What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-10 compared with 2021-08-12 · 216 added, 208 removed, 237 unchanged (64% of the section changed)

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that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions.

Any statements that are

not statements of historical fact are forward-looking statements.

When used, the words “believe,” “plan,” “intend,”

“anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional

constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify

certain of these forward-looking statements.

These forward-looking statements are subject to risks and uncertainties that could cause

actual results or events to differ materially from those expressed or implied by the forward-looking statements in this form.

results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several

Any statements that

are not statements of historical fact are forward-looking statements.

When used, the words “believe,” “plan,”

“intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or

future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or

similar expressions, identify certain of these forward-looking statements.

These forward-looking statements are subject to risks and

uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements

in this form.

Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements

as a result of several factors.

results may not indicate future performance.

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software suite that provides tools for presentation creation and delivery, assessment, and collaboration.

date, we have generated substantially all of our revenue from the sale of our hardware (primarily consisting of interactive displays)

and software to the educational market in the United States and Europe.

date, we have generated substantially all our revenue from the sale of our hardware (primarily consisting of interactive displays) and

software to the educational market in the United States and Europe.

have also implemented a comprehensive plan to reach and maintain profitability both from our core business operations and as a result

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in cash, common stock, and deferred consideration.

The company has been Boxlight’s key distributor in Belgium and Luxembourg.

Interactive has been the Company’s key distributor in Belgium

and Luxembourg.

September 24, 2020, the Company acquired Sahara Presentation Systems PLC, a leader in distributed and manufactured AV solutions (“Sahara”).

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are comprised of hardware products, software services, and professional development revenues less sales discounts.

Product revenue is derived from the sale of our hardware (interactive projectors), flat panels, peripherals

and accessories, along with other third-party products, directly to our customers, as well as through our network of domestic and

international distributors.

Product revenue is derived from the sale of our hardware (interactive projectors), flat panels, peripherals, and accessories,

along with other third-party products, directly to our customers, as well as through our network of domestic and international distributors.

development revenue.

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gross profit and gross profit margin have been, and may in the future be, influenced by several factors including:

product, channel and

geographical revenue mix;

product, channel,

and geographical revenue mix;

changes in product costs related to the release of projector models;

component, contract manufacturing and

supplier pricing and foreign currency exchange.

component, contract manufacturing

and supplier pricing and foreign currency exchange.

As we primarily procure our product components and manufacture our products in Asia,

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of debt and trade payable obligations exchanged for common shares, and the effects of changes in the fair value of derivative liabilities.

are subject to income taxes in the United States, United Kingdom, Mexico, Sweden, Finland, Holland, and Germany where we do business.

The United Kingdom, Mexico, Sweden, Finland, Holland, and Germany have a statutory tax rate different from that in the United States.

Additionally, certain of our international earnings are also taxable in the United States.

Accordingly, our effective tax rates will

vary depending on the relative proportion of foreign to U.S.

income, the absorption of foreign tax credits, changes in the valuation

of our deferred tax assets and liabilities and changes in tax laws.

We regularly assess the likelihood of adverse outcomes resulting

from the examination of our tax returns by the U.S.

Internal Revenue Service, or IRS, and other tax authorities to determine the adequacy

of our income tax reserves and expense.

Should actual events or results differ from our current expectations, charges or credits to our

income tax expense may become necessary.

Any such adjustments could have a significant impact on our results of operations.

are subject to income taxes in the jurisdictions in which we do business, including the United States, United Kingdom, Mexico,

Sweden, Finland, Holland, and Germany.

The United Kingdom, Mexico, Sweden, Finland, Holland, and Germany have a

statutory tax rate different from that in the United States.

Additionally, certain of our international earnings are also taxable in

the United States.

Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to U.S.

absorption of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities and changes in tax laws.

assess the likelihood of adverse outcomes resulting from the examination of our tax returns by the U.S.

Internal Revenue Service, or

IRS, and other tax authorities to determine the adequacy of our income tax reserves and expense.

Should actual events or results differ

from our current expectations, charges or credits to our income tax expense may become necessary.

Any such adjustments could have a significant

impact on our results of operations.

Results – Boxlight Corporation

the three-month periods ended June 30, 2021 and 2020

Total revenues for the three months ended June 30, 2021 were $46.8 million as compared to $7.8 million for the three months ended

June 30, 2020, resulting in a 500% increase.

Revenues primarily consist of hardware revenue, software revenue, and professional development.

The increase in revenues was primarily due to the acquisitions of Sahara Presentation Systems in September 2020 and increased demand

for our solutions in the U.S.

Cost of revenues for the three months ended June 30, 2021 was $33.9 million as compared to $5.1 million for

the three months ended June 30, 2020, resulting in a 565% increase.

the three-month periods ended September 30, 2021 and 2020

Total revenues for the three months ended September 30, 2021 were $61.0 million as compared to $9.5 million for the three months

ended September 30, 2020, resulting in a 544% increase in revenue.

Revenues primarily consist of hardware revenue, software revenue,

and professional development.

The increase in revenues was primarily due to the acquisitions of Sahara Presentation Systems in September

2020 and Interactive Concepts in March 2021 as well as increased demand for our solutions in the U.S.

Cost of revenues for the three months ended September 30, 2021 was $ 45.2 million compared to $7.5 million for the three

months ended September 30, 2020, resulting in a 507% increase.

Cost of revenues consists primarily of product cost, freight expenses,

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as outlined above and was also due to additional increases in global freight/shipping which the company has experienced (as have many

others as following the COVID-10 pandemic.

In Q1/2021 we reported the cost increase to be ~4x compared to pre-pandemic levels, this is

expected to continue throughout 2021.

Gross profit for the three months ended June 30, 2021 was $12.8 million, as compared to $2.7 million for the three

months ended June 30, 2020.

The decrease in gross profit margin from 34% to 27% was primarily driven by the effects of freight /shipping

expenses discussed above, product cost increases (which have been partially offset by increased sales prices) and certain purchase accounting

adjustments stemming from the Sahara acquisition and effecting recognized revenues.

others) as a result of supply chain issues arising as a result of the COVID-19 pandemic.

In the first quarter of 2021 we reported

the cost increase to be approximately four times normal costs as compared to pre-pandemic levels.

We expect such cost increases

to continue throughout 2021.

Gross profit for the three months ended September 30, 2021, was $15.8 million, as compared to $2.0 million for the three

months ended September 30, 2020.

Gross profit margin increased from 21% to 26% despite the effects of increased freight and

shipping expenses discussed above, product cost increases (which have been partially offset by increased sales prices) and certain

purchase accounting adjustments stemming from the Sahara acquisition and effecting recognized revenues.

and Administrative Expenses.

General and administrative expenses for the three months ended June 30, 2021 were $10.8 million

and 23% of revenues, as compared to $3.2 million and 41% of revenues for the three months ended June 30, 2020.

General and administrative expenses for the three months ended September 30, 2021 were $11.9 million

and 20% of revenues, as compared to $3.3 million and 35% of revenues for the three months ended September 30, 2020.

The increase was

mainly a result from the additional personnel costs associated with the acquired Sahara operations , new hires for planned

growth and stock compensation issuances.

mainly a result of the additional personnel costs associated with the acquired Sahara operations, new hires for planned growth and stock

compensation issuances.

and Development Expenses.

Research and development expense were $481 thousand and 1% of revenues for the three months ended June

30, 2021, as compared to $285 thousand and 4% of revenues for the three months ended June 30, 2020.

Research and development expense

primarily consists of costs associated with development of our proprietary hardware and software technologies, The absolute increase

in research and development expense was primarily driven by an increase in contract services related to software development.

Research and development expenses were $355 thousand and 0.6% of revenues for the three months ended

September 30, 2021, as compared to $471 thousand and 5% of revenues for the three months ended September 30, 2020.

Research and development

expense primarily consists of costs associated with development of our proprietary hardware and software technologies.

Expense (net).

Other expense (net) for the three months ended June 30, 2021 was $1.3 million for the three months ended June 30,

2021, as compared to $0.6 million for the three months ended June 30, 2020.

Other expense increased primarily due to an $136 thousand

increase in interest expense associated with increased borrowings, and $585 thousand of additional losses recognized upon the settlement

of certain debt obligations in exchange for issuance of common shares.

Income tax expense for the three months ending June 30, 2021 was $2.5 million, as compared no income tax expenses

for the three months ended June 30, 2020.

Other expense (net) for the three months ended September 30, 2021 was $1.4 million, as compared to $2.5 million for

the three months ended September 30, 2020.

Other expense decreased primarily due to $1.1 million less in losses recognized upon the settlement

of certain debt obligations in exchange for issuance of common shares, offset by a $339 thousand increase in interest expense associated

with increased borrowings.

Income tax expense for the three months ending September 30, 2021 was $1.4 million, as compared no income tax expenses

for the three months ended September 30, 2020.

Income tax have been recognized in connection with our acquired Sahara operations.

Company recorded a significant tax impact of $2.2 million this quarter to reflect a discrete event directly pertaining to the tax impact

on our UK deferred tax liability associated with the intangible assets acquired as part of the Sahara business combination, and the effect

of a recent UK rate income tax rate change.

Finance Bill 2021 (“the Bill”) provides for an increase in the UK statutory tax

rate to 25% for taxpayers with profits over £250K beginning April 1, 2023.

expect this rate to apply to the earnings of our Sahara operations in the UK.

The Bill received Royal Assent on June 10, 2021, and it

is considered enacted on that date under U.S.

As such, we must reflect the tax impact as a discrete event in our second quarter

The effective tax rate is 6.94% and is relatively low due to the effect of net operating loss carryforwards associated with

our legacy operations in the U.S.

Net loss was $2.2 million and $1.4 million for the three months ended June 30, 2021 and 2020, respectively.

has been significantly reduced as result of the Company achieving positive operating income and operating margin in Q2 of 2021.

the six-month periods ended June 30, 2021 and 2020

Total revenues for the six months ended June 30, 2021 were $80.2 million as compared to $13.6 million for the six months ended June

30, 2020, resulting in a 490% increase.

The increase in revenues was primarily due to the acquisitions of Sahara Presentation

Systems in September 2020 and Interactive Concepts in March 2021, and increased demand for our solutions in the U.S., Europe,

Middle East, and Africa.

Organic revenue growth for the first half of 2021 was 40%.

Cost of revenues for the six months ended June 30, 2021 were $58.8 million as compared to $9.3 million for

the six months ended June 30, 2020, resulting in an 532% increase.

The increase in cost of revenues was associated with the acquisitions

and growth of the business as outlined above, and was also due to additional increases in global freight/shipping which the company has

experienced as have many others as following the COVID-10 pandemic.

In Q1/2021 we reported the cost increase to be ~4x compared to pre-pandemic

levels, this is expected to continue throughout 2021.

Gross profit for the six months ended June 30, 2021 was $21.4 million as compared to $4.3 million for the six months ended

June 30, 2020.

The gross profit margin decreased from 32% for the six months ended June 30, 2020 to 27% in for the six months ending

June 30, 2021 was primarily driven by the effects of customs and freight expenses discussed above, and certain purchase accounting adjustments

stemming from the Sahara acquisition and effecting recognized revenues.

Income (Loss).

Net income was $729 thousand in the three months ended September 30, 2021 and net loss was $4.2 million for

the three months ended September 30, 2020, respectively.

The Company had net income in the quarter, a result of achieving positive operating

income and operating margin in the quarter.

the nine-month periods ended September 30, 2021 and 2020

Total revenues for the nine months ended September 30, 2021 were $141.2 million as compared to $23.0 million for the nine months

ended September 30, 2020, resulting in a 514% increase in revenue.

The increase in revenues was primarily due to the acquisitions

of Sahara Presentation Systems in September 2020 and Interactive Concepts in March 2021, and increased demand for our solutions in the

U.S., Europe, and Australia.

Organic revenue growth for the nine months of 2021 was 125%.

Cost of revenues for the nine months ended September 30, 2021, were $104.0 million as compared to $16.7 million for

the nine months ended September 30, 2020, resulting in an 52 2% increase.

The increase in cost of revenues was associated

with the acquisitions and growth of the business as outlined above and was also due to additional increases in global freight/shipping

which the company has experienced as have many others as following the COVID-10 pandemic.

In the first quarter of 2021 we reported the

cost increase to be approximately four times higher as compared to pre-pandemic levels, this is expected to continue throughout

Gross profit for the nine months ended September 30, 2021 was $37.2 million as compared to $6.3 million for the nine months

ended September 30, 2020.

The gross profit margin decreased from 27% for the nine months ended September 30, 2020 to 26% in for the

nine months ending September 30, 2021, primarily driven by the effects of customs and freight expenses discussed above, and certain purchase

accounting adjustments stemming from the Sahara acquisition and effecting recognized revenues.

and Administrative Expenses.

General and administrative (“G&A”) expense for the six months ended June 30, 2021 were

$20.9 million and 26% of revenue as compared to $7.1 million and 52% of revenue for the six months ended June 30, 2020.

The increase in G&A expenses resulted from additional personnel costs associated with the acquired Sahara operations, new hires

for planned growth and stock compensation issuances.

General and administrative (“G&A”) expenses for the nine months ended September 30,

2021 were $32.8 million and 23% of revenue as compared to $10.4 million and 45% of revenue for the nine months ended September 30, 2020.

The increase in G&A expenses resulted from additional personnel costs associated with the acquired Sahara operations, new hires for

planned growth and stock compensation issuances.

and Development Expenses.

Research and development expenses were $955 thousand and 1% of revenue for the six months ended June 30,

2021 as compared to $602 thousand and 4% of revenue for the six months ended June 30, 2020.

The absolute increase in research and development

expense was primarily driven by an increase in contract services related to software development.

Research and development expenses were $1.3 million and 0.9% of revenue for the nine months ended

September 30, 2021, as compared to $1.1 million and 5% of revenue for the nine months ended September 30, 2020.

The absolute increase

in research and development expense was primarily driven by an increase in contract services related to software development.

Income (Expense) Net.

Other expense, net for the six months ended June 30, 2021 was $(4.4) million as compared to other income,

net, of $82 thousand for the six months ended June 30, 2020.

Other expense increased primarily due to a $695 thousand increase in interest

expense associated with increased borrowings, and net movement year on year of $3.5 million of additional losses recognized upon

the settlement of certain debt obligations in exchange for issuance of common shares.

Income tax expense for the three months ending June 30, 2021 was $2.5 million, as compared no income tax expenses for

the six months ended June 30, 2020.

Other expense, net, for the nine months ended September 30, 2021 was $5.8 million as compared to other expense,

net, of $2.4 million for the nine months ended September 30, 2020.

Other expense increased primarily due to a $1.0 million increase in

interest expense associated with increased borrowings, and net movement year on year of $2.4 million of additional losses recognized

upon the settlement of certain debt obligations in exchange for issuance of common shares.

Income tax expense for the nine months ending September 30, 2021 was $3.9 million, as compared no income tax expenses

for the nine months ended September 30, 2020.

Income tax was recognized in connection with our acquired Sahara operations.

The Company recorded

a significant tax impact of $2.2 million during the second quarter to reflect a discrete event directly pertaining to the tax impact on our UK deferred

tax liability associated with the intangible assets acquired as part of the Sahara business combination, and the effect of a recent UK

rate income tax rate change.

Finance Bill 2021 (“the Bill”) provides for an increase in the UK statutory tax rate to 25%

for taxpayers with profits over £250K beginning April 1, 2023.

We expect this rate to apply to the earnings of our Sahara operations

The Bill received Royal Assent on June 10, 2021, and it is considered enacted on that date under U.S.

As such, we must

reflect the tax impact as a discrete event in our second quarter results.

The effective tax rate is 6.94% and is relatively low due to

the effect of net operating loss carryforwards associated with our legacy operations in the U.S.

Net loss was $7.4 million and $3.4 million for the six months ended June 30, 2021 and 2020, respectively.

The increase in the

net loss was primarily due to the lower gross profit margins, increased interest expense, increased tax expense, amortization of

intangible assets following the Sahara acquisition , stock compensation expense, and losses incurred on the settlement of

certain debt obligations in exchange for shares of our common stock.

recorded a significant tax impact of $2.2 million during the second quarter of 2021 to reflect a discrete event directly pertaining to

the tax impact on our UK deferred tax liability associated with the intangible assets acquired as part of the Sahara business combination,

and the effect of a recent UK rate income tax rate change.

Finance Bill 2021 (“the Bill”) provides for an increase in the

UK statutory tax rate to 25% for taxpayers with profits over £250K beginning April 1, 2023.

We expect this rate to apply to the

earnings of our Sahara operations in the UK.

The Bill received Royal Assent on June 10, 2021 and it is considered enacted on that date

As such, we reflected the tax impact as a discrete event in our second quarter results.

The effective tax rate is (139.3)%

due to there being no tax expense/benefit for the legacy Boxlight entities, but the Sahara entities are fully taxable.

Net loss was $6.6 million and $7.6 million for the nine months ended September 30, 2021 and 2020, respectively.

decrease in the net loss was primarily due to the slightly lower gross profit margins, increased interest expense, increased tax expense,

amortization of intangible assets following the Sahara acquisition, stock compensation expense, and losses incurred on the settlement

of certain debt obligations in exchange for shares of our common stock.

provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its

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(in thousands)

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

Depreciation and amortization

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Reconciliation

of net loss for the six months ended

of net loss for the nine months ended

30, 2021 and 2020 to EBITDA and adjusted EBITDA

(in thousands)

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

Depreciation and amortization

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The bulk of our products are shipped to our educational customers prior to the beginning of the school year, usually

in June, July, August or September.

To prepare for the upcoming school year, we generally build up inventories during the second quarter

in, July, August, or September.

To prepare for the upcoming school year, we generally build up inventories during the second

quarter of the year.

Therefore, inventories tend to be at the highest levels at that point in time.

In the first quarter of the year, inventories

tend to decline significantly as products are delivered to customers and we do not need the same inventory levels during the first quarter.

Accounts receivable balances tend to be at the highest levels in the third quarter, in which we record the highest level of sales.

In the first quarter of the year,

inventories tend to decline significantly as products are delivered to customers and we do not need the same inventory levels during

the first quarter.

Accounts receivable balances tend to be at the highest levels in the third quarter, in which we record the highest

level of sales.

to some continuing travel restrictions and concerns for the safety for our employees during the ongoing COVID-19 pandemic, we have reduced

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and Capital Resources

of June 30, 2021, we had cash and cash equivalents of $7.4 million, a working capital balance of $26.7 million, and a current ratio of

This financial position represents a significant improvement from a year ago at June 30, 2020 when we had $6.1 million of cash

and cash equivalents, a working capital balance of $3.8 million, and a current ratio of 1.28.

the six months ended June 30, 2021 and 2020, we had net cash used in operating activities of $4.6 million and $6.2 million, respectively,

net cash used for investing activities of $852 thousand and $99 thousand respectively, and net cash provided by (used in) financing

activities of $(139) thousand and $11.4 million, respectively.

of September 30, 2021, we had cash and cash equivalents of $6.2 million, a working capital balance of $32.0 million, and a current

ratio of 1.48.

This financial position represents a significant improvement from a year ago at September 30, 2020 when we had $9.6

million of cash and cash equivalents, a working capital balance of $25.1 million, and a current ratio of 1.80.

the nine months ended September 30, 2021 and 2020, we had net cash used in operating activities of $13.1 million and $7.0 million, respectively,

net cash used for investing activities of $943 thousand and $45.0 million respectively, and net cash provided by financing activities

of $7.2 million and $60.7 million, respectively.

We had accounts receivable net of allowances of $47.9 million and $20.9

$20.9 million as of June 30, 2021 and year ended December 31, 2020, respectively.

million as of September 30, 2021, and year ended December 31, 2020, respectively.

addition to the cash flows generated by our ongoing operating activities we financed our operations during 2021 with a new $20.0 million

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purchases 85% of the eligible accounts receivable of the Company, for up to $15.0 million, with the right of recourse.

receivable and our ability to borrow against accounts receivable provides us with an additional source of liquidity as cash payments

are collected from customers in the normal course of business.

Our accounts receivable balance fluctuates throughout the year based on

the seasonality of our business.

Our accounts receivable

and our ability to borrow against accounts receivable provides us with an additional source of liquidity as cash payments are collected

from customers in the normal course of business.

Our accounts receivable balance fluctuates throughout the year based on the seasonality

of our business.

the current lingering COVID-19 pandemic environment, the availability of debt and equity capital has been reduced and the cost of capital

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facility leases.

We lease all of our office facilities.

We expect to make future payments on existing leases from cash generated from

We have limited credit available from our major vendors and are required to prepay for the majority of our inventory purchases,

which further constrains our cash liquidity.

disclosed below, previously the Company entered into an accounts receivable agreement, effective September 30, 2020 (the “Accounts

Receivable Agreement”), between Sallyport Commercial Finance LLC (“Sallyport”) and the Company’s subsidiaries.

Under the terms of the Accounts Receivable Agreement, the Subsidiaries were originally able to sell up to $6,000,000 (the “Maximum

Facility Limit Amount”) of eligible accounts receivable that are accepted by Sallyport for up to 90% of the face amount of each

such eligible account.

On July 20, 2021, Boxlight and Sallyport amended the Accounts Receivable Agreement (the “ARC Amendment”)

for purposes of increasing the Maximum Facility Limit Amount to $13,000,000, as well as increasing the minimum monthly sales from $1,250,000

to $3,000,000.

In exchange for entry into the ARC Amendment, Boxlight agreed to a fee of $50,000, representing one percent of the increased

Maximum Facility Limit Amount.

Other terms of the Accounts Receivable Agreement remain unchanged.

On August 6, 2021, Boxlight

and Sallyport entered into an additional amendment of the Accounts Receivable Agreement (the “Second ARC Amendment”), which

further increased the Maximum Facility Limit Amount to $15,000,000.

In exchange for entry into the Second ARC Amendment, Boxlight agreed

We lease all our office facilities.

We expect to make future payments on existing leases from cash generated from operations.

We have limited credit available from our major vendors and are required to prepay for the majority of our inventory purchases, which

further constrains our cash liquidity.

disclosed below, the Company entered into an accounts receivable agreement, effective September 30, 2020 (the “Accounts Receivable

Agreement”), between Sallyport Commercial Finance LLC (“Sallyport”) and the Company’s subsidiaries, Boxlight,

and EOSEDU LLC (the Subsidiaries”).

Under the terms of the Accounts Receivable Agreement, the Subsidiaries were originally

able to sell up to $6,000,000 (the “Maximum Facility Limit Amount”) of eligible accounts receivable that are accepted by

Sallyport for up to 90% of the face amount of each such eligible account.

On July 20, 2021, Boxlight and Sallyport amended the Accounts

Receivable Agreement (the “ARC Amendment”) for purposes of increasing the Maximum Facility Limit Amount to $13,000,000, as

well as increasing the minimum monthly sales from $1,250,000 to $3,000,000.

In exchange for entry into the ARC Amendment, Boxlight agreed

to a fee of $50,000, representing one percent of the increased Maximum Facility Limit Amount.

Other terms of the Accounts Receivable

Agreement remain unchanged.

Agreement remained unchanged.

On August 6, 2021, Boxlight and Sallyport entered into an additional amendment of the Accounts Receivable

Agreement (the “Second ARC Amendment”), which further increased the Maximum Facility Limit Amount to $15,000,000.

for entry into the Second ARC Amendment, Boxlight agreed to a fee of $20,000, representing one percent of the increased Maximum Facility

Limit Amount.

Other terms of the Accounts Receivable Agreement remained unchanged.

On August 23,

2021, the Company and Sallyport, as first lien creditor, and Lind Global Macro Fund, LP (“LGMF”) and Lind Global Asset Management,

LLC (“Lind Global”), together as second lien creditors, entered into the fourth amended and restated intercreditor agreement

(the “Fourth A&R Intercreditor Agreement”) for the sole purpose of increasing the permitted first lien cap thereunder

from $6 million to $20 million.

January 26, 2021, we entered into an agreement with Everest Display Inc., a Taiwan corporation (“EDI”), and EDI’s subsidiary,

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506 of Regulation D under Section 4(a)(2) of the Securities Act.

September 21, 2020, we and Lind Global Asset Management LLC (“Lind Global”) entered into a securities purchase agreement

(the “Lind Global SPA”), pursuant to which Lind Global purchased from the Company a $22,000,000 secured convertible note

(the “Convertible Note”) in exchange for payment to us of $20,000,000 (the “Funding”).

Under the terms of the

Lind Global SPA, in addition to the issuance of the Convertible Note, the Company paid to Lind (i) a commitment fee of $400,000 and (ii)

a bonus fee (the “Bonus Payment”) of $500,000 payable in shares of Class A common stock of the Company, with the per share

price of the Bonus Payment shares calculated based on the 20-day VWAP of the Class A Common Stock prior to closing.

The Convertible Note

has a term of 24-months, bears a 4% interest rate (0% interest so long as the Class A Common Stock trades at $3.50 or more per share),

is repayable in 22 equal instalments commencing 60 days after the Funding and, at the option of the Company, may be repaid in either

cash or Class A common stock.

Class A common stock issuable to Lind Global in conjunction with the Bonus Payment and the Convertible

Note was registered pursuant to a shelf takedown on the Company’s existing shelf registration statement on Form S-3 (SEC File No.

September 21, 2020, we and Lind Global entered into a securities purchase agreement (the “Lind Global SPA”), pursuant to

which Lind Global purchased from the Company a $22,000,000 secured convertible note (the “Convertible Note”) in exchange

for payment to us of $20,000,000 (the “Funding”).

Under the terms of the Lind Global SPA, in addition to the issuance of

the Convertible Note, the Company paid to Lind (i) a commitment fee of $400,000 and (ii) a bonus fee (the “Bonus Payment”)

of $500,000 payable in shares of Class A common stock of the Company, with the per share price of the Bonus Payment shares calculated

based on the 20-day VWAP of the Class A Common Stock prior to closing.

The Convertible Note has a term of 24-months, bears a 4% interest

rate (0% interest so long as the Class A Common Stock trades at $3.50 or more per share), is repayable in 22 equal instalments commencing

60 days after the Funding and, at the option of the Company, may be repaid in either cash or Class A common stock.

Class A common stock

issuable to Lind Global in conjunction with the Bonus Payment and the Convertible Note was registered pursuant to a shelf takedown on

the Company’s existing shelf registration statement on Form S-3 (SEC File No.

conjunction with our entry into the Lind Global SPA and the issuance of the Convertible Note, on September 21, 2020, the Company and

Lind Global Macro Fund, LP, an affiliate of Lind Global(“Lind”), entered into a third amended and restated security agreement

(the “Third A&R Security Agreement”) for purposes of amending and restating a prior security agreement, dated as of February

4, 2020, between the Company and Lind in order to incorporate the Lind Global SPA and the Convertible Note therein.

Lind Global Macro Fund, LP, an affiliate of Lind Global, entered into a third amended and restated security agreement (the “Third

A&R Security Agreement”) for purposes of amending and restating a prior security agreement, dated as of February 4, 2020, between

the Company and Lind in order to incorporate the Lind Global SPA and the Convertible Note therein.

In addition, on September 21, 2020,

21, 2020, the Company, Sallyport Commercial Finance, LLC (“Sallyport”), as first lien creditor, and Lind and Lind Global,

as second lien creditors, entered into a third amended and restated intercreditor agreement (the “Third A&R Intercreditor Agreement”)

the Company, Sallyport Commercial Finance, LLC (“Sallyport”), as first lien creditor, and Lind and Lind Global, as second

lien creditors, entered into a third amended and restated intercreditor agreement (the “Third A&R Intercreditor Agreement”)

for purposes of amending and restating the second amended and restated intercreditor agreement, dated as of February 4, 2020, between

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the Preliminary Prospectus, the “Prospectus”).

June 8, 2020, the Company entered into an underwriting agreement (the “June Underwriting Agreement”) with Maxim pursuant

to which Maxim agreed to underwrite the public offering (the “June Offering”) of 13,333,333 shares (the “Shares”)

September 8, 2020, the Company entered into an underwriting agreement (the “September Underwriting Agreement”) with Maxim

pursuant to which Maxim agreed to underwrite the public offering (the “September Offering”) of 13,333,333 shares (the “Shares”)

of the Company’s Class A common stock at a public offering price of $0.75 per share.

National acted as co-manager of the June Offering.

The June Offering closed on June 11, 2020, with the Company’s sale of the Shares for gross proceeds of $10,000,000.

the Company granted the underwriters a 45-day option to purchase up to an additional 2,000,000 shares of Class A common stock at the

public offering price less discounts and commissions (the “June Over-Allotment Option”).

The June Over-Allotment Option was

exercised in full on June 24, 2020, for additional proceeds of $1,500,000, through the sale of an additional 1,999,667 shares of Class

A common stock.

Maxim acted as sole-bookrunner and National acted as co-manager for the Offering.

Gross proceeds, before underwriting

discounts and commissions and estimated offering expenses, totaled $11.5 million.

As compensation for underwriting the Offering, Maxim

and National together received an underwriting discount of 7% of the Offering and the Over-Allotment Option and were reimbursed for up

to $85,000 in underwriting expenses.

The June Offering was conducted pursuant to the Company’s registration statement on Form S-1

(SEC File No.

333-238634) previously filed with and subsequently declared effective by the SEC.

The September Offering closed on September

11, 2020, and the Company sold the Shares for gross proceeds of $10,000,000.

In addition, the Company granted the underwriters

a 45-day option to purchase up to an additional 2,000,000 shares of Class A common stock at the public offering price less discounts

and commissions (the “September Over-Allotment Option”).

The September Over-Allotment Option was exercised in full on September

24, 2020, for additional proceeds of $1,500,000, through the sale of an additional 1,999,667 shares of Class A common stock.

as sole-bookrunner and National acted as co-manager for the September Offering.

Gross proceeds, before underwriting discounts

and commissions and estimated offering expenses, totaled $11.5 million.

As compensation for underwriting the Offering, Maxim and National

together received an underwriting discount of 7% of the Offering and the Over-Allotment Option and were reimbursed for up to $85,000

in underwriting expenses.

The September Offering was conducted pursuant to the Company’s registration statement on Form S-1 (SEC

333-238634) previously filed with and declared effective by the SEC.

Balance Sheet Arrangements

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the following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results,

and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters

that are inherently uncertain :

and they require our most difficult, subjective, or complex judgments, resulting from the need to make estimates about the effect of

matters that are inherently uncertain :

and Intangible assets

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company effective dates.

Section 2(a)(19) of the Securities Act of 1933 and Section 3(a)(80) of the Securities Exchange Act of 1934, as amended, an emerging growth

company will lose its status upon the earliest of several conditions, one of which is reaching the last day of the fiscal year in which

the fifth anniversary of the company’s first sale of equity securities pursuant to an effective registration statement occurs.

For the Company, this will occur on January 1, 2022.

Quantitative and Qualitative Disclosure About Market Risk

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis