[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Boxlight Corporation's unaudited condensed consolidated financial statements and notes for Q2 and H1 2022 and 2021 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Boxlight Corporation's unaudited condensed consolidated financial statements and notes for Q2 and H1 2022 and 2021 [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement details Boxlight Corporation's revenues, costs, and net income or loss for Q2 and H1 2022 and 2021 | Metric (in thousands, except per share) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues, net | $59,628 | $46,754 | $110,231 | $80,177 | | Cost of revenues | $42,794 | $33,920 | $80,781 | $58,791 | | Gross profit | $16,834 | $12,834 | $29,450 | $21,386 | | Operating expense: | | | | | | General and administrative expenses | $15,304 | $10,800 | $30,762 | $20,911 | | Research and development | $649 | $481 | $1,261 | $955 | | Total operating expense | $15,953 | $11,281 | $32,023 | $21,866 | | Income (loss) from operations | $881 | $1,553 | $(2,573) | $(480) | | Net income (loss) | $26 | $(2,220) | $(4,829) | $(7,388) | | Net loss per common share – basic and diluted | $(0.00) | $(0.04) | $(0.08) | $(0.13) | | Weighted average common shares outstanding | 65,820 | 57,871 | 65,405 | 56,518 | - For the three months ended June 30, 2022, net income was **$26 thousand**, a significant improvement from a **$2.2 million** loss in the prior year period. For the six months ended June 30, 2022, net loss decreased to **$4.8 million** from **$7.4 million** in the prior year[13](index=13&type=chunk) [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This statement presents Boxlight Corporation's assets, liabilities, and equity as of June 30, 2022, and December 31, 2021 | ASSETS (in thousands) | June 30, 2022 (unaudited) | December 31, 2021 | | :-------------------- | :------------------------ | :---------------- | | Cash and cash equivalents | $11,620 | $17,938 | | Accounts receivable – trade, net | $41,153 | $29,573 | | Inventories, net | $45,287 | $51,591 | | Total current assets | $108,149 | $108,546 | | Total assets | $196,691 | $201,436 | | LIABILITIES AND STOCKHOLDERS' EQUITY (in thousands) | June 30, 2022 (unaudited) | December 31, 2021 | | :-------------------------------------------------- | :------------------------ | :---------------- | | Accounts payable and accrued expenses | $33,385 | $33,638 | | Short-term debt | $9,159 | $9,804 | | Total current liabilities | $54,319 | $54,748 | | Total liabilities | $124,634 | $119,626 | | Total stockholders' equity | $43,548 | $53,301 | - As of June 30, 2022, cash and cash equivalents decreased to **$11.6 million** from **$17.9 million** at December 31, 2021. Total assets slightly decreased from **$201.4 million** to **$196.7 million**, while total liabilities increased from **$119.6 million** to **$124.6 million**[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement details changes in Boxlight Corporation's stockholders' equity for the six months ended June 30, 2022 - Total stockholders' equity decreased from **$53.3 million** at December 31, 2021, to **$43.5 million** at June 30, 2022. This change was primarily influenced by a foreign currency translation adjustment of **$(6.4) million** and a net loss of **$(4.8) million** for the six months ended June 30, 2022[22](index=22&type=chunk)[24](index=24&type=chunk) - During the six months ended June 30, 2022, **196,841 shares** were issued for stock options exercised and **1,660,806 shares** for conversion of restricted shares. Stock compensation expense contributed **$2.1 million** to additional paid-in capital[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement presents Boxlight Corporation's cash flows from operating, investing, and financing activities for H1 2022 and 2021 | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(6,876) | $(4,570) | | Net cash used in investing activities | $(659) | $(852) | | Net cash provided by (used in) financing activities | $621 | $(139) | | Effect of foreign currency exchange rates | $596 | $(462) | | Net decrease in cash and cash equivalents | $(6,318) | $(6,023) | | Cash and cash equivalents, beginning of period | $17,938 | $13,460 | | Cash and cash equivalents, end of period | $11,620 | $7,437 | - Net cash used in operating activities increased to **$6.9 million** for the six months ended June 30, 2022, from **$4.6 million** in the prior year. Net cash provided by financing activities significantly improved to **$621 thousand** in 2022, compared to a net use of **$139 thousand** in 2021, primarily due to proceeds from short-term debt[28](index=28&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines Boxlight Corporation's business, accounting policies, estimates, and revenue recognition - Boxlight Corporation designs, produces, and distributes interactive technology solutions under its Clevertouch and Mimio brands, serving education, corporate, and government markets[29](index=29&type=chunk) - The Company adopted ASU 2016-02 'Leases' on January 1, 2022, recognizing an operating lease right-of-use asset of **$3.8 million** and related liabilities, with no impact on the statement of operations or cash flows[68](index=68&type=chunk)[69](index=69&type=chunk) - Revenue is recognized when control of products or services is transferred to customers, with product revenue from hardware and software sales, and service revenue from maintenance, installation, training, and subscriptions[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) Disaggregated Revenue (in thousands) | Revenue Type | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Hardware | $56,569 | $43,145 | $103,863 | $73,905 | | Software | $1,038 | $1,818 | $2,556 | $2,685 | | Professional Services | $479 | $205 | $833 | $475 | | Maintenance and Subscription Services | $1,542 | $1,586 | $2,979 | $3,112 | | Total | $59,628 | $46,754 | $110,231 | $80,177 | [NOTE 2 – RECENT BUSINESS ACQUISITIONS](index=22&type=section&id=NOTE%202%20%E2%80%93%20RECENT%20BUSINESS%20ACQUISITIONS) This note details Boxlight Corporation's recent acquisitions, FrontRow Calypso LLC and Interactive Concepts BV - On December 31, 2021, Boxlight acquired FrontRow Calypso LLC for **$34.7 million**, expanding its offerings in network-based communication solutions for learning environments[74](index=74&type=chunk)[75](index=75&type=chunk) FrontRow Acquisition - Net Assets Acquired (in thousands) | Assets Acquired: | Amount | | :----------------- | :----- | | Cash | $2,752 | | Accounts receivable | $3,381 | | Inventories | $10,240 | | Total assets acquired | $17,604 | | Total liabilities assumed | $(2,738) | | Net tangible assets acquired | $14,866 | | Identifiable intangible assets | $16,866 | | Goodwill | $2,920 | | Total net assets acquired | $34,652 | | Consideration paid: Cash | $34,652 | - On March 23, 2021, Boxlight acquired Interactive Concepts BV for approximately **$3.3 million**, enhancing its distribution network in Belgium and Luxembourg[82](index=82&type=chunk) [NOTE 3 – ACCOUNTS RECEIVABLE - TRADE](index=24&type=section&id=NOTE%203%20%E2%80%93%20ACCOUNTS%20RECEIVABLE%20-%20TRADE) This note details accounts receivable, trade, net of allowances, which increased to **$41.2 million** at June 30, 2022 Accounts Receivable - Trade (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Accounts receivable – trade | $42,619 | $31,053 | | Allowance for doubtful accounts | $(344) | $(405) | | Allowance for sales returns and volume rebates | $(1,122) | $(1,075) | | Accounts receivable - trade, net of allowances | $41,153 | $29,573 | [NOTE 4 – INVENTORIES](index=24&type=section&id=NOTE%204%20%E2%80%93%20INVENTORIES) This note details inventory composition, which decreased to **$45.3 million** at June 30, 2022, primarily due to reduced finished goods Inventories (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :------------------------- | :------------ | :---------------- | | Finished goods | $46,227 | $51,346 | | Spare parts | $240 | $260 | | Reserve for inventory obsolescence | $(1,348) | $(599) |\ | Advanced shipping costs | $168 | $584 | | Inventories, net | $45,287 | $51,591 | - The reserve for inventory obsolescence increased significantly from **$599 thousand** at December 31, 2021, to **$1.3 million** at June 30, 2022[88](index=88&type=chunk) [NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=25&type=section&id=NOTE%205%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) This note shows prepaid expenses and other current assets increased to **$10.1 million** at June 30, 2022, driven by higher prepayments Prepaid Expenses and Other Current Assets (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :---------------------------------- | :------------ | :---------------- | | Prepayments to vendors | $8,574 | $7,739 | | Prepaid licenses and other | $1,515 | $1,705 | | Prepaid expenses and other current assets | $10,089 | $9,444 | [NOTE 6 – INTANGIBLE ASSETS](index=25&type=section&id=NOTE%206%20%E2%80%93%20INTANGIBLE%20ASSETS) This note details intangible assets, net of amortization, which decreased to **$56.8 million** at June 30, 2022, due to amortization and foreign currency adjustments Intangible Assets, Net (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :------------------------------------------- | :------------ | :---------------- | | Intangible assets, at cost | $72,524 | $77,731 | | Accumulated amortization | $(15,717) | $(12,199) | | Intangible assets, net of accumulated amortization | $56,807 | $65,532 | - Amortization expense for intangible assets was **$2.2 million** for the three months ended June 30, 2022 (vs. **$1.8 million** in 2021) and **$4.4 million** for the six months ended June 30, 2022 (vs. **$3.5 million** in 2021)[90](index=90&type=chunk) - Changes to gross carrying amount of recognized intangible assets due to translation adjustments include approximately **$2.2 million** reduction as of the six months ended June 30, 2022[90](index=90&type=chunk) [NOTE 7 – LEASES](index=25&type=section&id=NOTE%207%20%E2%80%93%20LEASES) This note outlines the Company's operating lease commitments and recognized right-of-use assets and liabilities following ASC 842 adoption - Operating lease expense was **$579 thousand** for the three months ended June 30, 2022, and **$1.0 million** for the six months ended June 30, 2022[94](index=94&type=chunk) Future Maturities of Operating Lease Liabilities (in thousands) | Fiscal year ended | Amount | | :---------------- | :----- | | 2022 | $974 | | 2023 | $1,918 | | 2024 | $1,206 | | 2025 | $1,033 | | 2026 | $731 | | Thereafter | $235 | | Total | $6,097 | | Less imputed interest | $(1,474) | | Total | $4,623 | - The weighted-average remaining lease term is **3.6 years**, with a weighted-average discount rate of **15.5%**[95](index=95&type=chunk) [NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES](index=26&type=section&id=NOTE%208%20%E2%80%93%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20EXPENSES) This note shows accounts payable and accrued expenses remained stable at **$33.4 million** at June 30, 2022, with a slight increase in accrued expenses Accounts Payable and Accrued Expenses (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Accounts payable | $23,877 | $25,714 | | Accrued expense | $8,316 | $6,440 | | Other | $1,192 | $1,484 | | Accounts payable and other liabilities | $33,385 | $33,638 | [NOTE 9 – DEBT](index=27&type=section&id=NOTE%209%20%E2%80%93%20DEBT) This note details the Company's debt structure, primarily a **$68.5 million** term loan credit facility with Whitehawk Finance LLC Summary of Debt (in thousands) | Metric | June 30, 2022 | December 31, 2021 | | :------------------------- | :------------ | :---------------- | | Debt – Third Parties | $59,873 | $59,509 | | Less: Discount and issuance cost | $6,474 | $7,568 | | Current portion of debt | $9,159 | $9,804 | | Long-term debt | $44,240 | $42,137 | | Total debt (net of discount) | $53,399 | $51,941 | - The Company entered into a **$68.5 million** term loan credit facility with Whitehawk Finance LLC on December 31, 2021, with an initial loan of **$58.5 million**, bearing interest at LIBOR plus **10.75%**[99](index=99&type=chunk) - Amendments to the Whitehawk credit agreement extended the repayment of an **$8.5 million** principal amount to February 28, 2023, and adjusted interest rates and borrowing base requirements[103](index=103&type=chunk)[104](index=104&type=chunk) [NOTE 10 – DERIVATIVE LIABILITIES](index=31&type=section&id=NOTE%2010%20%E2%80%93%20DERIVATIVE%20LIABILITIES) This note explains derivative liabilities, primarily warrant instruments, which decreased from **$3.06 million** to **$1.41 million** at June 30, 2022 Derivative Liabilities - Warrant Instruments (in thousands) | Description | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Derivative liabilities - warrant instruments | $1,414 | $3,064 | - The change in fair value of derivative liabilities was a gain of **$1.66 million** for the three months ended June 30, 2022, and a gain of **$1.65 million** for the six months ended June 30, 2022[41](index=41&type=chunk) Warrant Valuation Inputs | Metric | June 30, 2022 | December 31, 2021 | | :----------------------------------- | :------------ | :---------------- | | Common stock issuable upon exercise of warrants | 3,434,103 | 2,043,291 | | Market value of common stock on measurement date | $0.68 | $1.38 | | Exercise price | $1.19 | $2.00 | | Risk free interest rate | 2.97% | 1.25% | | Expected life in years | 4.5 years | 5 years | | Expected volatility | 81.1% | 79% | [NOTE 11 – INCOME TAXES](index=33&type=section&id=NOTE%2011%20%E2%80%93%20INCOME%20TAXES) This note discusses income tax expense and benefit, showing a significant decrease year-over-year, with an effective tax rate of **0.9%** for H1 2022 Pretax (Loss) Income by Jurisdiction (in thousands) | Jurisdiction | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | $510 | $(105) | $(3,908) | $(5,428) | | Foreign | $(443) | $407 | $(966) | $583 | | Total pretax book income (loss) | $67 | $302 | $(4,874) | $(4,845) | - Income tax expense for the three months ended June 30, 2022, was **$41 thousand**, down from **$2.5 million** in the prior year, largely due to foreign pretax loss and a UK tax rate change in 2021[120](index=120&type=chunk)[121](index=121&type=chunk) - The effective tax rate for the six months ended June 30, 2022, was **0.9%**, primarily because U.S. operations have no material tax expense due to net operating loss carryforwards offset by a valuation allowance[120](index=120&type=chunk)[123](index=123&type=chunk)[211](index=211&type=chunk) [NOTE 12 – EQUITY](index=35&type=section&id=NOTE%2012%20%E2%80%93%20EQUITY) This note details the Company's equity structure, including preferred and common stock, and issuances related to debt conversion, RSUs, and stock options - As of June 30, 2022, **167,972 shares** of Series A preferred stock, **1,586,620 shares** of Series B preferred stock, and **1,320,850 shares** of Series C preferred stock were outstanding[128](index=128&type=chunk)[129](index=129&type=chunk) - Series B and C Preferred Stock are classified as mezzanine equity due to redemption features not solely within the Company's control[131](index=131&type=chunk) - As of June 30, 2022, **66,207,717 shares** of Class A common stock were issued and outstanding, an increase from **63,821,901 shares** at December 31, 2021[136](index=136&type=chunk) - During the six months ended June 30, 2022, **1,660,806 restricted stock units** vested and converted into Class A common stock, and **196,841 stock options** were exercised[141](index=141&type=chunk)[142](index=142&type=chunk) [NOTE 13 – STOCK COMPENSATION](index=39&type=section&id=NOTE%2013%20%E2%80%93%20STOCK%20COMPENSATION) This note outlines the Company's stock compensation plans, including stock options and RSUs, detailing award activity and recognized expense Stock Option Activity (Six Months Ended June 30, 2022) | Metric | Number of Units | Weighted Average Exercise Price | | :--------------------------- | :-------------- | :------------------------------ | | Outstanding, December 31, 2021 | 4,054,116 | $1.92 | | Granted | 1,071,744 | $1.19 | | Exercised | (196,841) | $0.32 | | Cancelled | (699,014) | $1.79 | | Outstanding, June 30, 2022 | 4,230,005 | $1.83 | | Exercisable, June 30, 2022 | 2,874,787 | $2.27 | Restricted Stock Unit (RSU) Activity (Six Months Ended June 30, 2022) | Metric | Number of Units | Weighted Average Grant Date Fair Value | | :--------------------------- | :-------------- | :------------------------------------- | | Outstanding, December 31, 2021 | 1,973,947 | $1.81 | | Granted | 2,411,662 | $1.20 | | Vested | (836,497) | $1.87 | | Forfeited | (58,611) | $1.37 | | Outstanding, June 30, 2022 | 3,490,501 | $1.38 | Total Stock Compensation Expense (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | $440 | $154 | $555 | $391 | | Restricted stock units | $489 | $154 | $1,506 | $1,467 | | Warrants | $0 | $0 | $1 | $1 | | Total stock compensation expense | $929 | $308 | $2,062 | $1,859 | - As of June 30, 2022, there was approximately **$5.7 million** of unrecognized compensation expense related to unvested awards, with **$1.3 million** estimated to be recorded in the remaining six months of 2022[156](index=156&type=chunk) [NOTE 14 – RELATED PARTY TRANSACTIONS](index=41&type=section&id=NOTE%2014%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses a management agreement with an entity owned by the CEO for consulting services, with a fee of **0.375%** of net revenues, capped at **$250,000** annually - The Company has a management agreement with an entity owned by CEO Michael Pope, effective upon his employment termination, for consulting services[157](index=157&type=chunk) - The management fee is **0.375%** of consolidated net revenues, capped at **$250,000** annually, and can be paid in cash or Class A common stock[157](index=157&type=chunk) [NOTE 15 – COMMITMENTS AND CONTINGENCIES](index=41&type=section&id=NOTE%2015%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note details the Company's operating lease commitments and inventory purchase commitments, totaling **$11.6 million** in open orders as of June 30, 2022 - The Company leases seven office facilities in the U.S. and two in the U.K., with non-cancelable lease agreements extending from 2023 to 2027[158](index=158&type=chunk) - As of June 30, 2022, the total amount of open inventory purchase orders was **$11.6 million**[161](index=161&type=chunk) [NOTE 16 – CUSTOMER AND SUPPLIER CONCENTRATION](index=43&type=section&id=NOTE%2016%20%E2%80%93%20CUSTOMER%20AND%20SUPPLIER%20CONCENTRATION) This note highlights customer and supplier concentration, with one customer at **11.7%** of revenues and two vendors at **39.5%** and **17.6%** of cost of sales for H1 2022 Customer Concentration | Customer | Total revenues as % of total revenues (6 months ended June 30, 2022) | Accounts receivable (in thousands) as of June 30, 2022 | | :--------- | :------------------------------------------------------------------- | :----------------------------------------------------- | | Customer 1 | 11.7% | $4,923 | Supplier Concentration | Vendor | Total purchases as % of total cost of sales (6 months ended June 30, 2022) | Accounts payable (prepayment) (in thousands) as of June 30, 2022 | | :------- | :--------------------------------------------------------------------------- | :----------------------------------------------------------------- | | Vendor 1 | 39.5% | $10,894 | | Vendor 2 | 17.6% | $409 | [NOTE 17 – SUBSEQUENT EVENTS](index=43&type=section&id=NOTE%2017%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses significant subsequent events, including a **$5.0 million** registered direct offering, a Nasdaq deficiency, and a new CFO appointment - On July 22, 2022, the Company completed a registered direct offering, issuing **7 million shares** and warrants for **$5.0 million** in gross proceeds, with net proceeds of approximately **$4.6 million** for working capital[163](index=163&type=chunk) - On July 6, 2022, Nasdaq notified the Company of non-compliance with the minimum **$1.00** bid price requirement, providing **180 calendar days** to regain compliance[166](index=166&type=chunk)[167](index=167&type=chunk) - Greg Wiggins commenced service as the Company's Chief Financial Officer on July 5, 2022, replacing Patrick Foley[168](index=168&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's analysis of Boxlight Corporation's financial condition and operational results for Q2 and H1 2022 [Overview](index=47&type=section&id=Overview) This section provides an overview of Boxlight Corporation's business, market position, and strategic goals - Boxlight is a technology company aiming to be a global leader in interactive products and software for education, business, and government markets, offering interactive displays, collaboration software, and STEM products[172](index=172&type=chunk) - The Company's revenue is primarily generated from hardware sales (interactive displays) and software to the educational market in the U.S. and Europe[173](index=173&type=chunk) - A comprehensive plan is in place to achieve profitability through integrating acquired products, cross-training sales teams, and expanding the reseller network[173](index=173&type=chunk)[174](index=174&type=chunk) [Recent Acquisitions](index=47&type=section&id=Recent%20Acquisitions) This section summarizes Boxlight Corporation's recent acquisitions, FrontRow Calypso LLC and Interactive Concepts BV - On December 31, 2021, Boxlight acquired FrontRow Calypso LLC for **$34.7 million**, enhancing its communication technology solutions for learning environments[175](index=175&type=chunk)[176](index=176&type=chunk) - On March 23, 2021, the Company acquired Interactive Concepts BV for approximately **$3.3 million**, strengthening its distribution in Belgium and Luxembourg[177](index=177&type=chunk) [Acquisition Strategy and Challenges](index=47&type=section&id=Acquisition%20Strategy%20and%20Challenges) This section discusses Boxlight Corporation's growth strategy through acquisitions and associated challenges - Boxlight's growth strategy involves acquiring companies with complementary products, technologies, industry specializations, or geographic coverage[178](index=178&type=chunk) - The Company anticipates achieving cost-savings post-acquisition through staff reductions, economies of scale (improved purchasing power), and increased market reach[180](index=180&type=chunk)[181](index=181&type=chunk) [Components of our Results of Operations and Financial Condition](index=49&type=section&id=Components%20of%20our%20Results%20of%20Operations%20and%20Financial%20Condition) This section explains the key components influencing Boxlight Corporation's financial results and condition - Revenues consist of hardware products, software services, and professional development, recognized net of sales discounts[182](index=182&type=chunk) - Cost of revenues includes direct product costs, logistics, freight, customs, warranty repairs, inventory write-downs, and professional development costs[184](index=184&type=chunk) - Gross profit and margin are influenced by product, channel, and geographical mix, product costs, and foreign currency exchange rates, with potential fluctuations due to increased freight costs[186](index=186&type=chunk) - Operating expenses are categorized into general and administrative (personnel, professional services, IT, depreciation) and research and development (personnel, prototype, design, certifications)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) [Operating Results – Boxlight Corporation](index=51&type=section&id=Operating%20Results%20%E2%80%93%20Boxlight%20Corporation) This section analyzes Boxlight Corporation's operating performance for Q2 and H1 2022 and 2021 [For the three-month periods ended June 30, 2022 and 2021](index=51&type=section&id=For%20the%20three-month%20periods%20ended%20June%2030%2C%202022%20and%202021) This section details Boxlight Corporation's financial performance for Q2 2022 and 2021 - Total revenues increased by **27.5%** to **$59.6 million** for Q2 2022, primarily due to the FrontRow acquisition (**$6.8 million**) and increased demand in the U.S. and Europe[193](index=193&type=chunk) - Gross profit margin for Q2 2022 was **28.2%**, an **80 basis point** increase YoY, but still impacted by increased global freight/shipping costs[195](index=195&type=chunk)[197](index=197&type=chunk) - Net income was **$26 thousand** for Q2 2022, a significant improvement from a **$2.2 million** loss in Q2 2021, driven by a decrease in income tax expense and changes in derivative liabilities[202](index=202&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) [For the six-month periods ended June 30, 2022 and 2021](index=53&type=section&id=For%20the%20six-month%20periods%20ended%20June%2030%2C%202022%20and%202021) This section details Boxlight Corporation's financial performance for H1 2022 and 2021 - Total revenues increased by **37.5%** to **$110.2 million** for H1 2022, with organic growth of **19.5%** and contributions from FrontRow (**$13.3 million**) and Interactive Concepts (**$407 thousand**) acquisitions[203](index=203&type=chunk) - Gross profit margin remained flat at **26.7%** for H1 2022 compared to H1 2021, despite increased cost of revenues due to acquisitions and higher freight costs[204](index=204&type=chunk)[205](index=205&type=chunk) - Net loss decreased to **$4.8 million** for H1 2022 from **$7.4 million** in H1 2021, primarily due to a **$1.7 million** change in the fair value of Whitehawk derivative liability and decreased loss on settlement of liabilities, partially offset by increased interest expense[210](index=210&type=chunk)[212](index=212&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $26 | $(2,220) | $(4,829) | $(7,388) | | Depreciation and amortization | $2,266 | $1,815 | $4,587 | $3,567 | | Interest expense | $2,417 | $764 | $4,733 | $1,782 | | Income tax expense (benefit) | $41 | $2,522 | $(45) | $2,543 | | **EBITDA** | **$4,750** | **$2,881** | **$4,446** | **$504** | | Stock compensation expense | $929 | $1,182 | $2,062 | $1,859 | | Change in fair value of derivative liabilities | $(1,660) | $(41) | $(1,650) | $225 | | Purchase accounting impact of fair valuing inventory | $589 | $15 | $1,206 | $30 | | Purchase accounting impact of fair valuing deferred revenue | $589 | $790 | $1,238 | $1,597 | | Net loss on settlement of debt | $(3) | $533 | $(856) | $2,735 | | **Adjusted EBITDA** | **$5,194** | **$5,360** | **$6,446** | **$6,950** | [Discussion of Effect of Seasonality on Financial Condition](index=56&type=section&id=Discussion%20of%20Effect%20of%20Seasonality%20on%20Financial%20Condition) This section discusses the impact of seasonal fluctuations on Boxlight Corporation's financial condition - The Company's financial statements are subject to seasonal fluctuations, with the bulk of products shipped to educational customers in July, August, or September[218](index=218&type=chunk) - Inventories typically peak in the second quarter to prepare for the school year and decline significantly in the first quarter. Accounts receivable are highest in the third quarter due to peak sales[218](index=218&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes Boxlight Corporation's cash position, working capital, and financing activities - As of June 30, 2022, cash and cash equivalents were **$11.6 million**, working capital was **$53.8 million**, and the current ratio was **1.99**, representing a significant improvement from June 30, 2021[219](index=219&type=chunk) - Operations were financed by cash flows from operating activities and a new credit facility from Whitehawk in the first half of 2022[220](index=220&type=chunk) - The Company faces challenges in debt and equity markets due to global economic uncertainty but is confident in managing through these challenges by managing payment terms with customers and vendors[221](index=221&type=chunk) [Off Balance Sheet Arrangements](index=58&type=section&id=Off%20Balance%20Sheet%20Arrangements) This section confirms Boxlight Corporation has no significant off-balance sheet arrangements - The Company has no significant off-balance sheet arrangements that materially affect its financial condition, results of operations, or liquidity[225](index=225&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies Boxlight Corporation's critical accounting policies and estimates requiring significant judgment - Critical accounting estimates include revenue recognition, business acquisitions, goodwill and intangible assets, and stock-based compensation expense, which require significant management judgment[227](index=227&type=chunk) [Status as Emerging Growth Company](index=58&type=section&id=Status%20as%20Emerging%20Growth%20Company) This section discusses Boxlight Corporation's status as an emerging growth company under the JOBS Act - Boxlight is an 'emerging growth company' under the JOBS Act, benefiting from reduced reporting and regulatory requirements, including an exemption from adopting new accounting standards until they apply to private companies[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk) - The Company will lose its emerging growth company status on January 1, 2023, marking the fifth anniversary of its first equity securities sale under an effective registration statement[232](index=232&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a 'smaller reporting company,' Boxlight Corporation is exempt from market risk disclosures in this report - The Company is exempt from this disclosure requirement as a 'smaller reporting company'[233](index=233&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of June 30, 2022, due to material weaknesses - Disclosure controls and procedures were deemed not effective as of June 30, 2022, due to material weaknesses previously described in the 2021 Annual Report on Form 10-K[235](index=235&type=chunk) - Despite material weaknesses, management believes the consolidated condensed financial statements fairly present the Company's financial condition, results of operations, and cash flows[236](index=236&type=chunk) - The Company engaged professional services firms to assist with income tax provision review and warrant valuation during 2022, with no other material changes to internal controls over financial reporting[238](index=238&type=chunk) [PART II. Other Information](index=59&type=section&id=PART%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, defaults, and other required disclosures [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The Company reported no legal proceedings for the period - There are no legal proceedings to report[239](index=239&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) The Company highlights global supply chain challenges, component shortages, and increased freight costs, exacerbated by geopolitical and pandemic uncertainties - Global supply chain challenges have led to production delays, shipping delays, and increased shipping costs, adversely affecting gross profit margins[240](index=240&type=chunk) - A global silicon chip supply shortage poses a potential risk to the Company's ability to timely obtain and deliver finished goods[240](index=240&type=chunk) - Heightened global economic uncertainty due to the Russia-Ukraine conflict and the continuing COVID-19 pandemic adds to existing risks[242](index=242&type=chunk) [Item 2. Unregistered Sale of Equity Securities and Use of Proceeds](index=61&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company reported no unregistered sales of equity securities or use of proceeds for the period - There were no unregistered sales of equity securities or use of proceeds to report[245](index=245&type=chunk) [Item 3. Defaults Upon Senior Securities](index=61&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities for the period - There were no defaults upon senior securities to report[246](index=246&type=chunk) [Item 4. Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable[247](index=247&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) The Company reported no other information for the period - There is no other information to report[248](index=248&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including warrants, employment agreements, credit agreement amendments, and certifications - Exhibits include Form of Pre-Funded Warrant (4.1), Form of Warrant (4.2), Employment Agreement with Greg Wiggins (10.1), Second Amendment to Credit Agreement (10.2), Form of Securities Purchase Agreement (10.3), and Form of Placement Agency Agreement (10.4)[251](index=251&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are also included (31.1, 31.2, 32.1, 32.2)[251](index=251&type=chunk) [Signatures](index=64&type=section&id=Signatures) The report is signed by Michael Pope, Chief Executive Officer, and Greg Wiggins, Chief Financial Officer, on August 11, 2022 - The report was signed by Michael Pope, Chief Executive Officer, and Greg Wiggins, Chief Financial Officer, on August 11, 2022[255](index=255&type=chunk)

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) This section provides Boxlight Corporation's unaudited consolidated condensed financial statements and management's discussion and analysis for the three months ended March 31, 2022 [Item 1. Unaudited Consolidated Condensed Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Consolidated%20Condensed%20Financial%20Statements) This section presents Boxlight Corporation's unaudited consolidated condensed financial statements for the three months ended March 31, 2022 and 2021, including statements of operations, balance sheets, changes in stockholders' equity, and cash flows, along with detailed notes on accounting policies, recent acquisitions, debt, equity, and other financial disclosures [Unaudited Consolidated Condensed Statements of Operations and Comprehensive Loss](index=3&type=section&id=Unaudited%20Consolidated%20Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement details the company's revenues, costs, gross profit, and net loss for the three months ended March 31, 2022 and 2021 Unaudited Consolidated Condensed Statements of Operations and Comprehensive Loss (in thousands) | Metric | 3 Months Ended March 31, 2022 (in thousands) | 3 Months Ended March 31, 2021 (in thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | | Revenues, net | $50,603 | $33,424 | | Cost of revenues | $37,987 | $24,872 | | Gross profit | $12,616 | $8,552 | | Loss from operations | $(3,454) | $(2,034) | | Net loss | $(4,856) | $(5,169) | | Net loss per common share – basic and diluted | $(0.07) | $(0.09) | [Unaudited Consolidated Condensed Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Condensed%20Balance%20Sheets) This statement presents the company's assets, liabilities, and stockholders' equity as of March 31, 2022, and December 31, 2021 Unaudited Consolidated Condensed Balance Sheets (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Total assets | $193,116 | $201,436 | | Total liabilities | $117,091 | $119,626 | | Total stockholders' equity | $47,516 | $53,301 | - Cash and cash equivalents decreased from **$17,938 thousand** at December 31, 2021, to **$11,265 thousand** at March 31, 2022[16](index=16&type=chunk) [Unaudited Consolidated Condensed Statements of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Consolidated%20Condensed%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This statement outlines changes in stockholders' equity, including net loss, foreign currency translation, and stock compensation, for the period ended March 31, 2022 Unaudited Consolidated Condensed Statements of Changes in Stockholders' Equity (in thousands) | Metric | December 31, 2021 (in thousands) | March 31, 2022 (in thousands) | | :----- | :------------------------------- | :---------------------------- | | Total Stockholders' Equity | $53,301 | $47,516 | | Net Loss | $(4,856) | | | Foreign currency translation | $(1,772) | | | Stock compensation | $1,135 | | - The decrease in total stockholders' equity was primarily driven by the net loss for the period and foreign currency translation adjustments, partially offset by stock compensation[20](index=20&type=chunk) [Unaudited Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) This statement details cash flows from operating, investing, and financing activities, showing the net decrease in cash for the three months ended March 31, 2022 and 2021 Unaudited Consolidated Condensed Statements of Cash Flows (in thousands) | Cash Flow Activity | 3 Months Ended March 31, 2022 (in thousands) | 3 Months Ended March 31, 2021 (in thousands) | | :----------------- | :------------------------------------------- | :------------------------------------------- | | Net cash used in operating activities | $(5,423) | $(1,557) | | Net cash used in investing activities | $(526) | $(194) | | Net cash used by financing activities | $(912) | $(747) | | Net decrease in cash and cash equivalents | $(6,673) | $(3,458) | | Cash and cash equivalents, end of the period | $11,265 | $10,002 | [Notes to Unaudited Consolidated Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Condensed%20Financial%20Statements) This section provides detailed disclosures on accounting policies, recent acquisitions, debt, equity, and other financial information supporting the condensed financial statements [NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%201%20%E2%80%93%20ORGANIZATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes Boxlight Corporation's business, revenue recognition policies, and the adoption of new accounting standards - Boxlight Corporation designs, produces, and distributes interactive technology solutions (interactive displays, collaboration software, accessories, professional services) under its Clevertouch and Mimio brands for education, corporate, and government markets[25](index=25&type=chunk) - Revenue is recognized when control of products or services is transferred to customers; product revenue is recognized at shipment, while service revenue (maintenance, subscriptions) is recognized ratably over time[39](index=39&type=chunk)[41](index=41&type=chunk) Revenue by Type (in thousands) | Revenue Type | 3 Months Ended March 31, 2022 (in thousands) | 3 Months Ended March 31, 2021 (in thousands) | | :----------- | :------------------------------------------- | :------------------------------------------- | | Product Revenues: Hardware | $47,294 | $30,761 | | Software | $1,519 | $867 | | Service Revenues: Professional Services | $355 | $270 | | Maintenance and Subscription Services | $1,435 | $1,526 | | **Total** | **$50,603** | **$33,424** | - The company adopted ASU 2016-02 "Leases" on January 1, 2022, recognizing an operating lease right-of-use (ROU) asset of **$3.8 million** and corresponding lease liabilities[65](index=65&type=chunk)[66](index=66&type=chunk) [NOTE 2 – RECENT BUSINESS ACQUISITIONS](index=19&type=section&id=NOTE%202%20%E2%80%93%20RECENT%20BUSINESS%20ACQUISITIONS) This note details the acquisitions of FrontRow Calypso LLC and Interactive Concepts BV, including their financing and strategic impact - On December 31, 2021, Boxlight acquired **100%** of FrontRow Calypso LLC for **$34.7 million**, expanding its communication technology solutions for learning environments[71](index=71&type=chunk)[72](index=72&type=chunk) - The FrontRow acquisition was financed through a new **$68.5 million** term loan credit facility with Whitehawk Finance LLC[73](index=73&type=chunk) - On March 23, 2021, the company acquired **100%** of Interactive Concepts BV for approximately **$3.3 million**, strengthening its distribution in Belgium and Luxembourg[79](index=79&type=chunk) [NOTE 3 – ACCOUNTS RECEIVABLE - TRADE](index=22&type=section&id=NOTE%203%20%E2%80%93%20ACCOUNTS%20RECEIVABLE%20-%20TRADE) This note provides the net trade accounts receivable balance as of March 31, 2022, and December 31, 2021 Accounts Receivable - Trade (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Accounts receivable – trade, net of allowances | $30,033 | $29,573 | [NOTE 4 – INVENTORIES](index=22&type=section&id=NOTE%204%20%E2%80%93%20INVENTORIES) This note presents the net inventory balance and the reserve for obsolescence as of March 31, 2022, and December 31, 2021 Inventories (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Inventories, net | $49,094 | $51,591 | | Reserve for inventory obsolescence | $(1,178) | $(599) | [NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=23&type=section&id=NOTE%205%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) This note details prepaid expenses, other current assets, and prepayments to vendors as of March 31, 2022, and December 31, 2021 Prepaid Expenses and Other Current Assets (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Prepaid expenses and other current assets | $7,913 | $9,444 | | Prepayments to vendors | $6,071 | $7,739 | [NOTE 6 – INTANGIBLE ASSETS](index=23&type=section&id=NOTE%206%20%E2%80%93%20INTANGIBLE%20ASSETS) This note provides the net intangible assets and amortization expense for the three months ended March 31, 2022 Intangible Assets (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Intangible assets, net of accumulated amortization | $62,075 | $65,532 | - Amortization expense for the three months ended March 31, 2022, was **$2.2 million**, up from **$1.7 million** in the prior year period[86](index=86&type=chunk) [NOTE 7 – LEASES](index=23&type=section&id=NOTE%207%20%E2%80%93%20LEASES) This note outlines the operating lease cost, weighted-average remaining lease term, and discount rate as of March 31, 2022 - Operating lease cost for the three months ended March 31, 2022, was **$469 thousand**[90](index=90&type=chunk) - The weighted-average remaining lease term is **3.8 years**, with a weighted-average discount rate of **15.5%**[91](index=91&type=chunk) [NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSE](index=24&type=section&id=NOTE%208%20%E2%80%93%20ACCOUNTS%20PAYABLE%20AND%20ACCRUED%20EXPENSE) This note presents accounts payable and other liabilities as of March 31, 2022, and December 31, 2021 Accounts Payable and Accrued Expense (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Accounts payable and other liabilities | $26,131 | $33,638 | | Accounts payable | $19,398 | $25,714 | [NOTE 9 – DEBT](index=25&type=section&id=NOTE%209%20%E2%80%93%20DEBT) This note details the company's debt, including the Whitehawk term loan facility, related financing activities, and PPP loan forgiveness Debt (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Total debt (net of discount) | $51,025 | $51,941 | | Note payable - Whitehawk | $57,875 | $58,500 | - The company entered into a maximum **$68.5 million** term loan credit facility with Whitehawk Finance LLC on December 31, 2021, to finance the FrontRow acquisition and repay existing debt[95](index=95&type=chunk) - On March 29, 2022, the company received a Notice of Events of Default but subsequently amended the Credit Agreement on April 4, 2022, to extend repayment terms for **$8.5 million** and waive certain defaults[96](index=96&type=chunk)[216](index=216&type=chunk) - The PPP loan forgiveness application for **$835,500** was approved on March 2, 2022, with a remaining balance of **$173,100**[107](index=107&type=chunk) [NOTE 10 – DERIVATIVE LIABILITIES](index=31&type=section&id=NOTE%2010%20%E2%80%93%20DERIVATIVE%20LIABILITIES) This note provides information on derivative liabilities related to warrant instruments and their repricing as of March 31, 2022 Derivative Liabilities (in thousands) | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----- | :---------------------------- | :------------------------------- | | Derivative liabilities - warrant instruments | $3,073 | $3,064 | - The exercise price of warrants issued to Whitehawk repriced on March 31, 2022, to **$1.19 per share** (from $2.00), increasing the number of shares from **2,043,291 to 3,434,103**[100](index=100&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [NOTE 11 – INCOME TAXES](index=33&type=section&id=NOTE%2011%20%E2%80%93%20INCOME%20TAXES) This note details the income tax benefit (expense), pretax loss, effective tax rate, and valuation allowance for deferred tax assets Income Taxes (in thousands) | Metric | 3 Months Ended March 31, 2022 (in thousands) | 3 Months Ended March 31, 2021 (in thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | | Income tax benefit (expense) | $86 | $(21) | | Total pretax book income, (loss) | $(4,942) | $(5,148) | - The year-to-date effective tax rate is **(139.3)%** due to no tax benefit for legacy Boxlight entities and full taxation of Sahara entities[122](index=122&type=chunk) - A full valuation allowance is maintained on the company's net deferred tax assets due to a history of cumulative losses in those jurisdictions[124](index=124&type=chunk) [NOTE 12 – EQUITY](index=34&type=section&id=NOTE%2012%20%E2%80%93%20EQUITY) This note describes the classification of preferred stock, outstanding common stock, and shares issued in connection with the Whitehawk loan and RSU vesting - Series B and Series C Preferred Stock are classified as mezzanine or temporary equity due to redemption features not solely within the company's control[133](index=133&type=chunk) - As of March 31, 2022, **65,522,438 shares** of Class A common stock were issued and outstanding[138](index=138&type=chunk) - **528,169 shares** of Class A common stock were issued to Whitehawk in January 2022 in conjunction with the loan[139](index=139&type=chunk) - **1,119,118 restricted stock units** vested and converted into Class A common stock during the three months ended March 31, 2022[142](index=142&type=chunk) [NOTE 13 – STOCK COMPENSATION](index=38&type=section&id=NOTE%2013%20%E2%80%93%20STOCK%20COMPENSATION) This note details total stock compensation expense, unrecognized compensation expense, and the granting of stock options and restricted stock units Stock Compensation Expense (in thousands) | Metric | 3 Months Ended March 31, 2022 (in thousands) | 3 Months Ended March 31, 2021 (in thousands) | | :----- | :------------------------------------------- | :------------------------------------------- | | Total stock compensation expense | $1,135 | $677 | - As of March 31, 2022, there was approximately **$6.3 million** of unrecognized compensation expense related to unvested options, restricted stock units, and warrants, with **$1.9 million** estimated to be recorded in the remaining nine months of 2022[162](index=162&type=chunk) - **494,069 stock options** were granted in Q1 2022 with a weighted average exercise price of **$1.10**[151](index=151&type=chunk) - **2,364,110 Restricted Stock Units (RSUs)** were granted in Q1 2022 with a weighted average grant date fair value of **$1.68**[155](index=155&type=chunk) [NOTE 14 – RELATED PARTY TRANSACTIONS](index=41&type=section&id=NOTE%2014%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note describes the management agreement with an entity owned by the CEO and Chairman for consulting services - The company has a management agreement with an entity owned by its CEO and Chairman, Michael Pope, for consulting services, with a management fee of **0.375% of consolidated net revenues**, not to exceed **$250,000 annually**[163](index=163&type=chunk) [NOTE 15 – COMMITMENTS AND CONTINGENCIES](index=41&type=section&id=NOTE%2015%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the total open inventory purchase orders and operating lease commitments as of March 31, 2022 - As of March 31, 2022, the total amount of open inventory purchase orders was **$55.5 million**[165](index=165&type=chunk) - The company has operating lease commitments for office building facilities and vehicles with terms extending from 2023 to 2027[164](index=164&type=chunk) [NOTE 16 – CUSTOMER AND SUPPLIER CONCENTRATION](index=42&type=section&id=NOTE%2016%20%E2%80%93%20CUSTOMER%20AND%20SUPPLIER%20CONCENTRATION) This note identifies significant customer and vendor concentrations for the three months ended March 31, 2022 - For the three months ended March 31, 2022, one customer accounted for **10.3%** of the company's consolidated revenues[168](index=168&type=chunk) - For the three months ended March 31, 2022, one vendor accounted for **29%** of the company's total purchases (cost of sales)[168](index=168&type=chunk) [NOTE 17 – SUBSEQUENT EVENTS](index=42&type=section&id=NOTE%2017%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note reports on the resignation of the CFO and the extension of stock options to a board member after the reporting period - Patrick Foley, the Chief Financial Officer, provided notice of his resignation, effective October 4, 2022[169](index=169&type=chunk) - On May 3, 2022, the board granted an extension of previously expired stock options to James Mark Elliott (board member and former CEO) for **577,675 shares**, valued at **$314,000**[170](index=170&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Boxlight Corporation's financial performance, including revenue growth, gross profit margin, net loss, and liquidity, for the three months ended March 31, 2022 - Total revenues for the three months ended March 31, 2022, increased by **51.5%** to **$50.6 million**, compared to **$33.4 million** for the same period in 2021, primarily due to the FrontRow acquisition (**$6.5 million** contribution) and increased demand[195](index=195&type=chunk) - Gross profit margin for Q1 2022 was **24.9%**, a **7 basis point reduction** year-over-year, mainly due to additional increases in global freight/shipping costs resulting from supply chain issues[197](index=197&type=chunk)[199](index=199&type=chunk) - Net loss improved to **$4.9 million** in Q1 2022 from **$5.2 million** in Q1 2021[203](index=203&type=chunk) EBITDA and Adjusted EBITDA (in thousands) | Metric | March 31, 2022 (in thousands) | March 31, 2021 (in thousands) | | :----- | :---------------------------- | :---------------------------- | | EBITDA | $(304) | $(2,376) | | Adjusted EBITDA | $1,222 | $1,591 | - As of March 31, 2022, the company had cash and cash equivalents of **$11.3 million**, working capital of **$49.6 million**, and a current ratio of **2.02**, representing a significant improvement from a year ago[210](index=210&type=chunk) - The company will lose its 'emerging growth company' status on January 1, 2023[226](index=226&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a smaller reporting company, Boxlight Corporation is exempt from providing quantitative and qualitative disclosures about market risk - The company is exempt from this disclosure requirement as a "smaller reporting company"[227](index=227&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the ineffectiveness of disclosure controls and procedures due to material weaknesses, while affirming the fair presentation of financial statements - Disclosure controls and procedures were not effective as of March 31, 2022, due to material weaknesses described in the 2021 Annual Report on Form 10-K[229](index=229&type=chunk) - Despite the material weaknesses, management believes the consolidated condensed financial statements fairly present the financial condition, results of operations, and cash flows[230](index=230&type=chunk) - Management has engaged professional services firms to assist with the review of the income tax provision and the preparation of FrontRow financial statements and warrant valuation[232](index=232&type=chunk) [PART II. Other Information](index=36&type=section&id=PART%20II.%20Other%20Information) This section provides additional information including legal proceedings, risk factors, equity sales, defaults, mine safety disclosures, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) Boxlight Corporation reported no legal proceedings for the period - No legal proceedings to report[233](index=233&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks including global supply chain disruptions, component shortages, increased freight costs, and geopolitical uncertainties - Global supply chain challenges have impacted the business through movement/delay in production schedules due to component shortages, continued delays in global shipping, and increased shipping costs, reducing gross profit margin[234](index=234&type=chunk) - A global silicon chip supply shortage could potentially cause disruptions in the supply chain, affecting the ability to timely obtain and deliver finished goods[234](index=234&type=chunk) - Heightened uncertainty surrounds global supply chains, markets, and general global economic conditions due to the ongoing conflict between Russia and Ukraine and the continuing COVID-19 pandemic[236](index=236&type=chunk) [Item 2. Unregistered Sale of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sale%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Boxlight Corporation reported no unregistered sales of equity securities or use of proceeds for the period - None[238](index=238&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Boxlight Corporation reported no defaults upon senior securities for the period - None[239](index=239&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Boxlight Corporation's business - Not Applicable[240](index=240&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) Boxlight Corporation reported no other information for the period - None[241](index=241&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the 10-Q report, including warrants, credit agreements, and certifications - Key exhibits include Form of Warrant (4.1), Credit Agreement (10.1), Employment Agreement with Michael Pope (10.2), Notice of Default (10.3), Amendment to Credit Agreement (10.4), Amended and Restated Fee Letter (10.5), and CEO/CFO certifications (31.1, 31.2, 32.1, 32.2)[243](index=243&type=chunk) [Signatures](index=39&type=section&id=Signatures) The report was signed by the Chief Executive Officer and Chief Financial Officer on May 16, 2022 - The report was signed by Michael Pope (Chief Executive Officer) and Patrick Foley (Chief Financial Officer) on May 16, 2022[247](index=247&type=chunk)

Boxlight Corporation (NASDAQ:BOXL) Q1 2022 Earnings Conference Call May 12, 2022 4:30 PM ET Company Participants Michael Pope – Chairman and Chief Executive Officer Patrick Noel Foley – Chief Financial Officer Mark Richard Starkey – President Conference Call Participants Brian Kinstlinger – Alliance Global Partners Jack Vander Aarde – Maxim Group Operator Thank you, and welcome to the Boxlight First Quarter 2022 Earnings Conference Call. This call is being webcast and is available for replay. The remarks to ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2021 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-37564 BOXLIGHT CORPORATION (Exact name of registrant as specified in its charter) Nevada 8211 46-4116523 (State or other juris ...

Call Start: 16:30 January 1, 0000 5:21 PM ET Boxlight Corporation (NASDAQ:BOXL) Q4 2021 Earnings Conference Call March 17, 2022, 4:30 PM ET Company Participants Michael Pope – Chief Executive Officer and Chairman Mark Starkey – President Patrick Foley – Chief Financial Officer Conference Call Participants Scott Buck – H.C. Wainwright Byron Meo – 1031 Private Exchange Brian Kinstlinger – Alliance Global Partners Operator Thank you and welcome to the Boxlight Fourth Quarter and Full Year 2021 Earnings Confere ...

Boxlight Corp (NASDAQ:BOXL) Q3 2021 Earnings Conference Call November 10, 2021 4:30 PM ET Company Participants Michael Pope - CEO & Chairman Mark Starkey - President Patrick Foley - CFO Conference Call Participants Brian Kinstlinger - Alliance Global Partners Jack Aarde - Maxim Group Martin Roth - Ferret Capital Management Operator Thank you, and welcome to the Boxlight Third Quarter 2021 Earnings Conference Call. By now, everyone should have access to the press release issued this afternoon. This call is b ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Nevada 8211 46-4116523 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification Number) Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period end ...

Boxlight Corp (NASDAQ:BOXL) Q2 2021 Earnings Conference Call August 12, 2021 4:30 PM ET Company Participants Michael Pope - CEO & Chairman Mark Starkey - President Patrick Foley - CFO Conference Call Participants Jacob Silverman - Alliance Global Partners Jack Aarde - Maxim Group Brian Kinstlinger - Alliance Global Partners Operator Thank you, ladies and gentlemen, and welcome to the Boxlight Second Quarter 2021 Earnings Conference Call. By now, everyone should have access to the press release issued this a ...

Revenue Growth - Total revenues for Q2 2021 were $46.8 million, a 500% increase from $7.8 million in Q2 2020, driven by acquisitions and increased demand in the U.S. and Europe[171] - Total revenues for the first half of 2021 were $80.2 million, a 490% increase from $13.6 million in the first half of 2020, with organic revenue growth of 40%[180] Cost of Revenues - Cost of revenues for Q2 2021 was $33.9 million, a 565% increase from $5.1 million in Q2 2020, attributed to acquisitions and rising global freight costs[173] - Cost of revenues for the first half of 2021 was $58.8 million, a 532% increase from $9.3 million in the first half of 2020, driven by acquisitions and increased shipping costs[182] Gross Profit and Margins - Gross profit for Q2 2021 was $12.8 million, with a gross profit margin decrease from 34% to 27% due to increased freight costs and product cost adjustments[174] - Gross profit for the first half of 2021 was $21.4 million, with a gross profit margin decrease from 32% to 27% due to customs and freight expenses[183] Expenses - General and administrative expenses for Q2 2021 were $10.8 million, representing 23% of revenues, compared to $3.2 million and 41% of revenues in Q2 2020[175] - Research and development expenses for Q2 2021 were $481 thousand, or 1% of revenues, up from $285 thousand and 4% of revenues in Q2 2020[176] - Other expense for Q2 2021 was $1.3 million, up from $0.6 million in Q2 2020, primarily due to increased interest expense and losses from debt settlements[177] Net Loss and Income Tax - Net loss for Q2 2021 was $2.2 million, reduced from $1.4 million in Q2 2020, reflecting positive operating income and margin improvements[179] - Income tax expense for the three months ending June 30, 2021, was $2.5 million, compared to no income tax expenses for the same period in 2020[187] - Net loss increased to $7.4 million for the six months ended June 30, 2021, from $3.4 million in 2020, primarily due to lower gross profit margins and increased expenses[188] EBITDA - EBITDA for the six months ended June 30, 2021, was $507 thousand, compared to a loss of $1.848 million in 2020[195] - Adjusted EBITDA for the six months ended June 30, 2021, was $6.953 million, compared to a loss of $672 thousand in 2020[196] Cash and Liquidity - As of June 30, 2021, cash and cash equivalents were $7.4 million, up from $6.1 million a year ago, with a current ratio of 1.52[200] - Net cash used in operating activities for the six months ended June 30, 2021, was $4.6 million, an improvement from $6.2 million in 2020[201] Financing Activities - The company amended its accounts receivable agreement to increase the maximum facility limit amount to $15 million[205] - The company entered into a securities purchase agreement for a $22 million secured convertible note, with a funding amount of $20 million[208] - The company expects to manage through current challenges in equity and debt finance markets by adjusting payment terms with customers and vendors[203] Seasonal Trends and Inventory - The company anticipates that seasonal trends in revenues will reduce as the business grows, with inventory levels peaking before the school year[197] Stock Offerings - The Company completed a public offering of 17,250,000 shares of Class A common stock at a price of $2.00 per share, generating gross proceeds of $34,500,000[210] - The Company also conducted a June Offering of 13,333,333 shares at $0.75 per share, resulting in gross proceeds of $10,000,000, with an additional $1,500,000 from the Over-Allotment Option[210] - Underwriters received a 7% discount on the offerings, totaling approximately $2,415,000 for the July Offering and a similar amount for the June Offering[210] Financial Reporting and Compliance - The Company has no significant off-balance sheet arrangements that could impact its financial condition or liquidity[211] - The Company is classified as an "emerging growth company," allowing it to take advantage of reduced reporting requirements[214] - The Company has elected to defer the adoption of new or revised financial accounting standards until they apply to private companies, potentially affecting comparability with other public companies[217]

Boxlight Corporation (NASDAQ:BOXL) Q1 2021 Earnings Conference Call May 13, 2021 4:30 PM ET Company Participants Michael Pope - Chairman and Chief Executive Officer Mark Starkey - Chief Executive Officer, Clevertouch Patrick Foley - Chief Financial Officer Conference Call Participants Jack Vander Aarde - Maxim Group, LLC Operator Thank you and welcome to the Boxlight First Quarter 2021 Earnings Conference Call. By now, everyone should have access to the press release issued this afternoon. This call is bein ...