delaying or preventing a merger, tender offer or proxy contest, which could have an adverse effect on the market price of our Class A common stock.

In addition, certain provisions of Nevada law applicable to our company could also delay or make more difficult a merger, tender offer or proxy contest involving our company, including Sections 78.411 through 78.444 of the Nevada Revised Statutes, which prohibit a Nevada corporation from engaging in any business combination with any “interested stockholder” (as defined in the statute) for a period of two years unless certain conditions are met. In addition, our senior management is entitled to certain payments upon a change in control and certain of the stock options and restricted shares we have granted provide for the acceleration of vesting in the event of a change in control of our ~~company.~~

Company.

We have no intention of declaring dividends in the foreseeable future.

The decision to pay cash dividends on our Class A common stock rests with our Board and will depend on our earnings, unencumbered cash, capital requirements and financial condition. We do not anticipate declaring any dividends in the foreseeable future, as we intend to use any excess cash to fund our operations. Investors in our Class A common stock should not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our Class A common stock to earn a return on their investment.

If securities or industry analysts do not publish research or reports about us, or if they adversely change their recommendations regarding our Class A common stock, then our stock price and trading volume could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us, our industry and our market. If no analyst elects to cover us and publish research or reports about us, the market for our Class A common stock could be severely limited and our stock price could be adversely affected. In addition, if one or more analysts ceases coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. If one or more analysts who elect to cover us adversely change their recommendations regarding our Class A common stock, our stock price could decline.

We may be exposed to risks relating to evaluations of controls required by Sarbanes-Oxley Act of 2002.

Pursuant to Sarbanes-Oxley Act of 2002, our management is required to report on ~~and our independent registered public accounting firm is required to attest to,~~ the effectiveness of our internal control over financial reporting. Although we prepare our financial statements in accordance with accounting principles generally accepted in the United States, our internal accounting controls may not meet all standards applicable to companies with publicly traded securities. If we fail to implement any required improvements to our disclosure controls and procedures, we may be obligated to report control ~~deficiencies and our independent registered public accounting firm may not be able to certify the effectiveness of our internal controls over financial reporting.~~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.

If we fail to develop, implement and maintain an effective system of internal control over financial reporting, the accuracy and timing of our financial reporting in future periods may be adversely affected.

The Sarbanes-Oxley Act and related rules and regulations require that management report annually on the effectiveness of our internal control over financial reporting and assess the effectiveness of our disclosure controls and procedures on a quarterly basis. Effective internal controls are necessary for us to provide timely and reliable financial reports and effectively prevent fraud. We have identified control deficiencies that constituted a material weakness in our internal controls and procedures in the past and may experience a material weakness in future years. If we fail to maintain adequate internal controls, our financial statements may not accurately reflect our financial condition. Any material misstatements could require a restatement of our consolidated financial statements, cause us to fail to meet our reporting

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obligations or cause investors to lose confidence in our reported financial information, leading to a decline in the market value of our securities.

Unstable market and economic conditions and potential disruptions in the credit markets may adversely affect our business, including the availability and cost of short-term funds for liquidity requirements and our ability to meet long-term commitments, which could adversely affect our results of operations, cash flows and financial condition.

If internally generated funds are not available from operations, we may be required to rely on the banking and credit markets to meet our financial commitments and short-term liquidity needs. Our access to funds under our revolving credit facility or pursuant to arrangements with other financial institutions is dependent on the financial institution’s ability to meet funding commitments. Financial institutions may not be able to meet their funding commitments if they experience shortages of capital and liquidity or if they experience high volumes of borrowing requests from other borrowers within a short period of time.

In addition, the global credit and financial markets have recently experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, inflationary pressure and interest rate changes and uncertainty about economic stability. More recently, the closures of Silicon Valley Bank, Signature Bank and First Republic Bank and their placement into receivership with the Federal Deposit Insurance Corporation (FDIC) created bank-specific and broader financial institution liquidity risk and concerns. Future adverse developments with respect to specific financial institutions or the broader financial services industry may lead to market-wide liquidity shortages, impair the ability of companies to access near-term working capital needs, and create additional market and economic uncertainty. There can be no assurance that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions. If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon clinical development plans. In addition, there is a risk that one or more of our current service providers, financial institutions, manufacturers and other partners may be adversely affected by the foregoing risks, which could directly affect our ability to attain our operating goals on schedule and on budget.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

As a regular part of our ordinary business operations, we collect and store data, including information necessary for our operations, information from our customers, employees, and our business partners. We recognize these networks and systems may be subject to increasing and continually evolving cybersecurity risks. Our Board is responsible for overseeing risk management and Cybersecurity is an integral part of the Company's overall risk management program. Our risk management process is designed to identify, prioritize, and monitor risks that could affect our ability to execute our corporate strategy and fulfill our business objectives and to appropriately mitigate such risks.

As part of our risk management processes, we are developing risk assessments to identify the probability, immediacy, and potential magnitude of information security risks. Our internal experts regularly conduct audits and tests of our information systems, and our cybersecurity program is periodically assisted by established, independent third-party consultants, who provide assistance through tabletop and other preparedness exercises. Additionally, we review regular publications on cyber awareness and conduct ongoing simulated phishing exercises. We use the findings from these and other processes to improve our information security practices, procedures and technologies.

While we have not yet experienced any material impacts from a cyber-attack, any one or more future cyber-attacks could materially adversely impact the Company, including a loss of trust among our customers, departures of key employees, general diminishment of our global reputation and financial losses from remediation actions, loss of business or potential litigation or regulatory liability. Further, evolving market dynamics are increasingly driving heightened cybersecurity protections and mandating cybersecurity standards for our products, and we may incur additional costs to address these increased risks and to comply with such demands.

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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.~~agreement expires on August 31, 2027. Our corporate headquarters house our administrative offices. 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. In 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 3. LEGAL PROCEEDINGS

From time to time we are party to litigation matters occurring in the ordinary course of our business. As of the date of this Annual Report, however, there are no material pending or threatened legal or governmental proceedings relating to our Company to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

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 Capital Market, or~~ Nasdaq under the symbol “BOXL” on November 30, 2017. Prior to that time, our common stock was not traded on any exchange or quoted on any over the counter market.

Holders

As of March ~~13, 2023,~~8, 2024, we had 378 holders of record of our class A common stock and ~~74,774,556~~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. 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~~Board out of funds legally available. At present, we intend to retain any earnings for the operation and expansion of our business and do not anticipate paying cash dividends on our Class A common stock in the foreseeable future. Any future determination as to the payment of cash dividends will depend upon future earnings, results of operations, capital requirements, our financial condition and other factors that our board of directors may consider.

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Securities Authorized for Issuance Under Equity Compensation Plans

Equity Incentive Plans

The Company has issued grants under two equity incentive plans, both of which have been approved by the Company’s shareholders: (i) the 2014 Equity Incentive Plan, as amended (the “2014 Plan”), pursuant to which a total of ~~6,390,438~~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 ~~5,000,000~~625,000 shares of the Company’s Class A common stock have been approved for issuance. Upon approval of the 2021 Plan in June 2021, any shares remaining for issuance under the 2014 Plan were cancelled, and all future grants were issued under the 2021 Plan. The 2021 Plan allows for issuance of shares of our Class A common stock, whether through restricted stock, restricted stock units, options, stock appreciation rights or otherwise, to the Company’s officers, directors, employees and consultants. As of December 31, ~~2022,~~2023, a total of approximately ~~2.3 million~~650 shares remained available for issuance under the 2021 Plan.

The following table provides information as of December 31, ~~2022~~2023 about our equity compensation plans and arrangements.


Plan 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)

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
Includes 340,675 equity incentive grants issued to Sahara employees in conjunction with our acquisition of Sahara Presentation Systems.

(2)Includes warrants issued to Dynamic Capital, Whitehawk, Ryan Legudi and a third-party investor.

~~(1)~~

~~Includes 2,725,400 equity incentive grants issued to Sahara employees in conjunction with our acquisition of Sahara Presentation Systems.~~

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Recent Sales of Unregistered Securities

~~During the year ended December 31, 2022, we sold 943,442 shares of Class A common stock to cover tax withholdings for restricted stock vesting.~~

On December 31, 2021, in connection with the WhiteHawk Credit Agreement, we issued to WhiteHawk (i) 528,169 shares of Class A common stock, which shares were registered pursuant to our existing shelf registration statement, and (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to increase to the extent of 3% of any Series B and Series C convertible preferred stock converted into Class A common stock), originally exercisable at $2.00 per share (the “Warrant”). Based on the arithmetic volume weighted average prices of the Company’s Class A common stock for the 30 trading days prior to March 31, 2022, the exercise price of the Warrant was reduced to $1.19 per share and the shares increased to 3,434,103.

On July 22, 2022, the Company entered into a Securities Purchase Agreement with an accredited institutional investor. According to the terms of the WhiteHawk agreement, this purchase agreement triggered a reduction of the exercise price of the warrants and a revaluation of the derivative liability. The warrants were repriced to $1.10 and shares increased to 3,715,075.

As partial consideration for our purchase of Sahara Holdings Ltd. (“Sahara”), on September 25, 2020, the Company issued 1,586,620 shares of Series B convertible redeemable preferred stock (the “Series B Preferred Stock”) and 1,320,850 shares of Series C convertible redeemable preferred stock (the “Series C Preferred Stock”). The fair value of the preferred shares issued was $16.5 million and $12.4 million for the Series B Preferred Stock and Series C Preferred Stock, respectively. Such shares were issued pursuant to an exemption from registration pursuant to Rule 506(b) of Regulation D of the Securities Act of 1933. See further discussion of the features of the preferred shares in Note 12.

On March 24, 2021, we entered into a share redemption and conversion agreement with the former Sahara shareholders who own approximately 96% of our Series B and Series C preferred stock. Under the agreement, we agreed to redeem and purchase from

None

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such preferred stockholders on or before June 30, 2021 all of the shares of Series B preferred stock for £11.5 million being the stated or liquidation value of the Series B preferred stock plus (b) accrued dividends from January 1, 2021 to the date of purchase. In addition, the holders of 96% of the Series C preferred stock agreed to convert those shares into 7.6 million shares of our Class A Common Stock at a conversion price of $1.66 per share. Former Sahara shareholders agreed to extend the share redemption and conversion agreement until December 31, 2021. We did not complete the conversion and redemption by December 31, 2021, and the agreement terminated without liability by any party.

On January 26, 2021, we entered into an agreement with Everest Display Inc., a Taiwan corporation (“EDI”), and EDI’s subsidiary, AMAGIC Holographics Inc., a California corporation (“AMAGIC”), pursuant to which $1,983,436 in accounts payable owed by us to EDI was settled in exchange for our issuance of 793,375 shares (the “2021 Shares”) of its Class A common stock to AMAGIC at a $2.50 per share purchase price. The 2021 Shares were issued to AMAGIC pursuant to an exemption from registration provided by Rule 506 of Regulation D under Section 4(a)(2) of the Securities Act.

Use of Proceeds

None.

Issuer Purchases of Equity Securities

None.

ITEM 6. ~~[Reserved]~~

[Reserved]

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. The Management’s Discussion and Analysis (“~~herein MD~~&A”)~~&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this ~~form.~~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.

Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

Overview

We are a technology company that develops, sells and services interactive solutions predominantly for the global education market, but also for the corporate and government sectors. We are seeking to become a worldwide leading innovator and integrator of interactive products and software solutions and improve collaboration and effective communication in meeting environments. We currently design, produce and distribute interactive technologies including our interactive and non-interactive ~~flat panel~~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,~~flat-panels, LED video walls and digital signage. We also distribute ~~science, technology, engineering and math (or “STEM”)~~STEM products, including our 3D printing and robotics solutions, and our portable science lab. All products are

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integrated into our classroom software suite that provides tools for whole class learning, assessment and collaboration. In addition, we offer professional training services related to our technology to our U.S. educational customers. To date, we have generated the majority of our revenue in the U.S. and internationally from the sale of interactive displays and related software to the educational market. We have sold our solutions into over 70 countries and into over 1.5 million classrooms and meeting spaces. We sell our products and software through more than 1,000 global reseller partners. We believe we offer the most comprehensive and integrated line of interactive display solutions, audio products, peripherals and accessories, software and professional development for schools and enterprises on the market today. The majority of our products are backed by nearly 30 years of research and development.

Advances in technology and new options for the introduction of technology into the classroom have forced school districts to look for solutions that allow teachers and students to bring their own devices into the classroom, provide school districts with information technology departments with the means to access data with or without internet access, handle higher demand for video, as well as control cloud and data storage challenges. Our design teams are able to quickly customize systems and configurations to serve the needs of clients so that existing hardware and software platforms can

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communicate with one another. Our goal is to become a single source solution to satisfy the needs of educators around the globe and provide a holistic approach to the modern classroom.

~~Recent Acquisitions~~

On December 31, 2021, the Company acquired FrontRow Calypso LLC, a California company and a leader in classroom and campus communication solutions for the education market. While purchase accounting was applied to the acquired assets and assumed liabilities of FrontRow, the fiscal 2021 revenues and the results of operations of FrontRow are not included in our consolidated financial statements for the year ended December 31, 2021 as a result of the year-end acquisition date.

On March 23, 2021, the Company acquired Interactive Concepts BV, a company incorporated and registered in Belgium and a distributor of interactive technologies (“Interactive”). Prior to the acquisition, the company had been Boxlight’s key distributor in Belgium and Luxembourg.

Our Acquisition Strategy and Challenges

Our growth strategy includes acquiring assets and technologies of companies that have products, technologies, industry specializations or geographic coverage that extend or complement our existing business. The process to undertake a potential acquisition is time-consuming and costly. Prior to completing any acquisition, we expect to expend significant resources to undertake business, financial and legal due diligence on our potential acquisition targets, as a result, and there is no guarantee that we will complete any acquisition that we pursue.

We believe we can achieve significant cost-savings by merging the operations of the companies we acquire and after their acquisition leverage the opportunity to reduce costs through the following methods:

●

•Staff reductions – consolidating resources, such as accounting, marketing and human resources.

•Economies of scale – improved purchasing power with a greater ability to negotiate prices with suppliers.

•Improved market reach and industry visibility – increase in customer base and entry into new markets.

~~Staff reductions – consolidating resources, such as accounting, marketing and human resources.~~

●

~~Economies of scale – improved purchasing power with a greater ability to negotiate prices with suppliers.~~

●

~~Improved market reach and industry visibility – increase in customer base and entry into new markets.~~

As a result, we believe that an analysis of the historical costs and expenses of our Target Sellers (a companythat is the subject of an attempted acquisition) prior to their acquisition will not provide guidance as to the anticipated results after acquisition. We anticipate that we will be able to achieve significant reductions in our costs of revenue and selling and, general and administrative expenses from the levels currently incurred by the Target Sellers operating independently, thereby increasing our EBITDA and cash flows.

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Components of our Results of Operations and Financial Condition

Revenue

The Company’s sales of interactive devices, including panels, whiteboards and other interactive devices generally include hardware maintenance services, a license to software, and the provision of related software maintenance. In most cases, interactive devices are sold with hardware maintenance services.

The Company’s installation, training and professional development service include third-party products and services and are generally sold separately from the Company’s products.

Cost of revenue

Our cost of revenue is comprised of the following:

●

~~third-party logistics costs;~~

●

~~costs to purchase components and finished goods directly;~~

●

~~inbound and outbound freight costs and duties;~~

●

~~costs associated with the repair of products under warranty;~~

●

~~write-downs of inventory carrying value to adjust for excess and obsolete inventory and periodic physical inventory counts;~~

●

~~cost of professionals to deliver the professional development training; and~~

●

~~customs expense.~~

•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.

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We outsource some of our warehouse operations and order fulfillment and we purchase products from related entities and third parties. Our product costs vary directly with volume and based on the costs of underlying product components as well as the prices we negotiate with our contract manufacturers. Shipping costs fluctuate with volume as well as with the method of shipping chosen in order to meet customer demand. As a global company with suppliers centered in Asia and customers located worldwide, we have used, and may in the future use, air shipping to deliver our products directly to our customers. Air shipping is more costly than sea or ground shipping or other delivery options and it is rarely used as a result. The Company did not experience material delays in shipping during ~~2022~~2023 or ~~2021~~2022 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.~~

revenues.

Gross profit and gross profit margin

Our gross profit and gross profit margin have been, and may in the future be, influenced by several factors including: product, channel and geographical revenue mix; changes in product costs related to the release of newer models; component, contract manufacturing and supplier pricing, foreign currency exchange and most recently, increased shipping costs due to the pandemic and global unrest. As we primarily procure our product components and manufacture our products in Asia, our suppliers incur many costs, including labor costs, in other currencies. To the extent that exchange rates move unfavorably for our suppliers, they may seek to pass these additional costs on to us, which could have a material impact on our future average selling prices and unit costs. Gross profit and gross profit margin may fluctuate over time based on the factors described above.

Operating expenses

We classify our operating expenses into two categories: research and development and general and administrative.

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Research and development. Research and development expense consists primarily of personnel related costs, prototype and sample costs, design costs and global product certifications mostly for wireless certifications.

General and administrative. General and administrative expense consists of personnel related costs, which include salaries, as well as the costs of professional services, such as accounting and legal, facilities, information technology, depreciation and amortization and other administrative expenses. General and administrative expense may fluctuate as a percentage of revenue, notably in the second and third quarters of our fiscal year when we have historically experienced our highest levels of revenue.

Other income (expense), net

Other income (expense), net primarily consists of interest expense associated with our debt financing arrangements, gains (losses) on the settlements of debt, and ~~trade payable obligations exchanged for common shares, and~~ the effects of changes in the fair value of derivative liabilities.

Income tax expense

We are subject to income taxes in the United States, 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. Additionally, certain of our international earnings are also taxable in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S. income, the absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws. We regularly assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S. Internal Revenue Service, or IRS, and other tax authorities to determine the adequacy of our income tax reserves and expense. Should actual events or results differ from our current expectations, charges or credits to our income tax expense may become necessary. Any such adjustments could have a significant impact on our results of operations.

Operating Results – Boxlight Corporation

For the years ended December 31, ~~2022~~2023 and ~~2021~~

2022

Revenues. Total revenues for the year ended December 31, ~~2022~~2023 were ~~$221.8~~$176.7 million as compared to ~~$185.2~~$221.8 million for the year ended December 31, ~~2021,~~2022, resulting in a ~~19.8% increase.~~20.3% decrease. The ~~increase~~decrease in revenues was primarily a result of ~~our acquisition of FrontRow in December 2021 and increased~~softening world-wide demand for our products and 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.~~

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Cost of Revenues. Cost of revenues for the year ended December 31, ~~2022~~2023 was ~~$156.9~~$113.4 million as compared to ~~$138.7~~$156.9 million for the year ended December 31, ~~2021,~~2022, resulting in ~~an 13.2% increase.~~a 27.7% decrease. The ~~increase~~decrease in cost of revenues was primarily due to the growth in revenues associated with the acquisition of FrontRow in December 2021. Excluding cost of revenues associated with FrontRow, cost of revenues for Boxlight increased by $5.1 million or 3.7%, to $143.8 million. The increase in cost of revenues, excluding FrontRow, was primarily due to the growth in revenues across all markets partially offset by lower manufacturing and freightmore favorable material and shipping ~~costs.~~

cost and the decrease in revenues.

Gross Profit. Gross profit for the year ended December 31, ~~2022~~2023 was ~~$64.9~~$63.3 million as compared to ~~$46.5~~$64.9 million for the year ended December 31, ~~2021.~~2022. Gross profit margin ~~increased from 25.1%~~improved to 35.8% for the year ended December 31, ~~2021~~2023 compared to 29.2% for the year ended December 31, 2022 due to ~~decreased~~audio products comprising a greater percentage of total sales, which carry higher margins, and decreases in 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.~~

cost.

General and Administrative Expense. General and administrative expense for the year ended December 31, ~~2022~~2023 was ~~$59.3~~$61.3 million and ~~26.8%~~34.7% of revenue as compared to ~~$47.3~~$59.3 million and ~~25.6%~~26.8% of revenue for the year ended December 31, ~~2021.~~2022. The increase primarily ~~resulted from additional costs associated with~~relates to an increase in personnel related expenses to support the ~~FrontRow acquisition. Excluding FrontRow, general and administrative expense for~~growth of the ~~year ended December 31, 2022 was $50.7 million and 25.8% of revenue.~~

business in certain markets.

Research and Development Expense. Research and development expense was ~~$2.5~~$3.2 million or ~~1.1%~~ 1.8% of revenue for the year ended December 31, ~~2022~~2023 as compared to ~~$1.8~~$2.5 million or ~~1.0%~~1.1% of revenue for the year ended December 31, ~~2021.~~2022. Research and

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development expense primarily consists of costs associated with development of proprietary technology. The increase in research and development expense was primarily driven by an increase in contract services related to software development.

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.

Other ~~income (expense),~~Expense, net. Other expense for the year ended December 31, ~~2022~~2023 was ~~$6.7~~$11.0 million as compared to ~~$7.9~~$6.7 million for the year ended December 31, ~~2021.~~2022. Other expense ~~decreased~~increased by ~~$1.2~~$4.2 million, ~~primarily~~ due to a ~~change~~$2.3 million decrease in fair value of derivative liabilities, ~~due to a decrease in the Company’s stock price. The decrease was partially offset by an~~$0.9 million increase in interest ~~expense.~~

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.~~ ~~The net~~Loss. Net loss attributable to common shareholders was ~~$5.0~~$40.4 million and ~~$14.7~~$5.0 million for the ~~year~~years ended December 31, ~~2022~~2023 and ~~2021,~~2022, 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.~~

year.

To provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its financial and decision-making surrounding operations, we supplement our consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles (“GAAP”) with EBITDA and Adjusted EBITDA, both non-GAAP financial measures of earnings.

EBITDA represents net ~~income (loss)~~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~~gain on settlement of ~~debt.~~debt, and impairment of goodwill. Our management uses EBITDA and Adjusted EBITDA as financial measures to evaluate the profitability and efficiency of our business model. We use these non-GAAP financial measures to assess the strength of the underlying operations of our business. These adjustments, and the non-GAAP financial measure that is derived from them, provide supplemental information to analyze our operations between periods and over time. We find this especially useful when reviewing results of operations, which include large non-cash amortizations of intangibles assets from acquisitions. Investors should consider our non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.

The following table contains reconciliations of net losses to EBITDA and adjusted EBITDA for the periods presented.

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Reconciliation of net loss for the years ended

December 31, ~~2022~~2023 and ~~2021~~2022 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


(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. As our business and revenues grow, we expect these seasonal trends to be reduced. The bulk of our products are shipped to our educational customers prior to the beginning of the school year, usually in July, August, or September. To prepare for the upcoming school year, we generally build up inventories during the second quarter of the year. Therefore, inventories tend to be at the highest levels at that point in time. In the first quarter of the year, inventories tend to decline significantly as products are delivered to customers and we do not need the same inventory levels during the first quarter. Accounts receivable balances tend to be at the highest levels in the third quarter, in which we record the highest level of sales.

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We have been very proactive, and will continue to be proactive, in obtaining contracts during the fourth and first quarters orof each year in order to help offset the seasonality of our business.

Liquidity and Capital Resources

As of December 31, ~~2022,~~2023, we had cash and cash equivalents ~~of $14.6~~of $17.3 million, a working capital ~~position~~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. ~~This financial position represents an improvement from a year ago at~~

For the years ended December 31, ~~2021 when we had a working capital position of $53.8 million~~2023 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 $11.6 million and $1.2 ~~million. For the year ended December 31, 2021, we had net cash used in~~million, respectively. Cash provided by operating activities increased year over year as a result of ~~$2.3 million. The~~a change in ~~cash from operating activities primarily relates to increases in operating income in 2022 compared to 2021. For the year ended December 31, 2022 and 2021, we~~working capital management. We had net cash used in investing activities of $1.3 million and $1.2 million for the years ended December 31, 2023 and ~~$34.0 million,~~2022, respectively. ~~The decrease in cash~~Cash used in investing activities is primarily ~~relates~~related to ~~the purchase of FrontRow that occurred in 2021, partially offset by an increase in~~ purchases of ~~Property~~property and ~~Equipment. In addition, for~~equipment. For the ~~year~~years ended December 31, 2023 and 2022, we had net cash used in financing activities of $8.0 million and $5.1 ~~million. For~~million, respectively. Cash used for financing activities for the year ended December 31, ~~2021, we had net cash provided~~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. Cash used by financing activities for the year ended December 31, 2022 was primarily related to principal payments on debt, and payments of ~~$41.1 million. The decrease in cash from financing activities primarily relates~~fixed dividends 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,~~our Series B preferred shareholders, partially offset by ~~an increase in~~net proceeds of issuance of common stock, and proceeds from ~~common~~long-term debt and stock ~~of $4.3 million.~~

In addition to the cash flows generated by our ongoing operating activities we financed our operations during 2022 with our current Credit Facility with WhiteHawk and in 2021 with a $20.0 million tranche of debtoption exercises.

Our liquidity needs are funded by ~~our previous lender,~~operating cash flow and from a pre-existing accounts receivable financing arrangement with another lender who purchases 85% of the eligible accounts receivable of the Company, up to $6.0 million, with the right of recourse. We closed these credit lines in December 2021 and replaced them with our Credit Facility with WhiteHawk. Our accounts receivable and our ability to borrow against accounts receivable provides an additional source of liquidity as cash payments are collected from customers in the ordinary course of business. Our accounts receivable balance fluctuates throughout the year based on the seasonality of the business.

available cash. 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 of our office facilities. We expect to make future payments on existing leases from cash generated from operations. We have limited credit available from our major vendors and are required to prepay a percentage of our inventory purchases, which further constrains our cash liquidity.

~~The Company had an accumulated deficit~~ 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

Table of ~~$65.0 million as of December 31,~~Contents

limiting disruptions related to product installation. This seasonality makes our needs for cash vary significantly from quarter to quarter.

In addition to the cash flows generated by our ongoing operating activities we financed our operations during 2023 and 2022 ~~and net cash provided by operations of $1.2 million for the year ended December 31, 2022.~~

~~Recent Financing~~

~~WhiteHawk Finance LLC~~

~~To finance the acquisition of FrontRow, the Company and substantially all of its direct and indirect subsidiaries, including Boxlight and FrontRow as guarantors, entered into~~with our Credit Facility with Whitehawk. Prior to April 24, 2023, we maintained a maximum $68.5 million term loan credit facility, dated December 31, 2021 (the “Credit Agreement”), with WhiteHawk Finance LLC, as lender (the “Lender”), and WhiteHawk Capital Partners, LP, as collateral agent. The Company received an initialdelayed draw term loan of ~~$58.5~~which we had $7.5 million available. On April 24, 2023, we borrowed $3.0 million on ~~December 31, 2021 (the “Initial Loan”) and was provided with a subsequent~~our delayed draw ~~facility~~term loan that was used for working capital purposes. The completion of upthe additional draw eliminates further draws under the term loan agreement. The $3.0 million was repaid during the third quarter of 2023.

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 ~~$10 million that~~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. We may be ~~provided~~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. 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.

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. 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. Increasing our capital through equity issuance at this time could cause significant dilution to our existing stockholders. 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.

Cash and cash equivalents, along with anticipated cash flows from operations, may not provide sufficient liquidity for ~~additional~~our working capital ~~purposes~~needs, debt service requirements or to maintain minimum liquidity requirements under ~~certain conditions (the “Delayed Draw”).~~ 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.

The ~~Initial Loan and Delayed Draw~~Company’s financial statements are ~~collectively referred to as~~prepared on a going concern basis, which contemplates the ~~“Term Loans.” The proceeds~~realization of the Initial Loan were used to finance the Company’s acquisition of FrontRow, pay off all indebtedness owed to the Company’s then existing lenders, Sallyport Commercial Finance, LLC and Lind Global Asset Management, LLC, pay related fees and transaction costs, and provide working capital. Of the Initial Loan, $8.5 million was subject to repayment on February 28, 2022, with quarterly principal payments of $625,000 and interest payments commencing March 31, 2022assets and the ~~$40.0 million remaining balance plus any Delayed Draw loans becoming due and payable~~satisfaction of obligations in ~~full on December 31, 2025.~~ the normal course of business.

The ~~Term Loans bear interest at the LIBOR rate plus 10.75%; provided that after March 31, 2022, if the Company’s~~Company was not in compliance with its Senior Leverage Ratio financial covenant under the Credit Agreement at September 30, 2023. The non-compliance was cured by the Company paying $4.3 million, inclusive of $0.3 million in prepayment penalties and interest in November 2023 in order to bring the Company into compliance with the Senior Leverage Ratio at September 30, 2023.

The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at December 31, 2023. Although on March 14, 2024, the Loan Parties entered into the Fifth Amendment with the Collateral Agent and the Lender mainly for the purpose of (1) amending and restating the Senior Leverage Ratio and Minimum Liquidity (as defined in the Credit Agreement) is less than 2.25, the interest rate would be reduced to LIBOR plus 10.25%. Such terms are subject to the Company maintaining a borrowing base in terms compliant with the Credit Agreement.

~~Table~~Fifth Amendment), and (2) waiving any Event 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. In addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred agency fees, legal fees and other costs in connection with the execution of the Credit Agreement totaling approximately $1.7 million. Under the terms of the warrant issued to WhiteHawk on December 31, 2021, the exercise price of the warrants would reprice if the stock price on March 31, 2022 was less than the original exercise price, at which time the number of warrants would also be increased proportionately, soDefault that after such adjustment the aggregate exercise price payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect. The warrants repriced on March 31, 2022 to $1.19 per share and the shares increased to 3,434,103.

~~On March 29, 2022, the Company received a notice from the collateral agent, alleging, among other things, defaults~~may have arisen directly as a result of ~~(i) failure to repay $8.5 million of~~ the ~~facility by February 28, 2022, (ii) non-compliance with the borrowing base resulting~~Financial Covenant Default (as defined in the ~~Company being in~~Fifth Amendment), there can be no assurance that the Lender will not declare an ~~over advance position~~event of default and acceleration of all of our obligations under the Credit Agreement ~~and (iii) failure~~in the event we are unable to timely provide certain reports and documents. As a result, all accrued and unpaid interest owed under the Term Loan, became subject to a post-default interest rate equal to the highest interest rate allowed for under the Credit Agreement plus 2.50% until such time as the events of default were either waived or cured. In February 2022, WhiteHawk and the Company agreed in principle to an extension of the February 2022 Payment. Pursuant to amendment to the Credit Agreement, dated April 4, 2022, the Collateral Agent and Lender agreed to extend the terms of repayment of the $8.5 million originally due on February 28, 2022 until February 28, 2023 and waive and/or otherwise extendget into full compliance with certain other terms of the Credit Agreement in order to allow the Loan Parties adequate time to comply with such terms. In July 2022, the Company and WhiteHawk agreed that the notice had inadvertently included the default with respect to the failure to repay $8.5 million of the facility. As a result, notwithstanding the notice, both WhiteHawk and the Company have agreed that the Company was not in default in making the February 2022 Payment to WhiteHawk.

The principal elements of the April amendment included (a) an extension of time to repay $8.5 million of the principal amount of the term loan from February 28, 2022 to February 28, 2023, and (b) forbearance on $3,500,000 in over advances until May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forththese covenants in the ~~Credit Agreement. In such connection,~~future. Following the Loan Parties have obtained credit insurance on certain key customers whose principal offices are located in the European Union and Australia as, without the credit insurance, their accounts owed to the Loan Parties had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the Collateral Agent to enforce security interests on such accounts. In addition, the Lender and Collateral Agent agreed to (i) reduce, through September 30, 2022, the minimum cash reserve requirement for the Loan Parties, (ii) reduce the interest rate by 50 basis points (to LIBOR plus 9.75%) after delivery of the Loan Parties’ September 30, 2023 financial statements, subject to the Loan Parties maintaining 1.75 EBITDA coverage ratio, and (iii) waive all prior Events of Default under the Credit Agreement. In conjunction with the amendmentFifth Amendment to the Credit Agreement, the ~~parties entered into an amended and restated fee letter (the “Fee Letter”) pursuant~~Senior Leverage ratio increased to ~~which the parties agreed to prepayment premiums of (i) 5% for payments made on or before December~~6.00 at March 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, remained at 2.00 at June 30, 2024 and ~~December 31, 2025. Furthermore,~~1.75 thereafter. Because of the ~~parties agreed~~significant decreases in the required Senior Leverage Ratio within the next twelve months, the Company’s current forecast projects the Company may not be able to maintain compliance with this ratio. These conditions raise substantial doubt about the ability of the Company to continue as a going concern within one year after the date that ~~no prepayment premiums would be payable with respect~~the financial statements are issued.

In view of this matter, continuation as a going concern is dependent upon the Company’s ability to ~~the first $5.0 million paid under the Term Loan, any payments made in relation~~continue to ~~the $8.5 million due on~~achieve positive cash flow from operations, obtain waivers or ~~before February 28, 2023, any required amortization payments~~other relief under the Credit Agreement ~~and~~for any ~~mandatory prepayments by way~~future non-

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compliance with the Senior Leverage Ratio, or ~~casualty events.~~

~~On June 21, 2022,~~refinance its Credit Agreement with a different lender on a basis with more favorable terms. The Company is actively working to refinance its debt with new lenders on terms more favorable to the Company. While the Company is confident in its ability to refinance its existing debt, it does not have written or executed agreements as of the issuance of this Form 10-K. The Company’s ability to refinance its existing debt is based upon credit markets and ~~substantially all~~economic forces that are outside of its ~~direct and indirect subsidiaries (together~~control. We believe we have a good working capital relationship with our current lender. However, there can be no assurance that the Company ~~the “Loan Parties”), entered into a second amendment (the “Second Amendment”)~~will be successful in refinancing its debt, or on terms acceptable to the ~~four-year term loan credit facility, originally entered into December 31, 2021 and as amended on April 4, 2022 (the “Credit Agreement”), with the Collateral Agent and Lender.~~

Company.

~~The Second Amendment~~

Recent Financing

See Note 9 to the Credit Agreement was entered into for purposes of the Lender funding a $2.5 million delayed draw term loan and adjusting certain terms to the Credit Agreement, including adjusting the Applicable Margin (as defined in the Second

consolidated financial statements.

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Amendment) to 13.25% for LIBOR Rate Loans and 12.25% for Reference Rate Loans, increasing the definition of change of control from 33% voting power to 40% voting power, requiring the Company to engage a financial advisor, and allowing additional time, until July 15, 2022, for the Company to come into compliance with certain borrowing base requirements set forth in the Second Amendment to the Credit Agreement, among other adjustments.

~~Lind Global Marco Fund and Lind Global Asset Management~~

On February 4, 2020, the Company and Lind Global Macro Fund, LP (“LGMF”) entered into a securities purchase agreement pursuant to which the Company received $750,000 in exchange for the issuance to Lind of (1) an $825,000 convertible promissory note, payable at an 8% interest rate, compounded monthly, (2) certain shares of restricted Class A common stock valued at $60,000, calculated based on the 20-day volume average weighted price of the Class A common stock for the period ended February 4, 2020, and (3) a commitment fee of $26,250. The Note was to mature over 24 months, with repayment commencing on August 4, 2020, after which time the Company made monthly payments of $45,833 plus interest by issuing shares of Class A common stock. The commitment fee in the amount of $26,025 was paid to LGMF, along with legal fees in the amount of $15,000. The Company paid LGMF $60,000 for closing fees by issuing 44,557 shares of Class A common stock. During the year ended December 31, 2021, the Company paid principal of $1.1 million and interest of $32,000 by issuing a total of 671,000 shares Class A common stock with an aggregate value of $1.5 million to Lind Global and recognized a loss extinguishment of debt of approximately $430,000. On December 31, 2021, the LGMF convertible note was paid in full.

On September 21, 2020, the Company and Lind Global Asset Management, LLC (“Lind Global”) entered into a securities purchase agreement (the “Lind SPA”) pursuant to which the Company received $20.0 million in exchange for the issuance to Lind Global of (1) a $22.0 million convertible promissory note, payable at a 4% interest rate, compounded monthly, (2) 310,399 shares of restricted Class A common stock valued at $900,000, calculated based on the 20-day volume average weighted price of the Class A common stock for the period ended September 21, 2020, and (3) a commitment fee of $400,000. The convertible note was to mature over 24 months, with repayment commencing on November 22, 2020, after which time the Company became obligated to make monthly payments of $1.0 million, plus interest. Interest accrued during the first two months of the note, after which time the interest payments, including accrued interest was paid monthly in either conversion shares. The commitment fee in the amount of $40,000 was paid to Lind Global, along with legal fees in the amount of $20,000 The Company paid Lind Global a total of $500,000 in closing fees consisting of commitment and legal fees, by issuing 310,399 shares of Class A common stock. The shares of Class A common stock issuable to Lind under the convertible note were registered pursuant to our effective shelf registration statement on Form S-3.

During the year ended December 31, 2021, as payment for the Lind Global convertible notes, the Company repaid principal of $12.0 million and interest of $584,000 to Lind Global by issuing a total of 7.2 million shares Class A common stock with an aggregate value of $15.9 million to Lind and recognized a $3.3 million loss.

~~Paycheck Protection Program Loan~~

On May 22, 2020, the Company received loan proceeds of $1.1 million under the Paycheck Protection Program. During 2021, the Company applied for forgiveness in the amount of $836 thousand. On March 2, 2022, we received a decision letter from the lender that the forgiveness application had been approved, leaving a remaining balance of $173 thousand to be paid. The Company received a payment schedule from its lender on May 5, 2022, extending the payoff date until May 2025. The amount remaining on the loan at December 31, 2022 was $127 thousand.

~~Everest Display, Inc.~~

On January 26, 2021, the Company entered into an agreement with EDI and EDI’s subsidiary, AMAGIC, settling $1,983,436 in accounts payable owed by the Company to EDI for 793,375 shares of Class A common stock. During the year ended December 31, 2021, the Company recognized a $357 thousand gain.

~~Accounts Receivable Financing – Sallyport Commercial Finance~~

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interest at the rate of 3.50% in excess of the highest prime rate publicly announced from time to time with a floor of 3.25%. In addition, the Company was required to pay a daily audit fee of $950 per day.

On July 20, 2021, Boxlight and Sallyport amended the Accounts Receivable Agreement (the “ARC Amendment”) for purposes of increasing the Maximum Facility Limit Amount (as defined in the ARC Amendment) to $13,000,000, as well as increasing the minimum monthly sales from $1,250,000 to $3,000,000. In exchange for entry into the ARC Amendment, Boxlight agreed to a fee of $50,000, representing one percent of the increased Maximum Facility Limit Amount. Other terms of the Accounts Receivable Agreement remained unchanged. On August 6, 2021, Boxlight and Sallyport entered into an additional amendment of the Accounts Receivable Agreement (the “Second ARC Amendment”), which further increased the Maximum Facility Limit Amount to $15,000,000. In exchange for entry into the Second ARC Amendment, Boxlight agreed to a fee of $20,000, representing one percent of the increased Maximum Facility Limit Amount. Other terms of the Accounts Receivable Agreement remain unchanged. Following the Company’s entry into the Credit Facility with WhiteHawk, on December 31, 2021, all indebtedness to Sallyport was satisfied in full.

Off Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operations or liquidity and capital resources.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles accepted in the United States. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, we review the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are discussed in detail in Note 1 to the accompanying consolidated financial statements, and briefly summarized below. We believe that the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain:

~~Revenue Recognition~~

~~Business Acquisitions~~

~~Goodwill and Intangible assets~~

~~Share-based Compensation~~

~~Derivative Warrant Liabilities~~

~~Income Taxes~~

1.Revenue Recognition

2.Goodwill and Intangible assets

3.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. Control is generally transferred when the Company has a present right to payment and the significant risks and rewards of ownership of products or services are transferred to its customers. Product revenue is derived from the sale of interactive panels, audio and communication equipment and related software and accessories to distributors, resellers, and end

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users. Service revenue is derived from hardware maintenance services, product installation, training, software maintenance, and subscription services.

The Company’s sales of interactive devices, including panels, whiteboards, audio and communication equipment and other interactive devices generally include hardware maintenance services, a license to software, and the provision of related software maintenance. Interactive devices are generally sold with hardware maintenance services with terms

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ranging from 36-60 months. Software maintenance includes technical support, product updates on a when and if available basis, and error correction services. At times, non-interactive projectors are also sold with hardware maintenance services with terms ranging from 36-60 months. The Company also licenses software independently of its interactive devices, in which case it is bundled with software maintenance, and in some cases, subscription services that include access to on-line content, access to replacement parts, and cloud-based applications. The Company’s software subscription services provide access to content and software applications on an as needed basis over the Internet, but do not provide the right to take delivery of the software applications.

The Company’s product sales, including those with software and related services, generally include a single payment up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the Company’s expectations and historical experience. For most of the Company’s product sales, control transfers, and therefore, revenue is recognized when products are shipped at the point of origin. When the Company transfers control of its products to the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation. For other software product sales, control is transferred when the customer receives the related access code or interactive hardware since the customer’s access code or connection to the interactive hardware activates the software license at which time the software is made available to the customer. For the Company’s software maintenance, hardware maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the best output measure of how those services are transferred to the customer.

The Company’s installation, training and professional development services are generally sold separately from the Company’s products. Control of these services is transferred to our customers over time with hours/time incurred in providing the service being the best depiction of the transfer of services since the customer is receiving the benefit of the services as the work is performed.

~~BUSINESS ACQUISITIONS~~

~~The Company’s business acquisitions are accounted for as a business combination, in accordance with Topic 350 “~~~~Business Combinations~~,” which requires, among other things, that assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date on the consolidated balance sheet. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired is recorded as goodwill. Income taxes, where applicable, are recognized and measured in accordance with Topic 740, ~~Accounting for Income Taxes.~~ For transactions occurring on or after January 1, 2021, contract liabilities acquired in a business combination are recognized and measured in accordance with Topic 606. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgement and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, and discount rates.

GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the cost in excess of the fair value of the net assets of acquired businesses. Goodwill is not amortized and is not deductible for tax purposes. Under ASC Topic 350 “Business Combinations,” we have an option to perform a “qualitative” assessment of the Company to determine whether further impairment testing is necessary. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of the business is less than carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. If we determine that the Company meets these criteria, we perform a qualitative assessment. In this qualitative assessment, we consider the following items: macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events. In addition, we assess whether the most recent fair value determination results in an amount that exceeds the carrying amount of the Company. Based on these assessments, we determine whether the likelihood that a current fair value determination would be less than the current carrying amount is not more likely than not.

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Because the qualitative assessment is an option, we may bypass it for any reporting unit in any period as begin our analysis with the quantitative impairment test. We may elect to perform a quantitative impairment test based on the period of time that has passed since the most recent determination of fair value, even when we do not believe that it is more-likely-than-not that the fair value of the business is less than carrying amount.

In analyzing goodwill for potential impairment in the quantitative impairment test, we use a combination of the income and market approaches to estimate the fair value. Under the income approach, we calculate the fair value based on estimated future discounted cash flows. The assumptions we use are based on what we believe a hypothetical marketplace participant would use in estimating fair value. Under the market approach, we estimate the fair value based on market multiples of revenue or earnings before interest, income taxes, depreciation and amortization for benchmark companies. If the fair value exceeds carrying value, then no further testing is required. However, if the fair value were to be less than carrying value, we would then determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the goodwill exceeded its implied value.

Intangible assets are amortized using the straight-line method over their estimated period of benefit. We evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised

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estimates of useful lives or that indicate that impairment exists. No material impairments of intangible assets have been identified during any of the periods presented. Intangible assets are tested for impairment on an annual basis, and between annual tests if indicators of potential impairment exist using 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. During the year ended December 31, 2023, due to triggering events, the Company performed Goodwill testing as of June 30, September 30, and December 31, 2023.

As of June 30, 2023, we determined that a ~~fair-value-based approach.~~

triggering event had occurred as a result of our market capitalization that suggested one or more of the reporting units may have fallen below the carrying amounts. In addition, changes in our reporting segments resulted in a change in the composition of our reporting units. As a result of these changes, we determined the Company had two reporting units for purposes of testing based upon entities that comprise the Americas and EMEA reporting segments. For purposes of impairment testing, we allocated goodwill to the reporting units based upon a relative fair value allocation approach and assigned approximately $22.4 million and $2.8 million of goodwill to the Americas and EMEA reporting units, respectively.

As of June 30, 2023, we performed an interim goodwill impairment test as a result of the triggering events identified. In analyzing goodwill for potential impairment in the quantitative impairment test, we used a combination of the income and market approaches to estimate the fair value. Under the income approach, we calculated the fair value based on estimated future discounted cash flows. The assumptions used are based on what we believe a hypothetical marketplace participant would use in estimating fair value and include the discount rate, projected average revenue growth and projected long-term growth rates in the determination of terminal values. Under the market approach, we estimated the fair value based on market multiples of revenue or earnings before interest, income taxes, depreciation, and amortization for benchmark companies. Based on the results of our interim test as of June 30, 2023, we concluded that the estimated fair value of each reporting unit exceeded the respective carrying value and, as such, we concluded that the goodwill assigned to each reporting unit, as of June 30, 2023, was not impaired.

As of September 30, 2023, due to further declines in the Company’s market capitalization and a reduction in cash-flows resulting from continued softening in the industry leading to a reduction in sales from interactive flat-panel displays, the Company determined that a triggering event had occurred.

As of September 30, 2023, the Company performed an interim goodwill impairment test as a result of the triggering event identified. The Company’s methodology for estimating fair value was consistent with the income and market approaches used as of June 30, 2023. Certain estimates and assumptions, including the Company’s operating forecast for 2023 and future periods, were revised based on current industry and Company trends. For the three and nine months ended September 30, 2023, the Company recorded goodwill impairment charges of $10.4 million and $2.8 million to the Americas and EMEA reporting units, respectively.

As of December 31, 2023, the Company performed goodwill impairment testing as a result of another triggering event identified. The Company’s methodology for estimating fair value was consistent with the income and market approaches used as of June 30, 2023 and September 30, 2023. Certain estimates and assumptions, including the Company’s operating forecast for 2023 and future periods, were further revised based on current industry and Company trends. For the year ended December 31, 2023, the Company recorded goodwill impairment charges of $22.4 million and $2.8 million in the Americas and EMEA reporting units, respectively, which also represents total accumulated goodwill impairment charges for each reporting unit.

SHARE-BASED COMPENSATION

The Company estimates the fair value of each stock option compensation award at the grant date by using the Black-Scholes option pricing model; the fair value of each restricted stock unit awarded is the market price of the underlying shares at the date of grant. The fair value determined represents the cost for the award and is recognized over the vesting period during which an employee is required to provide service in exchange for the award. Accordingly, stock compensation expense is recognized based on the estimated fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period. Total expense related to the award is reduced by the fair value of the options that are forfeited by the employees that leave the Company prior to ~~vesting.~~

vesting as they occur.

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). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses the classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

The Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification as equity instruments due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole control of the Company. Such warrants are measured at fair value at each reporting date, and the changes in fair value are included in determining net income for the period.

INCOME TAXES

The Company follows the asset and liability method of accounting for income taxes pursuant to the pertinent guidance issued by the FASB. Deferred income taxes are recorded to reflect the estimated future tax effects of differences between the financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to the amount management considers more likely than not to be realized. Such valuation allowances are recorded for the portion of the deferred tax assets that are not expected to be realized based on the levels of historical taxable income and projections for future taxable income over the periods in which the temporary differences will be deductible.

~~Table of Contents~~

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,” this item is not required.

Table of Contents

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Shareholders, ~~and the~~ Board of Directors, and Audit Committee of Boxlight Corporation

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Boxlight Corporation and its subsidiaries (the “Company”) as of December 31, ~~2022~~2023 and ~~2021,~~2022, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, ~~2022,~~2023, and the related notes and financial statement schedule II (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2022~~2023 and ~~2021,~~2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, ~~2022,~~2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 to the financial statements, the Company has identified certain conditions relating to its outstanding debt and Series B Preferred Stock that are outside the control of the Company. In addition, the Company has generated recent losses. These factors, among others, raise substantial doubt regarding the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the accompanying financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.We believe that our audits provide a reasonable basis for our opinion.

F-1

Table of Contents

Critical Audit ~~Matters~~

Matter

The critical audit ~~matters~~matter communicated below ~~are matters~~is a matter arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) ~~relate~~relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.The communication of a critical audit ~~matters~~matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit ~~matters~~matter below, providing a separate ~~opinions~~opinion on the critical audit ~~matters~~matter or on the accounts or disclosures to which ~~they relate.~~it relates.

~~Critical Audit Matter – Fair Value of Derivative Liabilities~~

As described in Notes 1 and 10, the Company has issued warrants to purchase common stock which feature net cash settlement provisions or do not have fixed settlement provisions because their conversion and exercise prices may be lowered under certain conditions. The warrants are derivative liabilities and are remeasured at fair value at each reporting date using a Monte Carlo simulation technique. Changes in fair value are included in operations each period. As of

~~F-1~~

~~Table of Contents~~

~~December 31, 2022, the Company estimated the fair value to be $472 thousand and recognized a $2.6 million change in fair value in operations for the year ended December 31, 2022.~~

We identified the fair value of the liability-classified warrants as a critical audit matter. The principal considerations for that determination were the unobservable inputs used in the Company’s valuation technique are highly subjectivity and involves higher measurement uncertainty. This required a high degree of auditor effort, including specialized skills and knowledge, and significant auditor judgment in evaluating the fair value of the warrants. The primary procedures we performed to address this critical audit matter included:

●

~~We obtained an understanding of management’s process for determining the unobservable inputs for the fair value measurement.~~

●

~~Utilizing a valuation specialist, we evaluated the significant assumptions and methods utilized in developing the fair value, including:~~

~~We evaluated the reasonableness of the Company’s measurement technique and significant assumptions and inputs.~~

~~We verified developed an independent calculation of the risk-free rate and volatility and compared our rates to those used by management.~~

~~We performed independent simulations using a Monte Carlo technique to determine the fair value of the warrants and test the accuracy of management’s valuation technique and application.~~

~~Critical Audit Matter – Equity-Classified Warrants~~

As described in Note 12, the Company issued certain warrants and prefunded warrants in connection with a securities purchase agreement to issue and sell 7.0 million shares of the Company’s common stock. The Company evaluated whether the warrants and pre-funded warrants were in the scope of ASC Topic 480 ~~Distinguishing Liabilities from Equity,~~ which discusses the accounting for instruments with characteristics of both liabilities and equity. The guidance in Topic 480, and the resulting liability classification, is applicable to instruments when certain criteria are met. Based on its analysis, the Company concluded that the warrants, and pre-funded warrants did not meet any of the criteria to be subject to liability classification and are therefore classified as equity.

We identified the classification of the warrants as a critical audit matter. The principal considerations for that determination included the complexity and effort required in identifying all relevant features of and obligations under the instruments for evaluation against the criteria for classification. This required a high degree of auditor effort, including specialized skills and knowledge, and significant auditor judgment in evaluating the features of and obligations under the warrants and the determination of whether such features meet the criteria for liability-classification.

~~The primary procedures we performed to address this critical audit matter included:~~

●

~~We obtained an understanding of management’s process for identifying and evaluating the critical terms of the warrant agreements in determining the classification.~~

●

~~With the assistance of professionals in our firm that have specialized skills and knowledge in accounting for debt and equity instruments:~~

~~We evaluated management’s analysis and conclusions regarding the relevant provisions and features of the warrants in light of relevant guidance and the criteria for classification.~~

~~We read the securities purchase agreement and underlying warrant agreements comprising the offering to identify the relevant features and settlement provisions for our evaluation.~~

~~We independently evaluated the relevant features and settlement provisions of the warrants under relevant guidance considering the criteria for liability-classification.~~

~~F-2~~

~~Table of Contents~~

Critical Audit Matter – Goodwill Impairment Assessment

As described in Note 1, in analyzing goodwill for potential impairment in the quantitative impairment test, the Company uses a combination of the income and market approaches to estimate the fair value. Under the income approach, the Company calculates the fair value based on discounted estimated future cash flows. Under the market approach, the Company estimates the fair value based on the market multiples of revenue or earnings before interest, income taxes, depreciation, and amortization for benchmark companies.

We identified the quantitative impairment test of goodwill as a critical audit matter. The principal considerations for that determination included the ~~judgement~~judgment involved in assessing management’s impairment test of goodwill due to the measurement uncertainty involved in determining the fair value of equity for the reporting units. In particular, the fair value estimates are sensitive to changes in assumptions such as discount rates, expected future cash flows, long-term growth rates, and comparable company earnings multiples.

The primary procedures we performed to address this critical audit matter included:

•

●

We obtained an understanding of management’s process for assessing goodwill impairment and performing the qualitative goodwill impairment test, including management’s process for developing assumptions used in the income and market approaches to estimate the fair value of reporting units.

●

We evaluated management’s revenue growth rates, margins, and cash flows to current industry and economic trends, while also considering the current and future business, customer base, and product mix.

●

~~We assessed management’s process for estimating revenue growth and margins by comparing past projections to actual performance.~~

●

With the assistance of our valuation professionals with specialized skills and knowledge, we evaluated the models, valuation methodology, and significant assumptions used in the income and market approaches to estimate the fair values.

●

~~We tested management’s reconciliation of the fair value of equity of the reporting units to the market capitalization of the Company.~~

•We evaluated management’s revenue growth rates, margins, and cash flows to current industry and economic trends, while also considering the current and future business, customer base, and product mix.

•

We assessed management’s process for estimating revenue growth and margins by comparing past projections to actual performance.

•With the assistance of our valuation professionals with specialized skills and knowledge, we evaluated the models, valuation methodology, and significant assumptions used in the income and market approaches to estimate the fair values.

•We tested management’s reconciliation of the fair value of equity of the reporting units to the market capitalization of the Company.

/s/ FORVIS, LLP ~~(Formerly, Dixon Hughes Goodman LLP)~~

We have served as the Company’s auditor since 2018.

Atlanta, Georgia

March ~~16, 2023~~

14, 2024

~~F-3~~

F-2

Table of Contents

Boxlight Corporation

Consolidated Balance Sheets

As of December 31, ~~2022~~2023 and ~~2021~~

2022

(in thousands except share and per share amounts)

December 31,

December 31,

2022

2021

ASSETS

Current assets:




Cash and cash equivalents

$
14,591

$
17,938
Accounts receivable – trade, net of allowances

31,009

29,573
Inventories, net of reserves

58,211

51,591
Prepaid expenses and other current assets

7,433

9,444
Total current assets

111,244

108,546

Property and equipment, net of accumulated depreciation

1,733

1,073
Operating lease right of use asset

4,350

—
Intangible assets, net of accumulated amortization

52,579

65,532
Goodwill

25,092

26,037
Other assets

397

248
Total assets

$
195,395

$
201,436

LIABILITIES AND STOCKHOLDERS’ EQUITY





Current liabilities:




Accounts payable and accrued expenses

$
36,566

$
33,638
Short-term debt

845

9,804
Operating lease liabilities, current

1,898

—
Deferred revenues, current

8,308

7,575
Derivative liabilities

472

3,064
Other short-term liabilities

386

667
Total current liabilities

48,475

54,748

Deferred revenues, non-current

15,603

13,952
Long-term debt

43,778

42,137
Deferred tax liabilities, net

4,680

8,449
Operating lease liabilities, non-current

2,457

—
Other long-term liabilities

—

340
Total liabilities

114,993

119,626

Commitments and contingencies (Note 15)




Mezzanine equity:


Preferred Series B, 1,586,620 shares issued and outstanding

16,146

16,146
Preferred Series C, 1,320,850 shares issued and outstanding

12,363

12,363
Total mezzanine equity

28,509

28,509

Stockholders’ equity:




Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 and 167,972 shares issued and outstanding, respectively

—

—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 74,716,696 and 63,821,901 Class A shares issued and outstanding at December 31, 2022 and 2021, respectively

7

6
Additional paid-in capital

117,843

110,867
Accumulated deficit

(65,043)

(61,300)
Accumulated other comprehensive (loss) income

(914)

3,728
Total stockholders’ equity

51,893

53,301

Total liabilities and stockholders’ equity

$
195,395

$
201,436

December 31,
2023 December 31,
2022
(as adjusted)*
ASSETS
Current assets:
Cash and cash equivalents $ 17,253 $ 14,591
Accounts receivable – trade, net of allowances 29,523 31,009
Inventories, net of reserves 44,131 58,211
Prepaid expenses and other current assets 9,471 7,433
Total current assets 100,378 111,244
Property and equipment, net of accumulated depreciation 2,477 1,733
Operating lease right of use asset 8,846 4,350
Intangible assets, net of accumulated amortization 45,964 52,579
Goodwill — 25,092
Other assets 906 397
Total assets $ 158,571 $ 195,395
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 32,899 $ 36,566
Short-term debt 1,037 845
Operating lease liabilities, current 1,827 1,898
Deferred revenues, current 8,698 8,308
Derivative liabilities 205 472
Other short-term liabilities 1,566 386
Total current liabilities 46,232 48,475
Deferred revenues, non-current 16,347 15,603
Long-term debt 39,134 43,778
Deferred tax liabilities, net 4,316 4,680
Operating lease liabilities, non-current 7,282 2,457
Total liabilities 113,311 114,993
Commitments and contingencies (Note 15)
Mezzanine equity:
Preferred Series B, 1,586,620 shares issued and outstanding 16,146 16,146
Preferred Series C, 1,320,850 shares issued and outstanding 12,363 12,363
Total mezzanine equity 28,509 28,509
Stockholders’ equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 and 167,972 shares issued and outstanding, respectively — —
Common stock, $0.0001 par value, 18,750,000 shares authorized; 9,704,496 and 9,339,587 Class A shares issued and outstanding at December 31, 2023 and 2022, respectively 1 1
Additional paid-in capital 119,724 117,849
Accumulated deficit (104,275) (65,043)
Accumulated other comprehensive income (loss) 1,301 (914)
Total stockholders’ equity 16,751 51,893
Total liabilities and stockholders’ equity $ 158,571 $ 195,395

See Accompanying Notes to Financial Statements.

~~F-4~~

F-3

Table of Contents

Boxlight Corporation

Consolidated Statements of Operations and Comprehensive Loss

For the Years Ended December 31, ~~2022~~2023 and ~~2021~~

2022

(in thousands, except per share amounts)

2022

2021
Revenues, net

$
221,781

$
185,177
Cost of revenues

156,913

138,652
Gross profit

64,868

46,525

Operating expense:




General and administrative expenses

59,337

47,270
Research and development

2,482

1,826
Total operating expense

61,819

49,096

Income (loss) from operations

3,049

(2,571)

Other income (expense):




Interest expense, net

(9,923)

(3,382)
Other expense, net

(267)

(20)
Gain (loss) on settlement of liabilities, net

856

(4,532)
Change in fair value of derivative liabilities

2,591

13
Total other expense

(6,743)

(7,921)
Loss before income taxes

(3,694)

(10,492)
Income tax expense

(49)

(3,310)
Net loss

(3,743)

(13,802)
Fixed dividends - Series B Preferred

(1,269)

(1,269)
Deemed contribution -Series B Preferred

—

367
Net loss attributable to common stockholders

$
(5,012)

$
(14,704)

Comprehensive loss:




Net loss

(3,743)

(13,802)
Other comprehensive loss:




Foreign currency translation adjustment

(4,642)

(1,464)
Total comprehensive loss

$
(8,385)

$
(15,266)

Net loss attributable to common stockholders

$
(5,012)

(14,704)

Net loss per common share – basic and diluted

$
(0.07)

$
(0.23)

Weighted average number of common shares outstanding – basic and diluted

69,153

58,849

2023 2022
Revenues, net $ 176,721 $ 221,781
Cost of revenues 113,419 156,913
Gross profit 63,302 64,868
Operating expense:
General and administrative expenses 61,252 59,337
Research and development 3,155 2,482
Impairment of goodwill 25,195 —
Total operating expense 89,602 61,819
(Loss) income from operations (26,300) 3,049
Other income (expense):
Interest expense, net (10,840) (9,923)
Other expense, net (417) (267)
Gain on settlement of liabilities, net — 856
Change in fair value of derivative liabilities 267 2,591
Total other expense (10,990) (6,743)
Loss before income taxes (37,290) (3,694)
Income tax expense (1,866) (49)
Net loss (39,156) (3,743)
Fixed dividends - Series B Preferred (1,269) (1,269)
Net loss attributable to common stockholders $ (40,425) $ (5,012)
Comprehensive loss:
Net loss (39,156) (3,743)
Other comprehensive loss:
Foreign currency translation adjustment 2,215 (4,642)
Total comprehensive loss $ (36,941) $ (8,385)
Net loss per common share – basic and diluted - as adjusted $ (4.28) $ (0.58)
Weighted average number of common shares outstanding – basic and diluted - as adjusted 9,455 8,644

See Accompanying Notes to Financial Statements.

~~F-5~~

F-4

Table of Contents

Boxlight Corporation

Consolidated Statements of Changes in Stockholders’ Equity

For the Year Ended December 31, 2023

(in thousands except share amounts)

Series A
Preferred Stock Class A
Common Stock Additional
Paid-in
Capital Accumulated Other
Comprehensive Income (Loss) Accumulated
Deficit Total
Shares Amount Shares Amount
Balance, December 31, 2022 167,972 $ — 9,339,587 $ 1 $ 117,849 $ (914) $ (65,043) $ 51,893
Cumulative effect of change in accounting principle, net of tax — — — — — — (76) (76)
Balance, December 31, 2022 - as adjusted 167,972 — 9,339,587 1 117,849 (914) (65,119) 51,817
Shares issued for:
Stock options exercised — — 12,500 — 13 — — 13
Vesting of restricted stock units — — 318,995 — — — — —
Reverse stock split fractional adjustment — — 33,414 — — — — —
Stock compensation — — — — 3,131 — — 3,131
Foreign currency translation — — — — — 2,215 — 2,215
Fixed dividends for preferred shareholders — — — — (1,269) — — (1,269)
Net loss — — — — — — (39,156) (39,156)
Balance, December 31, 2023 167,972 $ — 9,704,496 $ 1 $ 119,724 $ 1,301 $ (104,275) $ 16,751
See Accompanying Notes to Financial Statements.

Boxlight Corporation

Consolidated Statements of Changes in Stockholders’ Equity

For the Year Ended December 31, 2022

(in thousands except share amounts) - as adjusted

Series A
Preferred Stock Class A
Common Stock Additional
Paid-in
Capital Accumulated Other
Comprehensive
Income (Loss) Accumulated
Deficit Total
Shares Amount Shares Amount
Balance, December 31, 2021 167,972 $ — 7,977,738 $ — $ 110,873 $ 3,728 $ (61,300) $ 53,301
Shares issued for:
Stock options exercised — — 37,105 — 81 — — 81
Acquisition — — 28,846 — 150 — — 150
Debt issuance costs — — 66,021 — — — — —
Vesting of restricted stock units — — 310,759 — — — — —
Securities purchase agreement — — 875,000 1 2,352 — — 2,353
Warrant redemption, net — — 44,118 — — — — —
Issuance of warrants and prefunded warrants — — — — 2,349 — — 2,349
Stock compensation — — — — 3,313 — — 3,313
Foreign currency translation — — — — — (4,642) — (4,642)
Fixed dividends for preferred shareholders — — — — (1,269) — — (1,269)
Net loss — — — — — — (3,743) (3,743)
Balance, December 31, 2022 167,972 $ — 9,339,587 $ 1 $ 117,849 $ (914) $ (65,043) $ 51,893
See Accompanying Notes to Financial Statements.

F-5

Table of Contents
Boxlight Corporation
Consolidated Statements of Cash Flows

For the Years Ended December 31, ~~2022~~2023 and ~~2021~~

2022

(in ~~thousands except share amounts)~~

Series A

Class A

Additional

Accumulated Other

Preferred Stock

Common Stock

Paid-in

Comprehensive

Accumulated


Shares

Amount

Shares

Amount

Capital

Income (Loss)

Deficit

Total

Balance, December 31, 2020

167,972

$
—

53,343,518

$
6

$
86,768

$
5,192

$
(47,498)

$
44,468
Shares issued for:
















Conversion of liabilities

—

—

8,697,166

—

19,080

—

—

19,080
Stock options exercised

—

—

492,460

—

415

—

—

415
Acquisition

—

—

142,882

—

404

—

—

404
Debt issuance costs

—

—

—

—

660

—

—

660
Vesting of restricted stock units

—

—

916,682

—

—

—

—

—
Warrant redemption, net

—

—

229,193

—

382

—

—

382
Stock compensation

—

—

—

—

4,060

—

—

4,060
Foreign currency translation

—

—

—

—

—

(1,464)

—

(1,464)
Fixed dividends for preferred shareholders

—

—

—

—

(1,269)

—

—

(1,269)
Deemed contribution for preferred shareholders

—

—

—

367

—

—

367
Net loss

—

—

—

—

—

—

(13,802)

(13,802)

Balance, December 31, 2021

167,972

—

63,821,901

6

110,867

3,728

(61,300)

53,301
Shares issued for:
















Stock options exercised

—

—

296,841

—

81

—

—

81
Acquisition

—

—

230,770

—

150

—

—

150
Debt issuance costs

—

—

528,169

—

—

—

—

—
Vesting of restricted stock units

—

—

2,486,075

—

—

—

—

—
Securities purchase agreement

—

—

7,000,000

1

2,352

—

—

2,353
Warrant redemption, net

—

—

352,940

—

—

—

—

—
Issuance of warrants and prefunded warrants

—

—

—

—

2,349

—

—

2,349
Stock compensation

—

—

—

—

3,313

—

—

3,313
Foreign currency translation

—

—

—

—

—

(4,642)

—

(4,642)
Fixed dividends for preferred shareholders

—

—

—

—

(1,269)

—

—

(1,269)
Net loss

—

—

—

—

—

—

(3,743)

(3,743)

Balance, December 31, 2022

167,972

$
—

74,716,696

$
7

$
117,843

$
(914)

$
(65,043)

$
51,893

thousands)

2023 2022
Cash flows from operating activities:
Net loss $ (39,156) $ (3,743)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of debt discount and issuance cost 2,303 2,158
Bad debt expense 9 266
Gain on settlement of liabilities — (856)
Changes in deferred tax assets and liabilities (347) (3,776)
Change in allowance for sales returns and volume rebate 1,356 316
Change in inventory reserve 2,131 (68)
Change in fair value of derivative liability (267) (2,591)
Stock compensation expense 3,131 3,313
Depreciation and amortization 8,859 9,129
Impairment of goodwill 25,195 —
Change in right of use assets and lease liabilities 249 8
Changes in operating assets and liabilities:
Accounts receivable – trade 781 (3,800)
Inventories 13,105 (10,272)
Prepaid expenses and other current assets (1,874) 1,602
Other assets (498) (161)
Accounts payable and accrued expenses (4,822) 5,756
Other short-term liabilities 1,136 256
Deferred revenues 290 3,965
Other liabilities — (312)
Net cash provided by operating activities $ 11,581 $ 1,190
Cash flows from investing activities:
Asset acquisition — (100)
Purchases of furniture and fixtures, net (1,321) (1,106)
Net cash used in investing activities $ (1,321) $ (1,206)
Cash flows from financing activities:
Net proceeds from issuance of common stock and warrants, net of issuance costs — 4,700
Proceeds from issuances of short-term debt 3,000 —
Proceeds from exercise of options and warrants 13 —
Principal payments on long-term debt (6,755) (11,141)
Proceeds from long term debt — 2,500
Principal payments on short-term debt (3,000) —
Payments of fixed dividends to Series B Preferred stockholders (1,269) (1,269)
Proceeds from issuance of common stock — 84
Net cash used in financing activities $ (8,011) $ (5,126)
Effect of foreign currency exchange rates 413 1,795
Net increase (decrease) in cash and cash equivalents 2,662 (3,347)
Cash and cash equivalents, beginning of the period 14,591 17,938
Cash and cash equivalents, end of the period $ 17,253 $ 14,591
Supplemental cash flow disclosures:
Cash paid for income taxes $ 2,691 $ 1,615
Cash paid for interest $ 8,290 $ 8,342
Non-cash investing and financing transactions:
Addition of operating lease liabilities $ 5,865 $ —
Shares issued for asset acquisition $ — $ 150

See Accompanying Notes to Financial Statements.

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Table of Contents

~~Boxlight Corporation~~

~~Consolidated Statements of Cash Flows~~

~~For the Years Ended December 31, 2022 and 2021~~

~~(in thousands)~~

2022

2021

Cash flows from operating activities:





Net loss

$
(3,743)

$
(13,802)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:





Amortization of debt discount and issuance cost

2,158

2,132

Bad debt expense

266

425

(Gain) loss on settlement of liabilities

(856)

3,345

Changes in deferred tax assets and liabilities

(3,776)

788

Change in allowance for sales returns and volume rebate

316

1,145

Change in inventory reserve

(68)

250

Change in fair value of derivative liability

(2,591)

(13)

Shares issued for interest payment on notes payable

—

617

Stock compensation expense

3,313

4,060

Depreciation and amortization

9,129

7,175

Change in right of use assets and lease liabilities

8

—

Changes in operating assets and liabilities:

Accounts receivable – trade

(3,800)

(6,427)

Inventories

(10,272)

(20,998)

Prepaid expenses and other current assets

1,602

(2,470)

Other assets

(161)

(158)

Accounts payable and accrued expenses

5,756

17,948

Other short-term liabilities

256

344

Deferred revenues

3,965

4,318

Other liabilities

(312)

(1,009)

Net cash provided by (used in) operating activities

$
1,190

$
(2,330)

Cash flows from investing activities:





Asset acquisition

(100)

(33,604)

Cash paid to settle earnout obligations

—

(119)

Purchases of furniture and fixtures, net

(1,106)

(285)

Net cash used in investing activities

$
(1,206)

$
(34,008)

Cash flows from financing activities:





Net proceeds from issuance of common stock and warrants, net of issuance costs

4,700

—

Proceeds from issuances of short-term debt

—

54,225

Proceeds from exercise of options and warrants

—

—

Principal payments on debt

(11,141)

(66,912)

Discount on notes payable

—

(500)

Proceeds from long term debt

2,500

58,500

Debt issuance costs

—

(3,324)

Payments of fixed dividends to Series B Preferred stockholders

(1,269)

(1,269)

Proceeds from issuance of common stock

84

428

Other Share based payments

Net cash (used in) provided by financing activities

$
(5,126)

$
41,148

Effect of foreign currency exchange rates

1,795

(332)

Net (decrease) increase in cash and cash equivalents

(3,347)

4,478

Cash and cash equivalents, beginning of the period

17,938

13,460

Cash and cash equivalents, end of the period

$
14,591

$
17,938

Supplemental cash flow disclosures:





Cash paid for income taxes

$
1,615

$
1,476

Cash paid for interest

$
8,342

$
1,497

Non-cash investing and financing transactions:





Shares issued to settle accounts payable

$
—

$
1,626

Shares issued for closing fees related to outstanding notes payable – Lind Global

$
—

$
17,454

Exercise of warrants

$
—

$
350

Shares issued for asset acquisition

$
150

$
403

Deemed contribution from Series B Preferred Stock

$
—

$
367

~~See Accompanying Notes to Financial Statements.~~

~~F-7~~

~~Table of Contents~~

Notes to Consolidated Financial Statements

Boxlight Corporation

NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

COMPANY HISTORY AND RECENT ACQUISITIVE GROWTH

Boxlight Corporation (the “Company”) was incorporated in the State of Nevada on September 18, 2014 with its headquarters in Atlanta, Georgia for the purpose of becoming a technology company that sells interactive educational products. The Company designs, produces and distributes interactive technology solutions predominantly to the education market.

~~On December 31, 2021, the Company acquired FrontRow Calypso LLC, a California company and a leader in classroom and campus communication solutions for the education market.~~

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Boxlight Corporation and its wholly owned subsidiaries. Intercompany transactions and account balances among all of affiliated entities have been eliminated.

In the opinion of management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature and necessary for fair financial statement presentation.

ESTIMATES AND ASSUMPTIONS

The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from those estimates. Significant estimates include estimates of reserves for inventory obsolescence; the recoverability of deferred tax assets; the fair value of warrants; the ~~initial fair value of preferred stock, the~~ fair value and recoverability of intangible assets and goodwill; the fair value of stock compensation; the ~~fair values of assets acquired; the~~ relative stand-alone selling prices of goods and services; and variable consideration.

REVERSE STOCK SPLIT AND RECLASSIFICATIONS

On June 14, 2023, the Company effected a reverse stock split of the Company’s Class A common stock whereby each eight shares of the Company’s authorized and outstanding Class A common stock was converted into one share of common stock. The par value of the common stock was not adjusted. Following the reverse split, the authorized shares for Class A common stock was adjusted to 18,750,000, the authorized shares for Class B common stock remained at 50,000,000 shares, and the authorized shares of preferred stock remained unchanged at 50,000,000 shares. All Class A common share and per share amounts for all periods presented in the consolidated financial statements and the notes to the consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in aggregate par value of Class A common stock to additional paid-in capital on the consolidated balance sheets of approximately $6 thousand. The quantity of Class A common stock equivalents and the conversion and exercise ratios were adjusted for the effect of the reverse stock split for warrants, stock compensation arrangements, and the conversion features on preferred shares. All of the agreements included existing conversion language in the event of a stock split and thus did not result in modification accounting or additional incremental expense as a result of this transaction. The Company issued 33,414 shares of Class A common stock to adjust fractional shares following the reverse stock split to the nearest whole share. There are presently no shares of Class B common stock outstanding and none were outstanding as of December 31, 2023 and 2022.

GOING CONCERN

The Company’s financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business.

At September 30, 2023 the Company was not in compliance with its Senior Leverage Ratio financial covenant under the credit agreement, originally dated December 31, 2021, as amended (the "Credit Agreement"), between the Company, its direct and indirect subsidiaries, and Whitehawk Finance LLC, as lender, and White Hawk Capital Partners, LP, as collateral agent. The Company's non-compliance with the Credit Agreement was cured by the Company paying

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$4.3 million, inclusive of $0.3 million in prepayment penalties and accrued interest, in November 2023 which would have resulted in the Company being in compliance with the Senior Leverage Ratio at September 30, 2023.

At December 31, 2023, the Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement. The Senior Leverage Ratio, as stated in the Third Amendment to the Credit Agreement, decreases to 2.50 at December 31, 2023, 2.00 at March 31, 2024 and June 30, 2024 and at 1.75 thereafter.

On March 14, 2024 the Company entered into a fifth agreement (the 'Fifth Amendment') with the Collateral Agent and Lender which waived any Event of Default that may have arisen directly as a result of the financial covenant default at December 31, 2023 and in the interim two-month period ended February 29, 2024. The Fifth Amendment also restated the Senior Leverage Ratio and Minimum Liquidity requirements. Under the Amended agreement, the Senior Leverage Ratio requirement at March 31, 2024 was amended from 2.00 to 6.00, at June 30, 2024 will remain at 2.00 and thereafter will remain at 1.75.

Because of the significant decreases in the required Senior Leverage Ratio that will occur over the next twelve months, the Company’s current forecast projects the Company may not be able to maintain compliance with this ratio. These conditions raise substantial doubt about the ability of the Company to continue as a going concern within one year after the date that the financial statements are issued.

In view of this matter, continuation as a going concern is dependent upon the Company’s ability to continue to achieve positive cash flow from operations, obtain waivers or other relief under the Credit Agreement for any future non-compliance with the Senior Leverage Ratio, or refinance its Credit Agreement with a different lender on more favorable terms. The Company is actively working to refinance its debt with new lenders. While the Company is confident in its ability to refinance its existing debt, it does not have written or executed agreements as of the issuance of this Form 10-K. The Company’s ability to refinance its existing debt is based upon credit markets and economic forces that are outside of its control. We believe we have a good working relationship with our current lender. However, there can be no assurance that the Company will be successful in refinancing its debt, or on terms acceptable to the Company.

To the extent not 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. 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. 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.

These financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern.

COMPREHENSIVE ~~INCOME~~

LOSS

Comprehensive income (loss) reflects the change in equity during the year except those resulting from investments by and distributions to stockholders and is comprised of all components of net ~~income (loss)~~loss and foreign currency translation adjustments.

FOREIGN CURRENCIES

The Company’s reporting currency is the U.S. dollar.

The U.S. dollar is the currency of the primary economic environment in which it operates and is generally the currency in which the Company’s business generates and expends cash. Subsidiaries with different functional currencies, translate their assets and liabilities into U.S. dollars at the exchange rates in effect as of the balance sheet date. Revenues and expenses are translated into U.S. dollars at the average exchange rates for the year. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of equity (deficit). Foreign exchange gains and losses arise from transactions denominated in currencies other than the functional currency.

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Gains and losses on those foreign currency transactions are included in determining net ~~income (loss)~~loss for the period in which the exchange rates change.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. The Company maintains cash balances at financial institutions which, from time to time, may exceed Federal Deposit Insurance Corporation insured limits of $250,000 for banks

~~F-8~~

~~Table of Contents~~

located in the U.S. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR ~~DOUBTFUL ACCOUNTS~~

EXPECTED CREDIT LOSS

Accounts receivable are stated at contractual amounts, net of an allowance for ~~doubtful accounts.~~expected credit losses. The allowance for ~~doubtful accounts~~credit losses represents management’s estimate of the amounts that ultimately will not be realized in cash. The Company reviews the adequacy of the allowance for ~~doubtful accounts~~credit losses on an ongoing basis, using historical payment trends, the age of receivables and knowledge of the individual customers. Estimated credit losses consider relevant information about past events, current conditions and reasonable and supporting forecasts that affect the collectability of financial assets. When the analysis indicates, management increases or decreases the allowance accordingly. However, if the financial condition of our customers were to deteriorate, additional allowances might be required.

INVENTORIES

Inventories are stated at the lower of cost or net realizable value and include spare parts and finished goods. Inventories are primarily determined using specific identification and the first-in, first-out (“FIFO”) cost methods. Cost includes direct cost from the Current Manufacturer (“CM”) or Original Equipment Manufacturer (“OEM”), plus material overhead related to the purchase, inbound freight and import duty costs.

The Company continuously reviews its inventory levels to identify slow-moving merchandise and markdowns necessary to clear slow-moving merchandise, which reduces the cost of inventories to its estimated net realizable value. Consideration is given to several quantitative and qualitative factors, including current pricing levels and the anticipated need for subsequent markdowns, aging of inventories, historical sales trends, and the impact of market trends and economic conditions. Estimates of markdown requirements may differ from actual results due to changes in quantity, quality and mix of products in inventory, as well as changes in consumer preferences, market and economic conditions.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost and depreciated using the straight-line method over the estimated life of the asset. Repairs and maintenance are charged to expense as incurred.

LONG–LIVED ASSETS

Long-lived assets to be held and used or disposed of other than by sale are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When required, impairment losses on assets to be held and used or disposed of other than by sale are recognized based on the fair value of the asset. Long-lived assets to be disposed of by sale are reported at the lower of carrying amount or fair value less cost to sell.

~~BUSINESS COMBINATIONS~~

~~Transactions in which the Company acquires or obtains control of one or more businesses are accounted~~ There was no impairment recognized for ~~as business combinations in accordance with Topic 805,~~ ~~Business Combinations~~~~, which requires, among other things, that assets acquired,~~2023 and liabilities assumed be recognized at their estimated fair values as of the acquisition date on the balance sheet. Income taxes, where applicable, are recognized and measured in accordance with Topic 740, ~~Accounting for Income Taxes~~~~. For transactions occurring on or after January 1, 2021, contract liabilities acquired in a business combination are recognized and measured in accordance with Topic 606,~~ ~~Revenue from Contracts with Customers~~ (“Topic 606”). Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgement and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, and discount rates. Transaction costs are expensed as incurred. Any excess consideration transferred over the assigned values of net assets acquired would be recorded as goodwill. The amounts of revenue and earnings of the acquiree since the acquisition date are included in the consolidated statements of operations and comprehensive loss for the reporting period.

2022.

~~F-9~~

GOODWILL

~~Table of Contents~~

~~GOODWILL~~

Goodwill represents the cost in excess of the fair value of the net tangible and intangible assets of acquired businesses, and represents implied synergies expected of the completed business combinations. ~~Goodwill~~Most goodwill is not amortized and is not deductible for tax purposes.

Under Topic 350, Intangibles—Goodwill and Other, the Company has an option to perform a “qualitative” assessment to determine whether quantitative impairment testing is necessary. If, as a result of a qualitative assessment, it is more-likely-than-not that the fair value of the business is less than carrying amount, quantitative impairment testing is required. Otherwise, no further testing is necessary. If the Company performs a qualitative assessment, the Company

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considers the following criteria: macroeconomic conditions, industry and market conditions, overall financial performance and other entity specific events. In addition, the Company assesses whether the most recent fair value determination resulted in an amount that significantly exceeded the carrying amount of the Company. Based on these assessments, the Company determines whether the likelihood that a current fair value determination would be less than the current carrying amount is not more likely than not.

Because the qualitative assessment is an option, the Company may bypass it for any reporting unit in any period and begin the analysis using a quantitative impairment test. The Company may also elect to perform a quantitative impairment test based on the period of time that has passed since the most recent determination of fair value, even when the Company does not believe that it is more-likely-than-not that the fair value of the business is less than carrying amount.

In analyzing goodwill for potential impairment in the quantitative impairment test, the Company uses a combination of the income and market approaches to estimate the fair value. Under the income approach, the Company calculates the fair value based on estimated future discounted cash flows. The assumptions used are based on what the Company believes a hypothetical marketplace participant would use in estimating fair value. Under the market approach, the Company estimates the fair value based on market multiples of revenue or earnings before interest, income taxes, depreciation, and amortization for benchmark companies. If the fair value exceeds carrying value, then no further testing is required. However, if the fair value were to be less than carrying value, the Company would then determine the amount of the impairment charge, if any, which would be the amount that the carrying value of the goodwill exceeded its implied value. ~~No goodwill impairments have been identified and recognized during any~~

As of June 30, 2023, we determined that a triggering event had occurred as a result of our market capitalization that suggested one or more of the reporting units may have fallen below the carrying amounts. In addition, changes in our reporting segments resulted in a change in the composition of our reporting units. As a result of these changes, we determined the Company had two reporting units for purposes of testing based upon entities that comprise the Americas and EMEA reporting segments. For purposes of impairment testing, we allocated goodwill to the reporting units based upon a relative fair value allocation approach and assigned approximately $22.4 million and $2.8 million of goodwill to the Americas and EMEA reporting units, respectively.

As of June 30, 2023, we performed an interim goodwill impairment test as a result of the triggering events identified. Based on the results of our interim test as of June 30, 2023, we concluded that the estimated fair value of each reporting unit exceeded the respective carrying value and, as such, we concluded that the goodwill assigned to each reporting unit, as of June 30, 2023, was not impaired.

As of September 30, 2023, the Company performed an interim goodwill impairment test as a result of the triggering event identified. Certain estimates and assumptions, including the Company’s operating forecast for 2023 and future periods, ~~presented.~~

~~We test~~were revised based on current industry and Company trends. As of September 30, 2023, the Company recorded goodwill ~~annually~~impairment charges of $10.4 million and $2.8 million to the Americas and EMEA reporting units, respectively.

As of December 31, 2023, the Company performed goodwill impairment testing as a result of another triggering event identified. Based upon that testing, the Company determined the remaining goodwill was fully impaired and the Company recognized goodwill impairment charges for ~~impairment during the fourth quarter. During~~ the year ended December 31, ~~2022, we began performing the annual impairment test as~~2023 of ~~October 1, compared to December 31 in previous years. This facilitates the overall coordination~~$22.4 million and timing of our annual financial statement close cycle and the preparation of our annual report. The change to the testing date did not represent a material change to our method of applying the accounting principle in light of requirements to monitor goodwill throughout the reporting period.

Since the acquisition of FrontRow Calypso LLC occurred December 31, 2021, the Company believes that the carrying amount does not exceed the fair value for the reporting unit. Goodwill arising from the FrontRow Calypso LLC acquisition was not included$2.8 million in the ~~goodwill impairment testing for 2022.~~

Americas and EMEA reporting units, respectively.

INTANGIBLE ASSETS

Intangible assets are amortized using the straight-line method over their estimated period of benefit and presented net of accumulated amortization. The Company reviews the carrying amounts of intangible assets for impairment whenever an event or change in circumstances indicates that the carrying amount of the assets may not be recoverable. The Company measures the recoverability of intangible assets by comparing the carrying amount of each asset to the future undiscounted cash flows the Company expects the asset to generate. Impairment is measured by the amount in which the carrying value of the asset exceeds its fair value. In addition, the Company periodically evaluates the estimated remaining useful lives of

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long-lived intangible assets to determine whether events or changes in circumstances warrant a revision to the remaining period of amortization.

During the year ended December 31, 2023, the Company performed impairment testing for intangibles assets for the quarters ended September 30, 2023 and December 31, 2023 as a result of triggering events identified, including the impairment of goodwill balances. The Company has not recognized impairment on intangible assets as of December 31, 2023.

DERIVATIVE TREATMENT OF STOCK PURCHASE WARRANTS

~~F-10~~

~~Table of Contents~~

contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments primarily include cash, accounts receivable, ~~warrants,~~derivative liabilities, accounts payable and debt. Due to the short-term nature of cash, accounts ~~receivables~~receivable and accounts payable, the carrying amounts of these assets and liabilities approximate their fair value. ~~Debt approximates fair value due to either~~

The Company has determined that the ~~short-term nature or recent execution of the debt agreement. The amount of consideration received is deemed to be the~~estimated fair value of ~~long-term~~ debt ~~net of any debt discount~~is approximately $44.4 million when the carrying value, excluding discounts, premiums and issuance ~~cost.~~

~~Warrants~~costs, of approximately $43.2 million. The fair value of debt was estimated using market rates the Company believes would be available for similar types of financial instruments and ~~contingent consideration for acquired businesses~~represents a Level 2 measurement.

Derivative liabilities are recorded at fair value on a recurring basis.

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows:

Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

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There were no transfers into or out of Level 3 measurements in 2023 and 2022.

The following tables set forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for at fair value on a recurring basis as of December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):

Markets for

Other

Significant

Carrying

Identical

Observable

Unobservable

Value as of

Assets

Inputs

Inputs

December 31,
Description

(Level 1)

(Level 2)

(Level 3)

2022
Derivative liabilities - warrant instruments

—

—

472

$
472

Markets for

Other

Significant

Carrying

Identical

Observable

Unobservable

Value as of

Assets

Inputs

Inputs

December 31,
Description

(Level 1)

(Level 2)

(Level 3)

2021
Derivative liabilities - warrant instruments

$
—

$
—

$
3,064

$
3,064

~~F-11~~


Description	Markets for Identical Assets (Level 1)	Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Carrying Value as of December 31, 2023
Derivative liabilities - warrant instruments	—	—	205	$	205


Description	Markets for Identical Assets (Level 1)		Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Carrying Value as of December 31, 2022
Derivative liabilities - warrant instruments	$	—	$	—	$	472	$	472

~~Table of Contents~~

See Note 10 for discussion of the valuation techniques and inputs and reconciliation of the opening and closing balances of the fair value of warrants.

~~The following tables reconcile opening and closing balances of contingent consideration for which fair value is based on level 3 inputs (in thousands).~~

Amount
Balance, December 31, 2020

$
119
Amount paid

(119)
Balance, December 31, 2021

—
Amount paid

—
Balance, December 31, 2022

$
—

NET ~~INCOME (LOSS)~~LOSS PER COMMON SHARE

Basic ~~net income (loss)~~loss per common share is computed by dividing net ~~income (loss)~~loss available to common shareholders by the weighted-average number of common shares outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and warrants to purchase common stock were considered to be common stock equivalents. Diluted net ~~income (loss)~~loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. The dilutive effect of convertible instruments is determined using the if-converted method, presuming share settlement. Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted calculation for the entire period being presented. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

For the year ended December 31, 2023, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 0.3 million shares from options to purchase common shares, 0.4 million of unvested restricted shares, and 1.4 million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of 2.2 million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive. For the year ended December 31, 2022, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise ~~3.9~~0.5 million shares from options to purchase common shares, ~~and 2.4 million of~~ unvested restricted shares ~~10.8~~of 0.3 million and 1.3 million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of ~~17.8~~2.2 million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive. For the year ended December 31, 2021, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 4.1 million shares from options to purchase common shares, unvested restricted shares of 2.0 million and 2.1 million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of 17.8 million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive.

REVENUE RECOGNITION

In accordance with Topic 606 Revenue from Contracts with Customers, the Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is transferred to its customers. Control is generally transferred when the Company has a present right to payment and the title and the significant risks and rewards of ownership of products or services are transferred to its customers. Product revenue is derived from the sale of interactive panels, audio and communication equipment and related software and accessories to distributors, resellers, and end users. Service revenue is derived from hardware maintenance services, product installation, training, software maintenance, and subscription services.

Nature of Products and Services and Related Contractual Provisions

The Company’s sales of interactive devices, including panels, audio and communication equipment and other interactive devices generally include hardware maintenance services, a license to software, and the provision of related software maintenance. Interactive devices are generally sold with hardware maintenance services with terms of

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approximately 36~~-60~~36-60 months. Software maintenance includes technical support, product updates on a when and if available basis, and error correction services. At times, non-interactive panels are also sold with hardware maintenance services with terms of approximately 60 months. The Company also licenses software independently of its interactive devices, in which case it is bundled with software maintenance, and in some cases, subscription services that include access to on-line content, and cloud-based applications. The Company’s software subscription services provide

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access to content and software applications on an as needed basis over the Internet, but do not provide the right to take delivery of the software applications.

The Company’s product sales, including those with software and related services, generally include a single payment up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the Company’s expectations and historical experience. For most of the Company’s product sales, control transfers, and therefore, revenue is recognized when products are shipped at the point of origin. When the Company transfers control of its products to the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation. For many of the Company’s software product sales, control is transferred when shipped at the point of origin since the software is installed on the interactive hardware device in advance of shipping. For other software product sales, control is transferred when the customer receives the related access code or interactive hardware since the customer’s access code or connection to the interactive hardware activates the software license at which time the software is made available to the customer. For the Company’s software maintenance, hardware maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the best output measure of how those services are transferred to the customer.

For the sale of third-party products and services where the Company obtains control of the products and services before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers. The Company considers multiple factors when determining whether it obtains control of the third-party products and services including, but not limited to, evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product or service. The Company has not historically entered into transactions where it does not take control of the product or service prior to transfer to the customer.

The Company excludes all taxes assessed by a governmental agency that are both imposed on and concurrent with the specific revenue-producing transaction from revenue (for example, sales and use taxes). In essence, the Company is reporting these amounts collected on behalf of the applicable government agency on a net basis as though they are acting as an agent. The taxes collected and not yet remitted to the governmental agency are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Significant Judgments

For contracts with multiple performance obligations, each of which represent promises within a contract that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”). The Company’s products and services included in its contracts with multiple performance obligations generally are not sold separately and there are no observable prices available to determine the SSP for those products and services. Since observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis. The Company’s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, when applicable, the estimated cost to provide the performance obligation, market trends in the pricing for similar offerings, product-specific business objectives, and competitor or other relevant market pricing and margins. Because observable prices are generally not available for the Company’s performance obligations that are sold in bundled arrangements, the Company does not apply the residual approach to determining SSP.

The Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of contracts that are executed in the same manner, contain the same performance obligations, and are priced in a consistent

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manner. The Company believes that the application of the portfolio approach produces the same result as if they were applied at the contract level.

Contract Balances

The timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences can result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. Fees for

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the Company’s product and most service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30~~-60~~30-60 days of contract execution. Fees for installation, training, and professional development services are fixed and generally become due as the services are performed. The Company has an established history of collecting under the terms of its contracts without providing refunds or concessions to its customers. The Company’s contractual payment terms do not vary when products are bundled with services that are provided over multiple years. In these contracts where services are expected to be transferred on an ongoing basis for several years after the related payment, the Company has determined that the contracts generally do not include a significant financing component. The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the customer continues to use the related services, so that the customer will receive the optimal benefit from the products over their lives. Additionally, the Company has elected the practical expedient to exclude any financing component from consideration for contracts where, at contract inception, the period between the transfer of services and the timing of the related payment is not expected to exceed one year.

The Company has an unconditional right to consideration for all products and services transferred to the customer. That unconditional right to consideration is reflected in accounts receivable in the accompanying consolidated balance sheets in accordance with Topic 606. Contract liabilities are reflected in deferred revenue in the accompanying consolidated balance sheets and reflect amounts allocated to performance obligations that have not yet been transferred to the customer related to software maintenance, hardware maintenance, and subscription services. The Company has no material contract assets onat December 31, ~~2022~~2023 or ~~2021.~~2022. During the years ended December 31, ~~2022~~2023 and ~~2021,~~2022, the Company recognized ~~$7.5~~$7.9 million and ~~$5.6~~$7.5 million, respectively, of revenue that was included in the deferred revenue balance as of December 31, 2022 and 2021, ~~and December 31, 2020,~~ respectively.

Variable Consideration

The Company’s otherwise fixed consideration in its customer contracts may vary when refunds or credits are provided for sales returns, stock rotation rights, price protection provisions, or in connection with certain other rebate provisions. The Company generally does not allow product returns other than under assurance warranties or hardware maintenance contracts. However, the Company, on a case-by-case basis, will grant exceptions, mostly “buyer’s remorse” where the distributor or reseller’s end customer either did not understand what they were ordering, or determined that the product did not meet their needs. An allowance for sales returns is estimated based on an analysis of historical trends. In very limited situations, a customer may return previous purchases held in inventory for a specified period of time in exchange for credits toward additional purchases. The Company provides rebates to certain customers based on the achievement of certain sales targets. The provision for rebates is estimated based on customers’ contracted rebate programs and our historical experience of rebates paid. The Company includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant reversal. These estimates are generally made using the ~~expected value~~most likely method based on historical experience and are measured at each reporting date. There was no material revenue recognized in ~~2022~~2023 related to changes in estimated variable consideration that existed at December 31, ~~2021.~~

2022.

Remaining Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting within the contract. The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer. The Company identifies performance obligations at contract inception so that it can monitor and account for the obligations over the life of the contract. Remaining performance obligations represent the portion of the transaction price in a contract allocated to products and services not yet transferred to the customer. As of December 31, ~~2022~~2023 and ~~2021,~~2022, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was ~~$23.9~~$25.0 million and ~~$21.5~~$23.9 million, respectively. The Company expects to recognize revenue on approximately ~~33%~~34% of the

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remaining performance obligations in ~~2023, 27%~~2024, 28% in ~~2024~~,2025, 21% in ~~2025, 13%~~2026, 12% in ~~2026~~,2027, with the remainder recognized thereafter.

In accordance with Topic 606, the Company has elected not to disclose the value of remaining performance obligations for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed (for example, a time-and-materials professional services contract). In addition, the Company has elected not to disclose the value of remaining performance obligations for contracts with performance obligations that are expected, at contract inception, to be satisfied over a period that does not exceed one year.

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~~Table of Contents~~

Disaggregated Revenue

The Company disaggregates revenue based upon the nature of its products and services and the timing and in the manner which it is transferred to the customer. Although all products are transferred to the customer at a point in time, hardware and some software is pre-installed on the interactive device are transferred at the point of shipment, while some software is transferred to the customer at the time the hardware is received by the customer or when software product access codes are delivered electronically to the customer. All service revenue is transferred over time to the customer; however, professional services are generally transferred to the customer within a year from the contract date as measured based upon hours or time incurred while software maintenance, hardware maintenance, and subscription services are generally transferred 3-3- 5 years from the contract execution date as measured based upon the passage of time.

Year Ended

December 31,

(in thousands)

2022

2021

Product revenues:

Hardware

$
206,770

$
171,780

Software

4,306

4,102

Service revenues:

Professional services

2,638

1,419

Maintenance and subscription services

8,067

7,876

$
221,781

$
185,177


	Year Ended December 31, (in thousands)
	2023		2022
Product revenues:
Hardware	$	163,948	$	206,770
Software and embedded firmware	2,402		4,306
Service revenues:
Professional services	1,480		1,458
Maintenance and subscription services	8,891		9,247
	$	176,721	$	221,781

Contract Costs

The Company capitalizes incremental costs to obtain a contract with a customer if the Company expects to recover those costs. The incremental costs to obtain a contract are those that the Company incurs to obtain a contract with a customer that it would not have otherwise incurred if the contract were not obtained (e.g., a sales commission). The Company capitalizes the costs incurred to fulfil a contract only if those costs meet all the following criteria:

●

~~The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify.~~

●

~~The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future.~~

●

~~The costs are expected to be recovered.~~

•The costs relate directly to a contract or to an anticipated contract that the Company can specifically identify.

•The costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future.

•The costs are expected to be recovered.

Certain sales commissions incurred by the Company were determined to be incremental costs to obtain the related contracts, which are deferred and amortized ratably over the estimated economic benefit period. For these sales commissions that are incremental costs to obtain where the period of amortization would have been recognized over a period that is one year or less, the Company elected the practical expedient to expense those costs as incurred. Commission costs that are deferred are classified as current or non-current assets based on the timing of when the Company expects to recognize the expense and are included in prepaid and other assets and other assets, respectively, in the accompanying consolidated balance sheets. Total deferred commissions at December 31, ~~2022~~2023 and ~~2021~~2022 and the related amortization for ~~2022~~2023 and ~~2021~~2022 were less than ~~$300,000.~~

$550,000.

The Company has not historically incurred any material ~~fulfilment~~fulfillment costs that meet the criteria for capitalization.

~~Bill~~

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SEGMENT REPORTING

ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision-making group, in deciding how to allocate resources and ~~Hold Arrangements~~

~~From time to time~~in assessing performance. Our CODM is our Chief Executive Officer.

Effective January 1, 2023, the Company ~~enters custodial bill~~changed its segment reporting to align with the geographic markets in which it operates, as further discussed in Note 17 - Segments. The Company previously managed the Company as one operating segment. Following the integration of recent acquisitions which further expanded the Company’s operations into Europe, Middle East and ~~hold arrangements with customers.~~ Africa (“EMEA”) and other international markets, the Company’s operations are now organized, managed and classified into three reportable segments – EMEA, North and Central America (the “Americas”) and all other geographic regions (“Rest of World”). Our EMEA segment consists of the operations of Sahara Holding Limited and its subsidiaries (the “Sahara Entities”). Our Americas segment consists primarily of Boxlight, Inc. and its subsidiaries and the Rest of World segment consists primarily of Boxlight Australia, PTY LTD ("Boxlight Australia”).

Each ~~arrangement is reviewed,~~of our operating segments are primarily engaged in the sale of education technology products and ~~revenue is recognized only when~~services in the ~~following criteria have been met: (1)~~education market but which are also sold into the ~~reason~~health, government and corporate sectors and derive a majority of their revenues from the sale of flat-panel displays, audio and other hardware accessory products, software solutions and professional services. Generally, our displays produce higher net operating revenues but lower gross profit margins than our accessory solutions and professional services. The Americas operating segment includes salaries and overhead for ~~the bill-and-hold arrangement is substantive (2) the product is identified as the customer’s asset (3) the product is ready for delivery~~corporate functions that are not allocated to the ~~customer (4) there must be a fixed schedule for delivery (5) the seller cannot use the product or direct the product to another customer. At December 31, 2022,$3.2 million of revenue was recognized for goods that will be delivered to a customer during the first quarter of 2023.~~

Company’s individual reporting segments. Transfers between segments are generally valued at market and are eliminated in consolidation.

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~~Table of Contents~~

WARRANTY RESERVE

For customers that do not purchase hardware maintenance services, the Company generally provides warranty coverage on panels and accessories, batteries and computers. This warranty coverage ranges from 2-52-5 years,, and the Company establishes a liability for estimated product warranty costs, included in other short-term liabilities in the consolidated balance sheets, at the time the related product revenue is recognized. The warranty obligation is affected by historical product failure rates and the related use of materials, labor costs and freight incurred in correcting any product failure. Should actual product failure rates, use of materials, or other costs differ from the Company’s estimates, additional warranty liabilities could be required, which would reduce its gross profit.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development costs are expensed as incurred and consist primarily of personnel related costs, prototype and sample costs, design costs, and global product certifications mostly for wireless certifications.

INCOME TAX

An asset and liability approach is used for financial accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carryforwards. If it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.

~~STOCK-BASED~~

STOCK COMPENSATION

The Company estimates the fair value of each stock option ~~compensation~~ award at the grant date by using the Black-Scholes option pricing model; the fair value for each restricted stock unit award is the market price of the underlying shares at the date of grant. The fair value determined represents the cost for the award and is recognized on a straight-line basis over the vesting period during which an employee is required to provide service in exchange for the award. Total expense is reduced by the previously recognized compensation expense for options and restricted stock units that are forfeited prior to vesting when the forfeiture occurs.

~~LEASES~~

F-16

~~The Company has entered into various operating leases for certain office, support locations and vehicles with terms extending through February 2027. Generally, these leases have initial lease terms~~Table of ~~five years or less.~~Contents

LEASES

~~Prior to the adoption of~~ ~~Accounting Standards Update ("ASU") No. 2016-02 "Leases” (Topic 842)~~ on January 1, 2022, the Company recorded the difference between the rent paid and the straight-line rent expense as a deferred rent liability within accrued expenses and other current liabilities and other liabilities.

~~Subsequent to the adoption of Topic 842, operating~~Operating lease assets and liabilities are reflected within operating lease assets, operating lease liabilities, current, and operating lease liabilities, non-current, on the consolidated balance sheets. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Many of the leases have one or more lease renewal options. The exercise of lease renewal options is at our sole discretion. The Company does not consider the exercise of any lease renewal options reasonably ~~certain.~~certain to occur. Certain of our lease agreements contain early termination options. No renewal options or early termination options have been included in the calculation of the operating right-of-use assets or operating lease liabilities. Certain of our lease agreements provide for periodic adjustments to rental payments for ~~inflation.~~inflation, which is recognized as variable lease cost when they occur. As the majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the commencement date in determining the present value of lease payments. The incremental borrowing rate is based on the ~~term~~terms of the lease. ~~In connection with the adoption of Topic 842, the Company used incremental borrowing rates on January 1, 2022 for operating leases that commenced prior to that date.~~ Leases with an initial term of 12 months or less are not recorded on the balance sheet. For these short-term leases, lease expense is recognized on a straight-line basis over the lease term.

The Company is not a lessor in any lease agreement.

~~F-16~~

RECLASSIFICATIONS

~~Table of Contents~~

~~SUBSEQUENT EVENTS~~

~~We reviewed all material events through~~The Company reclassified certain 2022 amounts in the ~~date of these~~footnotes to the consolidated financial statements ~~were issued for subsequent event disclosure consideration as described in Note 17.~~

to conform to the 2023 presentation.

NEW ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

The Company adopted Topic 842, as amended, which requires that lessees and lessors recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. The Company elected the modified retrospective approach which it applied on January 1, 2022, and therefore have not restated comparative periods. The Company elected certain relief options offered in ASU 2016-02 including the package of practical expedients, and the option not to recognize right-of-use assets and lease liabilities that arise from short-term leases (i.e., leases with terms of twelve months or less). The Company also elected the practical expedient to not separate lease and non-lease components, which allows it to account for lease and non-lease components as a single component. Finally, the Company elected not to apply the hindsight practical expedient to determine the lease term for existing leases.

The Company’s operating leases relate primarily to office space. As a result of the adoption of ASU 2016-02, the Company recognized an operating lease right-of-use ("ROU") asset of $3.8 million and a current operating lease liability of approximately $1.6 million and a long-term operating lease liability of approximately $2.3 million as of January 1, 2022, with no impact on the Company’s Consolidated Statement of Operations and Comprehensive Loss or Consolidated Statement of Cash Flows. The ROU asset and operating lease liabilities are recorded as separate line items in the Consolidated Balance Sheet.

~~The Company adopted ASU 2021-06, “~~~~Amendments to SEC Paragraphs Pursuant to SEC Final Rule Releases No. 33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses~~~~” to amend SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Release No. 33-10786,~~ ~~Amendments to Financial Disclosures about Acquired and Disposed Businesses.~~ Among other changes, the final rule modifies the significance tests and improves the disclosure requirements for (1) acquired or to be acquired businesses, (2) real estate operations, and (3) pro forma financial information. In addition, the final rule includes amendments to financial disclosures specific to smaller reporting companies (SRCs). There is no immediate impact on the Company’s financial statements due to the adoption of this standard.

~~The Company early adopted (as of January 1, 2021) ASU No. 2020-06,~~ ~~“Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.”~~ The new guidance simplifies the accounting for certain convertible instruments and for contracts in an entity’s own equity. Key provisions include the elimination of the “cash conversion” guidance and the “beneficial conversion feature” guidance in ASC Subtopic 470-20, ~~(Debt with Conversion and Other Options)~~, as well as a simplification of the settlement assessment that entities are required to perform to determine whether a contract qualifies for equity classification by removing certain conditions in ASC Subtopic 815-40-25. Since the beneficial conversion feature is eliminated by this guidance, it will not be recorded for our Series B preferred stock.

~~The amendments in ASU 2020-06 further revise the guidance in ASC Topic 260, “~~~~Earnings Per Share,~~” to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For the years ended December 31, 2022 and 2021, the Company has calculated diluted earnings per share using the if-converted method.

~~The Company early adopted (as of January 1, 2021) ASU No. 2021-08, “~~~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers,~~~~” (“ASU 2021-08”), which amends the guidance in ASC Topic 805, “~~~~Business Combinations~~,” to require that “an entity (acquirer) recognize, and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, rather than at fair value.” At the acquisition date, an acquirer would account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts. The Company applied the guidance in this ASU to the FrontRow acquisition that was completed on December 31, 2021.

~~The Company adopted ASU No. 2019-12, “Income Taxes” (ASU 740):~~ ~~“Simplifying the Accounting for Income Taxes.”~~ ~~The new guidance eliminates the need for an organization to analyze whether the following apply in a given period: (1) the exception to the~~

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~~Table of Contents~~

incremental approach for intraperiod tax allocation; (2) the exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) the exception in interim periods income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, (4) enacted changes in tax laws in interim periods and (5) certain income tax accounting for employee stock ownership plans and affordable housing projects. The standard became effective for the Company on January 1, 2021 and did not have a material impact on the financial statements.

~~Recent Accounting Pronouncements not yet Adopted~~

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit ~~Losses”~~Losses (Topic 326): Measurement of Credit Losses on Financial ~~Instruments.~~Instruments,” which introduced a new model for recognizing credit losses on financial instruments based on an estimate of current expected credit losses (“CECL”). The new guidance ~~replaces the incurred loss methodology with the current expected credit loss (CECL) methodology. The measurement of expected credit losses under the CECL methodology is applicable~~applies to loans, accounts receivable, trade receivables, other financial assets measured at amortized cost, ~~including trade accounts receivable. It~~loan commitments and other off-balance sheet credit exposures. The new guidance also applies to ~~off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees,~~debt securities and other ~~similar instruments)~~financial assets measured at fair value through other comprehensive income. Estimated credit losses under CECL consider relevant information about past events, current conditions and ~~net investments in leases recognized by a lessor in accordance with Topic 842. This~~reasonable and supporting forecasts that affect the collectability of financial assets. The new guidance ~~changes~~was effective January 1, 2023 and was applied using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of January 1, 2023. Prior period comparative information has not been recast and continues to be reported under the ~~impairment model~~accounting guidance in effect for ~~most financial assets~~those periods. The Company recognized a cumulative-effect adjustment to reduce retained earnings by $76 thousand, net of taxes. The change in the allowance for credit losses was not significant during the year ended December 31, 2023.

Recent Accounting Pronouncements not yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280. The enhanced disclosure requirements include: title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain ~~other instruments. The ASU~~annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances. This change is ~~not~~ effective ~~until~~for fiscal years beginning after December 15, ~~2022,~~2023 and interim periods within that fiscal year. The Company’s trade receivable terms are short term in duration and historically losses on accounts receivable have not been significant; write-offs were approximately $243,000 for the year endedbeginning after December ~~31, 2022. Accordingly, the Company does not expect the adoption~~15, 2024. This change will apply retrospectively to ~~have a material impact on the Company’s financial statements.~~

There were various other accounting standards and interpretations issued recently, some of which may be applicable to the Company but none of which are expected to a have a material impact on our financial position, operations, or cash flows.

~~NOTE 2 –BUSINESS ACQUISITIONS~~

The acquisitions described below were accounted for as business combinations which require, among other things, that assets acquired, and liabilities assumed be recognized at their estimated fair values as of the acquisition date. Deferred income taxes are recognized and measured in accordance with Topic 740 “~~Accounting for Income Taxes~~~~”. Transaction costs are expensed as incurred. Any excess of the consideration transferred over the assigned values of the net assets acquired would be recorded as goodwill.~~

~~FrontRow Calypso LLC.~~

On December 31, 2021, the Company, and its wholly owned subsidiary, Boxlight, Inc, acquired 100% of the membership interests of FrontRow Calypso LLC, a Delaware limited liability company (“FrontRow”) in exchange for payment of $34.7 million to Phonic Ear Inc. and Calypso Systems LLC, the equity holders of FrontRow.

Based in Petaluma, California, FrontRow makes technology that improves communication in learning environments, including developing network-based solutions for intercom, paging, bells, mass notification, classroom sound, lesson sharing, AV control and management. FrontRow also has offices in Toronto, Copenhagen, Brisbane, Hamilton (UK) and Shenzhen.

To finance the acquisition of FrontRow, the Company entered into a term loan credit facility, with WhiteHawk Finance LLC, as lender and WhiteHawk Capital Partners, LP, as collateral agent. See Note 9 “Debt.”

The assets acquired and liabilities assumed were recorded at their estimated fair values at the acquisition date. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies.all periods presented. The Company engaged the assistance of an independent third-party valuation specialist to determine certain fair value measurements related to acquired assets. The excess consideration over the net fair values of the assets acquired and liabilities assumed was recognized as goodwill.

The fair value or net realizable value of inventories at the date of acquisition was determined using a “top-down” approach based upon the estimated sales value, less a reasonable profit margin and less the estimated costs to dispose of the inventory, including

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~~Table of Contents~~

selling costs and other disposal costs such as freight. The fair value of accounts receivable acquired in connection with the acquisition approximated the contractual amount due from customers at that date.

~~The acquired contract liabilities of FrontRow have been recognized and measured in accordance with Topic 606.~~

~~The following table summarizes the estimated acquisition date fair values of the net assets acquired and liabilities assumed, and the estimate of the fair value of consideration paid:~~

(in thousands)
Assets acquired:

Cash

$
2,752
Accounts receivable

3,381
Inventories

10,240
Prepaid expenses

883
Property and equipment

348
Total assets acquired

17,604

Accounts payable and accrued expenses

(1,501)
Deferred revenue

(1,225)
Other liabilities

(12)
Total liabilities assumed

(2,738)

Net tangible assets acquired

$
14,866

Identifiable intangible assets:

Customer relationships

8,195
Trademarks

3,244
Technology

5,036
Non-compete

391
Total intangible assets subject to amortization

16,866

Goodwill

2,920

Total net assets acquired

$
34,652

Consideration paid:

Cash

$
34,652

The following table presents the useful lives over which the acquired intangible assets will be amortized on a straight-line basis, which approximates the pattern by which the related economic benefits of the assets are consumed:


		~~Estimated~~
		~~Weighted Average~~
		~~Life (years)~~
~~Customer relationships~~		8
~~Trademarks~~		10
~~Technology~~		8
~~Non-compete agreements~~		3

~~Goodwill~~ is primarily attributable to synergies expected from the acquisition and the assembled workforce. The Company incurred a total of $500,700 in acquisition-related costs and expensed all such costs incurred during the period in which the service was received. Acquisition related costs are included in general and administrative expenses in the Consolidated Statement of Operations and Comprehensive Loss. The results of operations of FrontRow are included in the Consolidated Statement of Operations and Comprehensive Loss beginning at the acquisition date. There was no impact to the Consolidated Statement of Operations and

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~~Table of Contents~~

Comprehensive Loss for the year ended December 31, 2021 since the acquisition was consummated on December 31, 2021. For the year ended December 31, 2022, revenue and net income from FrontRow were $24.8 million and $0.8 million, respectively.

~~Pro Forma Financials~~

The following unaudited pro forma information reflects our consolidated results of operations as if the acquisition of FrontRow had taken place on January 1, 2021. The unaudited pro forma information is not necessarily indicative of the results of operations that the Company would have reported had the acquisition actually occurred at the beginning of these periods nor is it necessarily indicative of future results. The unaudited pro forma financial information does not reflectcurrently evaluating the impact of ~~future events that may occur~~this ASU on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid. This change is effective for annual periods beginning after December 15, 2024. This change will apply on a prospective basis to annual financial statements for periods beginning after the acquisition, including, but not limited to, anticipated costs savings from synergies or other operational improvements. The nature and amount of any material, nonrecurring pro forma adjustments directly attributable to the business combination are includedeffective date. However, retrospective application in ~~the pro forma revenue and net earnings reflected below.~~

Year ended December 31,

2021

(Unaudited)

(in thousands)

(in thousands)

As Reported

Pro Forma
Revenues, net

$
185,177

$
214,636

Net loss attributable common shareholders

$
(14,704)

$
(12,868)

~~Interactive Concepts~~

On March 23, 2021, the Company acquired 100% of the outstanding shares of Interactive Concepts BV, a company incorporated and registered in Belgium and a distributor of interactive technologies (“Interactive”), for total consideration of approximately $3.3 million in cash, common stock and deferred consideration.all prior periods presented is permitted. The Company ~~has been Boxlight’s key distributor in Belgium and Luxembourg.~~

is currently evaluating the impact of this ASU on its financial statements.

~~F-20~~

F-17

Table of Contents

~~The following table summarizes the estimated acquisition date fair values of the net assets acquired and liabilities assumed, and the estimate of the fair value of consideration paid:~~

(in thousands)
Assets acquired:

Cash

$
1,647
Accounts receivable

1,045
Inventories

191
Property and equipment

37
Total assets acquired

2,920

Accounts payable and accrued expenses

(821)
Deferred tax liability

(230)
Total liabilities assumed

(1,051)

Net tangible assets acquired

1,869
Identifiable intangible assets:

Tradename

220
Customer relationships

745
Total intangible assets subject to amortization

965

Goodwill

439

Total net assets acquired

$
3,273

Consideration paid:

Cash

$
1,795
Deferred cash consideration

1,075
Common shares issued

403

Total consideration paid

$
3,273

NOTE 32 – ACCOUNTS RECEIVABLE - TRADE

Accounts receivable consisted of the following at December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):

2022

2021

Accounts receivable – trade

$
33,198

$
31,053
Allowance for doubtful accounts

(414)

(405)
Allowance for sales returns and volume rebates

(1,775)

(1,075)
Accounts receivable - trade, net of allowances

$
31,009

$
29,573


	2023		2022

Accounts receivable – trade	$	33,089	$	33,198
Allowance for credit losses	(421)		(414)
Allowance for sales returns and volume rebates	(3,145)		(1,775)
Accounts receivable - trade, net of allowances	$	29,523	$	31,009

Write-offs of accounts receivable ~~was~~were approximately ~~$243,000~~$78,000 and ~~$525,000~~$243,000 for the years ended December 31, 2023 and 2022, ~~and 2021,~~ respectively.

~~F-21~~

~~Table of Contents~~

NOTE 43 – INVENTORIES

Inventories consisted of the following at December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):

2022

2021

Finished goods

$
56,583

$
51,346
Spare parts

775

260
Reserve for inventory obsolescence

(531)

(599)
Advanced shipping costs

1,384

584
Inventories, net

$
58,211

$
51,591

~~The Company wrote off inventories of approximately $1.2 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively.~~


	2023		2022

Finished goods	$	45,461	$	57,967
Spare parts	1,221		775
Reserve for inventory obsolescence	(2,551)		(531)

Inventories, net	$	44,131	$	58,211

NOTE 54 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following at December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):

2022

2021

Prepayments to vendors

$
4,131

$
7,739
Prepaid licenses and other

3,302

1,705
Prepaid expenses and other current assets

$
7,433

$
9,444


	2023		2022

Prepayments to vendors	$	3,176	$	4,131
Prepaid licenses and other	6,295		3,302
Prepaid expenses and other current assets	$	9,471	$	7,433

Prepaid expenses and other current assets as of December 31, 2023 and 2022 are net of reserves related to vendor receivables of $1.4 million and $0.8 ~~million. There were no reserves related to vendor receivables as~~million, respectively.

F-18

Table of ~~December 31, 2021.~~

Contents

NOTE 65 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):

2022

2021

Building

$
200

$
200
Building improvements

14

14
Leasehold improvements

450

176
Office equipment

1,057

467
Software

88

88
Other equipment

678

335
Construction in progress

14

85

Property and equipment, at cost

2,501

1,365
Accumulated depreciation

(768)

(292)

Property and equipment, net of accumulated depreciation

$
1,733

$
1,073


	2023		2022

Building	$	200	$	200
Building improvements	14		14
Leasehold improvements	544		450
Office equipment	1,242		1,057
Software	88		88
Other equipment	705		678
Construction in progress	1,029		14

Property and equipment, at cost	3,822		2,501
Accumulated depreciation	(1,345)		(768)

Property and equipment, net of accumulated depreciation	$	2,477	$	1,733

For the years ended December 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded depreciation expense of $631,000 and $484,000, ~~and $156,000,~~ respectively.

~~F-22~~

~~Table of Contents~~

NOTE 76 – INTANGIBLE ASSETS AND GOODWILL

Intangible assets and goodwill consisted of the following at December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):


	Useful lives	2023		2022
INTANGIBLE ASSETS
Patents	4-10 years	$	182	$	182
Customer relationships	8-15 years	52,588		52,736
Technology	3-5 years	8,944		8,943
Domain	7 years	14		14
Non-compete	3 years	391		391
Tradenames	2-10 years	12,723		12,769
Intangible assets, at cost		74,842		75,035
Accumulated amortization		(28,878)		(22,456)
Intangible assets, net of accumulated amortization		$	45,964	$	52,579

GOODWILL
Beginning Balance		$	25,092	$	26,037

Change due to foreign currency translation		103		(945)
Impairment		(25,195)		—
Ending Balance		$	—	$	25,092

Useful lives

2022

2021
INTANGIBLE ASSETS

Patents

4-10 years

$
182

$
182
Customer relationships

8-15 years

52,736

55,158
Technology

3-5 years

8,943

8,901
Domain

7 years

14

14
Non-compete

8-15 years

391

391
Tradenames

2-10 years

12,769

13,085
Intangible assets, at cost

75,035

77,731
Accumulated amortization

(22,456)

(12,199)
Intangible assets, net of accumulated amortization

$
52,579

$
65,532

GOODWILL

Beginning Balance

$
26,037

$
22,742
Goodwill acquired during the period

—

3,359
Change due to foreign currency translation

(945)

(64)
Impairment

—

—
Ending Balance

$
25,092

$
26,037

~~As of December 31, 2022, the company had $25.1 million of~~The Company’s goodwill ~~of which none was allocated to a reporting unit with a negative carrying amount. The company’s goodwill has~~had an indefinite useful life and iswas tested for impairment annually. For the years ended December 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded amortization expense of $8.3 million and $8.6 million, ~~and $7.0 million,~~ respectively. Changes to gross carrying amount of recognized intangible assets ~~and goodwill~~ due to translation adjustments were approximately ($~~3.1)~~0.1) million and ~~$3.2~~($3.1) million as of December 31, 2023 and 2022, ~~and 2021,~~ respectively.

F-19

Table of Contents

Expected future amortization expense for intangible assets as of December 31, ~~2022~~2023 is as follows (in thousands):

2023
$
8,857
2024

7,916
2025

7,804
2026

7,290
2027

6,886
Thereafter

13,826

Total
$
52,579

~~F-23~~


2024	$	7,570
2025	7,398
2026	7,045
2027	6,630
2028	6,571
Thereafter	10,750

Total	$	45,964

NOTE 7 – LEASES

~~Table~~The Company has entered into various operating leases for certain offices, support locations and vehicles with terms extending through December 2038. Generally, these leases have initial lease terms of ~~Contents~~

five years or less.

Operating lease expense was $2.6 million and $2.1 million for the years ended December 31, 2023 and 2022, respectively. Variable lease costs and short-term lease cost were $1.7 million for the year ended December 31, 2023. For the year ended December 31, 2022, variable lease cost and short-term lease cost were immaterial. Cash paid for amounts included in the measurement of lease liabilities was $2.2 million and $2.4 million for the years ended December 31, 2023 and 2022, respectively.

Future minimum lease payments of the Company’s operating leases with a term over one year subsequent to December 31, 2023 are as follows:


Year ending December 31,	(in thousands)
2024	$	1,949
2025	2,070
2026	1,640
2027	1,089
2028	831
Thereafter	6,700
Total Lease Liabilities	14,279
Less: Imputed Interest	(5,170)
Present Value of Lease Liabilities	$	9,109

During the year ended December 31, 2023, the weighted-average remaining lease term was 9.9 years, and the weighted-average discount rate was 10.8%. During the year ended December 31, 2022, the weighted-average remaining lease term was 3.2 years, and the weighted-average discount rate was 15.5%.

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable consisted of the following at December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):


	2023		2022
Accounts payable	$	27,448	$	30,719
Accrued expense	5,106		5,306
Other	345		541
Accounts payable and other liabilities	$	32,899	$	36,566

F-20

Table of Contents

2022

2021
Accounts payable

$
30,719

$
25,714
Accrued expense

5,306

6,440
Other

541

1,484
Accounts payable and other liabilities

$
36,566

$
33,638

NOTE 9 – DEBT

The following comprises debt onat December 31, ~~2022~~2023 and ~~2021~~2022 (in thousands):

2022

2021
Debt – Third Parties




Paycheck Protection Program

$
127

$
1,009
Note payable - Whitehawk

49,906

58,500
Total debt

50,033

59,509
Less: Discount and issuance costs

5,410

7,568
Current portion of debt

845

9,804
Long-term debt

$
43,778

$
42,137
Total debt (net of discount and issuance costs)

$
44,623

$
51,941


	2023		2022
Debt – Third Parties
Paycheck Protection Program	$	72	$	127
Note payable - Whitehawk	43,206		49,906
Total debt	43,278		50,033
Less: Premium, discount and issuance costs	3,107		5,410
Current portion of debt	1,037		845
Long-term debt	$	39,134	$	43,778
Total debt (net of premium, discount and issuance costs)	$	40,171	$	44,623

Debt - Third Parties:

WhiteHawk Finance LLC

In order to finance the acquisition of FrontRow Calypso LLC (“FrontRow”), which closed on December 31, 2021, 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~~Whitehawk Finance LLC, as lender (the “Lender”), and ~~WhiteHawk~~White Hawk Capital Partners, LP, as collateral ~~agent.~~agent (“Whitehawk” or the “Collateral Agent”). The Company received an initial term loan of $58.5 million on December 31, 2021 (the “Initial Loan”) and was provided with a subsequent delayed draw facility of up to ~~$10~~$10.0 million that may be ~~provided~~available for additional working capital purposes under certain conditions (the “Delayed Draw”). The Initial Loan and Delayed Draw are collectively referred to as the “Term Loans.” The Term Loans are secured by substantially all of the assets of the Company. The proceeds of the Initial Loan were used to finance the Company’s acquisition of FrontRow, pay off all indebtedness owed to the Company’s then existing lenders, Sallyport Commercial Finance, LLC and Lind Global Asset Management, LLC, pay related fees and transaction costs, and provide working capital. Of the Initial Loan, $8.5 million was subject to repayment on February 28, 2022, with quarterly principal payments of $625,000 and interest payments commencing March 31, 2022 and the $40.0 million remaining balance plus any Delayed Draw loans becoming due and payable in full on December 31, 2025. The Term Loans bear interest at the LIBOR rate plus 10.75%; provided that after March 31, 2022, if the Company’s Senior Leverage Ratio (as defined in the Credit Agreement) is less than 2.25, the interest rate would be reduced to LIBOR plus 10.25%. Such terms are subject to the Company maintaining a borrowing base in ~~terms compliant~~compliance with the Credit Agreement.

In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 528,169 shares of Class A common stock (the “Shares”), which Shares were registered pursuant to the Company’s existing shelf registration statement and were delivered to the Lender in January 2022, (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to increase to the extent of 3% of any Series B and Series C convertible preferred stock being converted into Class A common stock), exercisable at $2.00 per share (the “Warrant”), which Warrant was subject to repricing on March 31, 2022 based on the arithmetic volume weighted average prices for the 30 trading days prior to September 30, 2022, in the event ~~the Company’s stock is then trading below $2.00 per share, (iii) a 3% fee~~ of $1,800,000, and (iv) a $500,000 original issue discount. In addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred agency fees, legal fees, and other costs in connection with the execution of the Credit Agreement totaling approximately $1.7 million. Under the terms of the warrant issued to WhiteHawk on December 31, 2021, the exercise price of the warrants would reprice if the stock price on March 31, 2022 was less than the original exercise price, at which

~~F-24~~

~~Table of Contents~~

time the number of warrants would also be increased proportionately, so that after such adjustment the aggregate exercise price payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect. The warrants repriced on March 31, 2022 to $1.19 per share and the shares increased to 3,434,103.

On March 29, 2022, the Company received a notice from the collateral agent, alleging, among other things, defaults as a result of (i) failure to repay $8.5 million of the facility by February 28, 2022, (ii) non-compliance with the borrowing base, ~~resulting~~the Company would be subject to an increased interest rate as stated in the ~~Company being in an over advance position under the~~ Credit Agreement, and (iii) failure to timely provide certain reports and documents. As a result, all accrued and unpaid interest owed under the Term Loan, became subject to a post-default interest rate equal to the highest interest rate allowed for under the Credit Agreement plus 2.50% until such time as the events of default were either waived or cured. In February 2022, WhiteHawk and the Company agreed in principle to an extension of the February 2022 Payment. Pursuant to amendment to the Credit Agreement, datedAgreement.

On April 4, 2022, the Collateral Agent and Lender agreed to extend the terms of repayment of the $8.5 million originally due on February 28, 2022 until February 28, 2023 and waive and/or otherwise extend compliance with certain other terms of the Credit Agreement in order to allow the Loan Parties adequate time to comply with such terms. In July 2022, the Company and Whitehawk agreed that the notice had inadvertently included the default with respect to the failure to repay $8.5 million of the facility. As a result, notwithstanding the notice, both WhiteHawk and the Company have agreed that the Company was not in default in making the February 2022 Payment to WhiteHawk.

2023. 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~~$3.5 million in over advances until May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forth in the Credit Agreement. In such connection, the ~~Loan Parties have~~Company and substantially all of its direct and indirect subsidiaries (together with the Company, the "Loan Parties") obtained credit insurance on certain key customers whose principal offices are located in the European Union and Australia as, without the credit insurance, ~~their~~the accounts ~~owed to the Loan Parties~~of these key customers had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the Collateral Agent to enforce security interests on such accounts. In addition, the Lender and Collateral Agent agreed to (i) reduce, through September 30, 2022, the minimum cash reserve requirement for the Loan Parties, (ii) reduce the interest rate by 50 basis points (to ~~LIBOR plus~~Libor plus+ 9.75%) after delivery of the Loan Parties’ September 30, 2023 financial statements, subject to the Loan Parties maintaining 1.75 EBITDA coverage ratio, and (iii) waive all prior Events of Default under the Credit Agreement. In conjunction with the amendment to the Credit Agreement, the parties entered into an amended and restated fee letter (the “Fee Letter”) pursuant to which the parties agreed to prepayment premiums of (i) 5% for payments made on or before December 31, 2022, (ii) 4% for payments made between January 1, 2023 and December 31, 2023, and (iii) 2% for payments made between January 1, 2024 and December 31, 2025. Furthermore, the parties agreed that no prepayment premiums would be payable with respect to the first $5.0 million paid under the Term Loan, any payments made in relation to the $8.5 million due on or before February 28, 2023, any required amortization payments under the Credit Agreement and any mandatory prepayments by way of ~~ECF~~excess cash flow 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”),~~Loan Parties entered into a second amendment (the “Second Amendment”) to the ~~four-year term loan credit facility, originally entered into December 31, 2021 and as amended on April 4, 2022 (the “Credit Agreement”),~~Credit Agreement with the Collateral Agent and Lender. The Second Amendment to the Credit Agreement was entered into for

F-21

Table of Contents

purposes of the Lender funding a $2.5 million delayed draw term loan and adjusting certain terms to the Credit Agreement, including adjusting the Applicable Margin (as defined in the Second Amendment) to 13.25% for LIBOR Rate Loans and 12.25% for Reference Rate Loans, increasing the definition of change of control from 33% voting power to 40% voting power, requiring the Company to engage a financial advisor, and allowing additional time, until July 15, 2022, for the Company to come into compliance with certain borrowing base requirements set forth in the Second Amendment to the Credit Agreement, among other adjustments.

On April 24, 2023, the Company entered into a third amendment (the “Third Amendment”) to the Credit Agreement, with the Collateral Agent and the Lender. The Third Amendment was entered into for purposes of the Lender funding an additional $3.0 million delayed draw term loan (the “Additional Draw”). The Additional Draw was funded on April 24, 2023, and must be repaid on or prior to September 29, 2023, is not subject to any prepayment penalties, and adjusts certain terms to the Credit Agreement, including adjusting the test period end dates and corresponding Senior Leverage Ratios (as defined in the Credit Amendment) and revising the minimum liquidity requirements that the Company must maintain compliance with pertaining to certain Borrowing Base Requirements, among other adjustments. The completion of the additional draw eliminates further delayed draws under the term loan agreement. On July 20, 2023, the Company paid the $3.0 million due under the terms of the Third Amendment. There were no prepayment penalties or premiums included with this payment.

On June 26, 2023, the Company entered into a fourth amendment (the “Fourth Amendment”) with the Collateral Agent and the Lender for the sole purpose of replacing LIBOR-based rates with a SOFR-based rate. Following the Fourth Amendment, the Company’s interest rate is calculated as the Daily Simple SOFR, subject to a floor of 1%, plus the SOFR Term Adjustment and Applicable Margin, as defined in the Credit Agreement, as amended. As of December 31, ~~2022~~2023, the rate was 16.4%. The Fourth Amendment made no other changes to the Credit Agreement.

Covenant Compliance and ~~2021,~~Liquidity Considerations

The Company's Credit Agreement, as amended to date, requires compliance with certain monthly covenants, which include provisions regarding over advance limitations based upon a borrowing base. In the second quarter of 2023, as part of obtaining an appropriate waiver, the Company agreed to engage a financial advisor and to use commercial reasonable efforts to refinance the Credit Agreement with an alternative lender and repay the Credit Facility by September 30, 2023, or as soon thereafter as practical. The waiver did not amend the maturity date of the Credit Agreement. Upon repayment, the Company will be subject to a prepayment premium that is higher than the prepayment premium included in the original Credit Agreement, as defined in the waiver.

The Company has either implemented or initiated appropriate plans regarding refinancing procedures that are within management’s control to comply with the waiver requirements. The financial statements do not include any adjustments that might result from the outcome of the Company’s ability to refinance and repay the credit facility.

The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at September 30, 2023. The Company cured the non-compliance by paying $4.3 million inclusive of $0.3 million in prepayment penalties and accrued interest in November 2023 which would have resulted in the Company being in compliance with the Senior Leverage Ratio at September 30, 2023.

In February 2024, the Company paid $1.7 million, inclusive of a $0.1 million pre-payment penalty to Whitehawk to maintain compliance with the borrowing base covenant calculation as of January 31, 2024. After the payment the Company was in compliance with ~~all covenants and~~the borrowing base ~~requirements.~~

~~During~~covenant.

The Company was not in compliance with its financial covenant related to the ~~year ended~~Senior Leverage Ratio under the Credit Agreement at December 31, ~~2022,~~2023. The non-compliance was cured by a waiver applied in accordance with the Fifth Amendment to the Credit Agreement dated March 14, 2024 which waived any Event of Default that may have arisen directly as a result of the financial covenant default at December 31, 2023 and in the interim two-month period ended February 29, 2024. The Fifth Amendment also amended and restated the Senior Leverage Ratio and Minimum Liquidity requirements. Under the Fifth Amendment, the Senior Leverage Ratio requirement at March 31, 2024 was amended from 2.00 to 6.00, at June 30, 2024 will remain at 2.00 and thereafter will remain at 1.75.

F-22

Table of Contents

Issuance Cost and Warrants

In conjunction with its receipt of the Initial Loan, the Company ~~paid~~issued to the $8.5 million due on February 28, 2023. During the year ended December 31, 2022, the Company repaid total principal of $10.4 million (inclusive of the $8.5 million) and interest of $8.3 million to WhiteHawk.

~~F-25~~

~~Table of Contents~~

~~Lind Global Marco Fund and Lind Global Asset Management~~

~~During the year ended December 31, 2021, the Company repaid principal of $12.0 million and interest of $584 thousand, to Lind Global by issuing a total of 7.2 million~~Lender (i) 66,022 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 255,411 shares of Class A common stock (subject to increase to the extent that 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 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 $16.00 per share, (iii) a 3% fee of $1,800,000, and (iv) a $500,000 original issue discount. In addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred agency fees, legal fees, and other costs in connection with ~~an aggregate value~~the execution of ~~$15.9 million~~the Credit Agreement totaling approximately $1.7 million. Under the terms of the warrant issued to ~~Lind Global and recognized a loss on extinguishment of debt of approximately $3.3 million. Any outstanding debt owed to Lind Global was repaid in full~~Whitehawk on December 31, 2021, ~~following~~ the ~~Company’s receipt~~exercise price of the ~~Initial Loan from WhiteHawk.~~

warrants would reprice if the stock price on March 31, 2022 was less than the original exercise price, at which time the number of warrants would also be increased proportionately, so that after such adjustment the aggregate exercise price payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect. The warrants repriced on March 31, 2022 to $9.52 per share and the shares increased to 429,263.

On July 22, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited institutional investor. According to the terms of the Credit Agreement, as amended, the Purchase Agreement triggered a reduction of the exercise price of the warrants and a revaluation of the derivative liability. The Whitehawk warrants were repriced to $8.80, and shares increased to 464,385.

Paycheck Protection Program Loan

On May 22, 2020, the Company received loan proceeds of $1.1 million under the Paycheck Protection Program. During 2021, the Company applied for forgiveness in the amount of $836 thousand. On March 2, 2022, the Company received a decision letter from the lender that the forgiveness application had been approved, leaving a remaining balance of $173 thousand to be paid. The Company received a payment schedule from ~~our~~the lender on May 5, 2022, extending the payoff date until May ~~2025. The amount remaining on the loan at December 31, 2022 was $127 thousand.~~

~~Everest Display, Inc.~~

~~On January 26, 2021, the Company entered into an agreement with EDI~~2025 and EDI’s subsidiary, AMAGIC, settling $1,983,436 in accounts payable owed by the Company to EDI for 793,375 shares of Class A common stock. During the year ended December 31, 2021, the Company recognized a $357 thousand gain on the settlement of the accounts payable.

~~Accounts Receivable Financing – Sallyport Commercial Finance~~

On September 30, 2020, Boxlight Inc. and EOS EDU LLC entered into an asset-based lending agreement with Sallyport Commercial Finance, LLC (“Sallyport”). Sallyport agreed to purchase 90% of the eligible accounts receivable of the Company during the Term with a right of recourse back to the Company if the receivables are not collectible. Advances against this agreement accrue interest at the rate of 3.50% in excess of the highest prime rate publicly announced from time to time with a floor of 3.25%. In addition, the Company is required to pay a daily audit fee of $950 per day. On July 20, 2021, Boxlight and Sallyport amended the Accounts Receivable Agreement (the “ARC Amendment”) for purposes of increasing the Maximum Facility Limit Amount to $13,000,000, as well as increasing the minimum monthly sales from $1,250,000 to $3,000,000. In exchange for entry into the ARC Amendment, Boxlight agreed to a fee of $50,000, representing one percent of the increased Maximum Facility Limit Amount. Other terms of the Accounts Receivable Agreement remain unchanged. On August 6, 2021, Boxlight and Sallyport entered into an additional amendment of the Accounts Receivable Agreement (the “Second ARC Amendment”), which further increased the Maximum Facility Limit Amount to $15,000,000. In exchange for entry into the Second ARC Amendment, Boxlight agreed to a fee of $20,000, representing one percent of the increased Maximum Facility Limit Amount. Other terms of the Accounts Receivable Agreement remain unchanged. Any outstanding debt owed to Sallyport was repaid in full on December 31, 2021 following the Company’s receipt of the Initial Loan from WhiteHawk.

~~Debt - Related Parties:~~

~~Note Payable - STEM Education Holdings, Pty~~

On April 17, 2020, the Company acquired MyStemKits and STEM Education Holdings, Pty, an Australian corporation (“STEM”), the largest online collection of K-12 STEM curriculum for 3D Purchase consideration for the acquisition of STEM included a note payable in the of $350,000. The note was payable in four equal installments of $87,500 on July 31, 2020, October 31, 2020, January 31, 2021 and April 30, 2021. Parties acknowledged that potential adjustments may be made to the installment payments due on July 31, 2020 and October 31, 2020 in the event the actual gross revenue of MyStemKits is materially below budget. Accordingly, and as agreed between Boxlight and the STEM sellers the note payable was adjusted to $175,000 and was paid off in September 2021.

bears 1% interest.

~~F-26~~

~~Table of Contents~~

Debt Maturity

Principal repayments to be made during the next five years on the Company’s outstanding debt facilities at December 31, ~~2022~~2023 are as follows (in thousands):


2024	$	2,831
2025	40,447
2026	—
2027	—
2028	—
Total	$	43,278

F-23

Table of Contents

2023

$
2,680
2024

2,681
2025

44,672
2026

—
2027

—
Total

$
50,033

NOTE 10 – DERIVATIVE LIABILITIES

At December 31, 2022 and December 31, 2021, the Company had warrants that contain net cash settlement provisions or do not have fixed settlement provisions because their conversion and exercise prices may be lowered under certain conditions.

The Company ~~concluded that the warrants should be accounted for as derivative liabilities. The Company used~~engaged a ~~third party~~third-party specialist to determine the fair value of the derivative liabilities ~~at December 31, 2022 and 2021, and they used~~using a Monte Carlo Simulation ~~model~~model. There were no changes to ~~determine~~ the ~~fair value. Key~~valuation techniques and the key assumptions used are as follows:

December 31, 2022

Common stock issuable upon exercise of warrants

3,715,075

Market value of common stock on measurement date

$
0.31

Exercise price

$
1.10

Risk free interest rate (1)

4.02
%
Expected life in years

4 years

Expected volatility (2)

83.6
%
Expected dividend yields (3)

—
%

December 31, 2021

Common stock issuable upon exercise of warrants

2,043,291

Market value of common stock on measurement date

$
1.38

Exercise price

$
2.00

Risk free interest rate (1)

1.25
%
Expected life in years

5 years

Expected volatility (2)

79.3
%
Expected dividend yields (3)

—
%


	December 31, 2023
~~(1)~~Common stock issuable upon exercise of warrants	~~The risk-free~~464,385
Market value of common stock on measurement date	$	1.07
Exercise price	$	8.80
Risk free interest rate ~~was determined using the applicable Treasury Bill as of the measurement date.~~(1)	3.93		%
Expected life in years	3
Expected volatility (2)	114.0		%
Expected dividend yields (3)	—		%


	December 31, 2022
~~(2)~~Common stock issuable upon exercise of warrants	~~The historical trading~~464,385
Market value of common stock on measurement date	$	2.48
Exercise price	$	8.80
Risk free interest rate (1)	4.02		%
Expected life in years	4 years
Expected volatility ~~for 2022 and 2021 was based on historical fluctuations in stock price for Boxlight and certain peer companies.~~(2)	83.6		%
Expected dividend yields (3)	—		%

~~(3)~~

~~The Company does not expect to pay a dividend in the foreseeable future.~~

(1)The risk-free interest rate was determined using the applicable Treasury Bill as of the measurement date.

(2)The historical trading volatility for 2023 and 2022 was based on historical fluctuations in stock price for Boxlight and certain peer companies.

(3)The Company does not expect to pay a dividend in the foreseeable future.

The following table shows the change in the Company’s derivative liabilities for the years ended December 31, ~~2022~~2023 and ~~2021:~~

Amount

(in thousands)
Balance, December 31, 2021

$
3,064

Exercise of warrants

(1)

Issuance of warrants

—

Change in fair value of derivative liabilities

(2,591)

Balance, December 31, 2022

$
472

2022:

~~F-27~~


	Amount (in thousands)
Balance, December 31, 2022	$	472
Exercise of warrants	—
Issuance of warrants	—
Change in fair value of derivative liabilities	(267)
Balance, December 31, 2023	$	205


	Amount (in thousands)
Balance, December 31, 2021	$	3,064
Exercise of warrants	(1)
Issuance of warrants	—
Change in fair value of derivative liabilities	(2,591)
Balance, December 31, 2022	$	472

~~Table of Contents~~

Amount

(in thousands)
Balance, December 31, 2020

$
363
Exercise of warrants

(348)
Issuance of warrants

3,064
Change in fair value of derivative liabilities

(15)
Balance, December 31, 2021

$
3,064

The change in fair value of derivative liabilities includes losses from exercise price modifications.

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Table of Contents

NOTE 11 – INCOME TAX

Pretax income (loss) resulting from domestic and foreign operations is as follows (in thousands):

2022

2021
United States

$
(2,569)

$
(18,130)
Foreign

(2,707)

6,032
Other Foreign Jurisdictions

1,582

1,606
Total pretax book loss

$
(3,694)

$
(10,492)


	2023		2022
United States	$	(30,393)	$	(2,569)
Foreign	(11,779)		(2,707)
Other Foreign Jurisdictions	4,882		1,582
Total pretax book loss	$	(37,290)	$	(3,694)

The components of income tax expense at December 31, ~~2022~~2023 and December 31, ~~2021,~~2022, are as follows (in thousands):

2022

2021
Current:




Federal

$
1,491

$
—
State

138

62
Foreign

1,399

2,722
Total Current

$
3,028

$
2,784

Deferred:




Federal

$
(85)

$
—
State

—

—
Foreign

(2,894)

526
Total Deferred

$
(2,979)

$
526

Total

$
49

$
3,310

~~F-28~~


	2023		2022
Current:
Federal	$	855	$	1,491
State	93		138
Foreign	1,589		1,399
Total Current	$	2,537	$	3,028

Deferred:
Federal	$	81	$	(85)
State	—		—
Foreign	(752)		(2,894)
Total Deferred	$	(671)	$	(2,979)

Total	$	1,866	$	49

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Table of Contents

The reconciliation of the provision for income taxes at the United States Federal statutory rate compared to the Company’s income tax expense (benefit) as reported is as follows (in thousands)


	2023		2022
Loss before income taxes	$	(37,290)	$	(3,694)

Income tax benefit computed at the statutory rate	(7,831)		(776)
State income taxes-net of federal tax benefit	74		73
Foreign tax rate differential	(273)		(19)

Section 162(m) compensation	61		61
Foreign currency adjustment	(90)		—
GILTI inclusion	693		160
Meals	75		39
Stock compensation	141		83
Amortization	4,845		11
Tax credits and government assistance	(623)		(179)
Non-deductible expenses	28		186
Other permanent differences	(270)		—
Adjustments to prior periods – temporary differences	1,000		197
Rate changes and differentials	(53)		(651)
Change in valuation allowance	4,089		864

Income tax expense	$	1,866	$	49

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Table of Contents

2022

2021
Loss before income taxes

$
(3,694)

$
(10,492)

Income tax benefit computed at the statutory rate

(776)

(2,203)
State income taxes-net of federal tax benefit

73

49
Foreign tax rate differential

(19)

(107)
Loss on debt settlement

—

788
Section 162(m) compensation

61

168
FX Adjustment

—

(265)
GILTI Inclusion

160

102
Meals

39

12
Stock compensation

83

(75)
Amortization

11

(4)
PPP loan

(179)

—
Non-deductible expenses

186

(10)
Prior period true ups – temporary differences

197

(35)
Rate changes and differentials

(651)

2,193
Change in valuation allowance

864

2,697

Income tax expense

$
49

$
3,310

Tax effects of temporary differences at December 31, ~~2022~~2023 and December 31, ~~2021~~2022 are as follows (in thousands):

Deferred tax assets:

2022

2021
Fixed assets

$
—

$
13
Allowance for bad debts

507

442
Inventory

294

192
R&D amortization

413

—
Accrued expenses

—

—
Deferred revenue

5,600

4,232
Stock compensation

1,209

645
Net lease asset

1

—
Other

203

—
Interest expense limitation

3,751

1,903
Net operating loss carry-forwards

7,282

8,165

Deferred tax assets (liabilities)

$
19,260

$
15,592
Valuation allowance

(14,084)

(11,294)
Deferred tax assets, net

$
5,176

$
4,298

Deferred tax liabilities:

2022

2021
Fixed assets

$
(24)

$
—
Intangible assets

(8,603)

(11,452)
Accrued expenses

(752)

(413)
Prepaid expenses

(169)

(137)
Other

(308)

(745)
Deferred tax liabilities

$
(9,856)

$
(12,747)

Deferred tax liabilities, net

$
(4,680)

$
(8,449)

~~F-29~~


Deferred tax assets:	2023		2022
Fixed assets	$	15	$	—
Allowance for bad debts	926		507
Inventory	432		294
R&D amortization	1,172		413

Deferred revenue	6,143		5,600
Stock compensation	291		1,209
Right of use liability	501		1
Other	—		203
Interest expense limitation	6,051		3,751
Net operating loss carry-forwards	6,635		7,282

Deferred tax assets	$	22,166	$	19,260
Valuation allowance	(18,173)		(14,084)
Deferred tax assets, net	$	3,993	$	5,176

Deferred tax liabilities:	2023		2022
Fixed assets	$	—	$	(24)
Intangible assets	(6,671)		(8,603)
Accrued expenses	(982)		(752)
Prepaid expenses	(48)		(169)
Right of use asset	(492)		—
Other	(116)		(308)
Deferred tax liabilities	$	(8,309)	$	(9,856)

Deferred tax liabilities, net	$	(4,316)	$	(4,680)

~~Table of Contents~~

The Company operates in the United States, United Kingdom and other jurisdictions. Income taxes have been provided based upon the tax laws and rates of the countries in which operations are conducted and income is earned. The cumulative U.S. Federal net operating losses carryforward on tax basis income was approximately ~~$23.5~~$20.4 million and ~~$29.9~~$23.5 million at December 31, ~~2022~~2023 and ~~2021,~~2022, respectively, of which ~~$4.6~~$10.6 million will expire between December 31, 2029 and December 31, 2037 and ~~$18.9~~$9.8 million will carryforward indefinitely. The cumulative U.S. state net operating losses carryforward was approximately $41.7 million and $45.8 million ~~and $28.8 million on~~at December 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The cumulative foreign net operating losses carryforward was $2.1 million and $1.8 million ~~and $2.6 million on~~at December 31, 2023 and 2022, ~~and 2021,~~ respectively.

The legacy Boxlight entities are in a net deferred tax asset position in the United States, the United Kingdom, and other jurisdictions are primarily driven by the aforementioned net operating losses. The recoverability of these deferred tax assets depends on the Company’s ability to generate taxable income in the jurisdiction to which the carryforward applies. It also depends on specific tax provisions in each jurisdiction that could impact utilization. For example, in the United States, a change in ownership, under section 382 as defined by federal income tax regulations, could significantly limit the Company's ability to utilize our U.S. net operating loss carryforwards. Additionally, because U.S. tax laws limit the time during which the net operating losses generated prior to 2018 may be applied against future taxes, if the Company fails to generate U.S.taxable income prior to the expiration dates the Company may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes. The Company has evaluated both positive and negative evidence as to the ability of its legacy entities in each jurisdiction to generate future taxable income. Based on its long history of cumulative losses in those jurisdictions, it believes it is appropriate to maintain a full valuation allowance on the net deferred tax asset of its legacy Boxlight entities at December 31, ~~2022~~2023 and ~~2021.~~2022. The change in its valuation allowance during ~~2022~~2023 is approximately ~~$0.6~~$4.1 million.

The Company has determined that it likely underwent IRC Sec 382 ownership changes in prior years. The Company is in the process of evaluating the Section 382 impact to determine what portion of its NOLs will be utilizable in the future. It is expected that the ownership change caused a limitation on the net operating losses generated before 2020.

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Table of Contents

Additionally, because U.S. tax laws limit the time during which the net operating losses generated prior to 2018 may be applied against future taxes, if the Company fails to generate U.S. taxable income prior to the expiration dates the Company may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes.

The Sahara entities have recorded a net deferred tax liability, which is primarily driven by the net deferred tax liability on the intangibles for which it does not have tax basis. ~~This includes the deferred tax liability recorded during 2021 for the acquisition of Interactive Concepts.~~ The Company does not qualify for any consolidated filing positions in any of these countries, so there is no ability to net the deferred tax liabilities of the Sahara companies against the deferred tax assets of the legacy Boxlight companies. Therefore, the net deferred tax liability of ~~$4.7~~$4.3 million at December 31, ~~2022~~2023 is primarily based on the Sahara acquired entities.

The tax years from 2009 to ~~2022~~2023 remain open to examination in the U.S. federal ~~jurisdictions~~jurisdictions. The tax years from 2022 to ~~which~~2023 remain open to examination in the ~~Company is subject.~~U.K. Statues of limitations vary in other immaterial jurisdictions. The ~~Company~~company has not identified any material uncertain tax positions at this time.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was enacted. The CARES Act includes provisions, among others, addressing the carryback of net operating losses for specific periods, refunds of alternative minimum tax credits, temporary modifications to the limitations placed on the tax deductibility of net interest expenses, and technical amendments for qualified improvement property. Additionally, the CARES Act provides for various payroll incentives, including Payroll Protection Program (“PPP”) loans, refundable employee retention tax credits, and the deferral of the employer-paid portion of social security payroll taxes. The Company received a $1.1 million loan under the PPP, of which over $0.8 million was forgiven in March 2022 under the requirements of the program. The remaining amount owed will be paid back in May 2022. No other provisions of the CARES Act had a material impact on the Company’s tax provision.

On December 27, 2020, the Consolidated Appropriations Act of 2021 - including the COVID-related Tax Relief Act of 2020 - was enacted. It included a provision that any expenses paid using forgiven PPP loan proceeds would be fully deductible. This has been reflected in the Company’s tax provision.

Effective January 1, 2022, for U.S. tax purposes research and development costs, including software development costs, are required to be capitalized and will be deductible over five years for costs incurred domestically and over fifteen years for costs incurred in a foreign country. Additionally, the first year of amortization requires that amortization begin with the midpoint of the taxable year. As of December 31, ~~2022,~~2023, the Company has recorded a deferred tax asset of ~~$0.4~~$1.2 million related to capitalized research and development costs.

~~F-30~~

~~Table of Contents~~

NOTE 12 – EQUITY

Preferred Shares

The Company’s articles of incorporation, as amended ~~on December 15, 2016,~~ provide that the Company is authorized to issue 50,000,000 shares of preferred stock consisting of: 1) 250,000 shares of non-voting Series A preferred stock, with a par value of $0.0001 per share; 2) ~~1,200,000~~1,586,620 shares of voting Series B preferred stock, with a par value of $0.0001 per share; 3) ~~270,000~~1,320,850 shares of voting Series C preferred stock, with a par value of $0.0001 per share; and 4) ~~48,280,000~~Remaining shares of “blank check” preferred stock as may be designated from time to by the Company’s board of directors.

Each authorized series of preferred stock is described below.

Issuance of preferred shares

Series A Preferred Stock

At the time of the Company’s initial public offering, 250,000 shares of the Company’s non-voting convertible Series A preferred stock were issued to Vert Capital for the acquisition of Genesis. ~~All~~As of ~~the~~December 31, 2023, a total of 167,972 shares of Series A preferred stock ~~was convertible~~remained outstanding which can be converted into ~~398,406~~33,461 shares of Class A common ~~stock. On August 5, 2019, 82,028~~stock, at the discretion of ~~these preferred shares were converted into 130,721 shares of Class~~the Series A ~~common stock.~~

stockholder.

Series B Preferred Stock and Series C Preferred Stock

On September 25, 2020, in connection with the acquisition of Sahara, the Company issued 1,586,620 shares of Series B Preferred Stock and 1,320,850 shares of Series C Preferred Stock. The Series B Preferred Stock has a stated and liquidation value of $10.00 per share and pays a dividend out of the earnings and profits of the Company at the rate of 8% per annum, payable quarterly. The Series B Preferred Stock is convertible into the Company’s Class A common stock at a conversion price of ~~$1.66~~$13.28 which was the closing price of BOXL’s Class A common stock on the Nasdaq stock market on September 25, 2020 (the “Conversion Price”) either (i) at the option of the holder at any time after January 1, 2024 or (ii) automatically upon the Company’s Class A common stock trading at 200% of the Conversion Price for 20 consecutive trading days (based on a volume weighted average price). The Series C Preferred Stock has a stated and liquidation value of $10.00 per share and is convertible into the Company’s Class A common stock at the Conversion Price either (i) at the option of the holder at any time after January 1, 2026 or (ii) automatically upon the Company’s Class A common stock trading at 200% of the Conversion Price for 20 consecutive trading days (based on a volume weighted average price).

To the extent not previously converted into the Company’s Class A common stock, the outstanding shares of Series B Preferred Stock shall be redeemable at the option of the Holders at any time or from time to time commencing on January 1, 2024, upon thirty (30) days prior written notice to the Holders, for a redemption price, payable in cash, equal to sum of (a) Ten ($10.00) multiplied by the number of shares of Series B Preferred Stock being redeemed (the “Redeemed

F-28

Table of Contents

Shares”), plus (b) all accrued and unpaid dividends, if any, on such Redeemed Shares. The Series C Preferred Stock is also subject to redemption on the same terms commencing January 1, 2026. The aggregate estimated fair value of the Series B and C Preferred Stock of $28.5 million was included as part of the total consideration paid for the purchase of Sahara.

On March 24, 2021, the Company entered into a share redemption and conversion agreement with certain holders of Series B and Series C preferred stock (the “Redemption Agreement”) which allows the Company to redeem and repurchase each such stockholder’s shares of Series B preferred stock on or before June 30, 2021 for the stated or liquidation value of approximately £11.5 million (or approximately $15.9 million) plus accrued dividends from January 1, 2021 to the date of purchase. Such stockholders hold 96% of the Series C preferred stock. Upon redemption, the Series C shares held by such stockholders would convert into approximately 7.6 million shares of Class A Common Stock at the stated conversion price of $1.66 per share.

On June 14, 2021, the Company entered into an amendment to the Redemption Agreement (the “Amended Redemption Agreement”) for purposes of extending the completion date to on or before December 31, 2021. In addition, the Amended Redemption Agreement changed the definition of “Redemption Payments” such that the redemption payment schedule would begin on or before May 31, 2021, for the quarter then ended and continue quarterly until the date of completion.

~~Regarding these amendments, the Company applied the accounting guidance from ASC Subtopic 470-50, “~~~~Debt Modifications and Extinguishments~~~~,” pertaining to determining whether an amendment to an equity-classified preferred share is an extinguishment or~~

~~F-31~~

~~Table of Contents~~

modification, and concluded that the Amended Redemption Agreement on June 14, 2021, as it effected the Series B Preferred Stock, resulted in an extinguishment of the original equity instruments subject to redemption agreement. Accordingly, the Series B Preferred Stock subject to the Amended Redemption Agreement was recorded at its fair value as of June 14, 2021, and a $367,000 deemed contribution was credited to additional-paid-in-capital. With the Redemption Agreement, the Series B Preferred Stock includes a beneficial conversion feature, but in accordance with ASC Subtopic 470-20, since it is dependent upon contingencies that are not solely in the control of the holder, the beneficial conversion feature was not recognized for accounting purposes. Since we early adopted (as of January 1, 2021) ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” which includes a key provision eliminating the beneficial conversion feature guidance in ASC Subtopic 470-20, we have not recorded the beneficial conversion feature.

The Series B Preferred Stock has been recorded at its estimated fair value on the date of issuance of approximately $16.1 million, which includes the conversion and redemption features as they have not been bifurcated from the host instruments.

The Series C Preferred Stock has been recorded at its estimated fair value on the date of issuance of approximately $12.4 million, which includes the redemption features as they have not been bifurcated from the host instrument.

As the redemption features in the Series B Preferred Stock and Series C Preferred Stock are not solely with the control of the Company, the Company has classified the Series B Preferred Stock and Series C Preferred Stock in temporary equity on the Company’s consolidated balance sheet.

Common Stock

The Company’s common stock consists of ~~150,000,000~~18,750,000 shares of Class A voting common stock and 50,000,000 shares of Class B non-voting common stock. Class A and Class B common stock have the same rights except that Class A common stock is entitled to one vote per share while Class B common stock has no voting rights. Upon any public or private sale or disposition by any holder of Class B common stock, such shares of Class B common stock shall automatically convert into shares of Class A common stock. As of December 31, ~~2022,~~2023 and December 31, ~~2021,~~2022, the Company had ~~74,716,696~~9,704,496 and ~~63,821,901~~9,339,587 shares of Class A common stock issued and outstanding,, respectively. No Class B shares were outstanding at December 31, ~~2022~~2023 and December 31, ~~2021.~~

2022.

Issuance of common stock

Securities Purchase Agreement

On July 22, 2022, the Company, entered into a Securities Purchase Agreement with an accredited institutional investor pursuant to which the Company agreed to issue and sell, in a registered direct offering directly to the Investor, ~~7.0 million~~875,000 shares of the Company’s Class A common stock, par value $0.0001 per share (“Common Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase ~~352,940~~44,118 shares of Common Stock at an exercise price of ~~$0.0001~~$0.0008 per share, which Pre-Funded Warrants were issued in lieu of shares of Common Stock to ensure that the Investor did not exceed certain beneficial ownership limitations, and warrants to purchase an aggregate of ~~7,352,940~~919,118 shares of Common Stock at an exercise price of ~~$0.68~~$5.44 per share (the “Warrants”, and collectively with the Pre-Funded Warrants and the Shares, the “Securities”). The Securities were sold at a price of ~~$0.68~~$5.44 per share for total gross proceeds to the Company of $5.0 million, before deducting estimated offering expenses, and excluding the exercise of any Warrants or Pre-Funded Warrants. The Pre-Funded Warrants were exercisable immediately and the Warrants will be exercisable six months after the date of issuance and will expire five and a half years from the date of issuance. As such, the net proceeds to the Company from the offering, after deducting placement agent’s fees and estimated expenses payable by the Company and excluding the exercise of any Warrants or Pre-Funded Warrants was $4.6 million of which the proceeds net of issuance costs were allocated based on the relative fair values of the instruments, warrants and prefunded warrants; $2.4 million was allocated to common stock, $2.2 million was allocated to warrants and $118 thousand was allocated to the pre-funded warrants. On August 9, 2022, the Investor exercised the prefunded warrants.

~~F-32~~

~~Table of Contents~~

The Company evaluated whether the Warrants, Pre-Funded Warrants and/or Shares were in the scope of ASC Topic 480 “Distinguishing Liabilities from Equity,” which discusses the accounting for instruments with characteristics of both liabilities and equity. The guidance in Topic 480, and the resulting liability classification, is applicable to such instruments when certain criteria are met. Based on its analysis, the Company concluded that the Warrants, Pre-Funded Warrants and Shares did not meet any of the criteria to be subject to liability classification under Topic 480 and are therefore classified as equity.

Credit Facility

In conjunction with its receipt of the WhiteHawk loan, the Company issued to WhiteHawk ~~528,169~~66,022 shares of Class A common stock, which were registered pursuant to the Company’s existing shelf registration statement and were delivered to the WhiteHawk in January 2022.

F-29

Table of Contents

~~Debt Conversion~~

~~During~~

Repurchase Plan

On February 14, 2023, the ~~year ended December 31, 2021,~~Board of Directors of Boxlight Corporation approved the Company’s establishment of a share repurchase program (the “Repurchase Program”) authorizing the Company ~~issued 7.9~~to purchase up to $15.0 million ~~shares~~ of the Company’s Class A common stock. Pursuant to the Repurchase Program, the Company may, from time to time, repurchase its Class A common stock in ~~lieu~~the open market, in privately negotiated transactions or by other means, including through the use of ~~$13.7 million~~trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in ~~principal~~accordance with applicable securities laws and ~~interest payments due in relation to notes payable to Lind Global. These conversion transactions resulted in a $3.8 million loss~~other restrictions. The timing and total amount of any repurchases made under the Repurchase Program will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The authorization expires on ~~the settlement of debt obligations.~~

~~Accounts Payable~~January 26, 2027, may be suspended or discontinued at any time, and ~~Other Liabilities Conversion~~

~~During the year ended December 31, 2021,~~does not obligate the Company ~~issued 793,375 shares~~to acquire any amount of Class A common ~~stock with an aggregate value~~stock. As of ~~$1.6 million to Everest Display, Inc. to convert $2.0 million in accounts payable owed, resulting in a gain of $356,700 from settlement of liabilities.~~

~~Conversion of Restricted Stock Units~~

~~During the year ended~~ December 31, ~~2022 and 2021, respectively, 2,489,075 and 916,682 restricted stock units vested and were converted into Class A common stock.~~

~~Exercise of Stock Options~~

There were 296,841 options to purchase common stock that were exercised during the year ended December 31, 2022. There were 492,460 options to purchase common stock exercised during the year ended December 31, 2021.

~~Exercise of Warrants~~

During the year ended December 31, 2022, pre-funded warrants to purchase 352,940 shares of Common Stock at an exercise price of $0.001 per share were exercised. During the year ended December 31, 2021, 295,000 warrants were exercised with an exercise price of $0.42.

~~Other~~

~~On March 23, 2021,~~2023, the Company ~~acquired 100% of~~has not utilized the outstanding shares of Interactive Concepts BV, a company incorporated and registered in Belgium and a distributor of interactive technologies (“Interactive”), for total consideration of approximately $3.3 million in cash, common stock and deferred consideration. The company has been Boxlight’s key distributor in Belgium and Luxembourg. The company issued 142,882 shares of Class A Common Stock, in conjunction with the purchase of Interactive.

~~F-33~~

Repurchase Program.

~~Table of Contents~~

NOTE 13 – STOCK COMPENSATION

~~Grants made~~

The Company has issued grants under ~~the Equity Incentive Plans must be~~two equity incentive plans, both of which have been approved by the Company’s ~~board~~shareholders: (i) the 2014 Equity Incentive Plan, as amended (the “2014 Plan”), pursuant to which a total of ~~directors. The total number of underlying~~798,805 shares of the Company’s Class A common stock ~~available~~have been approved for ~~grant to directors, officers, key employees~~issuance, and ~~consultants of~~(ii) the ~~Company or a subsidiary of the Company under the Company’s~~ 2021 Equity Incentive Plan ~~was 5,000,000 shares.~~

(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. Upon approval of the 2021 Plan in September 2021, any shares remaining available for issuance under the 2014 Plan were cancelled, and all future grants were issued under the 2021 Plan. The 2021 ~~Equity Incentive~~ Plan ~~was approved by~~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 ~~Board on April 12,~~officers, directors, employees and consultants. Prior to the second quarter of 2023, the Company had issued 774,904 shares under the 2021 ~~and~~Plan such that the Company was over the authorized share number. The fair value of shares previously issued in excess of the approved byshares under the ~~shareholders at~~2021 Plan of approximately $13 thousand was reclassed from liability to equity during the ~~Company’s 2021 Annual Shareholders Meeting held on June 25, 2021.~~

year ended December 31, 2023.

Stock Options

Under our Equity Incentive Plans, an employee may receive an award of stock grants that provides the opportunity in the future to purchase the Company’s shares at the market price of our stock on the date the award is granted (strike price). The options become exercisable over a range of immediately vested to four-year vesting periods and expire five years from the grant date, unless stated differently in the option agreements, if they are not exercised. We record compensation expense based on the estimated fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period. Accordingly, total expense related to the award is reduced by the fair value of options that are forfeited by employees that leave the Company prior to ~~vesting.~~

vesting as they occur.

Following is a summary of the option activities during the years ended December 31, ~~2022~~2023 and ~~2021:~~

2022:


	Number of Units	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding, December 31, 2021	506,765	$	15.36	2.29
Granted	152,718	$	8.96
Exercised	(37,105)	$	2.00
Cancelled	(132,893)	$	20.72
Outstanding, December 31, 2022	489,485	$	12.88	2.17
Granted	364,299	$	2.71
Exercised	(12,500)	$	1.04
Cancelled	(493,025)	$	10.05
Outstanding, December 31, 2023	348,259	$	6.65	2.09
Exercisable, December 31, 2023	295,296	$	6.59	1.99

F-30

Table of Contents

Weighted

Average

Weighted

Remaining

Number of

Average

Contractual

Units

Exercise Price

Term (in years)
Outstanding, December 31, 2020

4,850,784

$
1.76

3.51
Granted

—

$
—


Exercised

(492,460)

$
0.84


Cancelled

(304,208)

$
1.01


Outstanding, December 31, 2021

4,054,116

$
1.92

2.29
Granted

1,221,744

$
1.12

Exercised

(296,841)

$
0.25

Cancelled

(1,063,142)

$
2.59

Outstanding, December 31, 2022

3,915,877

$
1.61

2.17
Exercisable, December 31, 2022

2,782,384

$
1.90

1.77

The Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model. The Company used the following inputs to value ~~warrants~~options issued and remeasurements, as applicable during the year ending December 31, ~~2022~~2023 using the Black Scholes option valuation method: market value on measurement date of ~~$0.00~~$1.68 to ~~$0.91;~~$2.24; exercise price of ~~$0.13~~$2.48 to ~~$5.01;~~$3.20; risk free interest rate of ~~1.45%~~4.19% to ~~2.87%~~4.22%; expected term, 3 to 4 years; expected volatility, ranging from ~~49%~~111.45% to ~~148%~~111.74% and expected dividend yield of 0%.

As of December 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the stock options had an intrinsic value of approximately $0 and $18 thousand, respectively.

During the year ended December 31, 2023, the Company granted 364,299 options of which 322,040 were subsequently cancelled and ~~$1.9 million, respectively.~~

42,259 vested during the year. Also, during the year ended December 31, 2023, 59,117 out of the money options were cancelled, with such shares being returned to the 2021 Plan and becoming available for re-issuance in new grants. During the year ended December 31, 2023, approximately 84,179 options expired during the period.

On May 3, 2022, the Boxlight board of directors adopted a resolution, in exchange for a three-year non-compete agreement, to grant Mark Elliott, a member of the board and former CEO of the Company, an extension for ~~one year,~~one-year, of previously granted stock options to purchase a total of ~~577,675~~72,210 shares of Class A common stock, par value $0.001 per share, which had expired on January 12, 2022. The stock price on the remeasurement date was ~~$1.04~~$8.32 and the incremental compensation recognized was approximately $314 thousand.

On June 13, 2022, the Boxlight board of directors granted Greg Wiggins, Chief Financial Officer, stock options for ~~150,000~~18,750 shares of the Company’s Class A common stock will vest in equal quarterly installments over a four-year term commencing on July 5, 2022.

~~F-34~~

~~Table of Contents~~

On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with Michael Pope, ~~the~~our now former Chairman and Chief Executive Officer, extending Mr. Pope’s term of employment with the Company. Under the terms of the agreement, Mr. Pope received a grant ~~494,069~~61,759 options to purchase Class A Common Stock, which are valued at approximately $420 thousand.

~~There were no issuances of stock options in 2021.~~

Restricted Stock Units

Under our Equity Incentive Plans, the Company may grant restricted stock units (“RSUs”) to certain employees, contractors and non-employee directors. Upon granting the RSUs, the Company records a fixed compensation expense equal to the fair market value of the underlying shares of RSUs granted on a straight-line basis over the requisite services period for the RSUs. Compensation expense related to the RSUs is reduced by the fair value of units that are forfeited by employees that leave the Company prior to ~~vesting.~~vesting as they occur. The restricted stock units vest over a range of immediately vested to four-year vesting periods in accordance with the terms of the applicable RSU grant agreement.

The following is a summary of the restricted stock activities during the years ended December 31, ~~2022~~2023 and ~~2021.~~

2022.


	Number of Units	Weighted Average Grant Date Fair Value
Outstanding, December 31, 2021	246,744	$	14.48
Granted	309,710	$	9.52
Vested	(197,941)	$	13.04
Forfeited	(54,634)	$	10.72
Outstanding, December 31, 2022	303,879	$	11.04
Granted	498,398	$	2.05
Vested	(318,995)	$	5.84
Forfeited	(74,831)	$	3.56
Outstanding, December 31, 2023	408,451	$	5.37

F-31

Table of Contents

Weighted

Average

Grant Date Fair

Number of Units

Value
Outstanding, December 31, 2020

2,721,347

$
1.62
Granted

1,019,583

$
2.81
Vested

(1,498,495)

$
2.18
Forfeited

(268,491)

$
1.66
Outstanding, December 31, 2021

1,973,947

$
1.81
Granted

2,477,675

$
1.19
Vested

(1,583,525)

$
1.63
Forfeited

(437,067)

$
1.34
Outstanding, December 31, 2022

2,431,030

$
1.38

2023 Grants

During fiscal year 2023, the Company granted

498,398 RSUs of which 62,300 were subsequently cancelled. On August 25, 2023, the Company granted 211,056 RSUs to its board of directors and 214,994 RSUs to certain members of senior management.

2022 Grants

On January 25, 2022, the Company granted an aggregate of ~~40,000~~5,000 RSUs to new employees. The RSUs vest over four years and the aggregate fair value of the shares was approximately $44 thousand.

On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with Michael Pope, ~~the~~our now former Chairman and Chief Executive Officer, extending Mr. Pope’s term of employment with the Company. Under the terms of the agreement, Mr. Pope received a grant of ~~163,637~~20,455 RSU’s, valued at approximately $180 thousand, and vesting over three years.

On February 24, 2022, following approval by the Company’s board of directors, the Company’s senior management issued a total of ~~1,771,950~~221,494 RSUs under the terms of Amendment No. 2 to the Boxlight Corporation 2014 Stock Incentive Plan, vesting over four years, as long-term incentive awards to its employees in the U.S. and Europe. The aggregate fair value of the shares was $2.1 million.

~~F-35~~

~~Table of Contents~~

On March 21, 2022, the Company granted an aggregate of ~~348,840~~43,605 RSUs to its board members. These RSUs vest ratably over one year and had an aggregated fair value of approximately $450 thousand on the grant date.

On May 26, 2022, the ~~company~~Company granted ~~73,565~~9,196 RSUs to a company owned and controlled by Karel Callens named OLORI. Mr. Callens performs certain sales and marketing functions in our EMEA markets. These RSUs vested and were issued directly to OLORI, and such common stock issuable upon vesting of the RSUs will be reserved for issuance directly out of the authorized shares of Class A common stock and not out of the Company’s equity incentive plan.

~~2021 Grants~~

On February 24, 2021, the Company granted an aggregate of 130,547 RSUs to its board members. These RSUs vest ratably over one year and had an aggregated fair value of approximately $374,000 on the grant date.

In addition, on March 20, 2021, the Company granted an aggregate of 875,245 shares of restricted common stock to Michael Pope, the Company’s CEO and Chairman, pursuant to his employment agreement. These shares were issued pursuant to the 2014 Equity Incentive Plan, vest ratably over one year, are issued monthly as they vest, and had an aggregated fair value of approximately $2.5 million on the grant date.

Warrants

The following is a summary of the warrant activities during the years ended December 31, ~~2022~~2023 and ~~2021:~~

Weighted

Average

Weighted

Remaining

Number of

Average

Contractual

Units

Exercise Price

Term (in years)
Outstanding, December 31, 2020

365,000

$
1.44

1.27
Granted

2,043,291

$
2.00

—
Exercised

(295,000)

$
0.45

—
Outstanding, December 31, 2021

2,113,291

$
2.00

0.94
Granted

7,705,880

$
0.65

Exercised

(352,940)

$
0.01

Outstanding, December 31, 2022

9,466,231

$
0.68

5.25
Exercisable, December 31, 2022

71,250

$
0.70

2.56

~~2022 Warrants~~

On July 22, 2022, the Company, entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited institutional investor (the “Investor”) pursuant to which the Company agreed to issue and sell, in a registered direct offering directly to the Investor, 7.0 million shares (the “Shares”) of the Company’s Class A common stock, par value $0.0001 per share (“Common Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase 352,940 shares of Common Stock at an exercise price of $0.0001 per share, which Pre-Funded Warrants were issued in lieu of shares of Common Stock to ensure that the Investor did not exceed certain beneficial ownership limitations, and warrants to purchase an aggregate of 7,352,940 shares of Common Stock at an exercise price of $0.68 per share (the “Warrants”, and collectively with the Pre-Funded Warrants and the Shares, the “Securities”). The Securities were sold at a price of $0.68 per share for total gross proceeds to the Company of $5.0 million (the “Offering”), before deducting estimated offering expenses, and excluding the exercise of any Warrants or Pre-Funded Warrants. The Pre-Funded Warrants were exercisable immediately and the Warrants will be exercisable six months after the date of issuance and will expire ~~five and a half years~~ from the date of issuance. As such, the net proceeds to the Company from the Offering, after deducting placement agent’s fees and estimated expenses payable by the Company and excluding the exercise of any Warrants or Pre-Funded Warrants was $4.6 million of which the proceeds net of issuance costs were allocated based on the relative fair values of the instruments, warrants and prefunded warrants; $2.4 million was allocated to common stock, $2.2 million was allocated to warrants and $118 thousand was allocated to the pre-funded warrants. The net proceeds received by the Company will be used for working capital purposes.

2022:

~~F-36~~


	Number of Units	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)
Outstanding, December 31, 2021	264,161	$	16.00	0.94
Granted	1,165,959	$	5.75	—
Exercised	(44,118)	$	0.08	—

Outstanding, December 31, 2022	1,386,002	$	6.57	5.25
Granted	—	$	—
Exercised	—	$	—
Outstanding, December 31, 2023	1,386,002	$	6.57	3.72
Exercisable, December 31, 2023	1,385,690	$	6.57	3.72

F-32

Table of Contents

~~2021 Warrants~~

On December 31, 2021, the Company granted WhiteHawk, Inc., 2,043,291 warrants, in conjunction with the issuance of a loan credit facility to the Company. The warrants had an exercise price of $2.00 per share and include a provision that allows for the exercise price to be adjusted based on the Company’s stock price as of March 31, 2022. The expiration period for these warrants is five years from the issuance date. The warrants had an aggregated fair market value of approximately $3.1 million on the grant date.

Stock compensation expense

For the years ended December 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded the following stock compensation expense which is included in general and administrative expense in the Company’s consolidated statement of operations and comprehensive loss (in thousands):

2022

2021
Stock options

$
805

$
660
Restricted stock units

2,505

3,399
Warrants

3

1
Total stock compensation expense

$
3,313

$
4,060


	2023		2022
Stock options	$	1,105	$	805
Restricted stock units	2,023		2,505
Equity-based Warrants	3		3
Total stock compensation expense	$	3,131	$	3,313

During the year ended December 31, 2023, certain members of senior management voluntarily forfeited certain unvested restricted stock units and stock option awards to increase share availability under the Company’s Equity Incentive Plan. The Company recorded stock compensation expense for the fair value of these cancelled awards of $624 thousand during the year ended December 31, 2023. As of December 31, ~~2022,~~2023, there was approximately ~~$4.0~~$2.4 million of unrecognized compensation expense related to unvested options, RSU’s, and warrants, which will be amortized over the remaining vesting period. Of that total, approximately ~~$2.0~~$1.5 million is estimated to be recorded as stock compensation expense in ~~2023.~~

2024.

NOTE 14 – OTHER RELATED PARTY TRANSACTIONS

Management Agreements

On November 1, 2022, the Company entered into a consulting agreement with Mark Elliott, former CEO of Boxlight and a current member of the board of directors. The agreement is for Mr. Elliott to provide sales, marketing, management and related consulting services to assist the Company in sourcing and entering into agreements with one or more customers to provide products and services for specified school districts. The Company will pay Mr. Elliott a fixed payment of $4,000 per month and commissions equal to 15% of gross profit derived by the Company based on total purchase order revenue. The agreement, unless ~~renewed or extended~~cancelled, will ~~expire~~renew every year on December 31st. For the year ended December 31, ~~2023.~~

2023, the Company paid $106 thousand under the agreement.

On January 31, 2018, the Company entered into a management agreement (the “Management Agreement”) with an entity owned and controlled by our now former CEO and Chairman, Michael Pope. The Management Agreement is separate and apart from Mr. Pope’s employment agreement. The Management Agreement is effective as of the first day of the same month that Mr. Pope’s employment with the Company terminates, and for a term of 13 months, Mr. Pope will provide consulting services to the Company including sourcing and analyzing strategic acquisitions, assisting with financing activities, and other services. As consideration for the services provided, the Company will pay a management fee equal to 0.375% of the consolidated net revenues of the Company, payable in monthly installments, not to exceed $250,000 in any calendar year. At his option, Mr. Pope may defer payment until the end of each year and receive payment in the form of shares of Class A common stock of the Company.

On January 4, 2024, Mr. Pope’s employment with the Company terminated. In accordance with the Management Agreement, Mr. Pope is expected to continue providing consulting services to the Company for the subsequent 13 months.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

~~Operating Lease Commitments~~

The Company has entered into various operating leases for certain office, support locations and vehicles with terms extending through December 2027. Generally, these leases have initial lease terms of five years or less. Many of the leases have one or more lease renewal options. The exercise of lease renewal options is at its sole discretion. The Company does not consider exercise of any lease renewal options reasonably certain. Certain of the Company’s lease agreements contain early termination options. No renewal options

~~F-37~~

~~Table of Contents~~

or early termination options have been included in the calculation of the operating right-of-use assets or operating lease liabilities. Certain of the Company’s lease agreements provide for periodic adjustments to rental payments for inflation. As the majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the commencement date in determining the present value of lease payments. The incremental borrowing rate is based on the term of the lease. In connection with the adoption of Topic 842, the Company used incremental borrowing rates on January 1, 2022 for operating leases that commenced prior to that date. Leases with an initial term of 12 months or less are not recorded on the balance sheet. For these short-term leases, lease expense is recognized on a straight-line basis over the lease term. At December 31, 2022, the Company had no leases classified as finance leases. The Company is not a lessor in any lease arrangement.

Operating lease expense was $2.1 million and $2.3 million for the year ended December 31, 2022 and 2021, respectively. Variable lease costs and short-term lease cost were not material for the year ended December 31, 2022. Cash paid for amounts included in the measurement of lease liabilities was $2.4 million for the year ended December 31, 2022. During the year ended December 31, 2022, the Company obtained new operating lease right-of-use assets totaling $1.8 million.

~~Future minimum lease payments of the Company’s operating leases with a term over one year subsequent to December 31, 2022 are as follows:~~

Year ending December 31,

(in thousands)
2023

$
1,995
2024

1,313
2025

1,099
2026

743
2027

246
Thereafter

6
Less imputed interest

(1,046)
Total

$
4,356

~~The weighted-average remaining lease term is 3.2 years and the weighted-average discount rate is 15.5%.~~

On January 19, 2022, the Company signed a lease agreement for 64 months for approximately 12,000 feet of space for its new corporate headquarters in Duluth, Georgia. The Company will occupy the building on approximately May 15, 2022. The lease will replace the space previously rented by the Company for its headquarters in Lawrenceville, Georgia.

On February 4, 2022, the Company signed a lease agreement for 60 months for 24,000 feet of warehouse space in Lawrenceville, Georgia to begin March 1, 2022. The lease will replace the space previously rented by the Company.

~~For the year ended December 31, 2021, if the annual amounts for these leases were added to the table above, the minimum lease payments would increase by approximately $2.7 million.~~

Purchase Commitments

The Company is legally obligated to fulfill certain purchase commitments made to vendors that supply materials used in the Company’s products. At December 31, ~~2022~~2023 the total amount of such open inventory purchase orders was ~~$56.2~~$49.9 million.

Legal Proceedings

From time to time, the Company is involved in routine litigation and legal proceedings in the ordinary course of its business, such as employment matters and contractual disputes. Currently, there is no pending litigation or proceedings

F-33

Table of Contents

that the Company’s management believes will have a material effect, either individually or in the aggregate, on its business or financial condition.

~~F-38~~

~~Table of Contents~~

NOTE 16 – CUSTOMER AND SUPPLIER CONCENTRATION

Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases.

For the year ended December 31, 2023, the Company's revenues were concentrated with one customer. The Company’s revenues were concentrated with ~~a few~~two customers for the ~~years~~year ended December 31, ~~2022 and 2021:~~

Total revenues

Total revenues

from the customers

Accounts

from the customer

Accounts

as a percentage of

receivable from

as a percentage of

receivable from

total revenues

the customers as of

total revenues

the customers as of

for the year ended

December 31,

for the year ended

December 31,

December 31,

2022

December 31,

2021
Customer

2022

(in thousands)

2021

(in thousands)
1

18
%
$
8,468

11
%
$
3,245
2

5
%
$
469

4
%
$
1,223

2022.


Customer	Total revenues from the customer as a percentage of total revenues for the year ended December 31, 2023		Accounts receivable from the customer as of December 31, 2023 (in thousands)		Total revenues from the customers as a percentage of total revenues for the year ended December 31, 2022		Accounts receivable from the customers as of December 31, 2022 (in thousands)
1	10	%	$	1,762	18	%	$	8,468
2	—	%	$	—	5	%	$	469

The loss of ~~the~~a significant ~~customers~~customer or the failure to attract new customers could have a material adverse effect on our business, results of operations and financial condition.

For the year ended December 31, 2023, the Company's purchases were concentrated among one vendor. The Company’s purchases were concentrated among ~~a few~~two vendors for the ~~years~~year ended December 31, ~~2022 and 2021:~~

Total purchases



Total purchases


from the vendors

from the vendors

as a percentage of

Accounts payable

as a percentage

Accounts payable

total cost of

(prepayment) to

of total cost of

(prepayment) to

revenues for

the vendors as of

revenues for

the vendors as of

the year ended

December 31,

the year ended

December 31,

December 31,

2022

December 31,

2021
Vendor

2022

(in thousands)

2021

(in thousands)
1

56
%
$
24,029

16
%
$
(1,185)
2

4
%
$
705

4
%
$
(805)

2022.


Vendor	Total purchases from the vendor as a percentage of total cost of revenues for the year ended December 31, 2023		Accounts payable (prepayment) to the vendor as of December 31, 2023 (in thousands)		Total purchases from the vendors as a percentage of total cost of revenues for the year ended December 31, 2022		Accounts payable (prepayment) to the vendors as of December 31, 2022 (in thousands)
1	48	%	$	20,472	56	%	$	24,029
2	—	%	$	—	4	%	$	705

The Company believes there are numerous other suppliers that could be substituted should ~~for~~ the above ~~suppliers~~supplier become unavailable or non-competitive.

F-34

Table of Contents

NOTE 17 - SEGMENTS

Information about our Company’s operations by operating segment is shown in the following tables (in thousands):


	Year Ended December 31,
	2023		2022
Revenue, net
Americas	$	95,995	$	100,393
EMEA	88,256		127,664
Rest of World	2,943		791
Eliminations and Adjustments (1)	(10,473)		(7,067)
Total Revenue, net	$	176,721	$	221,781
(Loss) Income from Operations
Americas	(18,695)		(591)
EMEA	(9,077)		3,534
Rest of World	977		144
Eliminations and Adjustments (1)	495		(38)
Total (Loss) Income from Operations	$	(26,300)	$	3,049

(1)Eliminations and adjustments represent net sales between the Americas, EMEA and Rest of World segments. Sales between these segments are generally valued at market.


	December 31, 2023		December 31, 2022
Identifiable Assets
Americas	$	69,749	$	88,451
EMEA	85,732		104,978
Rest of World	3,090		1,966
Total Identifiable Assets	$	158,571	$	195,395

NOTE 1718 – SUBSEQUENT EVENTS

On ~~February 14, 2023,~~January 4, 2024, the board of directors appointed Dale Strang, a current member of ~~Boxlight Corporation approved~~the Board, to serve as the Company’s ~~establishment~~interim Chief Executive Officer and principal executive officer. Mr. Strang replaced Michael Pope, whose last day as an employee of a share repurchase program (the “Repurchase Program”) authorizing the Company to purchase up to $15.0 million of the Company’s Class A common stock. Pursuant to the Repurchase Program, the Company may, from time to time, repurchase its Class A common stock in the open market, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of any repurchases made under the Repurchase Program will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The authorization expires on January 26, 2027, may be suspended or discontinued at any time, and does not obligate the company to acquire any amount of Class A common stock.

As previously disclosed, we received a deficiency letter from the Listing Qualifications Department (the "Staff") of the Nasdaq Stock Market LLC ("Nasdaq") notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Company's Class A common stock (the "Common Stock") was trading below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Requirement").

~~In accordance with Nasdaq Rules,~~ the Company was ~~provided with an initial period~~on January 12, 2024. Mr. Pope no longer serves as Chairman of ~~180 calendar days, or until January 2, 2023~~the Board but will remain as a member of the Board.

On March 14, 2024, the Company entered into a fifth amendment (the ~~("Initial Grace Period"~~"Fifth Amendment')~~, to regain compliance~~ with the ~~Bid Price Requirement. Because~~Collateral Agent and Lender for the ~~Initial Grace Period was coming to an end~~purpose of (1) amending and restating the ~~Company had not yet regained compliance,~~Senior Leverage Ratio and Minimum Liquidity (as defined in ~~December 2022,~~ the ~~Company submitted~~Fifth Amendment), and (2) waiving any Event of Default that may have arisen directly as a ~~request to Nasdaq to obtain an~~result of the Financial Covenant Default (as defined in the Fifth Amendment). The Fifth Amendment also added additional ~~180-day grace period (the "Additional Grace Period") to regain compliance with~~financial reporting obligations and potentially may include certain foreign subsidiaries of Boxlight Inc. as additional guarantors under the Bid Price Requirement. On January 3, 2023, the Company received formal approval from Nasdaq granting it an additional 180 days, or until July 3, 2023 (the “Compliance Date”), to regain compliance with the Bid Price Requirement.

Credit Agreement.

~~F-39~~

F-35

Table of Contents

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On June 1, 2022, the Company was notified by Dixon Hughes Goodman LLP ("DHG"), the Company's independent registered public accounting firm, that DHG was merging with BKD, LLP ("BKD"), and that following their merger, their combined entities would operate under the name FORVIS, LLP (“FORVIS”). The audit committee of the Company’s board of directors approved the engagement of FORVIS, the successor in the merger of DHG and BKD, as the Company’s independent registered public accounting firm, effective June 1, 2022.

DHG’s audit report on the consolidated financial statements of the Company for the year ended December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.

During the Company’s two most recent fiscal years ended December 31, 2021 and 2020 and through June 2, 2022, the Company has not had any “disagreements” (as such term is defined in Item 304 of Regulation S-K) with DHG on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of DHG, would have caused DHG to make reference to the subject matter of the disagreement in its reports on the Company’s consolidated financial statements for such periods.

~~During the Company’s two most recent fiscal years and through June 2, 2022, there were no “reportable events” (as such term is defined in Item 304 of Regulation S-K).~~

On June 2, 2022, the Company provided FORVIS, as successor to DHG, with a copy of the Current Report on Form 8-K filed on June 2, 2022 (the “Form 8-K”) and has requested that FORVIS furnish it with a letter addressed to the U.S. Securities and Exchange Commission stating whether or not FORVIS agrees with the Company’s statements in the Form 8-K . A copy of the letter dated June 2, 2022 furnished by FORVIS in response to that request was filed as Exhibit 16.1 to the Form 8-K filed with the SEC on June 2, 2022.

None

ITEM 9A. CONTROLS AND PROCEDURES

As required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures and internal control over financial reporting as of the end of the period covered by this Annual Report.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this Annual Report (“Evaluation Date”), pursuant to Rule 13a-15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective due to material weaknesses described in our report on internal control over financial reporting below.

Notwithstanding the existence of the material weaknesses, we believe that the consolidated financial statements included in this ~~report~~Annual Report fairly present in accordance with U.S. GAAP, in all material respects, our financial condition, results of operations and cash flows for the periods presented in this Annual Report.

Limitations on the Effectiveness of Controls

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide

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absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives.

Management’s Report on Internal Control Over Financial Reporting

Our principal executive officer and our principal accounting and financial officer are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, ~~2021.~~2023. In making this assessment, management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ~~(COSO)~~(the "COSO"). Based upon such assessment and due to the existence of the material weaknesses in our internal control over financial reporting described below, our principal executive officer and our principal accounting and financial officer have concluded that, as of December 31, ~~2022,~~2023, our internal control over financial reporting was not ~~effective.~~

●

Our written policies and procedures over accounting transaction processing and period end financial close and reporting are limited which has resulted in ineffective oversight in the establishment of proper monitoring controls over accounting and financial reporting.

●

We lacked sufficient review of certain financial transactions, such that a proper review had not been performed by someone other than preparer, and that process documentation is lacking for review and monitoring controls over accounting and financial reporting.

effective, including:

•Our written policies and procedures over accounting transaction processing and period end financial close and reporting are limited which has resulted in ineffective oversight in the establishment of proper monitoring controls over accounting and financial reporting; and

•We lacked sufficient review of certain financial transactions, and critical financial spreadsheets, such that a proper review had not been performed by someone other than preparer, and that process documentation is lacking for review and monitoring controls over accounting and financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based

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in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

In light of the material weakness described above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included in this ~~report~~Annual Report fairly present in accordance with U.S. GAAP, in all material respects, our financial condition, results of operations and cash flows for the periods presented in this Annual Report.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the ~~three months~~fiscal year ended December 31, ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, the ~~company’s~~Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

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PART III

ITEM 10.10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item will be included in our definitive proxy statement for the ~~2023~~2024 Annual Meeting of Stockholders.

ITEM 11 EXECUTIVE COMPENSATION

The information required by this item will be included in our definitive proxy statement for the ~~2023~~2024 Annual Meeting of Stockholders and is incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this item will be included in our definitive proxy statement for the ~~2023~~2024 Annual Meeting of Stockholders.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this item will be included in our definitive proxy statement for the ~~2023~~2024 Annual Meeting of Stockholders.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this item will be included in our definitive proxy statement for the ~~2023~~2024 Annual Meeting of Stockholders.

The independent registered public accounting firm is FORVIS, LLP (PCAOB Firm ID No. 686) located in Atlanta, Georgia.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Schedule II

Valuation and Qualifying Accounts

(in thousands)

Additions


Balance at
beginning of
period

Charge
(Credit) to
Cost and
Expense

Charged to
Other
Accounts

Deductions (a)

Balance at
end of
period
Year Ended December 31, 2021

Allowance for doubtful accounts

$
473

$
425

$

$
493

$
405
Total allowance deducted from assets

$
473

$
425

$
-

$
493

$
405

Year Ended December 31, 2022

Allowance for doubtful accounts

$
405

$
239

$

$
230

$
414
Total allowance deducted from assets

$
405

$
239

$
-

$
230

$
414


			Additions
	Balance at beginning of period		Charge (Credit) to Cost and Expense		Charged to Other Accounts(a)		Deductions (b)		Balance at end of period
Year Ended December 31, 2022
Allowance for doubtful accounts	$	405	$	239	$		$	230	$	414
Total allowance deducted from assets	$	405	$	239	$	-	$	230	$	414

Year Ended December 31, 2023
Allowance for credit losses	$	414	$	9	$	76	$	78	$	421
Total allowance deducted from assets	$	414	$	9	$	76	$	78	$	421

(a)The Company adopted the new standard using a modified retrospective transition approach, with the cumulative impact being charged to Retained Earnings.

(b)Write-offs, net of recoveries

(a) Financial Statements

We have filed the financial statements in Item 8. Financial Statements and Supplementary Data as a part of this Annual Report.

(b) Exhibits

The following is a list of all exhibits filed or incorporated by reference as part of this Annual Report

Exhibit
No.

~~Exhibit~~
~~No.~~

Description of Exhibit

3.1

Eleventh Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.5 to the Registration Statement on Form S-1 (File No. 333-204811) filed on December 15, 2016).

3.2

Amended and Restated Bylaws adopted June 24, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on June 24, 2021).

~~4.1~~

3.3

Certificate of Change, filed on June 13, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on June 13, 2023).

4.1

Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 in the Registration Statement on Form S-1 (Reg. No. 377-00845) filed on June 9, 2015).

4.2

Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1/A (Reg. No 333-204811) filed on December 28, 2015.

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4.3									Operating Agreement of EOSEDU, LLC, dated September 17, 2018, by and between the Boxlight Corporation and EOSEDU, LLC dated September 17, 2018 (incorporated by reference to Exhibit 4.8 to Amendment No. 1 to the Registration Statement on Form S-1 (Reg. No. 333-226068) filed on September 24, 2018).

4.4									Form of Certificate of Designations for Series B Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed September 25, 2020).

4.5									Form of Certificate of Designations for Series C Convertible Preferred Stock (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed September 25, 2020).

4.6									Form of Amended and Restated Certificate of Designations for Series B Convertible Preferred Stock (incorporated by reference to Exhibit 4.3 to the Quarterly Report on Form 10-Q for the period ended September 30, 2020).

4.7									Form of Amended and Restated Certificate of Designations for the Series C Convertible Preferred Stock (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form 10-Q for the period ended September 30, 2020).

4.8

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~~4.8~~	Form of Warrant, dated December 31, 2021, issued to WhiteHawk Finance LLC (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8- K filed January 5, 2022).

4.9		Description of Securities.*(Incorporated by reference to Exhibit 4.9 to the Annual Report on Form 10-K filed March 16, 2023).

4.10		Form of Pre-Funded Warrant, dated July 22, 2022, issued to an accredited institutional investor (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8- K filed July 26, 2022).

4.11		Form of Warrant, dated July 22, 2022, issued to an accredited institutional investor (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8- K filed July 26, 2022).

10.1		Trademark Assignment dated May 27, 2016, between Herbert Myers, Boxlight Corporation and Boxlight Inc. (incorporated by reference to Exhibit 10.6 in the Registration Statement on Form S-1 (Reg. No. 33-204811 filed on May 13, 2016).

10.2		Share Purchase Agreement, dated as of May 10,2016 by and among Boxlight Holdings, Inc., Boxlight Corporation, Boxlight, Inc., Boxlight Latinoamerica, S.A. DE C.V. Boxlight Latinoamerica, Servicios S.A. DE C.V. Everest Display Inc. and Guang Feng International Ltd. (incorporated by reference to Exhibit 10.1 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on May 13, 2016.

10.3		$2,000,000 Convertible Promissory Note of Boxlight Corporation to Mim io Holdings, dated as of April 1, 2016 (Incorporated by reference to Exhibit 10.14 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on May 13, 2016).

10.4		Amendment No. 2 to Membership Interest Purchase Agreement, effective June 30, 2016 among Skyview Capital, LLC, Mimio LLC, MIM Holdings, LLC and Boxlight Corporation (incorporated by reference to Exhibit 10.30 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on December 15, 2016).

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10.5									Amendment No. 3 to Membership Interest Purchase Agreement, effective August 3, 2016 among Skyview Capital, LLC, Mimio LLC, MIM Holdings, LLC and Boxlight Corporation (incorporated by reference to Exhibit 10.34 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on August 12, 2016).

10.6									Promissory Note, issued June 3, 2016 between Boxlight, Inc. and AHA Inc. Co Ltd. (Incorporated by reference to Exhibit 10.32 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on July 11, 2016).

10.7									Form of Loan and Security Agreement with Hitachi Capital America Corp (incorporated by reference to Exhibit 10.33 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on August 12, 2016).

10.8									Loan and Security Agreement, dated September 28, 2016, between Boxlight Inc., Crestmark Bank and Mimio LLC (incorporated by reference to Exhibit 10.35 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on January 12, 2017).

10.9									Amendment 1 to Share Purchase Agreement and Option Agreement, dated May 10, 2016 by and Among Everest Display, Inc., GuangFeng International, Ltd., Boxlight Holdings, Boxlight Corporation, Boxlight Inc., Boxlight Latinoamerica S.A. and Boxlight Latinoamerica Servicios, S.A. DE C.V. (incorporated by reference to Exhibit 10.36 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on October 28, 2016).

10.10									Subscription Agreement between K Laser International Co., Ltd. And Boxlight Corporation for $1,000,000 equity investment at $5.60 per share (incorporated by reference to Exhibit 10.37 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on October 28, 2016).

10.11

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~~10.11~~	$2,000,000 Convertible Promissory Note, dated September 29,2016 between Boxlight Corporation and Everest Display, Inc. (incorporated by reference to Exhibit 10.38 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on October 28, 2016).

10.12		Notice of Default dated December 28, 2015 – Skyview Capital (incorporated by reference to Exhibit 10.39 in the Registration Statement on Form S-1 (Reg. No. 333-204811) filed on January 12, 2017).

10.13		Account Sale and Purchase Agreement, dated September 5, 2017 between Sallyport Commercial Finance LLC and Boxlight Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 11, 2017).

10.14		Stock Purchase Agreement and Exhibits, date May 9, 2018 among Boxlight Corporation, Cohuborate Ltd. and the shareholders of Cohuborate, Ltd. (incorporated by reference to Exhibit 10.20 to the Registration Statement on Form S-1 (Reg. No. 333-226068) filed on July 5, 2018).

10.15		$500,000 Promissory Note, dated May 16, 2018, from Boxlight Corporation to Harbor Gates Capital, LLC (incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-1 (Reg. No. 333-226068) filed on July 5, 2018).

10.16		Membership Interest Purchase agreement, dated as of September 17, 2018, by and among the Boxlight Corporation, Daniel Leis, Aleksandra Leis and EOSEDU, LLC (incorporated by reference to Exhibit 10.24 in Amendment No. 1 to the Registration Statement on Form S-1 (Reg. No. 333-226068) filed on September 24, 2018).

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10.17									Employment agreement, dated September 1, 2018, by and between Boxlight Corporation and Aleksandra Leis (incorporated by reference to Exhibit 10.25 to Amendment No. 1 to the Registration Statement on Form S-1(Reg. No. 333-226068) filed on September 24, 2018).

10.18									Employment agreement, dated September 1, 2018, by and between Boxlight Corporation and Daniel Leis (incorporated by reference to Exhibit 10.26 to Amendment No. 1 to the Registration Statement on Form S-1(Reg. No. 333-226068) filed on September 24, 2018.

10.19									Asset Purchase Agreement, dated March 12, 2019, between Boxlight Corporation, Boxlight Inc., Modern Robotics and Stephen Fuller (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 15, 2019).

10.20									Securities Purchase Agreement dated March 22, 2019 between Boxlight Corporation and Lind Global Macro Fund L.P. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 25, 2019).

10.21									Form of $4,400,000 Secured Convertible Promissory Note dated March 22, 2019 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed March 25, 2019).

10.22									Security Agreement, dated March 22, 2019, between Boxlight Corporation and Lind Global Macro Fund LP (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed March 25, 2019).

10.23									Intercreditor Agreement, dated March 22, 2019, between Boxlight Corporation, and Sallyport Commercial Finance LLC and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed March 25, 2019).

10.24									Securities Purchase Agreement, dated as of December 13, 2019, between Boxlight Corporation and Lind Global Macro Fund, L.P. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 17, 2019).

10.25									Secured Convertible Note, Dated December 13, 2019, issued by Boxlight Corporation to Lind Global Macro Fund, L.P. (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed December 17, 2019).

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10.26									Amended and Restated Security Agreement dated as of December 13, 2019, between Boxlight Corporation, Sallyport Commercial Finance, LLC. And Lind Global Macro Fund, LP (filed as Exhibit 10.3 to the Current Report on Form 8-K filed December 17, 2019).

10.27									Amended and Restated Intercreditor Agreement, dated as of December 13, 2019, between Boxlight Corporation, Sallyport Commercial Finance, LLC and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed December 17, 2019).

10.28									Amended and Restated Employment Agreement, dated January 13, 2020, between Boxlight Corporation and James Mark Elliott (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 14, 2020).

10.29									Employment letter, dated January 13, 2020, between Boxlight Corporation and Harold Bevis (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed January 14, 2020).

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10.30									Asset Purchase Agreement dated February 3, 2020, between Boxlight Corporation, Boxlight Inc., MyStemKit, Inc. and STEM Education Holdings, Pty. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 7, 2020).

10.31									Securities Purchase Agreement dated February 4, 2020 between Boxlight Corporation and Lind Global Macro Fund, LP. (Incorporated by reference to Exhibit 10.2 to the Current Report 8-Kfiled February 7, 2020).

10.32									Secured Convertible Note, dated February 4, 2020, (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed February 7, 2020).

10.33									Second Amended and Restated Security Agreement, dated February 4, 2020, between Boxlight Corporation and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed February 7, 2020).

10.34									Second Amended and Restated Intercreditor Agreement, dated February 4, 2020, between Boxlight Corporation, Sallyport Commercial Finance, LLC and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed February 7, 2020).

10.35									Third Restated Convertible Promissory Note, dated February 4, 2020, issued by Boxlight Corporation to Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed February 7, 2020).

10.36									Second Restated Convertible Promissory Note, dated February 4, 2020, issued by Boxlight Corporation issued by Boxlight Corporation to Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K filed February 7, 2020).

10.37									Employment Agreement, dated February 21, 2020, between Boxlight Corporation and Takesha Brown (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 26, 2020).

10.38									Agreement, dated March 3, 2020, between Boxlight Corporation, Everest Display, Inc and AMAGIC Holographics, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 13, 2020).

10.39									Employment Agreement, dated March 20, 2020, between Boxlight Corporation and Michael Pope (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 23, 2020).

10.40									Amended and Restated Employment Agreement, dated April 1, 2020, between Boxlight Corporation and Daniel Leis (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 10, 2020).

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10.41		Letter Agreement, dated April 17, 2020, between Boxlight Corporation, Boxlight Inc. and MyStemKits, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 22, 2020).

10.42		Letter Agreement, dated April 17, 2020, between Boxlight Corporation and Stemify Limited (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 22, 2020).
	~~��~~
10.43		Agreement, dated June 11, 2020, between Boxlight Corporation, Everest Display, Inc. and Amagic Holographics, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 24, 2020).

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10.44		Letter Agreement, dated June 30, 2020, between Boxlight Corporation and R. Wayne Jackson (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed July 7, 2020).

10.45		Letter Agreement, dated June 30, 2020, between Boxlight Corporation and Charles P. Amos (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on July 7, 2020).

10.46		Securities Purchase Agreement, dated September 21, 2020, between Boxlight Corporation and Lind Global Asset Management LLC (incorporated by reference to Exhibit 10.1 to the Current Report on For 8-K filed September 22, 2020).

10.47		Form of Convertible Secured Note issued to Lind Global Asset Management (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed September 22, 2020).

10.48		Third Amended and Restated Security Agreement, dated September 21, 2020, between Boxlight Corporation and Lind Global Macro Fund, LP (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed September 22, 2020).

10.49		Third Amended and Restated Intercreditor Agreement, dated September 21, 2020, between Boxlight Corporation, Sallyport Commercial Finance, LLC, Lind Global Macro Fund, LP and Lind Global Asset Management, LLC (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed September 22, 2020).

10.50		Patent Purchase Agreement, dated September 23, 2020, between Boxlight Corporation and Circle Technology Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 24, 2020).

10.51		Securities Purchase Agreement, dated September 24, 2020, between Boxlight Corporation and the Sellers of Sahara Holdings Limited (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 25, 2020).

10.52		Form of Lock-up Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed September 25, 2020).

10.53		Form of Accounts Receivable Agreement, effective September 30, 2020, between Boxlight Inc,, EOSEDU LLC and Sallyport Commercial Finance LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 9, 2020).

10.54		Form of Blocked Account Agreement between Boxlight Inc., EOSEDU LLC and Sallyport Commercial Finance LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed October 9, 2020).

~~10.55~~	Employment Agreement, dated November 1, 2019, between Sahara Presentation Systems PLC and Mark Starkey (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 19, 2020).

10.55

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~~10.56~~

Amendment No. 2 to the Boxlight Corporation 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8 dated October 7, 2020).

~~10.57~~

10.56

Deed of Variation, dated September 24, 2020, between Sahara Presentation Systems PLC and Mark Starkey (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed November 19, 2020).

~~10.58~~

10.57

Employment Agreement, dated April 7, 2020, between Sahara Presentation Systems PLC and Patrick Foley (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 30, 2020).

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~~10.59~~

10.58

Deed of variation, dated September 24, 2020, between Sahara Presentation Systems PLC and Patrick Foley (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed November 30, 2020).

~~10.60~~

10.59

Employment Agreement, dated January 1, 2019, between Sahara Presentation Systems PLC and Shaun Marklew (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed November 30, 2020).

~~10.61~~

10.60

Deed of variation, dated September 24, 2020, between Sahara Presentation Systems PLC and Shaun Marklew (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed November 30, 2020).

~~10.62~~

10.61

Agreement, dated January 29, 2021, between Boxlight Corporation, Everest Display, Inc. and Amagic Holographics, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 1, 2021).

~~10.63~~

10.62

Preferred Stock Redemption and Conversion Agreement dated March 24, 2021, by and between Boxlight Corporation and the Preferred Stockholders (incorporated by reference to Exhibit 10.67 to the Annual Report on Form 10-K filed March 31, 2021).

~~10.64~~

10.63

Share Purchase Agreement, dated March 19, 2021, between Sahara Holdings Ltd., Clevertouch BV and Karel Callens (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on May 13, 2021).

~~10.65~~

10.64

Amendment to Preferred Stock Redemption Agreement, dated June 14, 2021, between Boxlight Corporation and the Preferred Stockholders (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 16, 2021).

~~10.66~~

10.65

Amendment to Accounts Receivable Agreement, dated July 20, 2021, between Boxlight Inc. and Sallyport Commercial Finance LLC (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed on July 21, 2021).

~~10.67~~

10.66

Amendment to Accounts Receivable Agreement, dated August 6, 2021, between Boxlight Inc. and Sallyport Commercial Finance LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 9, 2021).

~~10.68~~

10.67

Boxlight Corporation 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-8 filed on October 14, 2021).

~~10.69~~

10.68

Fourth Amended and Restated Intercreditor Agreement dated August 23, 2021, between Boxlight Corporation, Sallyport Commercial Finance, LLC, Lind Global Macro Fund, LP and Lind Global Asset Management, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on August 27, 2021).

~~10.70~~

10.69

Employment Agreement dated September 15, 2021 between Boxlight Corporation and Aleksandra Leis (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 20, 2021).

~~10.71~~

10.70

Membership Interest Purchase Agreement dated October 29, 2021, between Boxlight Corporation, Boxlight Inc., FrontRow Calypso LLC, Phonic Ear Inc. and Calypso Systems LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 1, 2021).

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~~10.72~~

10.71

Credit Agreement dated December 31, 2021, between Boxlight Corporation, its subsidiaries, ~~Whiteawk~~Whit e h awk Finance LLC., and White Hawk Capital Partners, LP (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 5, 2022).

~~10.73~~

10.72

Employment Agreement dated February 14, 2022, between Boxlight Corporation and Michael Pope (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 18, 2022).

~~10.74~~

10.73

Notice of Default and Reservation of Rights dated March 29, 2022, from Whitehawk Capital Partners, LP (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 4, 2022).

~~10.75~~

10.74

Amendment to Credit Agreement, dated April 4, 2022, between Boxlight Corporation, its subsidiaries, Whitehawk Finance LLC and White Hawk Capital Partners, LP (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 4, 2022).

~~10.76~~

10.75

Amended and Restated Fee Letter, dated April 4, 2022, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance, LLC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed April 4, 2022).

~~10.77~~

10.76

Employment Agreement, dated June 13, 2022, between Boxlight Corporation and Greg Wiggins (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 14, 2022).

~~10.78~~

10.77

Second Amendment to Credit Agreement (including Exhibit A), dated June 21, 2022, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 27, 2022).

~~10.79~~

10.78

Securities Purchase Agreement dated July 22, 2022, between Boxlight Corporation and an accredited institutional investor (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed July 26, 2022).

~~10.80~~

10.79

Placement Agency Agreement, dated July 22, 2022, between Boxlight Corporation and Maxim Group LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed July 26, 2022).

~~10.81~~

10.80

Third Amendment to Credit Agreement, dated April 24, 2023, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC.(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 26, 2023)

Amended and Restated Insider Trading Policy*

~~14.1~~

10.81

Notice of Borrowing, dated April 24, 2023, from Boxlight Corporation addressed to Whitehawk Capital Partners, LP. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed April 26, 2023)

10.82

Fourth Amendment to the Credit Agreement, dated June 26, 2023, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC. (incorporated by reference to exhibit 10.4 to the quarterly report on Form 1 0-Q filed August 9, 2023.

10.83

Fifth Amendment to Credit Agreement, dated March 1 4 , 2024, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC.*

14.1

Code of Business Conduct and Ethics*Ethics *(Incorporated by reference to Exhibit 14.1 to the Annual Report on Form 10-K filed March 16, 2023)

Table of Contents

16.1

Letter of FORVIS, LLP, dated June 2, 2022 to the Securities and Exchange Commission (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K filed June 2, 2022.)

~~21.1~~

19.1

Amended and Restated Insider Trading Policy (Incorporated by reference to Exhibit 10.81 to the Annual Report on Form 10-K filed March 16, 2023)

Subsidiaries*

~~23.1~~

21.1

Subsidiaries (Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K filed March 16, 2023)

23.1

Consent of FORVIS LLP*

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

32.2

~~Table of Contents~~

~~32.2~~

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS

Inline XBRL Instance Document.*

101.SCH

Inline XBRL Taxonomy Extension Schema Document.*

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.*

101.DEF

Inline XBRL Taxonomy Definition Linkbase Document.*

101.LAB

Inline XBRL Taxonomy Label Linkbase Document.*

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.*

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*

*filed herewith.

**Furnished herewith

ITEM 16. FORM 10-K SUMMARY

~~None.~~

None.

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.


	BOXLIGHT, CORPORATION
	~~BOXLIGHT, CORPORATION~~ (Registrant)

	By:	~~(Registrant)~~ /s/ DALE W. STRANG
		Dale W. Strang
	~~By:~~	~~/s/ MICHAEL POPE~~
~~Michael R. Pope~~
~~Chairman of the Board and~~
Chief Executive Officer
		Principal Executive Officer

Date: March ~~16, 2023~~

14, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

~~Signature~~

~~Title~~

~~Date~~

/s/ ~~Michael R. Pope~~

Dale W. Strang

~~Chairman of the Board, and~~

~~March 16, 2023~~

~~Michael R. Pope~~

Chief Executive Officer

March 14, 2024

Dale W. Strang

(principal executive officer)

/s/ Gregory S. Wiggins

Chief Financial Officer

March ~~16, 2023~~

14, 2024

Gregory S. Wiggins

(principal financial and accounting officer)

/s/ Rudolph F. Crew

Director

~~Director~~

March ~~16, 2023~~

14, 2024

Rudolph F. Crew

/s/ Roger W. Jackson

Director (Chairman of the Board)

~~Director~~

March ~~16, 2023~~

14, 2024

Roger W. Jackson

/s/ Tiffany Kuo

Director

~~Director~~

March ~~16, 2023~~

14, 2024

Tiffany Kuo

/s/ Charles P. Amos

Director

~~Director~~

March ~~16, 2023~~

14, 2024

Charles P. Amos

/s/ Michael R. Pope

Director

March 14, 2024

Michael R. Pope

(former Chairman and Chief Executive Officer)

~~/s/ Dale W. Strang~~

~~Director~~

~~March 16, 2023~~

~~Dale W. Strang~~

/s/ Mark Elliott

Director

~~Director~~

March ~~16, 2023~~

14, 2024

Mark Elliott


					Page
			PART I
Item 1.			~~Page~~ Business		4
Item 1A.			~~PART I~~Risk Factors		18
~~Item 1~~.			~~Business~~	4
~~Item 1A~~.	~~Risk Factors~~	18
Item 1B.	Unresolved Staff Comments			33 34
Item 21 C ..			~~Properties~~Cybersecurity		33 34
Item 32..			~~Legal Proceedings~~Properties		33 35
Item 43..			Legal Proceedings		35
Item 4.			Mine Safety Disclosures		33 35

			PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		33 36
Item 6.			[Reserved]		35 37
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		35 37
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk		46
Item 8.			Financial Statements and Supplementary Data		47
Item 9.			Changes In and Disagreements with Accountants on Accounting and Financial Disclosure		49 47
Item 9A.			Controls and Procedures		49 47
Item 9B.			Other Information		50 48
Item 9C9C..			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		50 48

			PART III
Item 10.			Directors, Executive Officers and Corporate Governance		51 49
Item 11.			Executive Compensation		51 49
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		51 49
Item 13.			Certain Relationships and Related Transactions, and Director Independence		51 49
Item 14.			Principal Accountant Fees and Services		51 49

			PART IV
Item 15.			Exhibits, Financial Statement Schedules		52 50
Item 16.			Form 10–K Summary		59 58

			SIGNATURES		~~SIGNATURES~~59	60


		Page
		~~Page~~

Report of Independent Registered Public Accounting Firm ~~(PCAOB ID No. 57)~~	~~F-1~~ F-1

Consolidated Balance Sheets as of December 31, ~~2022~~202 3 and ~~2021~~20 2 2		~~F-4~~ F-3

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, ~~2022~~202 3 and ~~2021~~202 2		~~F-5~~ F-4

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, ~~2022~~202 3 and ~~2021~~202 2		~~F-6~~ F-5

Consolidated Statements of Cash Flows for the years ended December 31, ~~2022~~202 3 and ~~2021~~202 2		~~F-7~~ F-6

Notes to Consolidated Financial Statements		~~F-8~~ F-7


			x			☒			ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			o			☐			TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	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



(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


	December 31,		December 31,
	2022		2021

ASSETS
Current assets:
Cash and cash equivalents	$	14,591	$	17,938
Accounts receivable – trade, net of allowances		31,009		29,573
Inventories, net of reserves		58,211		51,591
Prepaid expenses and other current assets		7,433		9,444
Total current assets		111,244		108,546

Property and equipment, net of accumulated depreciation		1,733		1,073
Operating lease right of use asset		4,350		—
Intangible assets, net of accumulated amortization		52,579		65,532
Goodwill		25,092		26,037
Other assets		397		248
Total assets	$	195,395	$	201,436

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	36,566	$	33,638
Short-term debt		845		9,804
Operating lease liabilities, current		1,898		—
Deferred revenues, current		8,308		7,575
Derivative liabilities		472		3,064
Other short-term liabilities		386		667
Total current liabilities		48,475		54,748

Deferred revenues, non-current		15,603		13,952
Long-term debt		43,778		42,137
Deferred tax liabilities, net		4,680		8,449
Operating lease liabilities, non-current		2,457		—
Other long-term liabilities		—		340
Total liabilities		114,993		119,626

Commitments and contingencies (Note 15)
Mezzanine equity:
Preferred Series B, 1,586,620 shares issued and outstanding		16,146		16,146
Preferred Series C, 1,320,850 shares issued and outstanding		12,363		12,363
Total mezzanine equity		28,509		28,509

Stockholders’ equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 and 167,972 shares issued and outstanding, respectively		—		—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 74,716,696 and 63,821,901 Class A shares issued and outstanding at December 31, 2022 and 2021, respectively		7		6
Additional paid-in capital		117,843		110,867
Accumulated deficit		(65,043)		(61,300)
Accumulated other comprehensive (loss) income		(914)		3,728
Total stockholders’ equity		51,893		53,301

Total liabilities and stockholders’ equity	$	195,395	$	201,436


	December 31, 2023		December 31, 2022 (as adjusted)*
ASSETS
Current assets:
Cash and cash equivalents	$	17,253	$	14,591
Accounts receivable – trade, net of allowances	29,523		31,009
Inventories, net of reserves	44,131		58,211
Prepaid expenses and other current assets	9,471		7,433
Total current assets	100,378		111,244

Property and equipment, net of accumulated depreciation	2,477		1,733
Operating lease right of use asset	8,846		4,350
Intangible assets, net of accumulated amortization	45,964		52,579
Goodwill	—		25,092
Other assets	906		397
Total assets	$	158,571	$	195,395

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	32,899	$	36,566
Short-term debt	1,037		845
Operating lease liabilities, current	1,827		1,898
Deferred revenues, current	8,698		8,308
Derivative liabilities	205		472
Other short-term liabilities	1,566		386
Total current liabilities	46,232		48,475

Deferred revenues, non-current	16,347		15,603
Long-term debt	39,134		43,778
Deferred tax liabilities, net	4,316		4,680
Operating lease liabilities, non-current	7,282		2,457

Total liabilities	113,311		114,993

Commitments and contingencies (Note 15)
Mezzanine equity:
Preferred Series B, 1,586,620 shares issued and outstanding	16,146		16,146
Preferred Series C, 1,320,850 shares issued and outstanding	12,363		12,363
Total mezzanine equity	28,509		28,509

Stockholders’ equity:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; 167,972 and 167,972 shares issued and outstanding, respectively	—		—
Common stock, $0.0001 par value, 18,750,000 shares authorized; 9,704,496 and 9,339,587 Class A shares issued and outstanding at December 31, 2023 and 2022, respectively	1		1
Additional paid-in capital	119,724		117,849
Accumulated deficit	(104,275)		(65,043)
Accumulated other comprehensive income (loss)	1,301		(914)
Total stockholders’ equity	16,751		51,893

Total liabilities and stockholders’ equity	$	158,571	$	195,395




	2022		2021
Revenues, net	$	221,781	$	185,177
Cost of revenues		156,913		138,652
Gross profit		64,868		46,525

Operating expense:
General and administrative expenses		59,337		47,270
Research and development		2,482		1,826
Total operating expense		61,819		49,096

Income (loss) from operations		3,049		(2,571)

Other income (expense):
Interest expense, net		(9,923)		(3,382)
Other expense, net		(267)		(20)
Gain (loss) on settlement of liabilities, net		856		(4,532)
Change in fair value of derivative liabilities		2,591		13
Total other expense		(6,743)		(7,921)
Loss before income taxes		(3,694)		(10,492)
Income tax expense		(49)		(3,310)
Net loss		(3,743)		(13,802)
Fixed dividends - Series B Preferred		(1,269)		(1,269)
Deemed contribution -Series B Preferred		—		367
Net loss attributable to common stockholders	$	(5,012)	$	(14,704)

Comprehensive loss:
Net loss		(3,743)		(13,802)
Other comprehensive loss:
Foreign currency translation adjustment		(4,642)		(1,464)
Total comprehensive loss	$	(8,385)	$	(15,266)

Net loss attributable to common stockholders	$	(5,012)		(14,704)

Net loss per common share – basic and diluted	$	(0.07)	$	(0.23)

Weighted average number of common shares outstanding – basic and diluted		69,153		58,849


	Series A Preferred Stock			Class A Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount


Balance, December 31, 2022	167,972	$	—	9,339,587	$	1	$	117,849	$	(914)	$	(65,043)	$	51,893

Cumulative effect of change in accounting principle, net of tax	—	—		—	—		—		—		(76)		(76)

Balance, December 31, 2022 - as adjusted	167,972	—		9,339,587	1		117,849		(914)		(65,119)		51,817

Shares issued for:
Stock options exercised	—	—		12,500	—		13		—		—		13


Vesting of restricted stock units	—	—		318,995	—		—		—		—		—
Reverse stock split fractional adjustment	—	—		33,414	—		—		—		—		—


Stock compensation	—	—		—	—		3,131		—		—		3,131
Foreign currency translation	—	—		—	—		—		2,215		—		2,215
Fixed dividends for preferred shareholders	—	—		—	—		(1,269)		—		—		(1,269)
Net loss	—	—		—	—		—		—		(39,156)		(39,156)

Balance, December 31, 2023	167,972	$	—	9,704,496	$	1	$	119,724	$	1,301	$	(104,275)	$	16,751
See Accompanying Notes to Financial Statements.


	Series A			Class A			Additional		Accumulated Other
	Preferred Stock			Common Stock			Paid-in		Comprehensive		Accumulated
	Shares	Amount		Shares	Amount		Capital		Income (Loss)		Deficit		Total

Balance, December 31, 2020	167,972	$	—	53,343,518	$	6	$	86,768	$	5,192	$	(47,498)	$	44,468
Shares issued for:
Conversion of liabilities	—		—	8,697,166		—		19,080		—		—		19,080
Stock options exercised	—		—	492,460		—		415		—		—		415
Acquisition	—		—	142,882		—		404		—		—		404
Debt issuance costs	—		—	—		—		660		—		—		660
Vesting of restricted stock units	—		—	916,682		—		—		—		—		—
Warrant redemption, net	—		—	229,193		—		382		—		—		382
Stock compensation	—		—	—		—		4,060		—		—		4,060
Foreign currency translation	—		—	—		—		—		(1,464)		—		(1,464)
Fixed dividends for preferred shareholders	—		—	—		—		(1,269)		—		—		(1,269)
Deemed contribution for preferred shareholders	—		—			—		367		—		—		367
Net loss	—		—	—		—		—		—		(13,802)		(13,802)

Balance, December 31, 2021	167,972		—	63,821,901		6		110,867		3,728		(61,300)		53,301
Shares issued for:
Stock options exercised	—		—	296,841		—		81		—		—		81
Acquisition	—		—	230,770		—		150		—		—		150
Debt issuance costs	—		—	528,169		—		—		—		—		—
Vesting of restricted stock units	—		—	2,486,075		—		—		—		—		—
Securities purchase agreement	—		—	7,000,000		1		2,352		—		—		2,353
Warrant redemption, net	—		—	352,940		—		—		—		—		—
Issuance of warrants and prefunded warrants	—		—	—		—		2,349		—		—		2,349
Stock compensation	—		—	—		—		3,313		—		—		3,313
Foreign currency translation	—		—	—		—		—		(4,642)		—		(4,642)
Fixed dividends for preferred shareholders	—		—	—		—		(1,269)		—		—		(1,269)
Net loss	—		—	—		—		—		—		(3,743)		(3,743)

Balance, December 31, 2022	167,972	$	—	74,716,696	$	7	$	117,843	$	(914)	$	(65,043)	$	51,893


	2023		2022
Cash flows from operating activities:
Net loss	$	(39,156)	$	(3,743)
Adjustments to reconcile net loss to net cash provided by operating activities:
Amortization of debt discount and issuance cost	2,303		2,158
Bad debt expense	9		266
Gain on settlement of liabilities	—		(856)
Changes in deferred tax assets and liabilities	(347)		(3,776)
Change in allowance for sales returns and volume rebate	1,356		316
Change in inventory reserve	2,131		(68)
Change in fair value of derivative liability	(267)		(2,591)

Stock compensation expense	3,131		3,313
Depreciation and amortization	8,859		9,129
Impairment of goodwill	25,195		—
Change in right of use assets and lease liabilities	249		8
Changes in operating assets and liabilities:
Accounts receivable – trade	781		(3,800)
Inventories	13,105		(10,272)
Prepaid expenses and other current assets	(1,874)		1,602
Other assets	(498)		(161)
Accounts payable and accrued expenses	(4,822)		5,756
Other short-term liabilities	1,136		256
Deferred revenues	290		3,965
Other liabilities	—		(312)
Net cash provided by operating activities	$	11,581	$	1,190

Cash flows from investing activities:
Asset acquisition	—		(100)

Purchases of furniture and fixtures, net	(1,321)		(1,106)
Net cash used in investing activities	$	(1,321)	$	(1,206)

Cash flows from financing activities:
Net proceeds from issuance of common stock and warrants, net of issuance costs	—		4,700
Proceeds from issuances of short-term debt	3,000		—
Proceeds from exercise of options and warrants	13		—
Principal payments on long-term debt	(6,755)		(11,141)

Proceeds from long term debt	—		2,500
Principal payments on short-term debt	(3,000)		—
Payments of fixed dividends to Series B Preferred stockholders	(1,269)		(1,269)
Proceeds from issuance of common stock	—		84

Net cash used in financing activities	$	(8,011)	$	(5,126)

Effect of foreign currency exchange rates	413		1,795

Net increase (decrease) in cash and cash equivalents	2,662		(3,347)

Cash and cash equivalents, beginning of the period	14,591		17,938

Cash and cash equivalents, end of the period	$	17,253	$	14,591

Supplemental cash flow disclosures:

Cash paid for income taxes	$	2,691	$	1,615
Cash paid for interest	$	8,290	$	8,342

Non-cash investing and financing transactions:


Addition of operating lease liabilities	$	5,865	$	—
Shares issued for asset acquisition	$	—	$	150


	Amount
Balance, December 31, 2020	$	119
Amount paid		(119)
Balance, December 31, 2021		—
Amount paid		—
Balance, December 31, 2022	$	—


	Year Ended
	December 31,
	(in thousands)
	2022		2021
Product revenues:
Hardware	$	206,770	$	171,780
Software		4,306		4,102
Service revenues:
Professional services		2,638		1,419
Maintenance and subscription services		8,067		7,876
	$	221,781	$	185,177


		(in thousands)
Assets acquired:
Cash	$	2,752
Accounts receivable		3,381
Inventories		10,240
Prepaid expenses		883
Property and equipment		348
Total assets acquired		17,604

Accounts payable and accrued expenses		(1,501)
Deferred revenue		(1,225)
Other liabilities		(12)
Total liabilities assumed		(2,738)

Net tangible assets acquired	$	14,866

Identifiable intangible assets:
Customer relationships		8,195
Trademarks		3,244
Technology		5,036
Non-compete		391
Total intangible assets subject to amortization		16,866

Goodwill		2,920

Total net assets acquired	$	34,652

Consideration paid:
Cash	$	34,652


	Year ended December 31,
	2021
			(Unaudited)
	(in thousands)		(in thousands)
	As Reported		Pro Forma
Revenues, net	$	185,177	$	214,636

Net loss attributable common shareholders	$	(14,704)	$	(12,868)




	Useful lives	2022		2021
INTANGIBLE ASSETS
Patents	4-10 years	$	182	$	182
Customer relationships	8-15 years		52,736		55,158
Technology	3-5 years		8,943		8,901
Domain	7 years		14		14
Non-compete	8-15 years		391		391
Tradenames	2-10 years		12,769		13,085
Intangible assets, at cost			75,035		77,731
Accumulated amortization			(22,456)		(12,199)
Intangible assets, net of accumulated amortization		$	52,579	$	65,532

GOODWILL
Beginning Balance		$	26,037	$	22,742
Goodwill acquired during the period			—		3,359
Change due to foreign currency translation			(945)		(64)
Impairment			—		—
Ending Balance		$	25,092	$	26,037




2023	$	8,857
2024		7,916
2025		7,804
2026		7,290
2027		6,886
Thereafter		13,826

Total	$	52,579


	2022		2021
Debt – Third Parties
Paycheck Protection Program	$	127	$	1,009
Note payable - Whitehawk		49,906		58,500
Total debt		50,033		59,509
Less: Discount and issuance costs		5,410		7,568
Current portion of debt		845		9,804
Long-term debt	$	43,778	$	42,137
Total debt (net of discount and issuance costs)	$	44,623	$	51,941


	December 31, 2022
Common stock issuable upon exercise of warrants		3,715,075
Market value of common stock on measurement date	$	0.31
Exercise price	$	1.10
Risk free interest rate (1)		4.02	%
Expected life in years		4 years
Expected volatility (2)		83.6	%
Expected dividend yields (3)		—	%


	December 31, 2021
Common stock issuable upon exercise of warrants		2,043,291
Market value of common stock on measurement date	$	1.38
Exercise price	$	2.00
Risk free interest rate (1)		1.25	%
Expected life in years		5 years
Expected volatility (2)		79.3	%
Expected dividend yields (3)		—	%


Deferred tax assets:	2022		2021
Fixed assets	$	—	$	13
Allowance for bad debts		507		442
Inventory		294		192
R&D amortization		413		—
Accrued expenses		—		—
Deferred revenue		5,600		4,232
Stock compensation		1,209		645
Net lease asset		1		—
Other		203		—
Interest expense limitation		3,751		1,903
Net operating loss carry-forwards		7,282		8,165

Deferred tax assets (liabilities)	$	19,260	$	15,592
Valuation allowance		(14,084)		(11,294)
Deferred tax assets, net	$	5,176	$	4,298


Deferred tax liabilities:	2022		2021
Fixed assets	$	(24)	$	—
Intangible assets		(8,603)		(11,452)
Accrued expenses		(752)		(413)
Prepaid expenses		(169)		(137)
Other		(308)		(745)
Deferred tax liabilities	$	(9,856)	$	(12,747)

Deferred tax liabilities, net	$	(4,680)	$	(8,449)


				Weighted
				Average
		Weighted		Remaining
	Number of	Average		Contractual
	Units	Exercise Price		Term (in years)
Outstanding, December 31, 2020	4,850,784	$	1.76	3.51
Granted	—	$	—
Exercised	(492,460)	$	0.84
Cancelled	(304,208)	$	1.01
Outstanding, December 31, 2021	4,054,116	$	1.92	2.29
Granted	1,221,744	$	1.12
Exercised	(296,841)	$	0.25
Cancelled	(1,063,142)	$	2.59
Outstanding, December 31, 2022	3,915,877	$	1.61	2.17
Exercisable, December 31, 2022	2,782,384	$	1.90	1.77


		Weighted
		Average
		Grant Date Fair
	Number of Units	Value
Outstanding, December 31, 2020	2,721,347	$	1.62
Granted	1,019,583	$	2.81
Vested	(1,498,495)	$	2.18
Forfeited	(268,491)	$	1.66
Outstanding, December 31, 2021	1,973,947	$	1.81
Granted	2,477,675	$	1.19
Vested	(1,583,525)	$	1.63
Forfeited	(437,067)	$	1.34
Outstanding, December 31, 2022	2,431,030	$	1.38


Year ending December 31,	(in thousands)
2023	$	1,995
2024		1,313
2025		1,099
2026		743
2027		246
Thereafter		6
Less imputed interest		(1,046)
Total	$	4,356


	Total revenues				Total revenues
	from the customers		Accounts		from the customer		Accounts
	as a percentage of		receivable from		as a percentage of		receivable from
	total revenues		the customers as of		total revenues		the customers as of
	for the year ended		December 31,		for the year ended		December 31,
	December 31,		2022		December 31,		2021
Customer	2022		(in thousands)		2021		(in thousands)
1	18	%	$	8,468	11	%	$	3,245
2	5	%	$	469	4	%	$	1,223


	Total purchases				Total purchases
	from the vendors				from the vendors
	as a percentage of			Accounts payable	as a percentage			Accounts payable
	total cost of			(prepayment) to	of total cost of			(prepayment) to
	revenues for			the vendors as of	revenues for			the vendors as of
	the year ended			December 31,	the year ended			December 31,
	December 31,			2022	December 31,			2021
Vendor	2022			(in thousands)	2021			(in thousands)
1	56	%	$	24,029	16	%	$	(1,185)
2	4	%	$	705	4	%	$	(805)


			Additions
	Balance at beginning of period		Charge (Credit) to Cost and Expense		Charged to Other Accounts		Deductions (a)		Balance at end of period
Year Ended December 31, 2021
Allowance for doubtful accounts	$	473	$	425	$		$	493	$	405
Total allowance deducted from assets	$	473	$	425	$	-	$	493	$	405

Year Ended December 31, 2022
Allowance for doubtful accounts	$	405	$	239	$		$	230	$	414
Total allowance deducted from assets	$	405	$	239	$	-	$	230	$	414

Operations

~~Operations~~

Sales & Marketing

Administration

~~187~~228