 to Amendment No. 1 to the Registration Statement on Form S-1(Reg.
No. 333-226068) filed on September 24, 2018.
Asset Purchase Agreement, dated March 12, 2019, between Boxlight Corporation, Boxlight Inc., Modern Robotics
and Stephen Fuller (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 15,
2019).
Securities Purchase Agreement dated March 22, 2019 between Boxlight Corporation and Lind Global Macro Fund
L.P. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 25, 2019).
Form of $4,400,000 Secured Convertible Promissory Note dated March 22, 2019 (incorporated by reference to
Exhibit 10.2 to the Current Report on Form 8-K filed March 25, 2019).
Security Agreement, dated March 22, 2019, between Boxlight Corporation and Lind Global Macro Fund LP
(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed March 25, 2019).
Intercreditor Agreement, dated March 22, 2019, between Boxlight Corporation, and Sallyport Commercial Finance
LLC and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-
K filed March 25, 2019).
Securities Purchase Agreement, dated as of December 13, 2019, between Boxlight Corporation and Lind Global
Macro Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 17,
2019).
10.25
Secured Convertible Note, Dated December 13, 2019, issued by Boxlight Corporation to Lind Global Macro Fund,
L.P. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed December 17, 2019).
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10.26
10.27
10.28
10.29
10.30
10.31
10.32
10.33
10.34
10.35
10.36
10.37
10.38
10.39
10.40
Amended and Restated Security Agreement dated as of December 13, 2019, between Boxlight Corporation,
Sallyport Commercial Finance, LLC. And Lind Global Macro Fund, LP (filed as Exhibit 10.3 to the Current Report
on Form 8-K filed December 17, 2019).
Amended and Restated Intercreditor Agreement, dated as of December 13, 2019, between Boxlight Corporation,
Sallyport Commercial Finance, LLC and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to
the Current Report on Form 8-K filed December 17, 2019).
Amended and Restated Employment Agreement, dated January 13, 2020, between Boxlight Corporation and James
Mark Elliott (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 14, 2020).
Employment letter, dated January 13, 2020, between Boxlight Corporation and Harold Bevis (incorporated by
reference to Exhibit 10.2 to the Current Report on Form 8-K filed January 14, 2020).
Asset Purchase Agreement dated February 3, 2020, between Boxlight Corporation, Boxlight Inc., MyStemKit, Inc.
and STEM Education Holdings, Pty. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K
filed February 7, 2020).
Securities Purchase Agreement dated February 4, 2020 between Boxlight Corporation and Lind Global Macro
Fund, LP. (Incorporated by reference to Exhibit 10.2 to the Current Report 8-Kfiled February 7, 2020).
Secured Convertible Note, dated February 4, 2020, (incorporated by reference to Exhibit 10.3 to the Current Report
on Form 8-K filed February 7, 2020).
Second Amended and Restated Security Agreement, dated February 4, 2020, between Boxlight Corporation and
Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed
February 7, 2020).
Second Amended and Restated Intercreditor Agreement, dated February 4, 2020, between Boxlight Corporation,
Sallyport Commercial Finance, LLC and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.5 to
the Current Report on Form 8-K filed February 7, 2020).
Third Restated Convertible Promissory Note, dated February 4, 2020, issued by Boxlight Corporation to Lind
Global Macro Fund, LP (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed
February 7, 2020).
Second Restated Convertible Promissory Note, dated February 4, 2020, issued by Boxlight Corporation issued by
Boxlight Corporation to Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.7 to the Current
Report on Form 8-K filed February 7, 2020).
Employment Agreement, dated February 21, 2020, between Boxlight Corporation and Takesha Brown (incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 26, 2020).
Agreement, dated March 3, 2020, between Boxlight Corporation, Everest Display, Inc and AMAGIC Holographics,
Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 13, 2020).
Employment Agreement, dated March 20, 2020, between Boxlight Corporation and Michael Pope (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 23, 2020).
Amended and Restated Employment Agreement, dated April 1, 2020, between Boxlight Corporation and Daniel
Leis (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 10, 2020).
55
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10.41
10.42
10.43
10.44
10.45
10.46
10.47
10.48
10.49
10.50
10.51
10.52
10.53
10.54
10.55
Letter Agreement, dated April 17, 2020, between Boxlight Corporation, Boxlight Inc. and MyStemKits, Inc.
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 22, 2020).
Letter Agreement, dated April 17, 2020, between Boxlight Corporation and Stemify Limited (incorporated by
reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 22, 2020).
Agreement, dated June 11, 2020, between Boxlight Corporation, Everest Display, Inc. and Amagic Holographics,
Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 24, 2020).
Letter Agreement, dated June 30, 2020, between Boxlight Corporation and R. Wayne Jackson (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed July 7, 2020).
Letter Agreement, dated June 30, 2020, between Boxlight Corporation and Charles P. Amos (incorporated by
reference to Exhibit 10.2 to the Current Report on Form 8-K filed on July 7, 2020).
Securities Purchase Agreement, dated September 21, 2020, between Boxlight Corporation and Lind Global Asset
Management LLC (incorporated by reference to Exhibit 10.1 to the Current Report on For 8-K filed September 22,
2020).
Form of Convertible Secured Note issued to Lind Global Asset Management (incorporated by reference to Exhibit
10.2 to the Current Report on Form 8-K filed September 22, 2020).
Third Amended and Restated Security Agreement, dated September 21, 2020, between Boxlight Corporation and
Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed
September 22, 2020).
Third Amended and Restated Intercreditor Agreement, dated September 21, 2020, between Boxlight Corporation,
Sallyport Commercial Finance, LLC, Lind Global Macro Fund, LP and Lind Global Asset Management, LLC
(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed September 22, 2020).
Patent Purchase Agreement, dated September 23, 2020, between Boxlight Corporation and Circle Technology
Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 24,
2020).
Securities Purchase Agreement, dated September 24, 2020, between Boxlight Corporation and the Sellers of Sahara
Holdings Limited (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 25,
2020).
Form of Lock-up Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed
September 25, 2020).
Form of Accounts Receivable Agreement, effective September 30, 2020, between Boxlight Inc,, EOSEDU LLC and
Sallyport Commercial Finance LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K
filed October 9, 2020).
Form of Blocked Account Agreement between Boxlight Inc., EOSEDU LLC and Sallyport Commercial Finance
LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed October 9, 2020).
Employment Agreement, dated November 1, 2019, between Sahara Presentation Systems PLC and Mark Starkey
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 19, 2020).
56
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10.56
10.57
10.58
10.59
10.60
10.61
10.62
10.63
10.64
10.65
10.66
10.67
10.68
10.69
10.70
10.71
Amendment No. 2 to the Boxlight Corporation 2014 Equity Incentive Plan (incorporated by reference to Exhibit
10.1 to the Registration Statement on Form S-8 dated October 7, 2020).
Deed of Variation, dated September 24, 2020, between Sahara Presentation Systems PLC and Mark Starkey
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed November 19, 2020).
Employment Agreement, dated April 7, 2020, between Sahara Presentation Systems PLC and Patrick Foley
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 30, 2020).
Deed of variation, dated September 24, 2020, between Sahara Presentation Systems PLC and Patrick Foley
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed November 30, 2020).
Employment Agreement, dated January 1, 2019, between Sahara Presentation Systems PLC and Shaun Marklew
(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed November 30, 2020).
Deed of variation, dated September 24, 2020, between Sahara Presentation Systems PLC and Shaun Marklew
(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed November 30, 2020).
Agreement, dated January 29, 2021, between Boxlight Corporation, Everest Display, Inc. and Amagic Holographics,
Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 1, 2021).
Preferred Stock Redemption and Conversion Agreement dated March 24, 2021, by and between Boxlight
Corporation and the Preferred Stockholders (incorporated by reference to Exhibit 10.67 to the Annual Report on
Form 10-K filed March 31, 2021).
Share Purchase Agreement, dated March 19, 2021, between Sahara Holdings Ltd., Clevertouch BV and Karel
Callens (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on May 13, 2021).
Amendment to Preferred Stock Redemption Agreement, dated June 14, 2021, between Boxlight Corporation and the
Preferred Stockholders (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June
16, 2021).
Amendment to Accounts Receivable Agreement, dated July 20, 2021, between Boxlight Inc. and Sallyport
Commercial Finance LLC (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on
July 21, 2021).
Amendment to Accounts Receivable Agreement, dated August 6, 2021, between Boxlight Inc. and Sallyport
Commercial Finance LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on
August 9, 2021).
Boxlight Corporation 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registration
Statement on Form S-8 filed on October 14, 2021).
Fourth Amended and Restated Intercreditor Agreement dated August 23, 2021, between Boxlight Corporation,
Sallyport Commercial Finance, LLC, Lind Global Macro Fund, LP and Lind Global Asset Management, LLC
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 27, 2021).
Employment Agreement dated September 15, 2021 between Boxlight Corporation and Aleksandra Leis
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 20, 2021).
Membership Interest Purchase Agreement dated October 29, 2021, between Boxlight Corporation, Boxlight Inc.,
FrontRow Calypso LLC, Phonic Ear Inc. and Calypso Systems LLC (incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K filed November 1, 2021).
57
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10.72
10.73
10.74
10.75
10.76
10.77
10.78
10.79
10.80
Credit Agreement dated December 31, 2021, between Boxlight Corporation, its subsidiaries, Whiteawk Finance
LLC., and White Hawk Capital Partners, LP (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed January 5, 2022).
Employment Agreement dated February 14, 2022, between Boxlight Corporation and Michael Pope (incorporated
by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 18, 2022).
Notice of Default and Reservation of Rights dated March 29, 2022, from Whitehawk Capital Partners, LP
(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 4, 2022).
Amendment to Credit Agreement, dated April 4, 2022, between Boxlight Corporation, its subsidiaries, Whitehawk
Finance LLC and White Hawk Capital Partners, LP (incorporated by reference to Exhibit 10.2 to the Current Report
on Form 8-K filed April 4, 2022).
Amended and Restated Fee Letter, dated April 4, 2022, between Boxlight Corporation, its subsidiaries, Whitehawk
Capital Partners, LP and Whitehawk Finance, LLC (incorporated by reference to Exhibit 10.3 to the Current Report
on Form 8-K filed April 4, 2022).
Employment Agreement, dated June 13, 2022, between Boxlight Corporation and Greg Wiggins (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 14, 2022).
Second Amendment to Credit Agreement (including Exhibit A), dated June 21, 2022, between Boxlight
Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 27, 2022).
Securities Purchase Agreement dated July 22, 2022, between Boxlight Corporation and an accredited institutional
investor (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed July 26, 2022).
Placement Agency Agreement, dated July 22, 2022, between Boxlight Corporation and Maxim Group LLC
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed July 26, 2022).
10.81
Amended and Restated Insider Trading Policy*
14.1
16.1
21.1
23.1
31.1
31.2
32.1
Code of Business Conduct and Ethics*
Letter of FORVIS, LLP, dated June 2, 2022 to the Securities and Exchange Commission (incorporated by reference
to Exhibit 16.1 to the Current Report on Form 8-K filed June 2, 2022.)
Subsidiaries*
Consent of FORVIS LLP*
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002*
58
Table of Contents
32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002*
101.INS
Inline XBRL Instance Document.*
101.SCH Inline XBRL Taxonomy Extension Schema Document.*
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF Inline XBRL Taxonomy Definition Linkbase Document.*
101.LAB Inline XBRL Taxonomy Label Linkbase Document.*
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*
*filed herewith.
ITEM 16. FORM 10-K SUMMARY
None.
59
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
BOXLIGHT, CORPORATION
(Registrant)
By:/s/ MICHAEL POPE
Michael R. Pope
Chairman of the Board and
Chief Executive Officer
Principal Executive Officer
Date: March 16, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
/s/ Michael R. Pope
Michael R. Pope
Chairman of the Board, and
Chief Executive Officer
(principal executive officer)
/s/ Gregory S. Wiggins
Gregory S. Wiggins
Chief Financial Officer
(principal financial and accounting officer)
/s/ Rudolph F. Crew
Rudolph F. Crew
/s/ Roger W. Jackson
Roger W. Jackson
/s/ Tiffany Kuo
Tiffany Kuo
/s/ Charles P. Amos
Charles P. Amos
/s/ Dale W. Strang
Dale W. Strang
/s/ Mark Elliott
Mark Elliott
Director
Director
Director
Director
Director
Director
Date
March 16, 2023
March 16, 2023
March 16, 2023
March 16, 2023
March 16, 2023
March 16, 2023
March 16, 2023
March 16, 2023
60
DESCRIPTION OF SECURITES
Description of Capital Stock
Exhibit 4.9
The following is a summary of the material terms of our Class A common stock, which is registered
under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and provisions of
our Eleventh Amended and Restated Articles of Incorporation (the “Charter”) and bylaws (the “Bylaws”). This
description is summarized from, and qualified in its entirety by reference to, the Charter and Bylaws, each of
which is filed as an exhibit to this Annual Report on Form 10-K. We encourage you to read our Charter, our
Bylaws, and the applicable provisions of the Nevada Revised Statutes.
Authorized Capital Stock
Our authorized capital stock consists of 250,000,000 shares, of which 150,000,000 are designated
Class A common stock, par value $0.0001 per share; 50,000,000 are designated Class B common stock, par
value $0.0001 per share; and 50,000,000 are designated preferred stock, of which 250,000 shares are
designated as Series A preferred stock, par value $0.0001 per share.
Common Stock
Class A common stock
Our Class A common stock is listed on The Nasdaq Capital Market under the ticker symbol “BOXL.”
Voting Rights. Each share of our Class A common stock entitles its holder to one vote per share on all
matters to be voted or consented upon by the stockholders. Cumulative voting for the election of directors is
not provided for in our articles of incorporation, as amended and restated.
Dividend Rights. Subject to the rights of the holders of preferred stock, as discussed below, the
holders of outstanding Class A common stock are entitled to receive dividends out of funds legally available at
the times and in the amounts that the board of directors may determine.
Liquidation Rights. In the event of our liquidation or dissolution, the holders of our Class A common
stock are entitled to share ratably in the assets available for distribution after the payment of all of our debts
and other liabilities, subject to the prior rights of the holders of our preferred stock.
Other Matters. The holders of our Class A common stock have no subscription, redemption or
conversion privileges. Our Class A common stock does not entitle its holders to preemptive rights. All of the
outstanding shares of our Class A common stock are fully paid and non-assessable. The rights, preferences and
privileges of the holders of our Class A common stock are subject to the rights of the holders of shares of any
series of preferred stock which we may issue in the future.
Class B common stock
Our Charter authorizes Class B common stock, although at present we have no Class B common stock
issued and outstanding. Our Class B common stock is only available for issuance upon exercise of stock
options to be granted to Boxlight Group employees.
Voting Rights. The holders of Class B common stock have no voting rights, other than voting only on
such matters as required by law.
Conversion Rights. Upon any public or private sale or disposition by any holder of Class B common
stock, such shares of Class B common stock shall automatically convert into shares of Class A common stock.
Preferred Stock
Our board of directors has the authority to issue preferred stock in one or more classes or series and to
fix the designations, powers, preferences, and rights, and the qualifications, limitations or restrictions thereof
including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption
prices, liquidation preferences and the number of shares constituting any class or series, without further vote or
action by the stockholders.
Governing Documents that May Have an Antitakeover Effect
Certain provisions of our Eleventh Amended and Restated Articles of Incorporation and our Bylaws,
which are discussed below, could discourage or make it more difficult to accomplish a proxy contest, change in
our management or the acquisition of control by a holder of a substantial amount of our voting stock.
-
-
-
Our Eleventh Amended and Restated Articles of Incorporation provide that our board of directors
has the authority to issue preferred stock in one or more classes or series and fix such
designations, powers, preferences and rights and the qualifications thereof without further vote by
our stockholders. The issuance of preferred stock may have the effect of delaying, deferring or
preventing a change in control of our company without further action by the stockholders and
may adversely affect the voting and other rights of the holders of our Class A common stock.
Our Bylaws limit the ability to call special meetings of the stockholders to the chairman of the
board of directors, the vice chairman of the board, the chief executive officer, the president or a
majority of authorized directors. The stockholders have no right to request or call a special
meeting and cannot take action by written consent.
Our Bylaws provide that the removal of a director from the board, with or without cause, must be
by affirmative vote of not less than 2/3 of the voting power of our issued and outstanding stock
entitled to vote generally in the election of directors (voting as a single class), excluding stock
entitled to vote only upon the happening of a fact or event unless such fact or event shall have
occurred, is required to remove a director from the Board with or without cause.
We expect that these provisions will discourage coercive takeover practices or inadequate takeover
bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate
with our board of directors, which we believe may result in an improvement of the terms of any such
acquisition in favor of our stockholders. However, they also give our board of directors the power to
discourage acquisitions that some stockholders may favor.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for shares of our common stock and preferred stock is VStock
Transfer, LLC, Woodmere, New York. Our Transfer Agent and Registrar’s telephone number is (212) 828-
8436.
Exhibit 10.81
BOXLIGHT CORPORATION
Amended and Restated
Policy on Insider Trading
This Amended and Restated Insider Trading Policy, effective as of March 10, 2023, provides the
standards of Boxlight Corporation (the “Company”) on trading and causing the trading of the
Company’s securities or securities of other publicly-traded companies while in possession of
confidential information. This policy is divided into two parts: the first part prohibits trading in certain
circumstances and applies to all directors, officers, employees and certain independent contractors of the
Company and the second part imposes special additional trading restrictions and applies to all (i)
directors of the Company, (ii) executive officers of the Company and (iii) the employees or persons
listed on Appendix A (collectively, “Covered Persons”).
One of the principal purposes of the federal securities laws is to prohibit so-called “insider
trading.” Simply stated, insider trading occurs when a person uses material non-public information
obtained through involvement with the Company to make decisions to purchase, sell, give away or
otherwise trade the Company’s securities or to provide that information to others outside the Company.
The prohibitions against insider trading apply to trades, tips and recommendations by virtually any
person, including all persons associated with the Company, if the information involved is “material” and
“non-public.” These terms are defined in this Policy under Part I, Section 3 below. The prohibitions
would apply to any director, officer or employee who buys or sells Company stock on the basis of
material non-public information that he or she obtained about the Company, its customers, suppliers, or
other companies with which the Company has contractual relationships or may be negotiating
transactions.
1. Applicability
PART I
This Policy applies to all transactions in the Company’s securities, including common stock,
options and any other securities that the Company may issue, such as preferred stock, notes, bonds and
convertible securities, as well as to derivative securities relating to any of the Company’s securities,
whether or not issued by the Company.
This Policy applies to all employees of the Company and its subsidiaries, all officers of the
Company and its subsidiaries and all members of the Company’s board of directors.
2. General Policy: No Trading or Causing Trading While in Possession of Material Non-Public
Information
(a). No director, officer or employee may purchase or sell any Company security, whether or not
issued by the Company, while in possession of material non-public information about the Company.
(The terms “material” and “non-public” are defined in Part I, Section 3(a) and (b) below.)
(b). No director, officer or employee who knows of any material non-public information about
the Company may communicate that information to any other person, including family and friends.
(c). In addition, no director, officer or employee may purchase or sell any security of any other
company, whether or not issued by the Company, while in possession of material non-public information
about that company that was obtained in the course of his or her involvement with the Company. No
director, officer or employee who knows of any such material non-public information may communicate
that information to any other person, including family and friends.
(d). For compliance purposes, you should never trade, tip or recommend securities (or otherwise
cause the purchase or sale of securities) while in possession of information that you have reason to
believe is material and non-public unless you first consult with, and obtain the advance approval of, the
Compliance Officer (which is defined in Part I, Section 3(c) below).
(e). Covered Persons must “pre-clear” all trading in securities of the Company in accordance
with the procedures set forth in Part II, Section 3 below.
3. Definitions
(a) Materiality. Insider trading restrictions come into play only if the information you possess is
“material.” Materiality, however, involves a relatively low threshold. Information is generally regarded
as “material” if it has market significance, that is, if its public dissemination is likely to affect the market
price of securities, or if it otherwise is information that a reasonable investor would want to know before
making an investment decision.
Information dealing with the following subjects is reasonably likely to be found material in
particular situations:
(i) significant changes in the Company’s prospects;
(ii) significant write-downs in assets or increases in reserves;
(iii) developments regarding significant litigation or government agency investigations;
(iv) liquidity problems;
(v) changes in earnings estimates or unusual gains or losses in major operations;
(vi) major changes in management;
(vii) changes in dividends;
(viii) extraordinary borrowings;
(ix) award or loss of a significant contract;
(x) changes in debt ratings;
(xi) proposals, plans or agreements, even if preliminary in nature, involving mergers,
acquisitions, divestitures, recapitalizations, strategic alliances, licensing arrangements, or purchases or
sales of substantial assets;
(xii) public offerings; and
(xiii) pending statistical reports (such as, consumer price index, money supply and retail figures,
or interest rate developments).
Material information is not limited to historical facts but may also include projections and
forecasts. With respect to a future event, such as a merger, acquisition or introduction of a new product,
the point at which negotiations or product development are determined to be material is determined by
balancing the probability that the event will occur against the magnitude of the effect the event would
have on a company’s operations or stock price should it occur. Thus, information concerning an event
that would have a large effect on stock price, such as a merger, may be material even if the possibility
that the event will occur is relatively small. When in doubt about whether particular non-public
information is material, presume it is material. If you are unsure whether information is material, you
should consult the Compliance Officer before making any decision to disclose such information
(other than to persons who need to know it) or to trade in or recommend securities to which that
information relates.
(b) Non-public Information. Insider trading prohibitions come into play only when you possess
information that is material and “non-public.” The fact that information has been disclosed to a few
members of the public does not make it public for insider trading purposes. To be “public” the
information must have been disseminated in a manner designed to reach investors generally, and the
investors must be given the opportunity to absorb the information. Even after public disclosure of
information about the Company, you must wait until the close of business on the second trading day after
the information was publicly disclosed before you can treat the information as public.
Non-public information may include:
(i) information available to a select group of analysts or brokers or institutional investors;
(ii) undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and
(iii) information that has been entrusted to the Company on a confidential basis until a public
announcement of the information has been made and enough time has elapsed for the market to respond
to a public announcement of the information (normally two or three days).
As with questions of materiality, if you are not sure whether information is considered
public, you should either consult with the Compliance Officer or assume that the information is
“non-public” and treat it as confidential.
(c) Compliance Officer. The Company has appointed the Corporate Secretary as the
Compliance Officer for this Policy. The duties of the Compliance Officer include, but are not limited to,
the following:
(i) assisting with implementation of this Policy;
(ii) circulating this Policy to all employees and ensuring that this Policy is amended as necessary
to remain up-to-date with insider trading laws;
(iii) pre-clearing all trading in securities of the Company by Covered Persons in accordance with
the procedures set forth in Part II, Section 3 below; and
(iv) providing approval of any transactions under Part II, Section 4 below.
4. Violations of Insider Trading Laws
Penalties for trading on or communicating material non-public information can be severe, both
for individuals involved in such unlawful conduct and their employers and supervisors, and may include
jail terms, criminal fines, civil penalties and civil enforcement injunctions. Given the severity of the
potential penalties, compliance with this Policy is absolutely mandatory.
(a) Legal Penalties. A person who violates insider trading laws by engaging in transactions in a
company’s securities when he or she has material non-public information can be sentenced to a
substantial jail term and required to pay a penalty of several times the amount of profits gained or losses
avoided.
In addition, a person who tips others may also be liable for transactions by the tippees to whom
he or she has disclosed material non-public information. Tippers can be subject to the same penalties and
sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit
from the transaction.
The SEC can also seek substantial penalties from any person who, at the time of an insider
trading violation, “directly or indirectly controlled the person who committed such violation,” which
would apply to the Company and/or management and supervisory personnel. These control persons may
be held liable for up to the greater of $1 million or three times the amount of the profits gained or losses
avoided. Even for violations that result in a small or no profit, the SEC can seek a minimum of $1
million from a company and/or management and supervisory personnel as control persons.
(b) Company-imposed Penalties. Employees who violate this Policy may be subject to
disciplinary action by the Company, including dismissal for cause. Any exceptions to the Policy, if
permitted, may only be granted by the Compliance Officer and must be provided before any activity
contrary to the above requirements takes place.
1. Blackout Periods
PART II
All Covered Persons are prohibited from trading in the Company’s securities during blackout
periods.
(a) Quarterly Blackout Periods. Trading in the Company’s securities is prohibited during the
period beginning three weeks prior to the last day of each fiscal quarter and ending three business days
following the date the Company’s financial results are publicly disclosed and the Form 10-Q or the Form
10-K is filed. During these periods, Covered Persons generally possess or are presumed to possess
material non-public information about the Company’s financial results.
(b) Other Blackout Periods. From time to time, other types of material non-public information
regarding the Company (such as negotiation of mergers, acquisitions or dispositions or new product
developments) may be pending and not be publicly disclosed. While such material non-public
information is pending, the Company may impose special blackout periods during which Covered
Persons are prohibited from trading in the Company’s securities. If the Company imposes a special
blackout period, it will notify the Covered Persons affected.
(c) Exception. These trading restrictions do not apply to transactions under a pre-existing
written plan, contract, instruction, or arrangement under Rule 10b5-1 (an “Approved 10b5-1 Plan”)
that:
(i) (x) in the case of directors and executive officers, the Approved 10b5-1 Plan has been
reviewed and approved the later of (A) at least 90 days in advance of any trades thereunder by the
Compliance Officer (or, if revised or amended, such revisions or amendments have been reviewed and
approved by the Compliance Officer at least 90 days in advance of any subsequent trades) or (B) at least
two business days after the filing of the Company’s Form 10-Q or Form 10-K (subject to a maximum of
120 after the date of adoption or modification); and (y) directors or executive officers must certify at the
time of such plan’s adopbtion that they (A) were not in possession of Material Non-Public Information at
the time of adoption of such plan and (B) are adopting such plan in good faith and not as part of a plan or
scheme to evade insider trading prohibitions of Rule 10b-5;
(ii) in the case of non-officers and directors, the Approved 10b5-1 Plan has been reviewed and
approved at least one month in advance of any trades thereunder by the Compliance Officer (or, if
revised
or amended, such revisions or amendments have been reviewed and approved by the Compliance Officer
at least one month in advance of any subsequent trades);
(ii) was entered into in good faith by the Covered Person at a time when the Covered Person was
not in possession of material non-public information about the Company, and the Covered Person
continues to operate in good faith in its use of the Approved 10b5-1 Plan for the duration of such plan;
and
(iii) gives a third party the discretionary authority to execute such purchases and sales, outside
the control of the Covered Person, so long as such third party does not possess any material non-public
information about the Company; or explicitly specifies the security or securities to be purchased or sold,
the number of shares, the prices and/or dates of transactions, or other formula(s) describing such
transactions.
2. Trading Window
Covered Persons are permitted to trade in the Company’s securities when no blackout period is
in effect. Generally this means that Covered Persons can trade during the period beginning on the fourth
business day following the filing of the Form 10-Q or the Form 10-K and ending on the day prior to
three weeks before the end of a fiscal quarter close. However, even during this trading window, a
Covered Person who is in possession of any material non-public information should not trade in the
Company’s securities until the information has been made publicly available or is no longer material. In
addition, the Company may close this trading window if a special blackout period under Part II, Section
1(b) above is imposed and will re-open the trading window once the special blackout period has ended.
3. Pre-clearance of Securities Transactions
(a). Because Covered Persons are likely to obtain material non-public information on a regular
basis, the Company requires all such persons to refrain from trading, even during a trading window
under Part II, Section 2 above, without first providing notice of any transactions in the Company’s
securities.
(b). Subject to the exemption in subsection (d) below, no Covered Person may, directly or
indirectly, purchase or sell (or otherwise make any transfer, gift, pledge or loan of) any Company
security at any time without first notifying the Compliance Officer. These procedures also apply to
transactions by such person’s spouse, other persons living in such person’s household and minor children
and to transactions by entities over which such person exercises control.
(c). The Compliance Officer shall record the date each notification if provided. If the transaction
does not occur within a two-week period, pre-notification of the transaction must be re-provided.
(d). Pre-notification is not required for purchases and sales of securities under an Approved
10b5-1 Plan. With respect to any purchase or sale under an Approved 10b5-1 Plan, the third party
effecting
transactions on behalf of the Covered Person should be instructed to send duplicate confirmations of all
such transactions to the Compliance Officer.
4. Prohibited Transactions
(a). Directors and executive officers of the Company are prohibited from, trading in the
Company’s equity securities during a blackout period imposed under an “individual account” retirement
or pension plan of the Company, during which at least 50% of the plan participants are unable to
purchase, sell or otherwise acquire or transfer an interest in equity securities of the Company, due to a
temporary suspension of trading by the Company or the plan fiduciary.
(b). A Covered Person, including such person’s spouse, other persons living in such person’s
household and minor children and entities over which such person exercises control, is prohibited from
engaging in the following transactions in the Company’s securities unless advance approval is obtained
from the Compliance Officer:
(i) Short-term trading. Covered Persons who purchase Company securities may not sell any
Company securities of the same class for at least six months after the purchase;
(ii) Short sales. Covered Persons may not sell the Company’s securities short;
(iii) Options trading. Covered Persons may not buy or sell puts or calls or other derivative
securities on the Company’s securities;
(iv) Trading on margin. Covered Persons may not hold Company securities in a margin account
or pledge Company securities as collateral for a loan; and
(v) Hedging. Covered Persons may not enter into hedging or monetization transactions or
similar arrangements with respect to Company securities.
5. Acknowledgment and Certification
All Covered Persons are required to sign the attached acknowledgment and certification.
ACKNOWLEDGMENT AND CERTIFICATION
The undersigned does hereby acknowledge receipt of the Company’s Insider Trading Policy. The
undersigned has read and understands (or has had explained) such Policy and agrees to be governed by
such Policy at all times in connection with the purchase and sale of securities and the confidentiality of
non-public information.
Date: ________________________
(Signature)
(Please print name)
APPENDIX A
MARK ELLIOTT
GREG WIGGINS
HANK NANCE
MICHAEL POPE
MARK STARKEY
SHAUN MARKLEW
DR. RUDY CREW
DALE STRANG
TIFFANY KUO
CHARLES AMOS
WAYNE JACKSON
Exhibit 14.1
BOXLIGHT CORPORATION
CODE OF CONDUCT
OVERVIEW
This Code of Conduct (“Code”) has been adopted by the Board of Directors of Boxlight Corporation
pursuant to the rules of the Securities and Exchange Commission (“SEC”). This Code is applicable to
all employees, officers and directors of the Company and contains standards for:
● the honest and ethical conduct, including the ethical handling of actual or apparent conflicts of
interest between personal and professional relationships,
● the full, fair, accurate timely and understandable disclosure in reports and documents that the
Company files with, or submits to, the SEC and in other public communications,
● compliance with applicable governmental laws, rules and regulations,
● prompt internal reporting of violations of this Code, and
● accountability for adherence to this Code.
Compliance Officers. The Company has designated (a) the Company’s Chief Financial Officer as its
Compliance Officer to administer this Code with respect to employees, and (b) the Chairman of the
Audit Committee to administer this Code with respect to officers and directors. You may, at your
discretion, make any report or complaint provided for in this Code to the appropriate Compliance
Officer.
Other Company Policies. This Code is in addition to the Code of Ethics that applies to the Company’s
Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, President, Controller and
Accounting / Finance Personnel. Also, this Code is in addition to the Company’s other policies and
guidelines with respect to its employees, officers and directors as contained in the Company’s employee
handbook.
CODE OF CONDUCT
1. Conflicts Of Interest. While it is not possible to identify every activity that might give rise to a
conflict of interest, a conflict of interest may exist whenever a relationship of an employee, officer or
director, or one of his or her family members, is inconsistent with the Company’s best interests or could
cause a conflict with job responsibilities or the Company’s business. Conflicts of interest may not always
be clear‐cut, so if you have a question, you should consult with the Compliance Officer. If you become
aware of a conflict or potential conflict, you should bring it to the attention of the Compliance Officer.
2. Compliance With Applicable Laws. All employees, officers and directors of the Company should
comply with all governmental laws, rules and regulations applicable to the Company.
3. Public Company Reporting. As a public company, it is of critical importance that the Company’s
filings with the SEC, and other public communications, contain full, fair, accurate, timely and
understandable disclosure. Depending on their respective positions with the Company, employees,
officers or directors may be called upon to provide information necessary to assure that the Company’s
public reports are complete, fair and understandable. The Company expects employees, officers and
directors to take this responsibility seriously and to provide prompt and accurate answers to inquiries
from the Company’s officers, directors, auditors or attorneys related to the Company’s public disclosure
requirements. With respect to any inquiries from other third‐parties (such as analysts, members of the
media and others), such inquiries should be directed to specifically designated persons who are
authorized
to respond, and such designated persons shall keep the Company’s board of directors advised as to the
content and scope of each such inquiry and response.
4. Reporting Any Illegal Or Unethical Behavior. Employees are encouraged to talk to supervisors,
managers or other appropriate personnel about observed illegal or unethical behavior and, when in
doubt, about the best course of action in a particular situation. Anyone who believes that a violation of
this Code or other illegal or unethical conduct by any employee, officers or director has occurred or may
occur should promptly contact the Compliance Officer. Alternatively, any employee of the company may
submit, on a confidential and anonymous basis if the employee so desires, directly to the Audit
Committee any concerns regarding financial statement disclosures, accounting, internal accounting
controls, auditing matters or violations of this Code. To make a confidential and anonymous submission
directly to the Audit Committee, an employee should send a written summary of his or her concern in a
sealed envelope to the following address, Boxlight Corporation., Attention: Chairman of Audit
Committee, 1045 Progress Circle, Lawrenceville, Georgia 30043.
The mailing envelope must contain a clear notation indicating “To Be Opened Only by Audit
Committee.” The Compliance Officer will forward any such envelopes received promptly and unopened
to the Audit Committee Chair. If an employee, would like to discuss any matter with the Audit
Committee, the employee should indicate this in the written submission and include a telephone number
or other means by which he or she can be reached, should the Audit Committee determine that such
communication is appropriate. Any such reports may be made confidentially or anonymously.
Confidentiality will be protected, subject to applicable law, regulation or legal proceedings, as well as to
applicable Company policy.
5. Protection and Proper Use of Company Assets. All employees, officers and directors should
endeavor to protect the Company’s assets and ensure their efficient use. Company assets should be used
for legitimate business purposes, although incidental personal use may be permitted. Theft, carelessness,
and waste of the Company’s assets have a direct impact on the Company’s business and its profitability.
Any suspected incident of fraud, theft or misuse should be immediately reported for investigation.
The obligation of employees, officers and directors to protect the Company’s assets includes its
proprietary information. Proprietary information includes intellectual property such as trade secrets,
patents, trademarks, copyrights and know how, as well as business, sales and marketing plans,
formulation and manufacturing ideas and practices, designs, databases, records, salary and other
compensation/benefit information and any unpublished financial data and reports. Unauthorized use or
distribution of the Company’s proprietary information is prohibited. Unauthorized use or distribution of
the Company’s proprietary information could also be illegal and may result in the imposition of civil or
criminal penalties.
6. No Retaliation. The Company will not permit retaliation of any kind by or on behalf of the Company
and its employees, officers and directors against good faith reports or complaints of violations of this
Code or other illegal or unethical conduct.
7. Amendment, Modification And Waiver. Any request for a waiver of any provision of this Code
must be in writing and addressed to the Compliance Officer. If you are a director or executive officer of
the Company, the request may be addressed directly to the Chairman of the Audit Committee. With
regard to executive officers and directors, the Board will have the sole and absolute discretionary
authority, acting upon such recommendations as may be made by the Audit Committee, to approve any
waiver from this Code. Any waiver of this Code with respect to executive officers and directors will be
promptly publicly
disclosed to the shareholders by filing a Form 8‐K with the SEC, or by such other selected by the Board
of Directors in conformity with applicable SEC rules. This Code may be amended, modified or waived
by the Board of Directors, subject to disclosure requirements and other applicable SEC rules.
8. Accountability. You are responsible for your adherence to this Code and will be held personally
accountable. Your failure to observe the terms of this Code may result in disciplinary action, which may
include immediate termination.
ACKNOWLEDGEMENT
The undersigned is an employee / officer / director of Boxlight Corporation. By my signature
below, I acknowledge receipt of a copy of the Code of Conduct and I confirm that I have carefully
read and fully understand all the provisions of the Code of Conduct.
Signature:
Print Name:
Dated: _________________, 2017
List of Subsidiaries
Exhibit 21.1
Boxlight Inc., a Washington corporation
Boxlight Latinoamerica, S.A. DE C.V., a Mexico corporation
Boxlight Latinoamerica Servicios, S.A. DE C.V., a Mexico corporation
Boxlight Group Ltd., a U.K. limited company
EOSEDU, LLC, a Nevada limited liability company
Sahara Holdings Limited, a U.K. limited company
Sahara Presentation Systems Ltd., a U.K. company
Sedao Limited, a U.K. company
Clevertouch B.V., a Holland company
Sahara Nordic OY, a Finland company
Sahara Nordic AB, a Sweden company
Sahara Presentation Systems, Inc., a Delaware company
Sahara Presentation Systems GmbH, a Germany company
Sahara Presentation Systems Europe BV, a Belgium company
FrontRow Calypso, LLC, a California company
Boxlight Canada, Inc., a Canada company
Boxlight Denmark, ApS, a Denmark company
Boxlight Australia, PTY LTD, an Australia company
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements on Form S-8 (Nos. 333-249375 and 333-
260253) and Form S-3 (Nos. 333-239939 and 333-264809) of Boxlight Corporation of our report dated March 16,
2023, with respect to the consolidated financial statements of Boxlight Corporation and its subsidiaries, included in
this annual report on Form 10-K.
Exhibit 23.1
/s/ FORVIS, LLP (Formerly, Dixon Hughes Goodman LLP)
Atlanta, Georgia
March 16, 2023
Exhibit 31.1
I, Michael Pope, certify that:
Certification
1.
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2022 of Boxlight
Corporation (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: March 16, 2023
/s/ Michael Pope
Michael Pope
Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
I, Greg Wiggins, certify that:
CERTIFICATION
1.
I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2022 of Boxlight
Corporation (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this
report, fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officers and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the
period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of
internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control
over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Date: March 16, 2023
/s/ Greg Wiggins
Greg Wiggins
Chief Financial Officer
(Principal Financial Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report of Boxlight Corporation (the “Company”) on Form 10-K pursuant for the
year ended December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), I, Michael Pope, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
Date: March 16, 2023
/s/ Michael Pope
Michael Pope
Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report of Boxlight Corporation (the “Company”) on Form 10-K for the year ended
December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I,
Greg Wiggins, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition
and results of operations of the Company.
Date: March 16, 2023
/s/ Greg Wiggins
Greg Wiggins
Chief Financial Officer
(Principal Financial Officer)