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What changed in Boxlight Corp's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Boxlight Corp's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+311 added−298 removedSource: 10-K (2024-03-14) vs 10-K (2023-03-17)

Top changes in Boxlight Corp's 2023 10-K

311 paragraphs added · 298 removed · 209 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

81 edited+26 added−17 removed75 unchanged
Biggest changeThe 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.
Biggest changeIn conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 66,022 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 255,412 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 $16.00 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 $16.00 per share, (iii) a 3% fee of $1,800,000 and (iv) a $500,000 original issue discount.
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.
With 4K resolution, 20 points of touch and built-in 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.
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.
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′′, and 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 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.
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 CleverLive management and digital signage platform for enhanced control of content on all displays.
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.
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 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.
(“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.
(“MRI”), a company 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.
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.
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 standard with 200+ editable templates enabling a mix of multimedia content.
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.
Vendors are also focusing on offering choices on the course content at competitive prices to gain market share in the global e-learning space. The exponential growth in the number of smartphone users and internet connectivity across emerging markets is driving the e-learning market in these regions.
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 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 for the Enterprise market.
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.
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 instant messages for emergency alerts.
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.
In addition, we have begun to see expansion in the market for sales of complementary products that work in conjunction with the interactive technology, including software, audio solutions, data capture and tablets.
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”.
Clevertouch UX Pro UX Pro interactive LED flat-panels are designed for the modern meeting space and are available in four sizes - 55”, 65”, 75” and 86”.
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.
In conjunction with this First 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.
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.
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 (the “First Amendment”).
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.
The PRO V4 can connect to Clevertouch physical button technology for managing emergencies 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.
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 8 Table of Contents ● 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.
Our Portfolio of Products 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 • 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.
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.
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, Mainland China, Germany, and Turkey.
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.
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, real-time 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.
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.
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. 14 Table of Contents • 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.
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 built-in Android system includes the CleverLive app for managing digital signage content of full screen capacity or can be 9 Table of Contents 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.
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.
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. 15 Table of Contents 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.
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 17 Table of Contents accounts.
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.
Mimio MyBot allows students to explore and learn freely while removing common obstacles such as requiring network infrastructure changes or expensive workstations. 12 Table of Contents 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.
Mimio MyBot allows students to explore and learn freely while removing common obstacles such as requiring network infrastructure changes or expensive workstations. 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.
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.
MimioWall MimioWall LED all-in-one display solution is designed 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.
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. 5 Table of Contents 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.
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. 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.
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.
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 U.S. sector is comprised of approximately 15,600 public school districts across the 50 states and 132,000 public and private elementary and secondary schools.
No drilling or cutting is required, MimioFrame easily and quickly attaches with industrial-strength double-sided tape. 11 Table of Contents 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.
No drilling or cutting is required, MimioFrame easily and quickly attaches with industrial-strength double-sided tape. 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.
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.
Integration Strategy We have centralized 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.
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 10 Table of Contents create an immersive user experience that is unmatched.
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 create an immersive user experience that is unmatched.
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.
EzRoom 11 Table of Contents 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.
We believe that this interactive and student dependent instructional model can dramatically enhance student outcomes. 13 Table of Contents 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.
We believe that this interactive and student dependent instructional model can dramatically enhance student outcomes. 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.
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.
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 six directly and indirectly owned subsidiaries located in the United States, Australia, Northern Ireland, Canada and Denmark.
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.
Our marketing team consists of our Vice President of Marketing Communications, a senior manager of marketing, four marketing specialist, 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, 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.
In 16 Table of Contents 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.
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 15 Table of Contents applicable service case.
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 applicable service case.
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 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 U.S. and in other countries focused on these areas.
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.
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.
The organizational structure of our companies is as follows: 6 Table of Contents 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.
The organizational structure of our companies as of the date of this Annual Report is as follows: Our Markets We believe that 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, 6 Table of Contents communicate and collaborate.
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. 9 Table of Contents Clevershare Clevershare allows users to share content with any device from either the dongle and the USB C connection or the Clevershare app.
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.
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.
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 44% of the global display market in 2027. We believe the growth in both the education and corporate sectors provides the Company with significant growth opportunities.
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.
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 $9.52 per share and the shares increased to 429,263. On July 22, 2022, the Company entered into a Securities Purchase Agreement with an accredited institutional investor.
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.
Mic., while Clevertouch by Boxlight won signage Technology of the Year for the CleverLive products. • 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.
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.
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. 7 Table of Contents New Technologies The delivery of digital education content is also driving a substantial shift in the education market.
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.
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.
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.
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 “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%.
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 compliance with the Credit Agreement.
A majority of our employees have entered into non-disclosure and non-competition agreements with us or our operating subsidiaries. ​ 16 Table of Contents 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”).
Recent Financing On December 31, 2021, the Company and substantially all of its direct and indirect subsidiaries, including Boxlight, FrontRow, and Sahara as guarantors (together the "Loan Parties"), 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”).
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.
The principal elements of the First 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.
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.
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. 10 Table of Contents 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”.
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.
The company has been our key distributor in Belgium and Luxembourg. On September 24, 2020, we acquired Sahara., a leader in distributed AV products and a manufacturer of multi-award-winning touchscreens and digital signage products, including the globally renowned Clevertouch brand.
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.
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.
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.
On May 9, 2016, we acquired Genesis Collaboration LLC, a Georgia limited liability company (“Genesis”). 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.
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”.
Each comes with licensed copies of our software, access to prepared content and Professional Development modules. These present upsell opportunities for our software and Professional Development modules. 8 Table of Contents Clevertouch, IMPACT Plus The IMPACT Plus interactive LED flat-panels deliver a truly intuitive experience and are available in four sizes 55,” 65,” 75,” and 86”.
LessonCam is a stand-out educational tool for teachers who want to engage with students wherever they are learning. 14 Table of Contents 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.
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.
Employees As of December 31, 2022, we had the following distribution of employees: ​ ​ ​ Operations 44 Sales & Marketing 98 Administration 45 Total 187 ​ None of our employees are represented by labor organizations. We consider our relationship with our employees to be excellent.
Employees As of December 31, 2023, we had the following distribution of employees: Operations 90 Sales & Marketing 117 Administration 21 Total 228 All of our employees are full-time employees. None of our employees are represented by labor organizations. We consider our relationship with our employees to be excellent.
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.
Sales and Marketing Our sales force consists of 56 account managers in EMEA including an EMEA sales director, 41 regional account managers in the U.S. including two Vice Presidents of Sales U.S., four sales heads based in Canada, three sales heads in Northern Ireland, two in Australia, and one in Latin America.
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.
As of the date of this Annual Report, we have four subsidiaries, consisting of Boxlight Inc., a Washington State corporation, Sahara Holdings Limited, an England and Wales corporation ("Sahara"), Boxlight Latinoamerica, S.A. DE C.V. (“BLS”) and Boxlight Latinoamerica Servicios, S.A. DE C.V., (“BLA”), both BLS and BLA are incorporated in Mexico. BLS and BLA are currently inactive.
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.
In July 2022, the Company and the Lender 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 the Lender and the Company have agreed that the Company was not in default in making the February 2022 Payment to the Lender.
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.
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.
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.
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.
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.
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.
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 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.
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.
With two clicks, the teacher or user can turn on, auto-focus, and illuminate the included LED lights for smooth high-definition images. 12 Table of Contents 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 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®.
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.
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 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 and subsequently renamed to Sahara Presentation Systems (Interactive) Europe BV.
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.
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.
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. 7 Table of Contents 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.
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.
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).
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.
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.
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.
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.
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. 4 Table of Contents 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.
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.
In addition, the display market is highly fragmented allowing the Company to position itself for increased market share in each of these sectors. Our Opportunity 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.
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.
Genesis also sells our 5 Table of Contents 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”).
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.
According to the terms of the Credit Agreement, this purchase agreement triggered a reduction of the exercise price of the Warrants. The Warrants were repriced to $8.80, and shares increased to 464,385. In February 2022, the Lender and the Company agreed in principle to an extension of the February 2022 Payment.
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’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 Mainland China. Mimio products have been deployed in over 600,000 classrooms in dozens of countries. Mimio’s software is provided in over 30 languages.
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.
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.
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.
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.
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.
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 a December 2023 report by Futuresource, US Schools are budgeting for more IT in their classrooms.
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.
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.
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.
Effective October 1, 2016, Mimio was merged into our Boxlight Inc. subsidiary.
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.
The growing popularity of blended learning that enhances the efficiency of learners will drive the growth of the e-learning market. According to an article by Futuresource in December 2023, the education market for interactive flat-panel displays is expected to comprise of 56% by 2027.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome 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; 30 Table of Contents ● 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.
Biggest changeSome 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; • 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 and, conflicts between Ukraine and Russia, and Israel and Hamas, 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 Item 1A under the caption “Risk Factors”.
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.
There is also a risk of reduced borrowing with our factoring and purchase order financing facilities, as well as the 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.
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.
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 the business and government training sectors.
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.
Even if we are indemnified against such costs, the indemnifying party may be unable to uphold its contractual obligations and determining the extent of such obligations could require additional litigation.
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. 28 Table of Contents ● we cannot assure that we will be successful in protecting, maintaining or enforcing our intellectual property rights.
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; 29 Table of Contents • 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. • we cannot assure that we will be successful in protecting, maintaining or enforcing our intellectual property rights.
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; 18 Table of Contents ● 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.
In that event, the trading price of our securities could decline, and you could lose all or part of your investment. 18 Table of Contents 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 conflicts between Russia and Ukraine, and Israel and Hamas, 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; • 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.
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.
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 ensure 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.
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 21 Table of Contents issues related to new product introductions.
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 issues related to new product introductions.
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.
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 25 Table of Contents 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.
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.
If there is a change in foreign currency exchange rates, the translation of any of the group companie's financial statements into U.S. dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income.
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.
Our reporting currency is the U.S. dollar. Sahara 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.
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.
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. 21 Table of Contents 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.
In addition, we are rapidly developing and introducing new products, and new products may have higher rates of errors and defects than 27 Table of Contents 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.
In addition, we are rapidly developing and introducing new products, and new products may have higher rates of errors and defects than 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.
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 19 Table of Contents may not cover all losses we could incur.
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 may not cover all losses we could incur.
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.
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, including our financial statements and related notes, before making a decision to invest in our securities.
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 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.
Other provisions of our Bylaws also may have the effect of discouraging, 31 Table of Contents 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.
Other provisions of our Bylaws also may have the effect of discouraging, 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.
Factors which could result in cash flow fluctuations include: ● the level of sales and the related margins on those sales; 20 Table of Contents ● 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.
Factors which could result in cash flow fluctuations include: • the level of sales and the related margins on those sales; • 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.
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.
In addition, the 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.
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.
In addition, a specific reduction in governmental funding support for products such as ours could also cause us to lose revenue. 26 Table of Contents If our products fail to comply with consumer product or environmental laws, it could materially affect our financial performance.
We cannot assure that our resellers and distributors will act in a manner that will promote the success of our products.
We cannot ensure that our resellers and distributors will act in a manner that will promote the success of our products.
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.
For the year ended December 31, 2023, we generated approximately 78% 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 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 29 Table of Contents would adversely impact our competitive position.
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 would adversely impact our competitive position.
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.
Any such volatility and disruptions may have adverse consequences on us or the third parties upon whom we rely. 28 Table of Contents 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.
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.
Unfavorable global economic or political conditions, including the ongoing conflict between Russia and Ukraine, and Israel and Hamas 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.
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 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.
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.
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. 23 Table of Contents We face significant challenges growing our sales in foreign markets.
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.
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.
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.
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 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.
In addition, our financial performance, government regulatory action, tax laws and market conditions in general, including the ongoing COVID-19 pandemic and conflicts between Ukraine and Russia, and Israel and Hamas, and their resulting impact on the economy at large, could have a significant impact on the future market price of our Class A common stock.
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.
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. 32 Table of Contents Our Articles of Incorporation, Bylaws and Nevada law may have anti-takeover effects.
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. ​ ​ 32 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any material misstatements could require a restatement of our consolidated financial statements, cause us to fail to meet our reporting 33 Table of Contents obligations or cause investors to lose confidence in our reported financial information, leading to a decline in the market value of our securities.
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.
Bribery Act 2010 which goes further than current U.S. 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.
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.
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.
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.
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.
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.
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. Further, in October 2023, a military conflict commenced between Israel and Hamas.
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 23 Table of Contents with companies that have significantly greater financial and other resources than we do.
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 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.
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 long-term incentive programs may not be attractive enough or perform sufficiently to attract or retain qualified personnel. 24 Table of Contents 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.
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.
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.
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.
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.
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.
At present, we are in the initial period of 180-day compliance period provided by Nasdaq relating to our failure to maintain the $1.00 minimum bid price requirement.
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. 26 Table of Contents 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 our securities and may adversely affect the market price of our Class A common stock.
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.
Pursuant to Sarbanes-Oxley Act of 2002, our management is required to report on 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.
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.
Although we are endeavoring to enter into written agreements with certain of our suppliers, we cannot assure that our efforts will be successful. Furthermore, the Company may experience materially adverse impacts on its supply chain in the event of sanctions or shipping embargoes caused by any conflict, war, or pandemics.
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.
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.
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.
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. 31 Table of Contents 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.
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.
If we fail to implement any required improvements to our disclosure controls and procedures, we may be obligated to report control deficiencies. 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.
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.
Should additional taxes be assessed 27 Table of Contents 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.
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. 24 Table of Contents 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.
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. An information security incident, including a cybersecurity breach, could have a negative impact to the Company’s business or reputation.
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.
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 military conflict between Russia and Ukraine.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
In general, cross border transactions between related parties and, in particular, related party financing transactions, are subject to close review by tax authorities.
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.
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 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. 22 Table of Contents 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.
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.
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.
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.
The market price of our Class A common stock may be highly volatile and subject to wide fluctuations. In 2023, the price of our Class A common stock declined from $2.48 on January 3, 2023 to $1.07 per share on December 29, 2023. As of March 8, 2024, our Class A common stock closed at $0.92 per share.
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.
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.
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.
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 addition, negative consumer perceptions regarding the safety of our products could cause negative publicity and harm our reputation. 25 Table of Contents 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.
Risks Related to our Foreign Operations We are subject to risks inherently related to our foreign operations. Sales outside the US represented 49% of our revenues for the year ended December 31, 2023. We have committed, and may continue to commit, significant resources to our international operations and sales and marketing activities.
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.
This impact could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action.
Removed
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.
Added
Risks Related to Our Business, Operations and Financial Condition We have not complied with certain covenants, minimum liquidity and borrowing base requirements under the Credit Agreement and this could cause us to be unable to continue to operate as a going concern.
Removed
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.
Added
As mentioned before, we have been unable to comply with certain covenants under our Credit Agreement with the Lender.
Removed
Such pricing pressures could reduce our gross margins and adversely affect our revenue. 22 Table of Contents Our customers’ experience with our products will be directly affected by the availability and quality of our customers’ Internet access.
Added
Although, to date, we have been successful in obtaining forbearance agreements with respect to these matters and avoid defaults under the agreement, there can be no assurance that the lender will not declare an event of default and acceleration all of our obligations under the Credit Agreement in the event we are unable to get into full compliance with these covenants in the future.
Removed
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.
Added
We are considering various alternatives to potentially refinancing such indebtedness. We believe that our ability to do so will require an improvement of our 2023 financial performance in 2024. In addition, t here is no assurance that we will refinance the indebtedness, so if so, the terms will be favorable to us.
Removed
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.
Added
Additionally, we have disclosed this in our periodic reports filed with the SEC that there is substantial doubt about our ability to continue as a going concern. We have a substantial amount of indebtedness bearing interest at a variable rate, which may adversely affect our cash flow and our ability to operate our business.
Removed
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.
Added
We have a significant amount of indebtedness. As of December 31, 2023, we have approximately $43 million of indebtedness outstanding, all of which is secured. Our substantial amount of indebtedness could have important consequences.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe 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. ​
Biggest changeIn addition, we also maintain sales, marketing and technical support offices in Apeldoorn, Netherlands, Anzegem, Belgium, Helsinki, Finland, Oskarshamn Kalmar, Sweden, and Düsseldorf, Germany. On August 9, 2023 the Company signed a lease agreement for 15 years for approximately 32,000 feet of space for its new Sahara headquarters in the U.K.
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.
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 expires on August 31, 2027. Our corporate headquarters house our administrative offices.
Added
The Company leases warehouse space in Lawrenceville, GA, for approximately $13,000 per month. This warehouse space rental agreement will expire on April 30, 2028. 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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 35 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides information as of December 31, 2022 about our equity compensation plans and arrangements. ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ ​ ​ ​ securities to be ​ Weighted- ​ Number of ​ ​ issued upon ​ average ​ securities ​ ​ exercise of ​ exercise price of ​ remaining ​ ​ outstanding ​ outstanding ​ available for ​ ​ options, ​ options, ​ future issuance ​ ​ warrants and ​ warrants and ​ under equity Plan category ​ rights (1) ​ rights ​ compensation plans Equity compensation plans approved by security holders 5,383,586 ​ 2,293,933 Equity compensation plans not approved by security holders ​ 983,321 ​ ​ ​ - ​ ​ 6,366,907 ​ $1.61 ​ 2,293,933 (1) Includes 2,725,400 equity incentive grants issued to Sahara employees in conjunction with our acquisition of Sahara Presentation Systems.
Biggest changePlan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans Equity compensation plans approved by security holders (1) 755,745 $ 5.88 650 Equity compensation plans not approved by security holders (2) 1,386,002 $ 6.57 - Total 2,141,747 $ 6.34 650 __________________________________________ (1) Includes 340,675 equity incentive grants issued to Sahara employees in conjunction with our acquisition of Sahara Presentation Systems.
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.
Holders of our Class A common stock are entitled to receive dividends, if any, declared and paid from time to time by the Board out of funds legally available.
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.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A common stock commenced trading on the 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.
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.
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 Class A common stock in the foreseeable future.
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 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, 2023, a total of approximately 650 shares remained available for issuance under the 2021 Plan.
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 As of March 8, 2024, we had 378 holders of record of our class A common stock and 9,728,465 shares of Class A common stock issued and outstanding. Dividends We have never paid cash dividends on our Class A common stock.
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. 33 Table of Contents 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.
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 798,805 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 625,000 shares of the Company’s Class A common stock have been approved for issuance.
Removed
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.
Added
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.
Removed
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”).
Added
The following table provides information as of December 31, 2023 about our equity compensation plans and arrangements.
Removed
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.
Added
(2) Includes warrants issued to Dynamic Capital, Whitehawk, Ryan Legudi and a third-party investor. 36 Table of Contents Recent Sales of Unregistered Securities None Use of Proceeds None. Issuer Purchases of Equity Securities None. ITEM 6. [Reserved]
Removed
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.
Removed
(“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”).
Removed
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.
Removed
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.
Removed
Under the agreement, we agreed to redeem and purchase from 34 Table of Contents 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.
Removed
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.
Removed
We did not complete the conversion and redemption by December 31, 2021, and the agreement terminated without liability by any party.
Removed
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.
Removed
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 & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+39 added−51 removed45 unchanged
Biggest changeReconciliation of net loss for the years ended December 31, 2022 and 2021 to EBITDA and Adjusted EBITDA ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ 2022 2021 Net loss ​ $ (3,743) ​ $ (13,802) Depreciation and amortization ​ 9,129 ​ 7,177 Interest expense ​ 9,923 ​ 3,382 Income tax expense ​ 49 ​ 3,310 EBITDA ​ $ 15,358 ​ $ 67 Stock compensation expense ​ 3,313 ​ 4,060 Change in fair value of derivative liabilities ​ (2,591) ​ (13) Purchase accounting impact of fair valuing inventory ​ 1,496 ​ 60 Purchase accounting impact of fair valuing deferred revenue ​ 2,229 ​ 2,980 Net (gain) loss on settlement of debt ​ (856) ​ 4,940 Adjusted EBITDA ​ $ 18,949 ​ $ 12,094 Discussion of Effect of Seasonality on Financial Condition Certain accounts on our balance sheets are subject to seasonal fluctuations.
Biggest changeThe following table contains reconciliations of net losses to EBITDA and adjusted EBITDA for the periods presented. 40 Table of Contents Reconciliation of net loss for the years ended December 31, 2023 and 2022 to EBITDA and Adjusted EBITDA (in thousands) 2023 2022 Net loss $ (39,156) $ (3,743) Depreciation and amortization 8,859 9,129 Interest expense 10,840 9,923 Income tax expense 1,866 49 EBITDA $ (17,591) $ 15,358 Stock compensation expense 3,131 3,313 Change in fair value of derivative liabilities (267) (2,591) Purchase accounting impact of fair valuing inventory 448 1,496 Purchase accounting impact of fair valuing deferred revenue 1,649 2,229 Net gain on settlement of debt — (856) Impairment of Goodwill 25,195 — Adjusted EBITDA $ 12,565 $ 18,949 Discussion of Effect of Seasonality on Financial Condition Certain accounts on our balance sheets are subject to seasonal fluctuations.
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 assesses the classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.
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.
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 37 Table of Contents 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.
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 43 Table of Contents users.
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 users.
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.
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 Annual Report. 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.
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.
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. 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 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.
We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised 44 Table of Contents 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.
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.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis ("MD&A") should be read in conjunction with our financial statements and the related notes thereto included elsewhere herein MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions.
Accounts receivable balances tend to be at the highest levels in the third quarter, in which we record the highest level of sales. 39 Table of Contents 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.
Accounts receivable balances tend to be at the highest levels in the third quarter, in which we record the highest level of sales. We have been very proactive, and will continue to be proactive, in obtaining contracts during the fourth and first quarters of each year in order to help offset the seasonality of our business.
Operating expenses We classify our operating expenses into two categories: research and development and general and administrative. 37 Table of Contents 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.
Operating expenses We classify our operating expenses into two categories: research and development and general and administrative. 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.
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.
Share-based Compensation 4. Derivative Warrant Liabilities 5. 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.
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.
Interactive devices are generally sold with hardware maintenance services with terms 43 Table of Contents 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.
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.
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. Goodwill and Intangible assets 3.
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 ​
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. ITEM 7A.
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.
EBITDA represents net loss before income tax expense, interest expense, net, and depreciation and amortization expense. Adjusted EBITDA represents EBITDA, adjusted for stock compensation expense and changes in fair value of derivative liabilities, purchase accounting impact for fair valuing inventory and deferred revenue, net gain on settlement of debt, and impairment of goodwill.
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.
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 the effects of changes in the fair value of derivative liabilities.
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.
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. 38 Table of Contents We outsource some of our warehouse operations and order fulfillment and we purchase products from related entities and third parties.
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.
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.
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 for the year ended December 31, 2023 was $63.3 million as compared to $64.9 million for the year ended December 31, 2022.
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.
Income tax expense We are subject to income taxes in the United States, Canada, United Kingdom, Mexico, Sweden, Finland, Holland, Australia, Denmark and Germany where we do business. The United Kingdom, Mexico, Sweden, Finland, Holland and Germany, Australia, Canada and Denmark have a statutory tax rate different from that in the United States.
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”).
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”). GOODWILL AND INTANGIBLE ASSETS Goodwill represents the cost in excess of the fair value of the net assets of acquired businesses.
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.
Liquidity and Capital Resources As of December 31, 2023, we had cash and cash equivalents o f $17.3 million , a working capital balance of $54.1 million, and a current ratio of 2.17. At December 31, 2022, we had $14.6 million of cash and cash equivalents, a working capital balance of $62.8 million, and a current ratio of 2.29.
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.
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.
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.
Our liquidity needs are funded by operating cash flow and available cash. Our cash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to facility leases. We lease all of our office facilities. We expect to make future payments on existing leases from cash generated from operations.
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.
Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
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.
For the years ended December 31, 2023 and 2022, we had net cash used in financing activities of $8.0 million and $5.1 million, respectively.
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 35 Table of Contents integrated into our classroom software suite that provides tools for whole class learning, assessment and collaboration.
We also distribute 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.
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.
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.
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.
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.
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.
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.
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).
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 as they occur. 45 Table of Contents 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).
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. 36 Table of Contents 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.
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.
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 development expense was $3.2 million or 1.8% of revenue for the year ended December 31, 2023 as compared to $2.5 million or 1.1% of revenue for the year ended December 31, 2022 . Research and development expense primarily consists of costs associated with development of proprietary technology.
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.
We had net cash used in investing activities of $1.3 million and $1.2 million for the years ended December 31, 2023 and 2022, respectively. Cash used in investing activities is primarily related to purchases of property and equipment.
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.
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.
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.
Recent Financing See Note 9 to the consolidated financial statements. 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.
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.
Any such adjustments could have a significant impact on our results of operations. Operating Results – Boxlight Corporation For the years ended December 31, 2023 and 2022 Revenues. Total revenues for the year ended December 31, 2023 were $176.7 million as compared to $221.8 million for the year ended December 31, 2022, resulting in a 20.3% decrease.
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.
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.
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.
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.
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.
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.
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.
Cost of revenues for the year ended December 31, 2023 was $113.4 million as compared to $156.9 million for the year ended December 31, 2022, resulting in a 27.7% decrease. The decrease in cost of revenues was primarily due to more favorable material and shipping cost and the decrease in revenues. Gross Profit .
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.
The Company did not experience material delays in shipping during 2023 or 2022 that materially negatively impacted our revenues.
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.
General and administrative expense for the year ended December 31, 2023 was $61.3 million and 34.7% of revenue as compared to $59.3 million and 26.8% of revenue for the year ended December 31, 2022 . The increase primarily relates to an increase in personnel related expenses to support the growth of the business in certain markets. Research and Development Expense.
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 years ended December 31, 2023 and 2022, we had net cash provided by operating activities of $11.6 million and $1.2 million, respectively. Cash provided by operating activities increased year over year as a result of a change in working capital management.
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.
Gross profit margin improved to 35.8% for the year ended December 31, 2023 compared to 29.2% for the year ended December 31, 2022 due to audio products comprising a greater percentage of total sales, which carry higher margins, and decreases in manufacturing and shipping cost. General and Administrative Expense.
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.
Intangible assets are tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist using an undiscounted cash-flow approach. The Company's annual impairment testing date normally occurs as of October 1, which facilitates the overall coordination and timing of our annual financial statement close cycle and the preparation of our annual report.
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.
The decrease in revenues was primarily a result of softening world-wide demand for our products and solutions in both the U.S. and EMEA markets. 39 Table of Contents Cost of Revenues.
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.
Other Expense, net. Other expense for the year ended December 31, 2023 was $11.0 million as compared to $6.7 million for the year ended December 31, 2022.
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.
In addition to the cash flows generated by our ongoing operating activities we financed our operations during 2023 and 2022 with our Credit Facility with Whitehawk. Prior to April 24, 2023, we maintained a delayed draw term loan of which we had $7.5 million available.
Research and 38 Table of Contents 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.
The increase in research and development expense was primarily driven by an increase in contract services related to software development. Impairment of Goodwill. Impairment of goodwill for the year ended December 31, 2023 was $25.2 million and related to both the Americas and EMEA reporting segments. There was no impairment of goodwill for the year ended December 31, 2022.
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.
Cash used by financing activities for the year ended December 31, 2022 was primarily related to principal payments on debt, and payments of fixed dividends to our Series B preferred shareholders, partially offset by net proceeds of issuance of common stock, and proceeds from long-term debt and stock option exercises.
Removed
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.
Added
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.
Removed
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.
Added
Other expense increased by $4.2 million, due to a $2.3 million decrease in fair value of derivative liabilities, $0.9 million increase in interest expense, and $0.9 million decrease from the settlement of liabilities in the prior year that did not recur in the current year. Net Loss.
Removed
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.
Added
Net loss attributable to common shareholders was $40.4 million and $5.0 million for the years ended December 31, 2023 and 2022, respectively, after deducting fixed dividends to Series B preferred shareholders of $1.3 million in each year.
Removed
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.
Added
Cash used for financing activities for the year ended December 31, 2023 is primarily related to principal payments on debt of $6.8 million, and $1.3 million in payments of fixed dividends to our Series B preferred shareholders, and stock option exercise proceeds of $13 thousand.
Removed
Air shipping is more costly than sea or ground shipping or other delivery options and it is rarely used as a result.
Added
In addition, our industry is seasonal with many sales to educational customers occurring during the second and third quarters when schools make budget appropriations and classes are not in session 41 Table of Contents limiting disruptions related to product installation. This seasonality makes our needs for cash vary significantly from quarter to quarter.
Removed
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 .
Added
On April 24, 2023, we borrowed $3.0 million on our delayed draw term loan that was used for working capital purposes. The completion of the additional draw eliminates further draws under the term loan agreement. The $3.0 million was repaid during the third quarter of 2023.
Removed
The decrease was partially offset by an increase in interest expense. ​ Net loss.
Added
To the extent not previously converted into the Company’s Class A common stock, the outstanding shares of our Series B preferred stock became redeemable at the option of the holders at any time or from time to time commencing on January 1, 2024 upon, 30 days’ prior written notice to the Company, for a redemption price, payable in cash, equal to the sum of (a) ($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.
Removed
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.
Added
We may be required to seek alternative financing arrangements or restructure the terms of the agreement with the Series B preferred shareholders on terms that are not favorable to us if cash and cash equivalents are not sufficient to fully redeem the Series B preferred shares.
Removed
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.
Added
We are currently evaluating alternatives to refinance or restructure the Series B preferred shares including extending the maturity of the Series B preferred shares beyond the current optional conversion date.
Removed
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.
Added
Given the uncertainty surrounding global supply chains, global markets, and general global uncertainty as a result of the ongoing conflict between Russia and Ukraine and Israel and Hamas and the continuing COVID-19 pandemic, the availability of debt and equity capital has been reduced and the cost of capital has increased.
Removed
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”).
Added
Furthermore, recent adverse developments affecting the financial services industry including events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions may lead to market-wide liquidity problems. This in turn could result in a reduction in our ability to access funding sources and credit arrangements in amounts adequate to finance our current and future business operations.
Removed
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.
Added
Increasing our capital through equity issuance at this time could cause significant dilution to our existing stockholders.
Removed
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.
Added
However, while there can be no guarantee we will be able to access capital when needed, we are confident that the Company will be able to manage through the current challenges in the equity and debt finance markets by managing payment terms with our customers and vendors.
Removed
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%.
Added
Cash and cash equivalents, along with anticipated cash flows from operations, may not provide sufficient liquidity for our working capital needs, debt service requirements or to maintain minimum liquidity requirements under our Credit Agreement, and we may need to raise capital to meet current working capital requirements including maintaining sufficient inventory levels to meet future sales demand.
Removed
Such terms are subject to the Company maintaining a borrowing base in terms compliant with the Credit Agreement. ​ 40 Table of Contents 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.

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Other BOXL 10-K year-over-year comparisons