Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 03, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-37564 | |
Entity Registrant Name | BOXLIGHT CORPORATION | |
Entity Central Index Key | 0001624512 | |
Entity Tax Identification Number | 46-4116523 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 2750 Premiere Parkway, Suite 900 | |
Entity Address, City or Town | Duluth | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30097 | |
City Area Code | 678 | |
Local Phone Number | 367-0809 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | BOXL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 75,117,642 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss | ||
Revenues, net | $ 41,189 | $ 50,603 |
Revenue, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember |
Cost of revenues | $ 26,041 | $ 37,987 |
Cost, Product and Service [Extensible Enumeration] | us-gaap:ProductMember | us-gaap:ProductMember |
Gross profit | $ 15,148 | $ 12,616 |
Operating expense: | ||
General and administrative | 14,731 | 15,457 |
Research and development | 597 | 613 |
Total operating expense | 15,328 | 16,070 |
Loss from operations | (180) | (3,454) |
Other income (expense): | ||
Interest expense, net | (2,447) | (2,317) |
Other expense, net | (22) | (15) |
Gain on settlement of liabilities, net | 854 | |
Change in fair value of derivative liabilities | (224) | (10) |
Total other expense | (2,693) | (1,488) |
Loss before income taxes | (2,873) | (4,942) |
Income tax (expense) benefit | (51) | 86 |
Net loss | (2,924) | (4,856) |
Fixed dividends - Series B Preferred | (317) | (317) |
Net loss attributable to common stockholders | (3,241) | (5,173) |
Comprehensive loss: | ||
Net loss | (2,924) | (4,856) |
Foreign currency translation adjustment | 558 | (1,772) |
Total comprehensive loss | $ (2,366) | $ (6,628) |
Net loss per common share - basic | $ (0.04) | $ (0.07) |
Net loss per common share - diluted | $ (0.04) | $ (0.07) |
Weighted average number of common shares outstanding - basic | 74,931 | 65,428 |
Weighted average number of common shares outstanding - diluted | 74,931 | 65,428 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 11,274 | $ 14,591 |
Accounts receivable - trade, net of allowances | 33,549 | 31,009 |
Inventories, net of reserves | 44,675 | 58,211 |
Prepaid expenses and other current assets | 7,383 | 7,433 |
Total current assets | 96,881 | 111,244 |
Property and equipment, net of accumulated depreciation | 1,626 | 1,733 |
Operating lease right of use asset | 3,890 | 4,350 |
Intangible assets, net of accumulated amortization | 51,228 | 52,579 |
Goodwill | 25,307 | 25,092 |
Other assets | 630 | 397 |
Total assets | 179,562 | 195,395 |
Current liabilities: | ||
Accounts payable and accrued expenses | 23,170 | 36,566 |
Short-term debt | 848 | 845 |
Operating lease liabilities, current | 1,828 | 1,898 |
Deferred revenues, current | 8,404 | 8,308 |
Derivative liabilities | 696 | 472 |
Other short-term liabilities | 309 | 386 |
Total current liabilities | 35,255 | 48,475 |
Deferred revenues, non-current | 15,695 | 15,603 |
Long-term debt | 43,561 | 43,778 |
Deferred tax liabilities, net | 4,552 | 4,680 |
Operating lease liabilities, non-current | 2,229 | 2,457 |
Total liabilities | 101,292 | 114,993 |
Commitments and contingencies (Note 14) | ||
Mezzanine equity: | ||
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; 75,078,661 and 74,716,696 Class A shares issued and outstanding, respectively | 7 | 7 |
Additional paid-in capital | 118,153 | 117,843 |
Accumulated deficit | (68,043) | (65,043) |
Accumulated other comprehensive loss | (356) | (914) |
Total stockholders' equity | 49,761 | 51,893 |
Total liabilities and stockholders' equity | 179,562 | 195,395 |
Series B Preferred Stock | ||
Mezzanine equity: | ||
Total mezzanine equity | 16,146 | 16,146 |
Series C Preferred Stock | ||
Mezzanine equity: | ||
Total mezzanine equity | $ 12,363 | $ 12,363 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 167,972 | 167,972 |
Preferred stock, shares outstanding | 167,972 | 167,972 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Class A common stock | ||
Common stock, shares authorized | 150,000,000 | |
Common stock, shares issued | 75,078,661 | 74,716,696 |
Common stock, shares outstanding | 75,078,661 | 74,716,696 |
Series B Preferred Stock | ||
Mezzanine equity, shares issued | 1,586,620 | 1,586,620 |
Mezzanine equity, shares outstanding | 1,586,620 | 1,586,620 |
Preferred stock, shares outstanding | 1,586,620 | |
Series C Preferred Stock | ||
Mezzanine equity, shares issued | 1,320,850 | 1,320,850 |
Mezzanine equity, shares outstanding | 1,320,850 | 1,320,850 |
Preferred stock, shares outstanding | 1,320,850 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Series A Preferred Stock. As Adjusted | Series A Preferred Stock. Series A Preferred Stock | Series A Preferred Stock. | Class A Common Stock As Adjusted | Class A Common Stock | Additional Paid-in Capital. As Adjusted | Additional Paid-in Capital. | Accumulated Other Comprehensive Income (Loss) As Adjusted | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit. Cumulative effect of change in accounting principle, net of tax | Accumulated Deficit. As Adjusted | Accumulated Deficit. | Cumulative effect of change in accounting principle, net of tax | As Adjusted | Series A Preferred Stock | Total |
Beginning balance, value at Dec. 31, 2021 | $ 6 | $ 110,867 | $ 3,728 | $ (61,300) | $ 53,301 | |||||||||||
Beginning balance, shares at Dec. 31, 2021 | 63,821,901 | 167,972 | ||||||||||||||
Stock options exercised | 25 | 25 | ||||||||||||||
Stock options exercised (in shares) | 53,250 | |||||||||||||||
Debt issuance costs (in shares) | 528,169 | |||||||||||||||
Conversion of restricted shares | $ 1 | (1) | ||||||||||||||
Conversion of restricted shares (in shares) | 1,119,118 | |||||||||||||||
Foreign currency translation | 6 | (1,772) | (6) | (1,772) | ||||||||||||
Fixed dividends for preferred shareholders | (317) | (317) | ||||||||||||||
Net loss | (4,856) | (4,856) | ||||||||||||||
Stock compensation | 1,135 | 1,135 | ||||||||||||||
Ending balance, value at Mar. 31, 2022 | $ 7 | 111,715 | 1,956 | (66,162) | 47,516 | |||||||||||
Ending balance, shares at Mar. 31, 2022 | 65,522,438 | 167,972 | ||||||||||||||
Beginning balance, value at Dec. 31, 2022 | $ 7 | $ 7 | $ 117,843 | 117,843 | $ (914) | (914) | $ (76) | $ (65,119) | (65,043) | $ (76) | $ 51,817 | 51,893 | ||||
Beginning balance, shares at Dec. 31, 2022 | 167,972 | 167,972 | 74,716,696 | 74,716,696 | ||||||||||||
Vesting of restricted stock units (in shares) | 361,965 | |||||||||||||||
Foreign currency translation | 558 | 558 | ||||||||||||||
Fixed dividends for preferred shareholders | (317) | (317) | ||||||||||||||
Net loss | (2,924) | (2,924) | ||||||||||||||
Stock compensation | 627 | 627 | ||||||||||||||
Ending balance, value at Mar. 31, 2023 | $ 7 | $ 118,153 | $ (356) | $ (68,043) | $ 49,761 | |||||||||||
Ending balance, shares at Mar. 31, 2023 | 167,972 | 75,078,661 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (2,924) | $ (4,856) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of debt discount and issuance cost | 456 | 36 |
Change in debt issuance costs | 509 | |
Bad debt expense | (10) | 9 |
Gain on settlement of liabilities | (835) | |
Changes in deferred tax assets and liabilities | (121) | (377) |
Change in allowance for sales returns and volume rebate | 90 | (178) |
Change in inventory reserve | 294 | 77 |
Change in fair value of derivative liability | 224 | 10 |
Stock compensation expense | 641 | 1,135 |
Depreciation and amortization | 2,263 | 2,321 |
Change in right of use assets and lease liabilities | 160 | 32 |
Changes in operating assets and liabilities: | ||
Accounts receivable - trade | (2,375) | (796) |
Inventories | 13,571 | 1,490 |
Prepaid expenses and other current assets | 122 | 1,558 |
Other assets | (229) | (185) |
Accounts payable and accrued expenses | (13,845) | (6,916) |
Other liabilities | (49) | 307 |
Deferred revenues | (171) | 1,236 |
Net cash used in operating activities | (1,903) | (5,423) |
Cash flows from investing activities: | ||
Purchases of furniture and fixtures, net | (81) | (526) |
Net cash used in investing activities | (81) | (526) |
Cash flows from financing activities: | ||
Principal payments on debt | (670) | (625) |
Payments of fixed dividends to Series B Preferred stockholders | (317) | (317) |
Proceeds from the exercise of options and warrants | 30 | |
Net cash used in financing activities | (987) | (912) |
Effect of foreign currency exchange rates | (346) | 188 |
Net decrease in cash and cash equivalents | (3,317) | (6,673) |
Cash and cash equivalents, beginning of the period | 14,591 | 17,938 |
Cash and cash equivalents, end of the period | 11,274 | 11,265 |
Supplemental cash flow disclosures: | ||
Cash paid for income taxes | 52 | 150 |
Cash paid for interest | 1,975 | $ 1,718 |
Non-cash investing and financing transactions: | ||
Addition of right of use assets | $ 26 |
ORGANIZATION AND SIGNIFICANT AC
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS Boxlight Corporation, a Nevada Corporation (“Boxlight”), designs, produces and distributes interactive technology solutions to the education, corporate and government markets under its Clevertouch and Mimio brands. Boxlight’s solutions include interactive displays, collaboration software, supporting accessories, and professional services. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements include the accounts of Boxlight and its wholly owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. Effective January 1, 2023, the Company’s internal reporting structure used by the Chief Operating Decision Maker changed that resulted in changes to the Company’s segment reporting to align with the geographic markets in which it operates, as further discussed below and in Note 16 - Segments. ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with 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 condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Note 1 in the Notes to the Consolidated Financial Statements for 2022 contained in the Annual Report on Form 10-K, filed with the SEC on March 17, 2023, describes the significant accounting policies that the Company used in preparing its condensed consolidated financial statements. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to revenue, reserves, and allowances. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates under different assumptions or conditions. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments primarily include cash, accounts receivable, derivative liabilities, accounts payable and debt. Due to the short-term nature of cash, accounts receivable and accounts payable, the carrying amounts of these assets and liabilities approximate their fair value. Debt approximates fair value due to either the short-term nature, variable rate, or recent execution of the debt agreement. The amount of consideration received is deemed to approximate the fair value of long-term debt net of any debt discount and issuance cost. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. ● Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. ● Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets 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 March 31, 2023 and December 31, 2022 (in thousands): Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs March 31, Description (Level 1) (Level 2) (Level 3) 2023 Derivative liabilities - warrant instruments — — $ 696 $ 696 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 The following tables reconcile the beginning and ending balances of the warrant instruments within Level 3 of the fair value hierarchy: (in thousands) Balance, December 31, 2022 $ 472 Change in fair value of derivative liabilities 224 Balance, March 31, 2023 $ 696 (in thousands) Balance, December 31, 2021 $ 3,064 Change in fair value of derivative liabilities 9 Balance, March 31, 2022 $ 3,073 INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting, and warrants to purchase common stock were considered to be common stock equivalents. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period giving effect to all potentially dilutive securities to the extent they are dilutive. The dilutive effect of options to purchase common stock, restricted stock units subject to vesting and other share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” 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. For the three months ended March 31, 2023, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise million shares from options to purchase common shares, million of unvested restricted shares and million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive. For the three months ended March 31, 2022, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise million shares from options to purchase common shares, 3.9 million of unvested restricted shares and 3.4 million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive. REVENUE RECOGNITION 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 the products or services, have been transferred to its customers. Product revenue is derived from the sale of projectors, interactive panels 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, projectors, 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 with terms of approximately 30-60 months. Software maintenance includes technical support, product updates performed 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 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 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 software product sales, control is transferred when the customer receives the related interactive hardware since the customer’s 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. 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. However, the Company does have performance obligations for which pricing is highly variable or uncertain, and contracts with those performance obligations generally contain multiple performance obligations with highly variable or uncertain pricing terms. For these contracts the Company allocates the transaction price to those performance obligations using an alternative method of allocation that is consistent with the allocation objective and the guidance on determining SSPs considering, when applicable, the estimated cost to provide the performance obligation, market pricing for competing product or service offerings, residual values based on the estimated SSP for certain goods, product-specific business objectives, incremental values for bundled transactions that include a service relative to similar transactions that exclude the service, and competitor pricing and margins. A separate price has not been established by the Company for performance obligations generally included in its contracts. In addition, the Company’s contracts generally include performance obligations that are never sold separately, are proprietary in nature, and the related selling price of these products and services is highly variable or uncertain. Therefore, the SSP of these products and services is estimated using the alternative method described above. The Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of contracts that are executed in the same manner, contain the same performance obligations, and are priced in a consistent manner. The Company believes that the application of the portfolio approach produces the same result as if they were applied at the contract level. Contract Balances The timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences can result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. Fees for the Company’s product and most service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30-60 days of contract execution. Fees for installation, training and professional development services are fixed and generally become due as the services are performed. The Company has an established history of collecting under the terms of its contracts without providing refunds or concessions to its customers. The Company’s contractual payment terms do not vary when products are bundled with services that are provided over multiple years. In these contracts where services are expected to be transferred on an ongoing basis for several years after the related payment, the Company has determined that the contracts generally do not include a significant financing component. The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the customer continues to use the related services; so that the customer can receive the optimal benefit from the products during the course of such product’s lifetime. 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 condensed consolidated balance sheets in accordance with Topic 606. Contract liabilities are reflected in deferred revenue in the accompanying condensed 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 had no material contract assets as of March 31, 2023 or December 31, 2022. During the three months ended March 31, 2023 and March 31, 2022, the Company recognized $2.1 million and $1.9 million of revenue that was included in the deferred revenue balance as of December 31, 2022 and December 31, 2021, respectively. Variable Consideration The Company’s otherwise fixed consideration 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 for “buyer’s remorse” where the distributor or reseller’s end customer either did not understand what they were ordering or otherwise 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 includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant reversal. These estimates are generally made using the expected value method based on historical experience and are measured at each reporting date. There was no material revenue recognized in the three months ended March 31, 2023 related to changes in estimated variable consideration that existed at December 31, 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 March 31, 2023 and December 31, 2022, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was $24.1 million and $23.9 million, respectively. The Company expects to recognize revenue on 34% of the remaining performance obligations during the next twelve months, 28% in the following twelve months, 21% in 2025 2026 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 contracts). 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. 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 which comes pre-installed on an interactive device is 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 keys 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 over three Three Months Ended March 31, (in thousands) 2023 2022 Product revenues: Hardware $ 38,217 $ 47,294 Software 464 1,519 Service revenues: Professional services 382 355 Maintenance and subscription services 2,126 1,435 $ 41,189 $ 50,603 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 fulfill 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; and ● The costs are expected to be recovered. Certain sales commissions incurred by the Company are 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 be recognized over a period that is one year or less, the Company has 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 condensed consolidated balance sheets. Total deferred commissions, net of accumulated amortization, on March 31, 2023 and December 31, 2022 was less than $300,000. Bill and Hold Arrangements From time to time the Company enters custodial bill and hold arrangements with customers. Each arrangement is reviewed, and revenue is recognized only when the following criteria have been met: (1) the reason for the bill-and-hold arrangement is substantive, (2) the product is identified as the customer’s asset, (3) the product is ready for delivery to the customer, (4) there is a fixed schedule for delivery, and (5) the seller cannot use the product or direct the product to another customer. As of March 31, 2023, $2.0 million of revenue was previously recognized for goods that are expected to be delivered to a customer during the second quarter. SEGMENT REPORTING ASC 280, Segment Reporting Effective January 1, 2023, the Company changed its segment reporting to align with the geographic markets in which it operates, as further discussed in Note 16 - Segments , PTY LTD (" ”) Each of our operating segments are primarily engaged in the sale of education technology products and services in the education market but which are also sold into the 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 corporate functions that are not allocated to the Company’s individual reporting segments. Transfers between segments are generally valued at market and are eliminated in consolidation. RECENTLY ADOPTED ACCOUNTING STANDARDS In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” 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 three months ended March 31, 2023. ACCOUNTING STANDARDS PENDING ADOPTION There were various other accounting standards and interpretations issued recently, some of which although applicable, are not expected to have a material impact on the Company’s financial position, operations, or cash flows. |
ACCOUNTS RECEIVABLE - TRADE
ACCOUNTS RECEIVABLE - TRADE | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS RECEIVABLE - TRADE | |
ACCOUNTS RECEIVABLE - TRADE | NOTE 2 – ACCOUNTS RECEIVABLE - TRADE Accounts receivable consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Accounts receivable – trade $ 35,677 $ 33,198 Allowance for doubtful accounts (261) (414) Allowance for sales returns and volume rebates (1,867) (1,775) Accounts receivable - trade, net of allowances $ 33,549 $ 31,009 |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 3 – 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. Inventories consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Finished goods $ 44,447 $ 56,583 Spare parts 978 775 Reserve for inventory obsolescence (1,587) (531) Advanced shipping costs 837 1,384 Inventories, net $ 44,675 $ 58,211 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Prepayments to vendors $ 4,837 $ 4,131 Prepaid licenses and other 2,546 3,302 Prepaid expenses and other current assets $ 7,383 $ 7,433 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS Intangible assets consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): Useful lives 2023 2022 INTANGIBLE ASSETS Patents 4-10 years $ 182 $ 182 Customer relationships 8-15 years 51,619 52,736 Technology 3-5 years 8,848 8,943 Domain 7 years 14 14 Non-compete 8-15 years 391 391 Tradenames 2-10 years 12,619 12,769 Intangible assets, at cost 73,673 75,035 Accumulated amortization (22,445) (22,456) Intangible assets, net of accumulated amortization $ 51,228 $ 52,579 For the three months ended March 31, 2023 and 2022, the Company recorded amortization expense of $2.1 million and $2.2 million, respectively. Changes to gross carrying amount of recognized intangible assets due to translation adjustments include approximately $1.4 million reduction as of March 31, 2023 and $3.1 million reduction as of December 31, 2022. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2023 | |
LEASES | |
LEASES | NOTE 6 – LEASES The Company has entered into various operating leases for certain offices, support locations and vehicles with terms extending through February 2028. 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 the Company’s sole discretion. The Company does not consider the exercise of any lease renewal options reasonably certain. Certain of the Company’s 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 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 ASC 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 March 31, 2023, the Company had no leases classified as finance leases. The Company is currently not a lessor in any lease arrangement. Our corporate headquarters is located at 2750 Premiere Parkway, Duluth, GA, 30097 in an office space of approximately 12,000 square feet, for which we pay approximately $23,000 per month as rent pursuant to a rental agreement. Our corporate headquarters house our administrative offices. The Company leases warehouse space in Lawrenceville, Georgia, for approximately $13,000 per month. We also maintain offices in Scottsdale, Arizona and Utica, New York in the U.S., and in Dartford, London, Leeds and Livingston and Belfast in the United Kingdom. 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 Operating lease expense was $564 thousand and $469 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively. Variable lease costs and short-term lease cost were not material for the three months ended March 31, 2023 and March 31, 2022. Cash paid for amounts included in the measurement of lease liabilities was $621 thousand and $423 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively. Future maturities of the Company's operating lease liabilities are summarized as follows (in thousands): Fiscal year ended, 2023 $ 1,522 2024 1,341 2025 1,106 2026 742 2027 246 Thereafter 6 4,963 Less imputed interest (906) Total $ 4,057 The following is supplemental lease information at March 31, 2023: Weighted-average remaining lease term (years) 3.1 Weighted-average discount rate 15.5 % |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expense consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Accounts payable $ 16,211 $ 30,719 Accrued expense 6,489 5,306 Other 470 541 Accounts payable and other liabilities $ 23,170 $ 36,566 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2023 | |
DEBT | |
DEBT | NOTE 8 – DEBT The following is a summary of the Company’s debt as of March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Debt – Third Parties Paycheck Protection Program $ 113 $ 127 Note payable - Whitehawk 49,250 49,906 Total debt 49,363 50,033 Less: Discount and issuance costs 4,954 5,410 Current portion of debt 848 845 Long-term debt $ 43,561 $ 43,778 Total debt (net of discount and issuance costs) $ 44,409 $ 44,623 Debt - Third Parties: Whitehawk Finance LLC In order to finance the acquisition of FrontRow Calypso LLC (“FrontRow”), the Company and substantially all of its direct and indirect subsidiaries, including Boxlight and FrontRow as guarantors, entered into a maximum $68.5 million term loan credit facility, dated December 31, 2021 (the “Credit Agreement”), with Whitehawk Finance LLC, as lender (the “Lender”), and White Hawk Capital Partners, LP, as collateral agent (“WhiteHawk”). The Company received an initial term loan of $58.5 million on December 31, 2021 (the “Initial Loan”) and was provided with a subsequent delayed draw facility of up to $10 million that may be provided for additional working capital purposes under certain conditions (the “Delayed Draw”). The Initial Loan and Delayed Draw are collectively referred to as the “Term Loans.” The proceeds of the Initial Loan were used to finance the Company’s acquisition of FrontRow, pay off all indebtedness owed to the Company’s then existing lenders, Sallyport Commercial Finance, LLC and Lind Global Asset Management, LLC, pay related fees and transaction costs, and provide working capital. Of the Initial Loan, $8.5 million was subject to repayment on February 28, 2022, with quarterly principal payments of $625,000 and interest payments commencing March 31, 2022 and the $40.0 million remaining balance plus any Delayed Draw loans becoming due and payable in full on December 31, 2025. The Term Loans bear interest at the LIBOR rate plus 10.75%; provided that after March 31, 2022, if the Company’s Senior Leverage Ratio (as defined in the Credit Agreement) is less than 2.25, the interest rate would be reduced to LIBOR plus 10.25%. Such terms are subject to the Company maintaining a borrowing base in terms compliant with the Credit Agreement. 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. The principal elements of the April amendment included (a) an extension of time to repay $8.5 million of the principal amount of the term loan from February 28, 2022 to February 28, 2023, and (b) forbearance on $3,500,000 in over advances until May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forth in the Credit Agreement. In such connection, the Loan Parties have obtained credit insurance on certain key customers whose principal offices are located in the European Union and Australia as, without the credit insurance, their accounts owed to the Loan Parties had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the Collateral Agent to enforce security interests on such accounts. In addition, the Lender and Collateral Agent agreed to (i) reduce, through September 30, 2022, the minimum cash reserve requirement for the Loan Parties, (ii) reduce the interest rate by 50 basis points (to Libor plus+ 9.75%) after delivery of the Loan Parties’ September 30, 2023 financial statements, subject to the Loan Parties maintaining 1.75 EBITDA coverage ratio, and (iii) waive all prior Events of Default under the Credit Agreement. In conjunction with the amendment to the Credit Agreement, the parties entered into an amended and restated fee letter (the “Fee Letter”) pursuant to which the parties agreed to prepayment premiums of (i) 5% for payments made on or before December 31, 2022, (ii) 4% for payments made between January 1, 2023 and December 31, 2023, and (iii) 2% for payments made between January 1, 2024 and December 31, 2025. Furthermore, the parties agreed that no prepayment premiums would be payable with respect to the first $5.0 million paid under the Term Loan, any payments made in relation to the $8.5 million due on or before February 28, 2023, any required amortization payments under the Credit Agreement and any mandatory prepayments by way of ECF or casualty events. On June 21, 2022, the Company and substantially all of its direct and indirect subsidiaries (together with the Company, the “Loan Parties”), entered into a second amendment (the “Second Amendment”) to the four year term loan credit facility, originally entered into December 31, 2021 and as amended on April 4, 2022 (the “Credit Agreement”), with the Collateral Agent and Lender. The Second Amendment to the Credit Agreement was entered into for purposes of the Lender funding a $2.5 million delayed draw term loan and adjusting certain terms to the Credit Agreement, including adjusting the Applicable Margin (as defined in the Second Amendment) to 13.25% for LIBOR Rate Loans and 12.25% for Reference Rate Loans, increasing the definition of change of control from 33% voting power to 40% voting power, requiring the Company to engage a financial advisor, and allowing additional time, until July 15, 2022, for the Company to come into compliance with certain borrowing base requirements set forth in the Second Amendment to the Credit Agreement, among other adjustments. During the three-month period ending March 31, 2023, the Company repaid principal of $656 thousand and interest of $2.0 million to Whitehawk. As of March 31, 2023, the Company was in compliance with all financial covenants under the Credit Facility. In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 528,169 shares of Class A common stock (the “Shares”), which Shares were registered pursuant to its existing shelf registration statement and were delivered to the Lender in January 2022, (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to increase to the extent of 3% of any Series B and Series C convertible preferred stock converted into Class A common stock), exercisable at $2.00 per share (the “Warrant”), which Warrant was subject to repricing on March 31, 2022 based on the arithmetic volume weighted average prices for the 30 trading days prior to September 30, 2022, in the event the Company’s stock is then trading below $2.00 per share, (iii) a 3% fee of $1,800,000, and (iv) a $500,000 original issue discount. In addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant. The Company also incurred agency fees, legal fees, and other costs in connection with the execution of the Credit Agreement totaling approximately $1.7 million. Under the terms of the warrant issued to Whitehawk on December 31, 2021, the exercise price of the warrants would reprice if the stock price on March 31, 2022 was less than the original exercise price, at which time the number of warrants would also be increased proportionately, so that after such adjustment the aggregate exercise price payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect. The warrants repriced on March 31, 2022 to $1.19 per share and the shares increased to 3,434,103. On July 22, 2022, the Company entered into a Securities Purchase Agreement with an accredited institutional investor. According to the terms of the Whitehawk agreement, this purchase agreement triggered a reduction of the exercise price of the warrants and a revaluation of the derivative liability. The warrants were repriced to $1.10 and shares increased to 3,715,075. 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 our lender on May 5, 2022, extending the payoff date until May 2025. As of March 31, 2023, the amount remaining on the loan was $113 thousand. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
DERIVATIVE LIABILITIES | |
DERIVATIVE LIABILITIES | NOTE 9 – DERIVATIVE LIABILITIES 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. Conversion and exercise prices may be lowered if the Company issues securities at lower prices in the future. Such warrants are measured at fair value at each reporting date, and the changes in fair value are included in determining net income (loss) for the period. The Company used a Monte Carlo Simulation model to determine the fair value of the derivative liabilities as of March 31, 2023 and December 31, 2022. March 31, 2023 Common stock issuable upon exercise of warrants 3,715,075 Market value of common stock on measurement date $ 0.38 Exercise price $ 1.10 Risk free interest rate (1) 3.64 % Expected life in years 3.75 years Expected volatility (2) 89.8 % Expected dividend yields (3) — % 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) — % (1) The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date. (2) The historical trading volatility 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. |
INCOME TAX
INCOME TAX | 3 Months Ended |
Mar. 31, 2023 | |
INCOME TAXES | |
INCOME TAX | NOTE 10 – INCOME TAXES Pretax (loss) income resulting from domestic and foreign operations is as follows (in thousands): Three Months Ended Three Months Ended March 31, March 31, 2023 2022 United States $ (3,515) $ (4,457) Foreign 642 (485) Total pretax book loss $ (2,873) $ (4,942) The Company recorded income tax expense of $51 thousand and income tax benefit of $86 thousand for the three months ended March 31, 2023 and March 31, 2022, respectively. The year-to-date effective tax rate is (1.8)% due to there being no tax expense/benefit for the legacy Boxlight entities, but the Sahara entities are fully taxable. The increase in tax expense year-over-year is largely due to foreign pretax book income for the three months ended March 31, 2023 as compared to foreign pretax loss for the three months ended March 31, 2022. 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 legacy Boxlight entities are in a net deferred tax asset position in the United States, the United Kingdom, and other jurisdictions, primarily driven by the aforementioned net operating losses. The recoverability of these deferred tax assets depends on the Company’s ability to generate taxable income in the jurisdiction to which the carryforward applies. It also depends on specific tax provisions in each jurisdiction that could impact utilization. For example, in the United States, a change in ownership, as defined by federal income tax regulations, could significantly limit the Company’s ability to utilize its 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 its net deferred tax asset at March 31, 2023 and December 31, 2022. 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. The tax years from 2009 to 2023 remain open to examination in the U.S. federal jurisdiction. The tax years from 2020 to 2023 remain open to examination in the U.K. Statutes of limitations vary in other immaterial jurisdictions. On August 16, 2022, the president signed the Inflation Reduction Act ( IRA ) into law. The IRA enacted a 15% corporate minimum tax effective in 2024, a 1% tax on share repurchases after December 31, 2022, and created and extended certain tax-related energy incentives. We currently do not expect the tax-related provisions of the IRA to have a material effect on our financial results. During the second quarter of 2021, the Company became aware of a potential state tax exposure for failure to file minimum tax returns in a state for several years. The Company has recorded an exposure item of $82 thousand for its best estimate of the amount for which it will settle the exposure. This amount includes $24 thousand of income tax and $58 thousand of penalties and interest. The Company has not identified any other material uncertain tax positions during the three months ended March 31, 2023. |
EQUITY
EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
EQUITY | |
EQUITY | NOTE 11 – EQUITY Preferred Shares The Company’s articles of incorporation 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) 1,586,620 shares of voting Series B preferred stock, with a par value of $0.0001 per share; 3) 1,320,850 shares of voting Series C preferred stock, with a par value of $0.0001 per share; and 4) 48,280,000 shares of “blank check” preferred stock to be designated by the Company’s board of directors. Issuance of preferred shares Series A Preferred Stock At the time of the Company’s initial public offering, the Company issued 250,000 shares of the Company’s non-voting convertible Series A preferred stock to Vert Capital for the acquisition of Genesis. All of the Series A preferred stock was convertible into 398,406 shares of Class A common stock, at the discretion of the Series A stockholder. On August 5, 2019, a total of 82,028 shares of Series A preferred stock were converted into a total of 130,721 shares of Class A common stock. As of March 31, 2023, a total of 167,972 shares of Series A preferred stock remained outstanding which can be converted into 267,684 shares of Class A common stock, at the discretion of the Series A stockholder. Series B Preferred Stock and Series C Preferred Stock On September 25, 2020, in connection with the acquisition of Sahara Holding Limited ("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 per share which was the closing price of the Company’s Class A common stock on the Nasdaq Stock Market on September 25, 2020 (the “Conversion Price”). Such conversion may occur 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, 30 days prior written notice to the holders, 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. 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. As the redemption features in the Series B preferred stock and Series C preferred stock are not solely within the control of the Company, the Company has classified the Series B preferred stock and Series C preferred stock as mezzanine or temporary equity in the Company’s condensed consolidated balance sheet. As of March 31, 2023, a total of 1,586,620 and 1,320,850 shares of Series B and C preferred stock remained outstanding, respectively. Common Stock The Company’s common stock consists of 1) 150,000,000 shares of Class A voting common stock and 2) 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 would automatically convert into shares of Class A common stock. As of March 31, 2023 and December 31, 2022, the Company had 75,078,661 and 74,716,696 shares of Class A common stock issued outstanding Issuance of common stock Securities Purchase Agreement 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 of the Company’s Class A common stock, par value $0.0001 per share, 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 The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Investors and customary indemnification rights and obligations of the parties. Pursuant to the terms of the Purchase Agreement, the Company has agreed to certain restrictions on the issuance and sale of its common stock or common stock equivalents (as defined in the Purchase Agreement) during the 60-day period following the closing of the Offering, which was on July 26, 2022. On August 9, 2022, the Investor exercised the prefunded warrants. The Company evaluated whether the Warrants, Pre-Funded Warrants and/or Shares were in the scope of ASC 480 which discusses the accounting for instruments with characteristics of both liabilities and equity. The guidance in ASC 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 ASC 480 and are therefore classified as equity. Credit Facility In conjunction with its receipt of the Whitehawk loan, the Company issued to Whitehawk 528,169 shares of Class A common stock, which were registered pursuant to the Company’s existing shelf registration statement and were delivered to the Whitehawk in January 2022. Repurchase Plan On February 14, 2023, the Board of Directors of Boxlight Corporation approved the Company’s establishment of a share repurchase program (the “Repurchase Program”) authorizing the Company to purchase up to $15.0 million of the Company’s Class A common stock. Pursuant to the Repurchase Program, the Company may, from time to time, repurchase its Class A common stock in the open market, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The timing and total amount of any repurchases made under the Repurchase Program will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations. The authorization expires on January 26, 2027, may be suspended or discontinued at any time, and does not obligate the company to acquire any amount of Class A common stock. Warrants The Company had equity warrants outstanding of 7,366,690 and 7,365,440 at March 31, 2023 and December 31, 2022, respectively. |
STOCK COMPENSATION
STOCK COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
STOCK COMPENSATION | |
STOCK COMPENSATION | NOTE 12 – STOCK COMPENSATION The Company has issued grants under two equity incentive plans, both of which have been approved by the Company’s shareholders: (i) the 2014 Equity Incentive Plan, as amended (the “2014 Plan”), pursuant to which a total of 6,390,438 shares of the Company’s Class A common stock have been approved for issuance, and (ii) the 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which a total of 5,000,000 shares of the Company’s Class A common stock have been approved for issuance. Upon approval of the 2021 Plan in June 2021, any shares remaining available 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 March 31, 2023, the Company has issued 6,199,231 shares under the 2021 Plan, such that the Company is over the authorized share number. The Company intends to increase the number of shares available for issuance under the 2021 Plan in May 2023. The fair value of any shares issued in excess of the approved shares under the 2021 Plan was less than $15 thousand and have been recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets at March 31, 2023. Stock Options Under the Company’s stock option program, pursuant to the 2014 Plan and 2021 Plan, an employee receives an award that provides the opportunity in the future to purchase the Company’s shares at the market price of the stock on the date the award is granted (the 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. Stock options have no financial statement effect on the date they are granted but rather are reflected over time through compensation expense. 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. The following is a summary of the option activities during the three months ended March 31, 2023: Number of Units Outstanding, December 31, 2022 3,915,877 Granted 2,914,386 Exercised — Cancelled (481,682) Outstanding, March 31, 2023 6,348,581 Exercisable, March 31, 2023 2,606,537 On January 1, 2023, the company granted 2,041,098 options which vest ratably over three years. 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 options issued during the three months ended March 31, 2023: market value on measurement date, $0.21 to $0.28; exercise price of $0.31 to $0.40; risk free interest rate, 4.19% to 4.22%; expected term, 3 years to 4 years; expected volatility, ranged from 111.45 to 111.74 and expected dividend yield of 0%. Restricted Stock Units Under the Company’s 2014 Plan and 2021 Plan, the Company may grant restricted stock units (“RSUs”) to certain employees and non-employee directors. Upon granting the RSUs, the Company recognizes a fixed compensation expense equal to the fair market value of the underlying shares of RSUs granted on a straight-line basis over the requisite services period for the RSUs. Compensation expense related to the RSUs is reduced by the fair value of units that are forfeited by employees that leave the Company prior to vesting. The RSUs 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 RSU activities during the three months ended March 31, 2023: Number of Units Outstanding, December 31, 2022 2,431,030 Granted 578,778 Vested (361,965) Forfeited (73,077) Outstanding, March 31, 2023 2,574,766 On January 1, 2023, the Company granted 578,778 RSU’s to our Chief Executive Officer, in accordance with his employment agreement. The RSU’s vest ratably over a three-year period. Stock Compensation Expense For the three months ended March 31, 2023 and 2022, the Company recorded the following stock compensation in general and administrative expense (in thousands): 2023 2022 Stock options $ 169 $ 115 Restricted stock units 471 1,019 Warrants 1 1 Total stock compensation expense $ 641 $ 1,135 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS Management Agreement 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 thousand per month and commissions equal to 15% of gross profit derived by the Company based on total purchase order revenue. The agreement, unless renewed or extended will expire on December 31, 2023. For the three months ended March 31, 2023, the Company paid $12 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 the Chief Executive Officer and Chairman, Michael Pope. The Management Agreement is separate and apart from Mr. Pope’s employment agreement with the Company. The Management Agreement will become effective as of the first day of the same month that Mr. Pope’s employment with the Company shall terminate. Thereafter, and for a term of 13 months, Mr. Pope shall 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/or receive payment in the form of shares of Class A common stock of the Company. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES | NOTE 14 – COMMITMENTS AND CONTINGENCIES Contingencies The Company assesses its exposure related to legal matters and other items that arise in the regular course of its business. If the Company determines that it is probable a loss has been incurred, the amount of the loss, or an amount within the range of loss, that can be reasonably estimated is recorded. The Company has not identified any legal matters that could have a material adverse effect on our consolidated results of operations, financial position, or cash flows. Purchase Commitments The Company is legally obligated to fulfill certain purchase commitments made to vendors that supply materials used in the Company’s products. As of March 31, 2023, the total amount of such open inventory purchase orders was $22.1 million. |
CUSTOMER AND SUPPLIER CONCENTRA
CUSTOMER AND SUPPLIER CONCENTRATION | 3 Months Ended |
Mar. 31, 2023 | |
CUSTOMER AND SUPPLIER CONCENTRATION | |
CUSTOMER AND SUPPLIER CONCENTRATION | NOTE 15 – CUSTOMER AND SUPPLIER CONCENTRATION There was one customer that accounted for greater than 10% of the Company’s consolidated revenues for the three months ended March 31, 2023 and 2022. Details are as follows: 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 three months ended March 31, for the three months ended March 31, March 31, 2023 March 31, 2022 Customer 2023 (in thousands) 2022 (in thousands) 1 14.1 % $ 3,362 10.3 % $ 1,997 For the three months ended March 31, 2023, the Company’s purchases did not exceed 10% with any particular vendor. For the three months ended March 31, 2022, the Company’s purchases were concentrated primarily with one vendor. Details are as follows: 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 three months ended March 31, the year ended March 31, March 31, 2023 March 31, 2022 Vendor 2023 (in thousands) 2022 (in thousands) 1 - % $ — 29 % $ 4,536 The Company believes there are other suppliers that could be substituted should the above cited supplier become unavailable or non-competitive. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Mar. 31, 2023 | |
SEGMENTS | |
SEGMENTS | NOTE 16 - SEGMENTS Information about our Company’s operations by operating segment is shown in the following tables (in thousands): Three Months Ended March 31, 2023 2022 Revenue, net Americas $ 21,066 $ 20,076 EMEA 23,955 30,695 Rest of World 1,323 105 Eliminations and Adjustments (1) (5,155) (273) Total Revenue, net $ 41,189 $ 50,603 Income (Loss) from Operations Americas (147) (2,927) EMEA (401) (492) Rest of World 408 8 Eliminations and Adjustments (1) (40) (43) Total Loss from Operations $ (180) $ (3,454) (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. March 31, December 31, 2023 2022 Identifiable Assets Americas $ 84,932 $ 88,451 EMEA 92,063 104,978 Rest of World 2,567 1,966 Total Identifiable Assets $ 179,562 $ 195,395 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS On April 24, 2023, the Company entered into a third amendment (the “Third Amendment”) to the Credit Agreement, with Whitehawk Capital Partners, LP, as collateral agent, and Whitehawk Finance LLC as the Lender. The Third Amendment serves to amend the Credit Agreement, originally entered into on December 31, 2021, as amended on April 4, 2022 and June 21, 2022, between the Company and all of its direct and indirect subsidiaries, the Collateral Agent and the Lender pursuant to which the Company received an initial $58.5 million term loan on December 31, 2021. 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, 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. |
ORGANIZATION AND SIGNIFICANT _2
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Boxlight Corporation, a Nevada Corporation (“Boxlight”), designs, produces and distributes interactive technology solutions to the education, corporate and government markets under its Clevertouch and Mimio brands. Boxlight’s solutions include interactive displays, collaboration software, supporting accessories, and professional services. |
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements include the accounts of Boxlight and its wholly owned subsidiaries (collectively, the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation. Effective January 1, 2023, the Company’s internal reporting structure used by the Chief Operating Decision Maker changed that resulted in changes to the Company’s segment reporting to align with the geographic markets in which it operates, as further discussed below and in Note 16 - Segments. |
ESTIMATES AND ASSUMPTIONS | ESTIMATES AND ASSUMPTIONS The preparation of financial statements in conformity with 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 condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Note 1 in the Notes to the Consolidated Financial Statements for 2022 contained in the Annual Report on Form 10-K, filed with the SEC on March 17, 2023, describes the significant accounting policies that the Company used in preparing its condensed consolidated financial statements. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to revenue, reserves, and allowances. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates under different assumptions or conditions. |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments primarily include cash, accounts receivable, derivative liabilities, accounts payable and debt. Due to the short-term nature of cash, accounts receivable and accounts payable, the carrying amounts of these assets and liabilities approximate their fair value. Debt approximates fair value due to either the short-term nature, variable rate, or recent execution of the debt agreement. The amount of consideration received is deemed to approximate the fair value of long-term debt net of any debt discount and issuance cost. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: ● Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. ● Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. ● Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels. The following table sets 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 March 31, 2023 and December 31, 2022 (in thousands): Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs March 31, Description (Level 1) (Level 2) (Level 3) 2023 Derivative liabilities - warrant instruments — — $ 696 $ 696 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 The following tables reconcile the beginning and ending balances of the warrant instruments within Level 3 of the fair value hierarchy: (in thousands) Balance, December 31, 2022 $ 472 Change in fair value of derivative liabilities 224 Balance, March 31, 2023 $ 696 (in thousands) Balance, December 31, 2021 $ 3,064 Change in fair value of derivative liabilities 9 Balance, March 31, 2022 $ 3,073 |
INCOME (LOSS) PER COMMON SHARE | INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting, and warrants to purchase common stock were considered to be common stock equivalents. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period giving effect to all potentially dilutive securities to the extent they are dilutive. The dilutive effect of options to purchase common stock, restricted stock units subject to vesting and other share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period. The dilutive effect of convertible securities is calculated using the “if-converted method.” 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. For the three months ended March 31, 2023, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise million shares from options to purchase common shares, million of unvested restricted shares and million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive. For the three months ended March 31, 2022, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise million shares from options to purchase common shares, 3.9 million of unvested restricted shares and 3.4 million shares issuable upon exercise of warrants. Additionally, potentially dilutive securities of million shares from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive. |
REVENUE RECOGNITION | REVENUE RECOGNITION 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 the products or services, have been transferred to its customers. Product revenue is derived from the sale of projectors, interactive panels 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, projectors, 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 with terms of approximately 30-60 months. Software maintenance includes technical support, product updates performed 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 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 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 software product sales, control is transferred when the customer receives the related interactive hardware since the customer’s 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. 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. However, the Company does have performance obligations for which pricing is highly variable or uncertain, and contracts with those performance obligations generally contain multiple performance obligations with highly variable or uncertain pricing terms. For these contracts the Company allocates the transaction price to those performance obligations using an alternative method of allocation that is consistent with the allocation objective and the guidance on determining SSPs considering, when applicable, the estimated cost to provide the performance obligation, market pricing for competing product or service offerings, residual values based on the estimated SSP for certain goods, product-specific business objectives, incremental values for bundled transactions that include a service relative to similar transactions that exclude the service, and competitor pricing and margins. A separate price has not been established by the Company for performance obligations generally included in its contracts. In addition, the Company’s contracts generally include performance obligations that are never sold separately, are proprietary in nature, and the related selling price of these products and services is highly variable or uncertain. Therefore, the SSP of these products and services is estimated using the alternative method described above. The Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of contracts that are executed in the same manner, contain the same performance obligations, and are priced in a consistent manner. The Company believes that the application of the portfolio approach produces the same result as if they were applied at the contract level. Contract Balances The timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences can result in receivables, contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets. Fees for the Company’s product and most service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30-60 days of contract execution. Fees for installation, training and professional development services are fixed and generally become due as the services are performed. The Company has an established history of collecting under the terms of its contracts without providing refunds or concessions to its customers. The Company’s contractual payment terms do not vary when products are bundled with services that are provided over multiple years. In these contracts where services are expected to be transferred on an ongoing basis for several years after the related payment, the Company has determined that the contracts generally do not include a significant financing component. The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the customer continues to use the related services; so that the customer can receive the optimal benefit from the products during the course of such product’s lifetime. 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 condensed consolidated balance sheets in accordance with Topic 606. Contract liabilities are reflected in deferred revenue in the accompanying condensed 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 had no material contract assets as of March 31, 2023 or December 31, 2022. During the three months ended March 31, 2023 and March 31, 2022, the Company recognized $2.1 million and $1.9 million of revenue that was included in the deferred revenue balance as of December 31, 2022 and December 31, 2021, respectively. Variable Consideration The Company’s otherwise fixed consideration 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 for “buyer’s remorse” where the distributor or reseller’s end customer either did not understand what they were ordering or otherwise 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 includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant reversal. These estimates are generally made using the expected value method based on historical experience and are measured at each reporting date. There was no material revenue recognized in the three months ended March 31, 2023 related to changes in estimated variable consideration that existed at December 31, 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 March 31, 2023 and December 31, 2022, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was $24.1 million and $23.9 million, respectively. The Company expects to recognize revenue on 34% of the remaining performance obligations during the next twelve months, 28% in the following twelve months, 21% in 2025 2026 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 contracts). 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. 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 which comes pre-installed on an interactive device is 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 keys 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 over three Three Months Ended March 31, (in thousands) 2023 2022 Product revenues: Hardware $ 38,217 $ 47,294 Software 464 1,519 Service revenues: Professional services 382 355 Maintenance and subscription services 2,126 1,435 $ 41,189 $ 50,603 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 fulfill 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; and ● The costs are expected to be recovered. Certain sales commissions incurred by the Company are 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 be recognized over a period that is one year or less, the Company has 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 condensed consolidated balance sheets. Total deferred commissions, net of accumulated amortization, on March 31, 2023 and December 31, 2022 was less than $300,000. Bill and Hold Arrangements From time to time the Company enters custodial bill and hold arrangements with customers. Each arrangement is reviewed, and revenue is recognized only when the following criteria have been met: (1) the reason for the bill-and-hold arrangement is substantive, (2) the product is identified as the customer’s asset, (3) the product is ready for delivery to the customer, (4) there is a fixed schedule for delivery, and (5) the seller cannot use the product or direct the product to another customer. As of March 31, 2023, $2.0 million of revenue was previously recognized for goods that are expected to be delivered to a customer during the second quarter. |
SEGMENT REPORTING | SEGMENT REPORTING ASC 280, Segment Reporting Effective January 1, 2023, the Company changed its segment reporting to align with the geographic markets in which it operates, as further discussed in Note 16 - Segments , PTY LTD (" ”) Each of our operating segments are primarily engaged in the sale of education technology products and services in the education market but which are also sold into the 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 corporate functions that are not allocated to the Company’s individual reporting segments. Transfers between segments are generally valued at market and are eliminated in consolidation. |
RECENTLY ADOPTED ACCOUNTING STANDARDS & ACCOUNTING STANDARDS PENDING ADOPTION | RECENTLY ADOPTED ACCOUNTING STANDARDS In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” 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 three months ended March 31, 2023. ACCOUNTING STANDARDS PENDING ADOPTION There were various other accounting standards and interpretations issued recently, some of which although applicable, are not expected to have a material impact on the Company’s financial position, operations, or cash flows. |
ORGANIZATION AND SIGNIFICANT _3
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES | |
SCHEDULE OF FINANCIAL LIABILITIES MEASURED ON A RECURRING BASIS | The following table sets 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 March 31, 2023 and December 31, 2022 (in thousands): Markets for Other Significant Carrying Identical Observable Unobservable Value as of Assets Inputs Inputs March 31, Description (Level 1) (Level 2) (Level 3) 2023 Derivative liabilities - warrant instruments — — $ 696 $ 696 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 |
SUMMARY OF WARRANT INSTRUMENTS ROLLFORWARD | The following tables reconcile the beginning and ending balances of the warrant instruments within Level 3 of the fair value hierarchy: (in thousands) Balance, December 31, 2022 $ 472 Change in fair value of derivative liabilities 224 Balance, March 31, 2023 $ 696 (in thousands) Balance, December 31, 2021 $ 3,064 Change in fair value of derivative liabilities 9 Balance, March 31, 2022 $ 3,073 |
SCHEDULE OF DISAGGREGATED REVENUE | Three Months Ended March 31, (in thousands) 2023 2022 Product revenues: Hardware $ 38,217 $ 47,294 Software 464 1,519 Service revenues: Professional services 382 355 Maintenance and subscription services 2,126 1,435 $ 41,189 $ 50,603 |
ACCOUNTS RECEIVABLE - TRADE (Ta
ACCOUNTS RECEIVABLE - TRADE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS RECEIVABLE - TRADE | |
SCHEDULE OF ACCOUNTS RECEIVABLE - TRADE | Accounts receivable consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Accounts receivable – trade $ 35,677 $ 33,198 Allowance for doubtful accounts (261) (414) Allowance for sales returns and volume rebates (1,867) (1,775) Accounts receivable - trade, net of allowances $ 33,549 $ 31,009 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INVENTORIES | |
SCHEDULE OF INVENTORIES | Inventories consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Finished goods $ 44,447 $ 56,583 Spare parts 978 775 Reserve for inventory obsolescence (1,587) (531) Advanced shipping costs 837 1,384 Inventories, net $ 44,675 $ 58,211 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Prepayments to vendors $ 4,837 $ 4,131 Prepaid licenses and other 2,546 3,302 Prepaid expenses and other current assets $ 7,383 $ 7,433 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INTANGIBLE ASSETS | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): Useful lives 2023 2022 INTANGIBLE ASSETS Patents 4-10 years $ 182 $ 182 Customer relationships 8-15 years 51,619 52,736 Technology 3-5 years 8,848 8,943 Domain 7 years 14 14 Non-compete 8-15 years 391 391 Tradenames 2-10 years 12,619 12,769 Intangible assets, at cost 73,673 75,035 Accumulated amortization (22,445) (22,456) Intangible assets, net of accumulated amortization $ 51,228 $ 52,579 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
LEASES | |
SCHEDULE OF FUTURE OPERATING LEASE LIABILITIES | Future maturities of the Company's operating lease liabilities are summarized as follows (in thousands): Fiscal year ended, 2023 $ 1,522 2024 1,341 2025 1,106 2026 742 2027 246 Thereafter 6 4,963 Less imputed interest (906) Total $ 4,057 |
SCHEDULE OF SUPPLEMENTAL LEASE INFORMATION | Weighted-average remaining lease term (years) 3.1 Weighted-average discount rate 15.5 % |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expense consisted of the following at March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Accounts payable $ 16,211 $ 30,719 Accrued expense 6,489 5,306 Other 470 541 Accounts payable and other liabilities $ 23,170 $ 36,566 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
DEBT | |
SCHEDULE OF DEBT | The following is a summary of the Company’s debt as of March 31, 2023 and December 31, 2022 (in thousands): 2023 2022 Debt – Third Parties Paycheck Protection Program $ 113 $ 127 Note payable - Whitehawk 49,250 49,906 Total debt 49,363 50,033 Less: Discount and issuance costs 4,954 5,410 Current portion of debt 848 845 Long-term debt $ 43,561 $ 43,778 Total debt (net of discount and issuance costs) $ 44,409 $ 44,623 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
DERIVATIVE LIABILITIES | |
SCHEDULE OF FAIR VALUE OF DERIVATIVE LIABILITIES | March 31, 2023 Common stock issuable upon exercise of warrants 3,715,075 Market value of common stock on measurement date $ 0.38 Exercise price $ 1.10 Risk free interest rate (1) 3.64 % Expected life in years 3.75 years Expected volatility (2) 89.8 % Expected dividend yields (3) — % 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) — % (1) The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date. (2) The historical trading volatility 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. |
INCOME TAX (Tables)
INCOME TAX (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INCOME TAXES | |
SCHEDULE OF PRETAX INCOME (LOSS) | Pretax (loss) income resulting from domestic and foreign operations is as follows (in thousands): Three Months Ended Three Months Ended March 31, March 31, 2023 2022 United States $ (3,515) $ (4,457) Foreign 642 (485) Total pretax book loss $ (2,873) $ (4,942) |
STOCK COMPENSATION (Tables)
STOCK COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
STOCK COMPENSATION | |
SUMMARY OF THE OPTION ACTIVITIES | Number of Units Outstanding, December 31, 2022 3,915,877 Granted 2,914,386 Exercised — Cancelled (481,682) Outstanding, March 31, 2023 6,348,581 Exercisable, March 31, 2023 2,606,537 |
SUMMARY OF THE RESTRICTED STOCK ACTIVITIES | Number of Units Outstanding, December 31, 2022 2,431,030 Granted 578,778 Vested (361,965) Forfeited (73,077) Outstanding, March 31, 2023 2,574,766 |
SCHEDULE OF STOCK COMPENSATION EXPENSE | For the three months ended March 31, 2023 and 2022, the Company recorded the following stock compensation in general and administrative expense (in thousands): 2023 2022 Stock options $ 169 $ 115 Restricted stock units 471 1,019 Warrants 1 1 Total stock compensation expense $ 641 $ 1,135 |
CUSTOMER AND SUPPLIER CONCENT_2
CUSTOMER AND SUPPLIER CONCENTRATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
CUSTOMER AND SUPPLIER CONCENTRATION | |
SCHEDULE OF CONCENTRATION RISK | 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 three months ended March 31, for the three months ended March 31, March 31, 2023 March 31, 2022 Customer 2023 (in thousands) 2022 (in thousands) 1 14.1 % $ 3,362 10.3 % $ 1,997 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 three months ended March 31, the year ended March 31, March 31, 2023 March 31, 2022 Vendor 2023 (in thousands) 2022 (in thousands) 1 - % $ — 29 % $ 4,536 |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
SEGMENTS | |
Schedule of revenue and income (loss) by operating segments | Three Months Ended March 31, 2023 2022 Revenue, net Americas $ 21,066 $ 20,076 EMEA 23,955 30,695 Rest of World 1,323 105 Eliminations and Adjustments (1) (5,155) (273) Total Revenue, net $ 41,189 $ 50,603 Income (Loss) from Operations Americas (147) (2,927) EMEA (401) (492) Rest of World 408 8 Eliminations and Adjustments (1) (40) (43) Total Loss from Operations $ (180) $ (3,454) (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. March 31, December 31, 2023 2022 Identifiable Assets Americas $ 84,932 $ 88,451 EMEA 92,063 104,978 Rest of World 2,567 1,966 Total Identifiable Assets $ 179,562 $ 195,395 |
ORGANIZATION AND SIGNIFICANT _4
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - SCHEDULE OF FINANCIAL LIABILITIES MEASURED ON A RECURRING BASIS (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Derivative liabilities | $ 696 | $ 472 | $ 3,073 | $ 3,064 |
Warrant | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Derivative liabilities | 696 | 472 | ||
Level 3 | Warrant | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||
Derivative liabilities | $ 696 | $ 472 |
ORGANIZATION AND SIGNIFICANT _5
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - CHANGES IN THE COMPANY WARRANT INSTRUMENTS (Details) - Fair Value, Recurring - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Beginning balance | $ 472 | $ 3,064 |
Change in fair value of derivative liabilities | 224 | 9 |
Ending balance | $ 696 | $ 3,073 |
ORGANIZATION AND SIGNIFICANT _6
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - EPS, REVENUE RECOGNITION, CONTRACT BALANCES AND COSTS AND WARRANTY RESERVE (Details) - USD ($) shares in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Revenue recognized which was previously deferred | $ 2,100,000 | $ 1,900,000 | |
Deferred commissions related amortization | $ 300,000 | $ 300,000 | |
Stock options | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive shares excluded from computation of diluted earnings per share due | 6.4 | 3.8 | |
Warrant | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive shares excluded from computation of diluted earnings per share due | 11.1 | 3.4 | |
Converted preferred stock | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive shares excluded from computation of diluted earnings per share due | 17.8 | 17.8 | |
Unvested restricted shares | |||
Property, Plant and Equipment [Line Items] | |||
Potentially dilutive shares excluded from computation of diluted earnings per share due | 2.6 | 3.9 | |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Period fees are due for adjustable rebate contracts | 30 days | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Period fees are due for adjustable rebate contracts | 60 days | ||
Interactive devices | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Hardware maintenance services terms (in months) | 30 months | ||
Interactive devices | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Hardware maintenance services terms (in months) | 60 months | ||
Non-interactive projectors | |||
Property, Plant and Equipment [Line Items] | |||
Hardware maintenance services terms (in months) | 60 months |
ORGANIZATION AND SIGNIFICANT _7
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - REMAINING PERFORMANCE OBLIGATIONS (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Remaining Performance Obligations | ||
Remaining performance obligations | $ 24.1 | $ 23.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | ||
Remaining Performance Obligations | ||
Remaining performance obligation period | 12 months | |
Remaining performance obligations (as a percent) | 34% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Remaining Performance Obligations | ||
Remaining performance obligation period | 12 months | |
Remaining performance obligations (as a percent) | 28% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-04-01 | ||
Remaining Performance Obligations | ||
Remaining performance obligation period | 12 months | |
Remaining performance obligations (as a percent) | 21% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01 | ||
Remaining Performance Obligations | ||
Remaining performance obligation period | 12 months | |
Remaining performance obligations (as a percent) | 13% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-04-01 | ||
Remaining Performance Obligations | ||
Remaining performance obligation period | 12 months | |
Remaining performance obligations (as a percent) | 4% |
ORGANIZATION AND SIGNIFICANT _8
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES - DISAGGREGATED REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue | ||
Revenue | $ 41,189 | $ 50,603 |
Product revenues | Hardware | ||
Disaggregation of Revenue | ||
Revenue | 38,217 | 47,294 |
Product revenues | Software | ||
Disaggregation of Revenue | ||
Revenue | 464 | 1,519 |
Service revenues | Professional services | ||
Disaggregation of Revenue | ||
Revenue | 382 | 355 |
Service revenues | Maintenance and subscription services | ||
Disaggregation of Revenue | ||
Revenue | 2,126 | $ 1,435 |
Bill and hold arrangements | ||
Disaggregation of Revenue | ||
Revenue | $ 2,000 |
ORGANIZATION AND SIGNIFICANT _9
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jan. 01, 2023 USD ($) segment | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) segment | |
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 3 | ||
Retained earnings | $ | $ (68,043) | $ (65,043) | |
Cumulative effect of change in accounting principle, net of tax | ASU 2016-13 | |||
Retained earnings | $ | $ (76) | ||
Maximum | |||
Duration over which software maintenance, hardware maintenance, and subscription services are generally transferred | 5 years | ||
Minimum | |||
Duration over which software maintenance, hardware maintenance, and subscription services are generally transferred | 3 years |
ACCOUNTS RECEIVABLE - TRADE (De
ACCOUNTS RECEIVABLE - TRADE (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
ACCOUNTS RECEIVABLE - TRADE | ||
Accounts receivable - trade | $ 35,677 | $ 33,198 |
Allowance for doubtful accounts | (261) | (414) |
Allowance for sales returns and volume rebates | (1,867) | (1,775) |
Accounts receivable - trade, net of allowances | $ 33,549 | $ 31,009 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
INVENTORIES | ||
Finished goods | $ 44,447 | $ 56,583 |
Spare parts | 978 | 775 |
Reserve for inventory obsolescence | (1,587) | (531) |
Advanced shipping costs | 837 | 1,384 |
Inventories, net | $ 44,675 | $ 58,211 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Prepaid expenses and other current assets | $ 7,383 | $ 7,433 |
Prepayments to vendors | ||
Prepaid expenses and other current assets | 4,837 | 4,131 |
Prepaid licenses and other | ||
Prepaid expenses and other current assets | $ 2,546 | $ 3,302 |
INTANGIBLE ASSETS - ASSETS BY T
INTANGIBLE ASSETS - ASSETS BY TYPE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | $ 73,673 | $ 75,035 |
Accumulated amortization | (22,445) | (22,456) |
Intangible assets, net of accumulated amortization | 51,228 | 52,579 |
Patents | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | $ 182 | 182 |
Patents | Minimum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 4 years | |
Patents | Maximum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | $ 51,619 | 52,736 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 8 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Technology | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | $ 8,848 | 8,943 |
Technology | Minimum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 3 years | |
Technology | Maximum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 5 years | |
Domain | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 7 years | |
Finite-Lived Intangible Assets, Gross | $ 14 | 14 |
Non-compete | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | $ 391 | 391 |
Non-compete | Minimum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 8 years | |
Non-compete | Maximum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Tradenames | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Assets, Gross | $ 12,619 | $ 12,769 |
Tradenames | Minimum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Tradenames | Maximum | ||
Finite-Lived Intangible Assets | ||
Finite-Lived Intangible Asset, Useful Life | 10 years |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
INTANGIBLE ASSETS | |||
Amortization of intangible assets | $ 2.1 | $ 2.2 | |
Changes to gross carrying amount of recognized intangible assets | $ (1.4) | $ 3.1 |
LEASES (Details)
LEASES (Details) | 3 Months Ended | |
Mar. 31, 2023 USD ($) ft² | Mar. 31, 2022 USD ($) | |
LEASES | ||
Initial lease term (in years) | 5 years | |
Renewal options | false | |
Operating lease cost | $ 564,000 | $ 469,000 |
Lease liabilities | $ 621,000 | $ 423,000 |
Office Space Lease at Duluth, GA | ||
LEASES | ||
Area of land, square feet | ft² | 12,000 | |
Rent payment | $ 23,000 | |
Warehouse Space Lease in Lawrenceville, GA | ||
LEASES | ||
Rent payment | $ 13,000 |
LEASES - SCHEDULE OF FUTURE MIN
LEASES - SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
LEASES | |
2023 | $ 1,522 |
2024 | 1,341 |
2025 | 1,106 |
2026 | 742 |
2027 | 246 |
Thereafter | 6 |
Minimum Lease Payments | 4,963 |
Less imputed interest | (906) |
Total | $ 4,057 |
LEASES - SUPPLEMENTAL LEASE INF
LEASES - SUPPLEMENTAL LEASE INFORMATION (Details) | Mar. 31, 2023 |
LEASES | |
Weighted-average remaining lease term (years) | 3 years 1 month 6 days |
Weighted-average discount rate | 15.50% |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||
Accounts payable | $ 16,211 | $ 30,719 |
Accrued expense | 6,489 | 5,306 |
Other | 470 | 541 |
Accounts payable and other liabilities | $ 23,170 | $ 36,566 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 02, 2022 |
DEBT | |||
Total debt | $ 49,363 | $ 50,033 | |
Less: Discount and issuance cost | 4,954 | 5,410 | |
Current portion of debt | 848 | 845 | |
Long-term debt | 43,561 | 43,778 | |
Total debt (net of discount and issuance costs) | 44,409 | 44,623 | |
Paycheck Protection Program | |||
DEBT | |||
Total debt | 113 | 127 | |
Total debt (net of discount and issuance costs) | 113 | $ 173 | |
Note payable | Whitehawk Inc | |||
DEBT | |||
Total debt | $ 49,250 | $ 49,906 |
DEBT - WHITEHAWK FINANCE LLC (D
DEBT - WHITEHAWK FINANCE LLC (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Jun. 21, 2022 USD ($) | Apr. 04, 2022 USD ($) | Mar. 31, 2022 USD ($) $ / shares shares | Jan. 31, 2022 shares | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) D $ / shares shares | Dec. 31, 2022 USD ($) shares | Jul. 22, 2022 $ / shares shares | Jun. 20, 2022 | Mar. 29, 2022 USD ($) | |
DEBT | |||||||||||
Long-term debt | $ 44,409,000 | $ 44,623,000 | |||||||||
Number of shares for warrants | shares | 3,715,075 | 3,715,075 | |||||||||
Agency fees, legal fees, and other costs | $ 4,954,000 | $ 5,410,000 | |||||||||
Repayment of interest | $ 1,975,000 | $ 1,718,000 | |||||||||
Maximum | |||||||||||
DEBT | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.40 | ||||||||||
Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Repayment of interest | $ 2,000,000 | ||||||||||
Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Percentage of fees payable | 3% | ||||||||||
Fees payable threshold amount | $ 1,800,000 | ||||||||||
Shares issued discount | $ 500,000 | ||||||||||
Repayment of notes payable | $ 656,000 | ||||||||||
Whitehawk Inc | London Interbank Offered Rate (LIBOR) | |||||||||||
DEBT | |||||||||||
Basis spread on interest rate | 10.75% | ||||||||||
Class A common stock | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
New issues (in shares) | shares | 528,169 | 528,169 | |||||||||
Percentage of increase in issue of warrants | 3% | ||||||||||
Exercise price (in dollars per share) | $ / shares | $ 2 | ||||||||||
Trading days for warrant repricing | D | 30 | ||||||||||
Share price | $ / shares | $ 2 | ||||||||||
Agency fees, legal fees, and other costs | $ 1,700,000 | ||||||||||
Class A common stock | Whitehawk Inc | London Interbank Offered Rate (LIBOR) | |||||||||||
DEBT | |||||||||||
Number of shares for warrants | shares | 2,043,291 | ||||||||||
March 2022 warrant repricing | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1.19 | $ 1.19 | |||||||||
Number of warrants after repricing | shares | 3,434,103 | 3,434,103 | |||||||||
July 2022 warrant repricing | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Share price | $ / shares | $ 1.10 | ||||||||||
Number of warrants after repricing | shares | 3,715,075 | ||||||||||
Credit agreement | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Change of control, voting percentage | 40% | 33% | |||||||||
Credit agreement | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Basis spread on interest rate | 9.75% | ||||||||||
Forbearance on advances granted the Loan Parties | $ 3,500,000 | ||||||||||
Interest rate reduction on debt instrument | 0.50% | ||||||||||
EBITDA coverage ratio required to be maintained | 1.75% | ||||||||||
Credit agreement | Whitehawk Inc | London Interbank Offered Rate (LIBOR) | |||||||||||
DEBT | |||||||||||
Basis spread on interest rate | 13.25% | 10.25% | |||||||||
Credit agreement | Whitehawk Inc | Reference Rate | |||||||||||
DEBT | |||||||||||
Basis spread on interest rate | 12.25% | ||||||||||
Credit agreement | After March 31, 2022 Senior leverage ratio is less than 2.25 | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Leverage ratio | 2.25% | ||||||||||
Credit agreement | Prepayment premiums the first year following the current fiscal year (as a percent) | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Prepayment premiums (as a percent) | 5% | ||||||||||
Credit agreement | Prepayment premiums the second year following the current fiscal year (as a percent) | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Prepayment premiums (as a percent) | 4% | ||||||||||
Credit agreement | Prepayment premiums the third year following the current fiscal year (as a percent) | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Prepayment premiums (as a percent) | 2% | ||||||||||
Initial Term Loan | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Maximum borrowing capacity | $ 68,500,000 | ||||||||||
Proceeds from debt | 58,500,000 | ||||||||||
Debt, face amount | $ 8,500,000 | $ 8,500,000 | |||||||||
Loan payment | $ 625,000 | ||||||||||
Long-term debt | 40,000,000 | ||||||||||
Repayment of debt not eligible for prepayment premiums | 5,000,000 | ||||||||||
Initial Loan Subject to Repayment on February 28, 2022 | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Debt, face amount | $ 8,500,000 | 8,500,000 | |||||||||
Delayed draw term loan | Whitehawk Inc | |||||||||||
DEBT | |||||||||||
Debt, face amount | $ 2,500,000 | ||||||||||
Delayed draw term loan | Whitehawk Inc | Maximum | |||||||||||
DEBT | |||||||||||
Debt, face amount | $ 10,000,000 |
DEBT - PAYCHECK PROTECTION PROG
DEBT - PAYCHECK PROTECTION PROGRAM LOAN (Details) - USD ($) $ in Thousands | May 22, 2020 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 02, 2022 | Dec. 31, 2021 |
DEBT | |||||
Long-term debt | $ 44,409 | $ 44,623 | |||
Paycheck Protection Program | |||||
DEBT | |||||
Proceeds from loan | $ 1,100 | ||||
Loan applied for forgiveness | $ 836 | ||||
Long-term debt | $ 113 | $ 173 |
DERIVATIVE LIABILITIES - FAIR V
DERIVATIVE LIABILITIES - FAIR VALUE OF DERIVATIVE LIABILITIES (Details) | Mar. 31, 2023 Y $ / shares shares | Dec. 31, 2022 Y $ / shares shares |
Fair Value Measurement Inputs and Valuation Techniques | ||
Common stock issuable upon exercise of warrants | shares | 3,715,075 | 3,715,075 |
Market value of common stock on measurement date | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Measurement input | 0.38 | 0.31 |
Exercise price | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Measurement input | 1.10 | 1.10 |
Risk free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Measurement input | 0.0364 | 0.0402 |
Expected life in years | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Measurement input | Y | 3.75 | 4 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Measurement input | 89.8 | 83.6 |
Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques | ||
Measurement input | 0 | 0 |
INCOME TAXES - SCHEDULE OF PRET
INCOME TAXES - SCHEDULE OF PRETAX INCOME (LOSS) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Total pretax book income (loss) | $ (2,873) | $ (4,942) |
US | ||
Total pretax book income (loss) | (3,515) | (4,457) |
Other Foreign Jurisdictions | ||
Total pretax book income (loss) | $ 642 | $ (485) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Jun. 30, 2021 | |
Income tax (expense) benefit | $ (51) | $ 86 | |
Penalties and interest accrued | $ 58 | ||
Other Foreign Jurisdictions | |||
Income tax (expense) benefit | $ (51) | $ 86 | |
Effective tax rate | (1.80%) | ||
State and Local Jurisdiction | |||
Income tax (expense) benefit | 24 | ||
Estimate of possible loss | $ 82 |
EQUITY - PREFERRED SHARES (Deta
EQUITY - PREFERRED SHARES (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
EQUITY | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Series A Preferred Stock | ||
EQUITY | ||
Preferred stock, shares authorized | 250,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | |
Series B Preferred Stock | ||
EQUITY | ||
Temporary equity, shares authorized | 1,586,620 | |
Temporary equity, par value (in dollars per share) | $ 0.0001 | |
Series C Preferred Stock | ||
EQUITY | ||
Temporary equity, shares authorized | 1,320,850 | |
Temporary equity, par value (in dollars per share) | $ 0.0001 | |
Blank Check Preferred Stock | ||
EQUITY | ||
Preferred stock, shares authorized | 48,280,000 |
EQUITY - SERIES A PREFERRED STO
EQUITY - SERIES A PREFERRED STOCK (Details) - shares | 3 Months Ended | ||
Aug. 05, 2019 | Mar. 31, 2023 | Dec. 31, 2022 | |
EQUITY | |||
Preferred stock, shares outstanding | 167,972 | 167,972 | |
Series A Preferred Stock | |||
EQUITY | |||
Shares issuable on conversion of preferred stock | 398,406 | ||
Shares converted on conversion | 82,028 | ||
Preferred stock, shares outstanding | 167,972 | ||
Series A Preferred Stock | Genesis Collaboration, LLC | |||
EQUITY | |||
Acquisition (in shares) | 250,000 | ||
Class A common stock | |||
EQUITY | |||
Shares issuable on conversion of preferred stock | 267,684 | ||
Shares issued on conversion | 130,721 |
EQUITY - SERIES B PREFERRED STO
EQUITY - SERIES B PREFERRED STOCK AND SERIES C PREFERRED STOCK (Details) $ / shares in Units, $ in Millions | Sep. 25, 2020 USD ($) D $ / shares shares | Mar. 31, 2023 shares | Dec. 31, 2022 shares |
Temporary Equity | |||
Remained outstanding | 167,972 | 167,972 | |
Series B Preferred Stock | |||
Temporary Equity | |||
Liquidation value per share | $ / shares | $ 10 | ||
Dividend rate | 8% | ||
Stock price trigger (as a percent) | 200% | ||
Threshold trading days | D | 20 | ||
Notice period for redemption | 30 days | ||
Redemption price per share | $ / shares | $ 10 | ||
Remained outstanding | 1,586,620 | ||
Series B Preferred Stock | Sahara Presentation Systems PLC | |||
Temporary Equity | |||
Shares issued on acquisition | 1,586,620 | ||
Series C Preferred Stock | |||
Temporary Equity | |||
Liquidation value per share | $ / shares | $ 10 | ||
Stock price trigger (as a percent) | 200% | ||
Threshold trading days | D | 20 | ||
Remained outstanding | 1,320,850 | ||
Series C Preferred Stock | Sahara Presentation Systems PLC | |||
Temporary Equity | |||
Shares issued on acquisition | 1,320,850 | ||
Series B and Series C Preferred Stock | Sahara Presentation Systems PLC | |||
Temporary Equity | |||
Fair value | $ | $ 28.5 | ||
Class A common stock | |||
Temporary Equity | |||
Conversion price per share | $ / shares | $ 1.66 | ||
Shares issuable on conversion of preferred stock | 267,684 |
EQUITY - COMMON STOCK (Details)
EQUITY - COMMON STOCK (Details) | 3 Months Ended | |
Mar. 31, 2023 Vote shares | Dec. 31, 2022 shares | |
EQUITY | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Class A common stock | ||
EQUITY | ||
Common stock, shares authorized | 150,000,000 | |
Number of votes per share | Vote | 1 | |
Common stock, shares issued | 75,078,661 | 74,716,696 |
Common stock, shares outstanding | 75,078,661 | 74,716,696 |
Class B common stock | ||
EQUITY | ||
Common stock, shares authorized | 50,000,000 | |
Number of votes per share | Vote | 0 | |
Common stock, shares outstanding | 0 | 0 |
EQUITY - ISSUANCE OF COMMON STO
EQUITY - ISSUANCE OF COMMON STOCK (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jul. 22, 2022 USD ($) $ / shares shares | Jan. 31, 2022 shares | Mar. 31, 2023 USD ($) Y $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 31, 2021 $ / shares shares | Feb. 14, 2023 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | |
Class of Stock [Line Items] | |||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Number of shares for warrants | shares | 3,715,075 | 3,715,075 | |||||
Net Income (Loss) Attributable to Parent | $ (2,924) | $ (4,856) | |||||
Accounts payable | $ 16,211 | $ 30,719 | |||||
Warrants shares outstanding | shares | 7,366,690 | 7,365,440 | |||||
Maximum | |||||||
Class of Stock [Line Items] | |||||||
Market value on measurement date | $ / shares | $ 0.28 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 0.40 | ||||||
Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Number of stock and warrants for common stock issued. | shares | 7,352,940 | ||||||
Price per share | $ / shares | $ 0.68 | ||||||
Gross proceeds from issuance of stock | $ 5,000 | ||||||
Shares offering, restriction to issue shares after closing of offering, period | 60 days | ||||||
Pre Funded Warrants | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Number of shares for warrants | shares | 352,940 | ||||||
Issuance proceeds allocated based on relative fair value of instruments | $ 118 | ||||||
Exercisable term of warrants | 6 months | ||||||
Warrants and rights outstanding, term | 5 years 6 months | ||||||
Net proceeds from issuance of warrants | $ 4,600 | ||||||
Warrant | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Issuance proceeds allocated based on relative fair value of instruments | 2,200 | ||||||
Risk free interest rate | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Measurement input | 0.0422 | ||||||
Expected life in years | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Measurement input | Y | 4 | ||||||
Expected volatility | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Measurement input | 1.1174 | ||||||
Expected dividend yield | |||||||
Class of Stock [Line Items] | |||||||
Measurement input | 0 | ||||||
Common stock | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Issuance proceeds allocated based on relative fair value of instruments | $ 2,400 | ||||||
Class A common stock | Maximum | |||||||
Class of Stock [Line Items] | |||||||
Stock repurchase program, authorized amount | $ 15,000 | ||||||
Class A common stock | Whitehawk Inc | |||||||
Class of Stock [Line Items] | |||||||
Public offering (in shares) | shares | 528,169 | 528,169 | |||||
Exercise price (in dollars per share) | $ / shares | $ 2 | ||||||
Class A common stock | Private Placement | |||||||
Class of Stock [Line Items] | |||||||
Public offering (in shares) | shares | 7,000,000 | ||||||
Common stock, par value | $ / shares | $ 0.0001 | ||||||
Exercise price (in dollars per share) | $ / shares | $ 0.0001 |
STOCK COMPENSATION (Details)
STOCK COMPENSATION (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jan. 01, 2023 shares | Mar. 31, 2023 USD ($) Y $ / shares shares | |
STOCK COMPENSATION | ||
Options granted (in shares) | 2,914,386 | |
Stock options | ||
STOCK COMPENSATION | ||
Vesting period (in years) | 3 years | 4 years |
Expiration term (in years) | 5 years | |
Options granted (in shares) | 2,041,098 | |
Equity Incentive Plan 2014 | ||
STOCK COMPENSATION | ||
Shares authorized | 6,390,438 | |
Equity Incentive Plan 2021 | ||
STOCK COMPENSATION | ||
Shares authorized | 5,000,000 | |
Stock options entitled to purchase | 6,199,231 | |
Fair value of shares issued under share-based payment arrangement | $ | $ 15 | |
Expected dividend yield | ||
STOCK COMPENSATION | ||
Measurement input | 0 | |
Minimum | ||
STOCK COMPENSATION | ||
Market value on measurement date | $ / shares | $ 0.21 | |
Exercise price (in dollars per share) | $ / shares | $ 0.31 | |
Minimum | Risk free interest rate | ||
STOCK COMPENSATION | ||
Measurement input | 0.0419 | |
Minimum | Expected life in years | ||
STOCK COMPENSATION | ||
Measurement input | Y | 3 | |
Minimum | Expected volatility | ||
STOCK COMPENSATION | ||
Measurement input | 1.1145 | |
Maximum | ||
STOCK COMPENSATION | ||
Market value on measurement date | $ / shares | $ 0.28 | |
Exercise price (in dollars per share) | $ / shares | $ 0.40 | |
Maximum | Risk free interest rate | ||
STOCK COMPENSATION | ||
Measurement input | 0.0422 | |
Maximum | Expected life in years | ||
STOCK COMPENSATION | ||
Measurement input | Y | 4 | |
Maximum | Expected volatility | ||
STOCK COMPENSATION | ||
Measurement input | 1.1174 |
STOCK COMPENSATION - STOCK OPTI
STOCK COMPENSATION - STOCK OPTIONS - ACTIVITY (Details) | 3 Months Ended |
Mar. 31, 2023 shares | |
Number of Units | |
Outstanding at beginning (in shares) | 3,915,877 |
Granted (in shares) | 2,914,386 |
Cancelled (in shares) | (481,682) |
Outstanding at ending (in shares) | 6,348,581 |
Exercisable (in shares) | 2,606,537 |
STOCK COMPENSATION - RESTRICTED
STOCK COMPENSATION - RESTRICTED STOCK UNITS - ACTIVITY (Details) - Restricted Stock Units - shares | 3 Months Ended | |
Jan. 01, 2023 | Mar. 31, 2023 | |
Number of Units | ||
Outstanding at beginning (in shares) | 2,431,030 | 2,431,030 |
Granted (in shares) | 578,778 | |
Vested (in shares) | (361,965) | |
Forfeited (in shares) | (73,077) | |
Outstanding at ending (in shares) | 2,574,766 | |
Vesting period (in years) | 4 years | |
Chief Executive Officer | ||
Number of Units | ||
Granted (in shares) | 578,778 | |
Vesting period (in years) | 3 years |
STOCK COMPENSATION - STOCK COMP
STOCK COMPENSATION - STOCK COMPENSATION EXPENSE (Details) - General and administrative expense. - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
STOCK COMPENSATION | ||
Stock compensation expense | $ 641 | $ 1,135 |
Stock options | ||
STOCK COMPENSATION | ||
Stock compensation expense | 169 | 115 |
Restricted Stock Units | ||
STOCK COMPENSATION | ||
Stock compensation expense | 471 | 1,019 |
Warrants | ||
STOCK COMPENSATION | ||
Stock compensation expense | $ 1 | $ 1 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 3 Months Ended | |||
Nov. 01, 2022 | Jan. 31, 2018 | Mar. 31, 2023 | Mar. 31, 2022 | |
Term over which Management Agreement pays after employment termination (in months) | 13 months | |||
Percentage of annual management fee payable in cash | 0.375% | |||
Revenues, net | $ 41,189,000 | $ 50,603,000 | ||
Maximum | ||||
Revenues, net | $ 250,000 | |||
Sales, marketing, management and related consulting services | Mark Elliott | ||||
Related party transaction, monthly fixed payment for services | $ 4,000 | |||
Related party transaction, percentage of commission on gross profit derived on total purchase order revenue | 15% | |||
Transactions with related party | $ 12,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - PURCHASE COMMITMENTS (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Purchase Commitments | |
Purchase Commitments | |
Open inventory purchase orders | $ 22.1 |
CUSTOMER AND SUPPLIER CONCENT_3
CUSTOMER AND SUPPLIER CONCENTRATION - CUSTOMER CONCENTRATION RISK (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) customer | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Concentration Risk | |||
Number of customers | customer | 1 | ||
Accounts receivable - trade, net of allowances | $ 33,549 | $ 31,009 | |
Revenue | Customer concentration risk | Customer one | |||
Concentration Risk | |||
Concentration risk (as a percent) | 14.10% | 10.30% | |
Accounts receivable - trade, net of allowances | $ 3,362 | $ 1,997 |
CUSTOMER AND SUPPLIER CONCENT_4
CUSTOMER AND SUPPLIER CONCENTRATION - SUPPLIER CONCENTRATION RISK (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) item | |
Concentration Risk | |
Number of suppliers | item | 1 |
Cost of goods sold | Supplier concentration risk | Supplier one | |
Concentration Risk | |
Concentration risk (as a percent) | 29% |
Accounts payable (prepayment) | $ | $ 4,536 |
SEGMENTS (Details)
SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Operating segments | |||
Revenue | $ 41,189 | $ 50,603 | |
Income (Loss) from Operations | (180) | (3,454) | |
Identifiable Assets | 179,562 | $ 195,395 | |
Americas | |||
Operating segments | |||
Identifiable Assets | 84,932 | 88,451 | |
EMEA | |||
Operating segments | |||
Identifiable Assets | 92,063 | 104,978 | |
Rest of World | |||
Operating segments | |||
Identifiable Assets | 2,567 | $ 1,966 | |
Operating segments | Americas | |||
Operating segments | |||
Revenue | 21,066 | 20,076 | |
Income (Loss) from Operations | (147) | (2,927) | |
Operating segments | EMEA | |||
Operating segments | |||
Revenue | 23,955 | 30,695 | |
Income (Loss) from Operations | (401) | (492) | |
Operating segments | Rest of World | |||
Operating segments | |||
Revenue | 1,323 | 105 | |
Income (Loss) from Operations | 408 | 8 | |
Eliminations | |||
Operating segments | |||
Revenue | (5,155) | (273) | |
Income (Loss) from Operations | $ (40) | $ (43) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Whitehawk Inc - USD ($) $ in Millions | 12 Months Ended | |
Apr. 24, 2023 | Dec. 31, 2021 | |
Initial Term Loan | ||
Subsequent Events | ||
Proceeds from financing | $ 58.5 | |
Subsequent event | Delayed Draw Term Loan-Additional Draw | ||
Subsequent Events | ||
Proceeds from financing | $ 3 |