What changed in this filing

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Item 1. Financial Statements

2022-05-16 compared with 2021-11-10 · 584 added, 982 removed, 181 unchanged (90% of the section changed)

Financial Statements

Condensed Statements of Operations and Comprehensive Loss

the nine months ended September 30, 2021, and 2020

thousands, except per share amounts)

Boxlight Corporation

Consolidated Condensed Statements of Operations and Comprehensive Loss

For the three months ended March 31, 2022 and 2021

(in thousands, except per share amounts)

Three Months Ended

Nine Months Ended

September 30,

Revenues, net

4 unchanged sentences

Total operating expense

Income (loss) from operations

Loss from operations

Other income (expense):

1 unchanged sentence

Other income (expense), net

(Gain) loss on settlement of liabilities, net

Changes in fair value of derivative liabilities

Loss from settlements of liabilities

Total other income (expense)

Income (loss) before income taxes

Income tax expense

Net income (loss)

Loss before income taxes

Income tax benefit (expense)

Fixed dividends - Series B Preferred

Deemed Contribution -Series B Preferred

Net income (loss) attributable to common stockholders

Net loss attributable to common stockholders

Comprehensive loss:

Net income (loss)

Foreign currency translation (loss) gain

Other comprehensive loss:

Foreign currency translation adjustment

Total comprehensive loss

Net income (loss) per common share – basic

Net income (loss) per common share – diluted

Weighted average number of common shares outstanding – basic

Weighted average number of common shares outstanding – diluted

accompanying notes to unaudited consolidated condensed financial statements.

Condensed Balance Sheets

of September 30, 2021 and December 31, 2020

September 30, 2021

December 31, 2020

Net loss per common share – basic and diluted

Weighted average number of common shares outstanding – basic and diluted

See accompanying notes to unaudited consolidated condensed financial statements.

Boxlight Corporation

Consolidated Condensed Balance Sheets

As of March 31, 2022 and December 31, 2021

(in thousands)

Current assets:

5 unchanged sentences

Property and equipment, net of accumulated depreciation

Operating lease right of use asset

Intangible assets, net of accumulated amortization

2 unchanged sentences

Accounts payable and accrued expenses

Accounts payable and accrued expenses – related parties

Short-term debt

Earn-out payable – related party

Deferred revenues – short-term

Operating lease liabilities, current

Deferred revenues, current

Derivative liabilities

1 unchanged sentence

Total current liabilities

Deferred revenues – long-term

Deferred revenues, non-current

Long-term debt

Deferred tax liability

Deferred tax liabilities, net

Operating lease liabilities, non-current

Other long-term liabilities

2 unchanged sentences

Mezzanine equity:

Preferred Series B

Preferred Series C

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

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

Total mezzanine equity

6 unchanged sentences

Accumulated deficit

Accumulated other comprehensive loss

Accumulated other comprehensive income

Total stockholders’ equity

Total liabilities and stockholders’ equity

accompanying notes to unaudited consolidated condensed financial statements.

Condensed Statements of Changes in Stockholders’ Equity

the three and nine months ended September 30, 2021

See accompanying notes to unaudited consolidated condensed financial statements.

Boxlight Corporation

Consolidated Condensed Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2022 and 2021

(in thousands)

Preferred Stock

Comprehensive

as of December 31, 2020

options exercised

lieu of payment for services rendered

lieu of payment for services rendered, shares

of accounts payable liabilities

of debt obligations

of Restricted Shares

of notes payable

of notes payable, shares

fees for issuance of notes payable

fees for issuance of notes payable, shares

issued for Stemify acquisition

issued for Stemify acquisition, shares

offering, shares

issued for Interactive Concepts acquisition

issued for Interactive Concepts acquisition, shares

currency translation

Contribution - Preferred Series B

dividends Preferred Series B

as of March 31, 2021

of debt obligations

of Restricted Shares

issued for Interactive Concepts acquisition

currency translation

Contribution - Preferred Series B

dividends - Preferred Series B

as of June 30, 2021

of debt obligations

Balance as of December 31, 2021

Shares issued for:

Stock options exercised

Debt issuance costs

Conversion of Restricted Shares

options exercised

currency translation

dividends Preferred Series B

as of September 30, 2021

accompanying notes to unaudited consolidated condensed financial statements.

Condensed Statements of Changes in Stockholders’ Equity

the three and nine Months Ended September 30, 2020

Comprehensive

as of December 31, 2019

lieu of payment for services rendered

of accounts payable liabilities

of debt obligations

currency translation

as of March 31, 2020

of accounts payable liabilities

of debt obligations

of Restricted Shares

issued for Stemify acquisition

currency translation

as of June 30, 2020

Acquisition of Preferred C shares

of notes payable

fees for issuance of notes payable

currency translation

income (loss)

as of September 30, 2020

Condensed Statements of Cash Flows

the nine months ended September 30, 2021 and 2020

Nine Months Ended

September 30, 2021

September 30, 2020

Stock compensation

Foreign currency translation

Fixed dividends Preferred Series B

Balance as of March 31, 2022

Balance as of December 31, 2020

Shares issued for:

Conversion of debt obligations

Conversion of accounts payable liabilities

Conversion of Restricted Shares

Stock options exercised

Warrants exercised

Stock compensation

Foreign currency translation

Fixed dividends Preferred Series B

Balance as of March 31, 2021

See accompanying notes to unaudited consolidated condensed financial statements.

Boxlight Corporation

Consolidated Condensed Statements of Cash Flows

For the three months ended March 31, 2022 and 2021

Three Months Ended

Cash flows from operating activities:

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

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

Amortization of debt discount and issuance cost

Bad debt (recovery) expense

Change in debt issuance cost

Bad debt expense (recovery)

Loss on settlement of liabilities

Changes in deferred tax assets and liabilities

Change in allowance for sales returns and volume rebate

Change in inventory reserve

Change in deferred tax assets and liabilities

Forgiveness of PPP debt

Change in fair value of derivative liability

1 unchanged sentence

Stock compensation expense

Other share-based payments

Depreciation and amortization

2 unchanged sentences

Prepaid expenses and other current assets

Operating lease liability and right of use asset

Accounts payable and accrued expenses

Other short-term liabilities

Warranty liability

Accounts payable and accrued expenses - related parties

Other short-term liabilities

Deferred revenues

3 unchanged sentences

Business acquisitions (net of cash acquired)

Cash paid for patents

Cash paid to settle earnout obligations

Purchases of furniture and fixtures, net

1 unchanged sentence

Cash flows from financing activities:

Net proceeds from issuance of common stock

Proceeds from payment protection plan loan

Proceeds from short-term debt

Principal payments on short-term debt

Payment on fixed dividends of class B preferred stock

Proceeds from convertible debt

Debt issuance costs

Net cash provided by financing activities

Payments of fixed dividends to Series B Preferred stockholders

Proceeds from the exercise of options and warrants

Net cash used by financing activities

Effect of foreign currency exchange rates

Net (decrease) increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents, beginning of the period

5 unchanged sentences

Shares issued to settle accounts payable

Shares issued for conversion of notes payable and accrued interest

Shares issued for closing fees related to outstanding notes payable

Shares issued to convert notes payable – Lind Global

Shares issued for acquisition

Preferred share issued as consideration for acquisition of Sahara

Exercise of warrants

Deemed contribution - Series B Preferred

Deferred consideration for acquisition

Notes payable issued as consideration for acquisition of MyStemKit

accompanying notes to unaudited consolidated condensed financial statements.

to the Unaudited Consolidated Condensed Financial Statements

1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

COMPANY AND RECENT ACQUISITIVE GROWTH

Corporation (“Boxlight”) designs, produces, and distributes interactive technology solutions to the education, corporate

and government markets under its Clevertouch and Mimio brands.

The Company’s solutions include interactive displays, collaboration

software, supporting accessories and professional services.

OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

accompanying unaudited condensed consolidated financial statements include the accounts of Boxlight and its wholly owned subsidiaries

(collectively, the “Company”).

Declared but unpaid fixed dividends on Series B Preferred Stock

See accompanying notes to unaudited consolidated condensed financial statements.

Boxlight Corporation

Notes to the Unaudited Consolidated Condensed Financial Statements

NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

THE COMPANY AND RECENT ACQUISITIVE GROWTH

Boxlight Corporation (“Boxlight”) designs, produces, and distributes interactive technology solutions to the education, corporate and government markets under its Clevertouch and Mimio brands.

The Company’s solutions include interactive displays, collaboration software, supporting accessories and professional services.

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying unaudited condensed consolidated financial statements include the accounts of Boxlight and its wholly owned subsidiaries (collectively, the “Company”).

All significant intercompany balances and transactions have been eliminated in consolidation.

accompanying unaudited consolidated condensed financial statements and related notes have been prepared in accordance with accounting

principles generally accepted in the United States of America (“GAAP”) for interim unaudited consolidated condensed financial

information and interim financial reporting guidelines and rules and regulations of the Securities and Exchange Commission (“SEC”).

The accompanying unaudited consolidated condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim unaudited consolidated condensed financial information and interim financial reporting guidelines and rules and regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, they do not include all the information and notes required by GAAP for complete consolidated condensed financial statements.

The unaudited consolidated condensed financial statements reflect all adjustments (consisting of normal recurring adjustments) which

are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

Interim results are

not necessarily indicative of the results for the full year.

These unaudited consolidated condensed financial statements should be read

in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2020 and notes

thereto contained in the Company’s Annual Report on Form 10-K.

Certain information and note disclosures normally included in consolidated

financial statements have been condensed.

The December 31, 2020, balance sheet included herein was derived from the audited consolidated

financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements.

AND ASSUMPTIONS

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

amounts of certain assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and

the reported amounts of revenues and expenses during the reporting period.

Note 1 in the Notes to the Consolidated Financial Statements

for 2020 contained in the Annual Report on Form 10-K, filed with the SEC on March 31, 2021, describes the significant accounting policies

that the Company used in preparing our consolidated condensed financial statements.

On an ongoing basis, the Company evaluates our estimates,

including, but not limited to, those related to revenue/reserves and allowances.

The Company bases estimates on historical experience

and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for

making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results

could differ materially from these estimates under different assumptions or conditions.

VALUE OF FINANCIAL INSTRUMENTS

Company’s financial instruments primarily include cash, accounts receivable, derivative liabilities, accounts payable and debt.

Due to the short-term nature of cash, accounts receivables and accounts payable, the carrying amounts of these assets and liabilities

approximate their fair value.

The unaudited consolidated condensed financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.

Interim results are not necessarily indicative of the results for the full year.

These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2021 and notes thereto contained in the Company’s Annual Report on Form 10-K.

Certain information and note disclosures normally included in consolidated financial statements have been condensed.

The December 31, 2021 balance sheet included herein was derived from the audited consolidated financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements.

ESTIMATES AND ASSUMPTIONS

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Note 1 in the Notes to the Consolidated Financial Statements for 2021 contained in the Annual Report on Form 10-K, filed with the SEC on April 13, 2022, describes the significant accounting policies that the Company used in preparing our consolidated condensed financial statements.

On an ongoing basis, the Company evaluates our estimates, including, but not limited to, those related to revenue/reserves and allowances.

The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results could differ materially from these estimates under different assumptions or conditions.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company’s financial instruments primarily include cash, accounts receivable, derivative liabilities, accounts payable and debt.

Due to the short-term nature of cash, accounts receivables and accounts payable, the carrying amounts of these assets and liabilities approximate their fair value.

Debt approximates fair value due to either the short-term nature or recent execution of the debt agreement.

The amount of consideration received is deemed to approximate the fair value of long-term debt net of any debt discount and issuance

value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between

market participants.

A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices

in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy is as

1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability

to access at the measurement date.

2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or

These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or

similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or

liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from

or corroborated by market data by correlation or other means.

3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable

(supported by little or no market activity).

assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The Company’s

assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of

the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

following table sets forth, by level within the fair value hierarchy, the Company’s financial liabilities that were accounted for

at fair value on a recurring basis as of September 30, 2021, and December 31, 2020 (in thousands):

OF FINANCIAL LIABILITIES MEASURED ON A RECURRING BASIS

Value as of September 30,

The amount of consideration received is deemed to approximate the fair value of long-term debt net of any debt discount and issuance cost.

Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants.

A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted

prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The fair value hierarchy is as follows:

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

● Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

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

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

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

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

Derivative liabilities - warrant instruments

Value as of December 31,

Derivative liabilities - warrant instruments

Earn-out payable – related party

following table shows the change in the Company’s warrant instruments rollforward for the nine months ended September 30, 2021:

OF WARRANT INSTRUMENTS ROLLFORWARD

The following table shows the change in the Company’s warrant instruments roll-forward for the three months ended March 31, 2022:

(in thousands)

Balance, December 31, 2021

Exercise of warrants

Change in fair value of derivative liabilities

Balance, September 30, 2021

GAIN (LOSS) PER COMMON SHARE

Basic net income (loss) per common share is

computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding

during the period.

For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting and

warrants to purchase common stock were considered to be common stock equivalents.

Diluted net income (loss) per common share is

determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of

common stock equivalents.

In periods when losses are reported, the weighted-average number of common shares outstanding excludes

common stock equivalents, because their inclusion would be anti-dilutive.

For the quarter ended September 30, 2021, where the

company had income, approximately 1.8 million

of potentially dilutive shares were excluded from the computation of diluted earnings per share due to their antidilutive

accordance with the FASB’s Accounting Standards Update (“ASU”) No.

2014-09, Revenue from Contracts with Customers

(Topic 606) , the Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services

is transferred to its customers.

Control is generally transferred when the Company has a present right to payment and the title, and

the significant risks and rewards of ownership of products or services are transferred to its customers.

Product revenue is derived from

the sale of projectors, interactive panels and related software and accessories to distributors, resellers, and end users.

Service revenue

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

of Products and Services and Related Contractual Provisions

Company’s sales of interactive devices, including panels, projectors, and other interactive devices generally include hardware

maintenance services, a license to software, and the provision of related software maintenance.

In most cases, interactive devices are

sold with hardware maintenance services with terms of approximately 60 months.

Software maintenance includes technical support, product

updates on a when and if available basis, and error correction services.

At times, non-interactive projectors are also sold with hardware

maintenance services with terms of approximately 60 months.

The Company also licenses software independently of its interactive devices,

in which case it is bundled with software maintenance, and in some cases, subscription services that include access to on-line content,

and cloud-based applications.

The Company’s software subscription services provide access to content and software applications

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

Company’s product sales, including those with software and related services, generally include a single payment up front for the

products and services, and revenue is recorded net of estimated sales returns and rebates based on the Company’s expectations and

historical experience.

For most of the Company’s product sales, control transfers, and therefore, revenue is recognized when products

are shipped at the point of origin.

When the Company transfers control of its products to the customer prior to the related shipping

and handling activities, the Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather

than a performance obligation.

For many of the Company’s software product sales, control is transferred when shipped at the point

of origin since the software is installed on the interactive hardware device in advance of shipping.

For software product sales, control

is transferred when the customer receives the related interactive hardware since the customer’s connection to the interactive hardware

activates the software license at which time the software is made available to the customer.

For the Company’s software maintenance,

hardware maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the

best output measure of how those services are transferred to the customer.

Company’s installation, training and professional development services are generally sold separately from the Company’s products.

Control of these services is transferred to our customers over time with hours/time incurred in providing the service being the best

depiction of the transfer of services since the customer is receiving the benefit of the services as the work is performed.

the sale of third-party products and services where the Company obtains control of the products and services before transferring it to

the customer, the Company recognizes revenue based on the gross amount billed to customers.

The Company considers multiple factors when

determining whether it obtains control of the third-party products and services including, but not limited to, evaluating if it can establish

the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product

The Company has not historically entered into transactions where it does not take control of the product or service prior

to transfer to the customer.

Company excludes all taxes assessed by a governmental agency that are both imposed on and concurrent with the specific revenue-producing

transaction from revenue (for example, sales and use taxes).

In essence, the Company is reporting these amounts collected on behalf of

the applicable government agency on a net basis as though they are acting as an agent.

The taxes collected and not yet remitted to the

governmental agency are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Financing Arrangements

a third-party leasing partner, we provide financing programs that are designed to offer customers a variety of options to purchase interactive

technology solutions whereby customers enter into purchase agreements with us along with a separate financing or leasing contract

with a third-party lender, who advances the proceeds from the sale to us upon contract execution and shipment of goods.

In such situations,

the sales to the customer are final and the Company bears no risk of loss regarding subsequent payments.

contracts with multiple performance obligations, each of which represent promises within a contract that are distinct, the Company allocates

revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”).

The Company’s

products and services included in its contracts with multiple performance obligations generally are not sold separately and there are

no observable prices available to determine the SSP for those products and services.

Since observable prices are not available, SSPs

are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if

they were sold regularly on a stand-alone basis.

The Company’s process for estimating SSPs without observable prices considers

multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, when

applicable, the estimated cost to provide the performance obligation, market trends in the pricing for similar offerings, product-specific

business objectives, and competitor or other relevant market pricing and margins.

Because observable prices are generally not available

for the Company’s performance obligations that are sold in bundled arrangements, the Company does not apply the residual approach

to determining SSP.

However, the Company does have certain performance obligations for which pricing is highly variable or uncertain,

and contracts with those performance obligations generally contain multiple performance obligations with highly variable or uncertain

For these contracts the Company allocates the transaction price to those performance obligations using an alternative method

of allocation that is consistent with the allocation objective and the guidance on determining SSPs in Topic 606 considering, when applicable,

the estimated cost to provide the performance obligation, market pricing for competing product or service offerings, residual values

based on the estimated SSP for certain goods, product-specific business objectives, incremental values for bundled transactions that

include a service relative to similar transactions that exclude the service, and competitor pricing and margins.

A separate price has

not been established by the Company for its hardware maintenance services and software maintenance services.

In addition, hardware maintenance

services, software solutions, and the related maintenance services are never sold separately and are proprietary in nature, and the related

selling price of these products and services is highly variable or uncertain.

Therefore, the SSP of these products and services is estimated

using the alternative method described above, which includes residual value techniques.

Company has applied the portfolio approach to its allocation of the transaction price for certain portfolios of contracts that are executed

in the same manner, contain the same performance obligations, and are priced in a consistent manner.

The Company believes that the application

of the portfolio approach produces the same result as if they were applied at the contract level.

timing of invoicing to customers often differs from the timing of revenue recognition and these timing differences can result in receivables,

contract assets, or contract liabilities (deferred revenue) on the Company’s consolidated balance sheets.

Fees for the Company’s

product and most service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30-60

days of contract execution.

Fees for installation, training, and professional development services are fixed and generally become due

as the services are performed.

The Company has an established history of collecting under the terms of its contracts without providing

refunds or concessions to its customers.

The Company’s contractual payment terms do not vary when products are bundled with services

that are provided over multiple years.

In these contracts where services are expected to be transferred on an ongoing basis for several

years after the related payment, the Company has determined that the contracts generally do not include a significant financing component.

The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment

is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred,

and 2) to ensure that the customer continues to use the related services;

so that the customer will receive the optimal benefit

from the products during the course of such product’s lifetime.

Additionally, the Company has elected the practical expedient to

exclude any financing component from consideration for contracts where, at contract inception, the period between the transfer of services

and the timing of the related payment is not expected to exceed one year.

Company has an unconditional right to consideration for all products and services transferred to the customer.

That unconditional right

to consideration is reflected in accounts receivable in the accompanying consolidated balance sheets in accordance with Topic 606.

liabilities are reflected in deferred revenue in the accompanying consolidated balance sheets and reflect amounts allocated to performance

obligations that have not yet been transferred to the customer related to software maintenance, hardware maintenance, and subscription

The Company has no material contract assets on September 30, 2021, or December 31, 2020.

During the nine months ended

September 30, 2021 and September 30, 2020, the Company recognized $ 4.4

million and $ 0.9

million, respectively of revenue that was included

in the deferred revenue balance as of December 31, 2020, and December 31, 2019, respectively.

Consideration

Company’s otherwise fixed consideration in its customer contracts may vary when refunds or credits are provided for sales returns,

stock rotation rights, price protection provisions, or in connection with certain other rebate provisions.

The Company generally does

not allow product returns other than under assurance warranties or hardware maintenance contracts.

However, the Company, on a case-by-case

basis, will grant exceptions, mostly for “buyer’s remorse” where the distributor or reseller’s end customer either

did not understand what they were ordering or otherwise determined that the product did not meet their needs.

An allowance for sales

returns is estimated based on an analysis of historical trends.

In very limited situations, a customer may return previous purchases

held in inventory for a specified period of time in exchange for credits toward additional purchases.

The Company includes variable consideration

in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant

These estimates are generally made using the expected value method based on historical experience and are measured at each

reporting date.

There was no material revenue recognized in the third quarter of 2021 related to changes in estimated variable consideration

that existed at December 31, 2020.

Performance Obligations

performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting

within the contract.

The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as,

the performance obligation is satisfied by transferring the promised good or service to the customer.

The Company identifies performance

obligations at contract inception so that it can monitor and account for the obligations over the life of the contract.

Remaining performance

obligations represent the portion of the transaction price in a contract allocated to products and services not yet transferred to the

As of September 30, 2021 and December 31, 2020, the aggregate amount of the contractual transaction prices allocated

to remaining performance obligations was $ 20.0

million and $ 16.1

million, respectively.

The Company expects to

recognize revenue on 9 %

of the remaining performance obligations during the fourth quarter of 2021, 24 %

in 2022, 47 %

in 2023 and 2024, with the remaining 20 %

recognized thereafter.

accordance with Topic 606, the Company has elected not to disclose the value of remaining performance obligations for contracts for which

the Company recognizes revenue at the amount to which it has the right to invoice for services performed (for example, a time-and-materials

professional services contracts).

In addition, the Company has elected not to disclose the value of remaining performance obligations

for contracts with performance obligations that are expected, at contract inception, to be satisfied over a period that does not exceed

Disaggregated

Company disaggregates revenue based upon the nature of its products and services and the timing and in the manner which it is transferred

to the customer.

Although all products are transferred to the customer at a point in time, hardware and some software is pre-installed

on the interactive device are transferred at the point of shipment, while some software is transferred to the customer at the time the

hardware is received by the customer or when software product keys are delivered electronically to the customer.

All service revenue

is transferred over time to the customer;

however, professional services are generally transferred to the customer within a year from

the contract date as measured based upon hours or time incurred while software maintenance, hardware maintenance, and subscription services

are generally transferred over five years from the contract execution date as measured based upon the passage of time.

OF DISAGGREGATES REVENUE

Balance, March 31, 2022

INCOME (LOSS) PER COMMON SHARE

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period giving effect to all potentially dilutive securities to the extent they are dilutive.

The dilutive effect of options to purchase common stock, restricted stock units subject to vesting and other share-based payment awards is calculated using the “treasury stock method,” which assumes that the “proceeds” from the exercise of these instruments are used to purchase common shares at the average market price for the period.

The dilutive effect of convertible securities is calculated using the “if-converted method.” Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting common shares are included in the denominator of the diluted calculation for the entire period being presented.

Since the Company was in a loss position for the periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been anti-dilutive.

For the three months ended March 31, 2022, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 7.7 million shares from options to purchase common shares and unvested restricted shares as well as 3.4 million shares issuable upon exercise of warrants.

Additionally, potentially dilutive securities from the assumed conversion of Series B and Series C convertible preferred stock (Note 12) into Class A common stock are excluded from the denominator because they would be anti-dilutive.

For the three months ended March 31, 2021, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 7.7 million shares from options to purchase common shares and unvested restricted shares as well as 340,000 shares issuable upon exercise of warrants.

REVENUE RECOGNITION

In accordance with the FASB’s Accounting Standards Update (“ASU”) No.

2014-09, Revenue from Contracts with Customers (Topic 606) , the Company recognizes revenue at the amount to which it expects to be entitled when control of the products or services is transferred to its customers.

Control is generally transferred when the Company has a present right to payment and the title, and the significant risks and rewards of ownership of products or services are transferred to its customers.

Product revenue is derived from the sale of projectors, interactive panels and related software and accessories to distributors, resellers, and end users.

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

Nature of Products and Services and Related Contractual Provisions

The Company’s sales of interactive devices, including panels, projectors, and other interactive devices generally include hardware maintenance services, a license to software, and the provision of related software maintenance.

In most cases, interactive devices are sold with hardware maintenance services with terms of approximately 60 months .

Software maintenance includes technical support, product updates on a when and if available basis, and error correction services.

At times, non-interactive projectors are also sold with hardware maintenance services with terms of approximately 60 months .

The Company also licenses software independently of its interactive devices, in which case it is bundled with software maintenance, and in some cases, subscription services that include access to on-line content, and cloud-based applications.

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

The Company’s product sales, including those with software and related services, generally include a single payment up front for the products and services, and revenue is recorded net of estimated sales returns and rebates based on the Company’s expectations and historical experience.

For most of the Company’s product sales, control transfers, and therefore, revenue is recognized when products are shipped at the point of origin.

When the Company transfers control of its products to the customer prior to the related shipping and handling activities, the Company has adopted a policy of accounting for shipping and handling activities as a fulfillment cost rather than a performance obligation.

For many of the Company’s software product sales, control is transferred when shipped at the point of origin since the software is installed on the interactive hardware device in advance of shipping.

For software product sales, control is transferred when the customer receives the related interactive hardware since the customer’s connection to the interactive hardware activates the software license at which time the software is made available to the customer.

For the Company’s software maintenance, hardware maintenance, and subscription services, revenue is recognized ratably over time as the services are provided since time is the best output measure of how those services are transferred to the customer.

The Company’s installation, training, and professional development services are generally sold separately from the Company’s products.

Control of these services is transferred to our customers over time with hours/time incurred in providing the service being the best depiction of the transfer of services since the customer is receiving the benefit of the services as the work is performed.

For the sale of third-party products and services where the Company obtains control of the products and services before transferring it to the customer, the Company recognizes revenue based on the gross amount billed to customers.

The Company considers multiple factors when determining whether it obtains control of the third-party products and services including, but not limited to, evaluating if it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring

acceptability of the product or service.

The Company has not historically entered into transactions where it does not take control of the product or service prior to transfer to the customer.

The Company excludes all taxes assessed by a governmental agency that are both imposed on and concurrent with the specific revenue-producing transaction from revenue (for example, sales and use taxes).

In essence, the Company is reporting these amounts collected on behalf of the applicable government agency on a net basis as though they are acting as an agent.

The taxes collected and not yet remitted to the governmental agency are included in accounts payable and accrued expenses in the accompanying consolidated balance sheets.

Customer Financing Arrangements

Through a third-party leasing partner, we provide financing programs that are designed to offer customers a variety of options to purchase interactive technology solutions whereby customers enter into purchase agreements with us along with a separate financing or leasing contract with a third-party lender, who advances the proceeds from the sale to us upon contract execution and shipment of goods.

In such situations, the sales to the customer are final and the Company bears no risk of loss regarding subsequent payments.

Significant Judgments

For contracts with multiple performance obligations, each of which represent promises within a contract that are distinct, the Company allocates revenue to all distinct performance obligations based on their relative stand-alone selling prices (“SSPs”).

The Company’s products and services included in its contracts with multiple performance obligations generally are not sold separately and there are no observable prices available to determine the SSP for those products and services.

Since observable prices are not available, SSPs are established that reflect the Company’s best estimates of what the selling prices of the performance obligations would be if they were sold regularly on a stand-alone basis.

The Company’s process for estimating SSPs without observable prices considers multiple factors that may vary depending upon the unique facts and circumstances related to each performance obligation including, when applicable, the estimated cost to provide the performance obligation, market trends in the pricing for similar offerings, product-specific business objectives, and competitor or other relevant market pricing and margins.

Because observable prices are generally not available for the Company’s performance obligations that are sold in bundled arrangements, the Company does not apply the residual approach to determining SSP.

However, the Company does have certain performance obligations for which pricing is highly variable or uncertain, and contracts with those performance obligations generally contain multiple performance obligations with highly variable or uncertain pricing.

For these contracts the Company allocates the transaction price to those performance obligations using an alternative method of allocation that is consistent with the allocation objective and the guidance on determining SSPs in Topic 606 considering, when applicable, the estimated cost to provide the performance obligation, market pricing for competing product or service offerings, residual values based on the estimated SSP for certain goods, product-specific business objectives, incremental values for bundled transactions that include a service relative to similar transactions that exclude the service, and competitor pricing and margins.

A separate price has not been established by the Company for its hardware maintenance services and software maintenance services.

In addition, hardware maintenance services, software solutions, and the related maintenance services are never sold separately and are proprietary in nature, and the related selling price of these products and services is highly variable or uncertain.

Therefore, the SSP of these products and services is estimated using the alternative method described above, which includes residual value techniques.

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

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

Contract Balances

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

Fees for the Company’s product and most service contracts are fixed, except as adjusted for rebate programs when applicable, and are generally due within 30 - 60 days of contract execution.

Fees for installation, training, and professional development services are fixed and generally become due as the services are performed.

The Company has an established history of collecting under the terms of its contracts without providing refunds or concessions to its customers.

The Company’s contractual payment terms do not vary when products are bundled with services that are provided over multiple years.

In these contracts where services are expected to be transferred on an ongoing basis for several years after the related payment, the Company has determined that the contracts generally do not include a significant

financing component.

The upfront invoicing terms are designed 1) to provide customers with a predictable way to purchase products and services where the payment is due in the same timeframe as when the products, which constitute the predominant portion of the contractual value, are transferred, and 2) to ensure that the customer continues to use the related services;

so that the customer will receive the optimal benefit from the products during the course of such product’s lifetime.

Additionally, the Company has elected the practical expedient to exclude any financing component from consideration for contracts where, at contract inception, the period between the transfer of services and the timing of the related payment is not expected to exceed one year.

The Company has an unconditional right to consideration for all products and services transferred to the customer.

That unconditional right to consideration is reflected in accounts receivable in the accompanying consolidated balance sheets in accordance with Topic 606.

Contract liabilities are reflected in deferred revenue in the accompanying consolidated balance sheets and reflect amounts allocated to performance obligations that have not yet been transferred to the customer related to software maintenance, hardware maintenance, and subscription services.

The Company has no material contract assets on March 31, 2022 or December 31, 2021.

During the three months ended March 31, 2022 and March 31, 2021, the Company recognized $ 1.9 million and $ 1.6 million, respectively of revenue that was included in the deferred revenue balance as of December 31, 2021 and December 31, 2020, respectively.

Variable Consideration

The Company’s otherwise fixed consideration in its customer contracts may vary when refunds or credits are provided for sales returns, stock rotation rights, price protection provisions, or in connection with certain other rebate provisions.

The Company generally does not allow product returns other than under assurance warranties or hardware maintenance contracts.

However, the Company, on a case-by-case basis, will grant exceptions, mostly for “buyer’s remorse” where the distributor or reseller’s end customer either did not understand what they were ordering or otherwise determined that the product did not meet their needs.

An allowance for sales returns is estimated based on an analysis of historical trends.

In very limited situations, a customer may return previous purchases held in inventory for a specified period of time in exchange for credits toward additional purchases.

The Company includes variable consideration in its transaction price when there is a basis to reasonably estimate the amount of the fee and it is probable there will not be a significant reversal.

These estimates are generally made using the expected value method based on historical experience and are measured at each reporting date.

There was no material revenue recognized in the first quarter of 2022 related to changes in estimated variable consideration that existed at December 31, 2021.

Remaining Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting within the contract.

The transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied by transferring the promised good or service to the customer.

The Company identifies performance obligations at contract inception so that it can monitor and account for the obligations over the life of the contract.

Remaining performance obligations represent the portion of the transaction price in a contract allocated to products and services not yet transferred to the customer.

As of March 31, 2022 and December 31, 2021, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was $ 22.3 million and $ 21.5 million, respectively.

The Company expects to recognize revenue on 35 % of the remaining performance obligations during the next twelve months , 26 % in 2023 , 34 % in 2024 and 2025 , with the remaining 5 % recognized thereafter .

In accordance with Topic 606, the Company has elected not to disclose the value of remaining performance obligations for contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed (for example, a time-and-materials professional services contracts).

In addition, the Company has elected not to disclose the value of remaining performance obligations for contracts with performance obligations that are expected, at contract inception, to be satisfied over a period that does not exceed one year.

Disaggregated Revenue

The Company disaggregates revenue based upon the nature of its products and services and the timing and in the manner which it is transferred to the customer.

Although all products are transferred to the customer at a point in time, hardware and some software is pre-installed on the interactive device are transferred at the point of shipment, while some software is transferred to the customer at the time the hardware is received by the customer or when software product keys are delivered electronically to the customer.

All service revenue is transferred over time to the customer;

however, professional services are generally transferred to the customer within a year

from the contract date as measured based upon hours or time incurred while software maintenance, hardware maintenance, and subscription services are generally transferred over five years from the contract execution date as measured based upon the passage of time.

Three Months Ended

Nine Months Ended

September 30, 2021

(in thousands)

September 30, 2020

(in thousands)

3 unchanged sentences

Maintenance and Subscription Services

Company capitalizes incremental costs to obtain a contract with a customer if the Company expects to recover those costs.

The incremental

costs to obtain a contract are those that the Company incurs to obtain a contract with a customer that it would not have otherwise incurred

if the contract were not obtained (e.g., a sales commission).

The Company capitalizes the costs incurred to fulfill a contract only if

those costs meet all the following criteria:

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

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

in the future.

costs are expected to be recovered.

sales commissions incurred by the Company are determined to be incremental costs to obtain the related contracts, which are deferred

and amortized ratably over the estimated economic benefit period.

For these sales commissions that are incremental costs to obtain where

the period of amortization would be recognized over a period that is one year or less, the Company has elected the practical expedient

to expense those costs as incurred.

Commission costs that are deferred are classified as current or non-current assets based on the timing

of when the Company expects to recognize the expense and are included in prepaid and other assets and other assets, respectively, in

the accompanying condensed consolidated balance sheets.

Total deferred commissions, net of accumulated amortization, was $ 253 thousand

at September 30, 2021.

reviewed all material events through the date on which these consolidated condensed financial statements were issued for subsequent event

disclosure consideration as described in Note 15.

STANDARDS PENDING ADOPTION

October 2021, The FASB issued Accounting Standards Update (ASU) No.

2021-08, “ Accounting for Contract Assets and Contract Liabilities

From Contracts With Customers ”, which amends the guidance in ASC 805 to require that “an entity (acquirer) recognize

and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.” At the acquisition

date, an acquirer would account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts.

The Company is currently evaluating the impact that this standard update will have on its financial statements.

August 2021, The FASB issued Accounting Standards Update (ASU) 2021-06, “ Amendments to SEC Paragraphs Pursuant to SEC Final

Rule Releases No.

33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses ” to amend SEC paragraphs

in the Accounting Standards Codification to reflect the issuance of SEC Release No.

33-10786, Amendments to Financial Disclosures

about Acquired and Disposed Businesses.

Among other changes, the final rule modifies the significance tests and improves the disclosure

requirements for (1) acquired or to be acquired businesses, (2) real estate operations, and (3) pro forma financial information.

the final rule includes amendments to financial disclosures specific to smaller reporting companies (SRCs).

The Company is currently

evaluating the impact that this standard update will have on its financial statements.

May 2021, the FASB issued ASU No.

2021-04, “ Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding

Equity-Classified Written Call Options .” The FASB issued this update to clarify and reduce diversity in an issuer’s accounting

for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified

after modification or exchange.

The amendments in this will be effective for all entities for fiscal years beginning after December 15,

2021, including interim periods within those fiscal years.

An entity should apply the amendments prospectively to modifications or exchanges

occurring on or after the effective date of the amendments.

Early adoption is permitted for all entities, including adoption in an interim

The Company is currently evaluating the impact that this standard will have on its financial statements.

August 2020, the FASB issued ASU No.

2020-06, “ Accounting for Convertible Instruments and Contracts in an Entity’s Own

Equity .” The new guidance simplifies the accounting for certain convertible instruments and for contracts in an entity’s

Key provisions include the elimination of the “cash conversion” guidance and the “beneficial conversion

feature” guidance in ASC 470-20 as well as a simplification of the settlement assessment that entities are required to perform

to determine whether a contract qualifies for equity classification by removing certain conditions in ASC 815-40-25.

Since the Company

is an Emerging Growth Company, the ASU is not effective until annual reporting periods beginning after December 15, 2023.

Earlier application

is permitted.

The Company is currently evaluating the impact that this standard will have on its financial statements, and whether it

will adopt the new standard earlier than January 2024.

December 2019, the FASB issued ASU No.

2019-12, “Income Taxes” (Topic 740).

The new guidance modifies the requirements

for the timing of adoption of enacted changes in tax law.

The effects of changes on taxes currently payable or refundable for the current

year must be reflected in the computation of the annual effective tax rate.

Since the Company is an Emerging Growth Company, the ASU

is not effective until fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December

Early adoption is permitted.

June 2016, the FASB issued ASU No.

Contract Costs

The Company capitalizes incremental costs to obtain a contract with a customer if the Company expects to recover those costs.

The incremental costs to obtain a contract are those that the Company incurs to obtain a contract with a customer that it would not have otherwise incurred if the contract were not obtained (e.g., a sales commission).

The Company capitalizes the costs incurred to fulfill a contract only if those costs meet all the following criteria:

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

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

● The costs are expected to be recovered.

Certain sales commissions incurred by the Company are determined to be incremental costs to obtain the related contracts, which are deferred and amortized ratably over the estimated economic benefit period.

For these sales commissions that are incremental costs to obtain where the period of amortization would be recognized over a period that is one year or less, the Company has elected the practical expedient to expense those costs as incurred.

Commission costs that are deferred are classified as current or non-current assets based on the timing of when the Company expects to recognize the expense and are included in prepaid and other assets and other assets, respectively, in the accompanying condensed consolidated balance sheets.

Total deferred commissions, net of accumulated amortization, was $ 322 thousand on March 31, 2022.

RECENTLY ADOPTED ACCOUNTING STANDARDS

Accounting Standards Update ("ASU") No.

2016-02 "Leases” (Topic 842), as amended, requires that lessees and lessors recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements.

The Company elected the modified retrospective approach which we applied on January 1, 2022, and therefore have not restated comparative periods.

The Company elected certain relief options offered in ASU 2016-02 including the package of practical expedients, and the option not to recognize right-of-use assets and lease liabilities that arise from short-term leases (i.e., leases with terms of twelve months or less).The Company also elected the practical expedient to not separate lease and non-lease components, which allows it to account for lease and non-lease components as a single component.

Finally, the Company elected the hindsight practical expedient to determine the lease term for existing leases.

Our operating leases relate primarily to office space.

As a result of the adoption of ASU 2016-02, the Company recognized an operating lease right-of-use ("ROU") asset of $ 3.8 million and a current operating lease liability of approximately $ 1.6 million and a long-term operating lease liability of approximately $ 2.3 million as of January 1, 2022, with no impact on our Consolidated Statements

of Comprehensive Income or Consolidated Statements of Cash Flows.

The ROU asset and operating lease liabilities are recorded as separate line items in the Consolidated Condensed Balance Sheets.

SUBSEQUENT EVENTS

We reviewed all material events through the date on which these consolidated condensed financial statements were issued for subsequent event disclosure consideration as described in Note 17.

ACCOUNTING STANDARDS PENDING ADOPTION

In June 2016, the FASB issued ASU No.

2016-13, “Financial Instruments Credit Losses” (Topic 326):

Measurement of Credit Losses

on Financial Instruments.” The new guidance replaces the incurred loss methodology with the current expected credit loss (CECL)

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized

cost, including trade accounts receivable.

It also applies to off-balance sheet credit exposures not accounted for as insurance (loan

commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized

by a lessor in accordance with Topic 842.

This new guidance changes the impairment model for most financial assets and certain other

Since the Company is an Emerging Growth Company, the ASU is not effective until fiscal years beginning after December 15,

2022, and interim periods within that fiscal year.

The Company continues to evaluate the impact that this standard will have, if any,

on its financial statements.

February 2016, the FASB issued ASC 842 “ Leases ” that creates new accounting and reporting guidelines for leasing arrangements.

The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights

and obligations created by those leases, regardless of whether they are classified as finance or operating leases.

Under the previous

guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily depended on its classification

as a finance or operating lease.

The new guidance also requires disclosures to help financial statement users better understand the amount,

timing, and uncertainty of cash flows arising from leases.

For Emerging Growth Companies, the new standard is not effective until annual

reporting periods beginning after December 15, 2021, including interim periods within that reporting period.

Earlier application is permitted.

were various other accounting standards and interpretations issued recently, some of which although applicable, are not expected to a

have a material impact on our financial position, operations, or cash flows.

2 – RECENT BUSINESS ACQUISITION

March 23, 2021 , the Company acquired 100 % of the outstanding shares of Interactive Concepts BV, a company incorporated and registered

in Belgium and a distributor of interactive technologies (“Interactive”), for total consideration of approximately $ 3.3 million

in cash, common stock and deferred consideration.

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

following table summarizes the estimated acquisition date fair values of the net assets acquired and liabilities assumed, and the estimate

of the fair value of consideration paid:

OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

Measurement of Credit Losses on Financial Instruments.

The new guidance replaces the incurred loss methodology with the current expected credit loss (CECL) methodology.

The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including trade accounts receivable.

It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842.

This new guidance changes the impairment model for most financial assets and certain other instruments.

The Company is currently evaluating the impact that this standard will have, if any, on its financial statements.

There were various other accounting standards and interpretations issued recently, some of which although applicable, are not expected to a have a material impact on our financial position, operations, or cash flows.

NOTE 2 – RECENT BUSINESS ACQUISITIONS

FrontRow Calypso LLC

On December 31, 2021, the Company, and its wholly owned subsidiary, Boxlight, Inc., consummated the acquisition of 100 % of the membership interests of FrontRow Calypso LLC, a Delaware limited liability company (“FrontRow”).

FrontRow was acquired in exchange for payment of $ 34.7 million to Phonic Ear Inc.

and Calypso Systems LLC, the equity holders of FrontRow (the “Equityholders”).

The acquisition occurred pursuant to the terms of a membership interest purchase agreement, dated October 29, 2021 (the “Purchase Agreement”), between the Company, Boxlight, FrontRow and the Equityholders, which Purchase Agreement was filed as Exhibit 10.1 to our Current Report on Form 8-K dated October 29, 2021.

Based in Petaluma, California, FrontRow makes technology that improves communication in learning environments, including developing network-based solutions for intercom, paging, bells, mass notification, classroom sound, lesson sharing, AV control and management.

FrontRow also has offices in Toronto, Copenhagen, Brisbane, Hamilton (UK) and Shenzhen.

In order to finance the acquisition of FrontRow, the Company and substantially all of its direct and indirect subsidiaries, including Boxlight and FrontRow as guarantors, entered into a maximum $ 68.5 million term loan credit facility, dated December 31, 2021 (the “Credit Agreement”), with Whitehawk Finance LLC, as lender (the “Lender”), and White Hawk Capital Partners, LP, as collateral agent.

Under the terms of the Credit Agreement, the Company received an initial term loan of $ 58.5 million on December 31, 2021 (the “Initial Loan”) and was provided with a subsequent delayed draw facility of up to $ 10 million that may be provided for additional working capital purposes under certain conditions.

The assets acquired and liabilities assumed were recorded at their estimated fair values at the acquisition date.

Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, and selection of comparable companies.

The Company engaged the assistance of an independent third-party valuation specialist to determine certain fair value measurements related to acquired assets.

The excess consideration over the net fair values of the assets acquired and liabilities assumed was recognized as goodwill.

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

Accordingly, the carrying amount of inventories at the acquisition date was increased to its estimated fair value based on these assumptions which will result in an increase in cost of revenues subsequent to the

acquisition date in 2022.

The fair value of accounts receivable acquired in connection with the acquisition approximated the contractual amount due from customers at that date.

The Company has early adopted ASU 2021-08, and therefore, the acquired contract liabilities of FrontRow have been recognized and measured in accordance with Topic 606 as follows.

(in thousands)

1 unchanged sentence

Accounts receivable

Prepaid expenses and other current assets

Prepaid expenses

Property and equipment

2 unchanged sentences

Deferred revenue

Deferred tax liability

Other liabilities

6 unchanged sentences

Consideration paid:

Preferred shares issued

Deferred cash consideration

Common shares issued

Total consideration paid

Presentation Systems PLC

September 24, 2020, the Company acquired 100 % of the outstanding shares of Sahara Holdings Limited, a private limited company operating

under the laws of the UK and all its subsidiaries, including Sahara Presentation Systems PLC (collectively, “Sahara”).

is a distributor of audio and video software and equipment including the Clevertouch branded product line of interactive touch screens.

This strategic acquisition expanded the Company’s geographic footprint, industry verticals served, and enhanced the Company’s

technology and product offerings.

consideration for the purchase of Sahara, the Company transferred GBP 74.0 million (approximately USD $ 94.9 million) in the form of GBP

52.0 million (approximately USD $ 66.7 million) in cash and GBP 22.0 million (approximately USD $ 28.2 million) in our Series B convertible

preferred stock and our Series C convertible preferred stock.

The convertible preferred stock was comprised of 1,586,620 shares of Series

B convertible redeemable preferred stock (the “Series B Preferred Stock”) and 1,320,850 shares of Series C convertible redeemable

preferred stock (the “Series C Preferred Stock”).

The fair value of the preferred shares issued was $ 16.5 million and $ 12.4

million for the Series B Preferred Stock and Series C Preferred Stock, respectively.

See further discussion of the features of the preferred

shares in Note 10.

consideration transferred to the selling shareholders along with the assets acquired and liabilities assumed were recorded at their estimated

fair values at the acquisition date.

The excess consideration over the net fair values of the assets acquired and liabilities assumed

was recognized as goodwill.

fair value of the deferred revenue at the date of acquisition was determined based on the estimated direct and incremental costs to fulfill

the remaining performance obligations associated with the deferred revenue, plus a reasonable profit margin.

Accordingly, the carrying

amount of deferred revenue at the acquisition date was reduced to its estimated fair value based on the assumptions above which has resulted

in and will result in a reduction in revenue that otherwise would have been recognized in periods subsequent to the acquisition date.

following table summarizes the estimated fair values of the net assets acquired and liabilities assumed, and the estimate of the fair

value of consideration paid:

OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

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

Weighted Average

Customer relationships

Non-compete agreements

Interactive Concepts

On March 23, 2021, the Company acquired 100 % of the outstanding shares of Interactive Concepts BV, a company incorporated and registered in Belgium and a distributor of interactive technologies (“Interactive”), for total consideration of

approximately $ 3.3 million in cash, common stock and deferred consideration.

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

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

(in thousands)

1 unchanged sentence

Accounts receivable

Prepaid expenses and other current assets

Property and equipment

1 unchanged sentence

Accounts payable and accrued expenses

Deferred revenue

Deferred tax liability

Other liabilities

Total liabilities assumed

5 unchanged sentences

Consideration paid:

Preferred shares issued

Deferred cash consideration

Common shares issued

Total consideration paid

results of operations of Sahara following the acquisition are included in the Condensed Consolidated Statement of Operations and Comprehensive

Loss for the nine months ended September 30, 2021.

Forma Financial Results

following unaudited pro forma information reflects our consolidated results of operations for the three and nine months ending September

30, 2020, as if the acquisition of Sahara had taken place on January 1, 2020.

The unaudited pro forma information is not necessarily

indicative of the results of operations that the Company would have reported had the acquisition actually occurred at the beginning of

these periods nor is it necessarily indicative of future results.

The unaudited pro forma financial information does not reflect the

impact of future events that may occur after the acquisition, including, but not limited to, anticipated costs savings from synergies

or other operational improvements.

The nature and amount of any material, nonrecurring pro forma adjustments directly attributable to

the business combination are included in the pro forma revenue and net earnings reflected below.

OF PRO FORMA INFORMATION

(Unaudited) in thousands As Reported

(Unaudited) in thousands Proforma

Three months ended September 30, 2020

(Unaudited) in thousands as

(Unaudited) in thousands Proforma

Revenues, net

Net loss attributable to common shareholders

(Unaudited) in thousands As Reported

(Unaudited) in thousands Proforma

Nine months ended September 30, 2020

(Unaudited) in thousands As Reported

(Unaudited) in thousands Proforma

Revenues, net

Net loss attributable to common shareholders

3 – ACCOUNTS RECEIVABLE - TRADE

receivable consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):

OF ACCOUNTS RECEIVABLE - TRADE

NOTE 3 – ACCOUNTS RECEIVABLE - TRADE

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

Accounts receivable – trade

2 unchanged sentences

Accounts receivable - trade, net of allowances

4 – INVENTORIES

are stated at the lower of cost or net realizable value and include spare parts and finished goods.

Inventories are primarily determined

using specific identification and the first-in, first-out (“FIFO”) cost methods.

Cost includes direct cost from the Current

Manufacturer (“CM”) or Original Equipment Manufacturer (“OEM”), plus material overhead related to the purchase,

inbound freight and import duty costs.

consisted of the following at September 30, 2021, and December 31, 2020 (in thousands):

OF INVENTORIES

for inventory obsolescence

shipping costs

5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

expenses and other current assets consisted of the following at September 30, 2021, and December 31, 2020 (in thousands):

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

NOTE 4 – INVENTORIES

Inventories are stated at the lower of cost or net realizable value and include spare parts and finished goods.

Inventories are primarily determined using specific identification and the first-in, first-out (“FIFO”) cost methods.

Cost includes direct cost from the

Current Manufacturer (“CM”) or Original Equipment Manufacturer (“OEM”), plus material overhead related to the purchase, inbound freight and import duty costs.

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

Finished goods

Reserve for inventory obsolescence

Advanced shipping costs

Inventories, net

NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

Prepayments to vendors

Prepaid licenses and other

Unbilled revenue

Prepaid expenses and other current assets

6 – INTANGIBLE ASSETS

assets consisted of the following at September 30, 2021 and December 31, 2020 (in thousands):

OF INTANGIBLE ASSETS

NOTE 6 – INTANGIBLE ASSETS

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

Customer relationships

2 unchanged sentences

Intangible assets, net of accumulated amortization

the nine months ended September 30, 2021, and 2020, the Company recorded amortization expense of $ 5.2

million and $ 747

thousand, respectively.

following is a summary of our debt as of September 30, 2021, and December 31, 2020:

For the three months ended March 31, 2022 and 2021, the Company recorded amortization expense of $ 2.2 million and $ 1.7 million, respectively.

NOTE 7 – LEASES

The Company has entered into various operating leases for certain office, support locations and vehicles with terms extending through February 2027.

Generally, these leases have initial lease terms of five years or less.

Many of the leases have one or more lease renewal options.

The exercise of lease renewal options is at our sole discretion.

The Company does not consider exercise of any lease renewal options reasonably certain.

Certain of our lease agreements contain early termination options.

No renewal options or early termination options have been included in the calculation of the operating right-of-use assets or operating lease liabilities.

Certain of our

lease agreements provide for periodic adjustments to rental payments for inflation.

As the majority of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate at the commencement date in determining the present value of lease payments.

The incremental borrowing rate is based on the term of the lease.

In connection with the adoption of ASC 842, the Company used incremental borrowing rates on January 1, 2022 for operating leases that commenced prior to that date.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

For these short-term leases, lease expense is recognized on a straight-line basis over the lease term.

At March 31, 2022, the Company had no leases classified as finance leases.

The Company is not a lessor in any lease arrangement.

Operating lease cost was $ 469 thousand for the three months ended March 31, 2022.

Variable lease cost and short-term lease cost were not material for the three months ended March 31, 2022.

Cash paid for amounts included in the measurement of lease liabilities was $ 423 thousand for the three months ended March 31, 2022.

During the three months ended March 31, 2022, the Company obtained new operating lease right-of-use assets totaling $ 1.8 million.

Future maturities of the Company's operating lease liabilities are summarized as follows (in thousands):

Fiscal year ended,

Less imputed interest

Supplemental lease information

Weighted-average remaining lease term (years)

Weighted-average discount rate

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSE

Accounts payable and accrued expense consisted of the following at March 31, 2022 and December 31, 2021 (in thousands):

Accounts payable

Accrued expense

Accounts payable and other liabilities

NOTE 9 – DEBT

The following is a summary of our debt as of March 31, 2022 and December 31, 2021 (in thousands):

Debt – Third Parties

Note payable – Lind Global

Paycheck Protection Program

Accounts receivable financing – Sallyport Commercial

Note payable – STEM Education Holdings

Note payable - Whitehawk

Discount and issuance cost

2 unchanged sentences

Total debt (net of discount)

- Third Parties:

Global Marco Fund and Lind Global Asset Management

February 4, 2020, the Company and Lind Global Macro Fund L.P.

(“Lind”) entered into a securities purchase agreement pursuant

to which the Company received $ 750

thousand in exchange for the issuance to Lind

thousand convertible promissory note, payable

interest rate, compounded monthly, (2) certain shares of restricted Class A common stock valued at $ 60

thousand, calculated based on the 20-day volume

average weighted price of the Class A common stock for the period ended February 4, 2020, and (3) a commitment fee of $ 26.25

Note matures over 24

with repayment that commenced on August 4, 2020, after which time the Company is obligated to make monthly payments of $45,833 thousand

plus interest.

Interest accrued during the first six

months of the note, after which time the interest payments, including accrued interest, is payable monthly in either conversion

shares or in cash.

A commitment fee in the amount of $ 26

thousand was paid to Lind, along with legal fees

in the amount of $ 15

The Company paid Lind $ 60

thousand for closing fees by issuing 44,557

shares of restricted Class A common stock.

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

agreement (the “Lind SPA”) pursuant to which the Company received $ 20.0

million in exchange for the issuance to Lind

convertible promissory note, payable at a 4 %

interest rate, compounded monthly, (2) 310,399

of restricted Class A common stock valued at $ 900

calculated based on the 20-day volume average weighted price of the Class A common stock for the period ended September 21, 2020, and

(3) a commitment fee of $ 400

Note matures over 24

with repayment commencing on November 22, 2020, after which time the Company became obligated to make monthly payments of $ 1.0

plus interest.

Interest accrued during the first two

months of the note, after which time the interest payments, including accrued interest is payable monthly in either conversion shares

The commitment fee in the amount of $400 thousand was paid to Lind Global, along with legal fees in the amount of $ 20

The Company paid Lind a total of

thousand in closing fees consisting

of commitment and legal fees, by issuing 310,399

shares of Class A common stock.

The shares of

Class A common stock issuable to Lind under the Note are registered pursuant to our effective shelf registration statement on Form S-3.

the nine months ended September 30, 2021, as payment for the Lind and Lind Global convertible notes, the Company repaid combined

principal of $ 9.9

million and interest of $ 510.9

thousand to Lind and Lind Global by issuing a

million shares Class A common stock with an aggregate

value of $ 13.8

million to Lind and recognized a $ 3.4

million loss.

Protection Program Loan

May 22, 2020, the Company received loan proceeds of $ 1.09 million

under the Paycheck Protection Program (“PPP”) established as part of the Coronavirus Aid, Relief and Economic Security

Act (“CARES Act”).

The loans and accrued interest received under the PPP are forgivable to the extent borrowers use the

loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains their payroll levels during the

designated period prior to which the PPP would otherwise be repayable.

The Company used the proceeds for purposes consistent with

unforgiven portion of the PPP loan is payable over two years at an interest rate of 1 %,

with a deferral of payments for the first six months.

Display, Inc .

June 22, 2020, the Company entered into an agreement with Everest Display, Inc., a Taiwan corporation (“EDI”), and EDI’s

subsidiary, AMAGIC Holographics, Inc., a California corporation (“AMAGIC”), effective June 11, 2020, pursuant to which $ 1,000,000

in accounts payable owed by the Company to EDI was settled in exchange for the Company’s issuance of 869,565 shares (the “Shares”)

of its Class A common stock to AMAGIC at a $ 1.15 per share purchase price.

The Shares were issued to AMAGIC pursuant to an exemption

from registration provided by Rule 506 of Regulation D under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities

January 26, 2021, the Company entered into an agreement with EDI and EDI’s subsidiary, AMAGIC, pursuant to which $ 1,983,436 in

accounts payable owed by the Company to EDI was settled in exchange for the Company’s issuance of 793,375 shares (the “2021

Shares”) of its Class A common stock to AMAGIC at a $ 2.50 per share purchase price.

The 2021 Shares were issued to AMAGIC pursuant

to an exemption from registration provided by Rule 506 of Regulation D under Section 4(a)(2) of the Securities Act.

Receivable Financing – Sallyport Commercial Finance

September 30, 2020, the Company’s wholly owned subsidiaries, Boxlight Inc.

(“Boxlight”), and EOS EDU

(“EOSEDU”) (Boxlight and EOSEDU together, the “Subsidiaries”), entered into an asset-based lending

agreement with Sallyport Commercial Finance, LLC (“Sallyport”), which agreement has a 12-month term (the “Term”).

Pursuant to the agreement, Sallyport agreed to purchase 90% of the eligible accounts receivable of the Subsidiaries during the

Term with a right of recourse back to the Subsidiaries if the receivables are not collectible.

This agreement requires a minimum

monthly sales volume of $1,250,000 with a maximum facility limit of $ 8,000,000 .

Advances against this agreement accrue interest at the rate of 3.50 %

in excess of the highest prime rate publicly announced from time to time with a floor of 3.25 %.

In addition, the Subsidiaries are required to pay a daily audit fee of $ 950

The Subsidiaries granted Sallyport

a security interest in all - the assets of Boxlight Inc.

and Genesis Collaboration, LLC.

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 .

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

Debt - Third Parties:

Whitehawk Finance LLC

In order to finance the acquisition of FrontRow, the Company and substantially all its direct and indirect subsidiaries, including Boxlight and FrontRow as guarantors, entered into a maximum $ 68.5 million term loan credit facility, dated December 31, 2021 (the “Credit Agreement”), with Whitehawk Finance LLC, as lender (the “Lender”), and White Hawk Capital Partners, LP, as collateral agent.

The Initial Loan and Delayed Draw are collectively referred to as the “Term Loans”.

The proceeds of the Initial Loan were used to finance the Company’s acquisition of FrontRow, pay off all indebtedness owed to our then existing lenders, Sallyport Commercial Finance, LLC and Lind Global Asset Management, LLC, pay related fees and transaction costs, and provide working capital.

Of the Initial Loan, $ 8.5 million was subject to repayment on February 28, 2022, with quarterly principal payments of $ 625,000 and interest payments commencing March 31, 2022 and the $ 40.0 million remaining balance plus any Delayed Draw loans becoming due and payable in full on December 31, 2025.

The Term Loans will bear interest at the LIBOR rate plus 10.75 %;

provided that after June 30, 2022, if the Company’s Senior Leverage Ratio (as defined in the Credit Agreement) is less than 2.25 , the interest rate would be reduced to LIBOR plus 10.25 %.

Such terms are subject to the Company maintaining a borrowing base in terms compliant with the Credit Agreement.

On March 29, 2022, the Company received a Notice of Events of Default and Reservation of Rights (the “Notice”) from the Collateral Agent, alleging, among other things, defaults as a result of (i) failure to repay $ 8.5 million of the facility by February 28, 2022, (ii) non-compliance with the borrowing base resulting in the Company being in an over advance position under the Credit Agreement, and (iii) failure to timely provide certain reports and documents.

As a result of the Notice, all accrued and unpaid interest owed under the Term Loan, became subject to a post-default interest rate equal to the highest interest rate allowed for under the Credit Agreement plus 2.50 % until such time as the Events of Default were either waived or cured.

Following the Company’s receipt of the Notice and pursuant to amendment to the Credit Agreement, dated April 4, 2022, the Collateral Agent and Lender agreed to extend the terms of repayment of the $ 8.5 million originally due on February 28, 2022 until February 28, 2023 and waive and/or otherwise extend compliance with certain other terms of the Credit Agreement in order to allow the Loan Parties adequate time to comply with such terms.

The principal elements of the amendment included (a) an extension of time for the Loan Parties to repay $ 8.5 million of the principal amount of the term loan from February 28, 2022 to February 28, 2023, and (b) forbearance on $ 3,500,000 in over advances to grant the Loan Parties until May 16, 2022 to allow the Company to come into compliance with the borrowing base requirements set forth in the Credit Agreement.

In such connection, the Loan Parties have obtained credit insurance on certain key customers whose principal offices are located in the European Union and Australia as, without the credit insurance, their accounts owed to the Loan Parties had been deemed ineligible for inclusion in the borrowing base calculation primarily due to the perceived inability of the Collateral Agent to enforce security interests on such accounts.

In addition, the Lender and Collateral Agent agreed to (i) reduce, through June 30, 2022, the minimum cash reserve requirement for the Loan Parties, (ii) reduce the interest rate by 50 basis points (to Libor plus+ 9.75 %) after delivery of the Loan Parties’ June 30, 2023 financial statements, subject to the Loan Parties maintaining 1.75 EBITDA coverage ratio, and (iii) waive all prior Events of

Default under the Credit Agreement.

In conjunction with the amendment to the Credit Agreement, the parties entered into an amended and restated fee letter (the “Fee Letter”) pursuant to which the parties agreed to prepayment premiums of (i) 5 % for payments made on or before December 31, 2022, (ii) 4 % for payments made between January 1, 2023 and December 31, 2023, and (iii) 2 % for payments made between January 1, 2024 and December 31, 2025 a.

Furthermore, the parties agreed that no prepayment premiums would be payable with respect to the first $ 5.0 million paid under the Term Loan, any payments made in relation to the $ 8.5 million due on or before February 28, 2023, any required amortization payments under the Credit Agreement and any mandatory prepayments by way of ECF or casualty events.

In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 528,169 shares of Class A common stock (the “Shares”), which Shares were registered pursuant to our existing shelf registration statement and were delivered to the Lender in January 2022, (ii) a warrant to purchase 2,043,291 shares of Class A common stock (subject to increase to the extent of 3 % of any Series B and Series C convertible preferred stock converted into Class A common stock), exercisable at $ 2.00 per share (the “Warrant”), which Warrant was subject to repricing on March 31, 2022 based on the arithmetic volume weighted average prices for the 30 trading days prior to March 31, 2022, in the event our stock is then trading below $ 2.00 per share, (iii) a 3 % fee of $ 1,800,000 , and (iv) a $ 500,000 original issue discount.

In addition, the Company agreed to register for resale the shares issuable upon exercise of the Warrant.

The Company also incurred agency fees, legal fees, and other costs in connection with the execution of the Credit Agreement totaling approximately $ 1.7 million.

Under the terms of the warrant issued to Whitehawk on December 31, 2021, the exercise price of the warrants would reprice if the stock price on March 31, 2022 was less than the original exercise price, at which time the number of warrants would also be increased proportionately, so that after such adjustment the aggregate exercise price payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect.

The warrants repriced on March 31, 2022 to $ 1.19 per share and the shares increased to 3,434,103 .

Lind Global Marco Fund and Lind Global Asset Management

On February 4, 2020, the Company and Lind Global Macro Fund, LP (“LGMF”) entered into a securities purchase agreement pursuant to which the Company received $ 750,000 in exchange for the issuance to Lind of (1) an $ 825,000 convertible promissory note, payable at an 8 % interest rate, compounded monthly, (2) certain shares of restricted Class A common stock valued at $ 60,000 , calculated based on the 20-day volume average weighted price of the Class A common stock for the period ended February 4, 2020, and (3) a commitment fee of $ 26,250 .

The Note was to mature over 24 months , with repayment that commenced on August 4, 2020, after which time the Company made monthly payments of $ 45,833 plus interest by issuing shares of Class A common stock.

The commitment fee in the amount of $ 26,025 was paid to LGMF, along with legal fees in the amount of $ 15,000 .

The Company paid LGMF $ 60,000 for closing fees by issuing 44,557 shares of Class A common stock.

During the year ended December 31, 2021, the Company paid principal of $ 1.1 million and interest of $ 32,000 by issuing a total of 671,000 shares Class A common stock with an aggregate value of $ 1.5 million to Lind Global and recognized a loss extinguishment of debt of approximately $ 430,000 .

On September 21, 2020, the Company and Lind Global Asset Management, LLC (“Lind Global”) entered into a securities purchase agreement (the “Lind SPA”) pursuant to which the Company received $ 20.0 million in exchange for the issuance to Lind of (1) a $ 22.0 million convertible promissory note, payable at a 4 % interest rate, compounded monthly, (2) 310,399 shares of restricted Class A common stock valued at $ 900,000 , calculated based on the 20-day volume average weighted price of the Class A common stock for the period ended September 21, 2020, and (3) a commitment fee of $ 400,000 .

The Note was to mature over 24 months , with repayment commencing on November 22, 2020, after which time the Company became obligated to make monthly payments of $ 1.0 million, plus interest.

Interest accrued during the first two months of the note, after which time the interest payments, including accrued interest was paid monthly in either conversion shares.

The commitment fee in the amount of $ 400,000 was paid to Lind Global, along with legal fees in the amount of $ 20,000 The Company paid Lind Global a total of $ 500,000 in closing fees consisting of commitment and legal fees, by issuing 310,399 shares of Class A common stock.

The shares of Class A common stock issuable to Lind under the Note were registered pursuant to our effective shelf registration statement on Form S-3.

In conjunction with our entry into the Lind Global SPA agreement 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.

In addition, on September 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 for purposes of amending and

restating the second amended and restated intercreditor agreement, dated as of February 4, 2020, between the Company, Sallyport and Lind, in order to (i) incorporate Lind Global as a second lien creditor and (ii) reaffirm and confirm the relative priority of each creditor’s respective security interests in the Company’s assets, among other matters.

During the 12 months ended December 31, 2021, the Company repaid principal of $ 12.0 million and interest of $ 548,000 to Lind Global by issuing a total of 7.2 million shares Class A common stock with an aggregate value of $ 15.9 million to Lind Global and recognized a loss extinguishment of det of approximately $ 3.3 million.

Further, on December 31, 2021, the Company paid the remaining principal balance of $ 8.0 million in connection with the execution of the Whitehawk Credit Agreement discussed above and recognized an additional loss on extinguishment of debt of $ 1.2 million.

Paycheck Protection Program Loan

On May 22, 2020, the Company received loan proceeds of $ 1.09 million under the Paycheck Protection Program (“PPP”) established as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).

The loans and accrued interest received under the PPP were forgivable to the extent borrowers use the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains their payroll levels during the designated period prior to which the PPP would otherwise be repayable.

The Company used the proceeds for purposes consistent with the PPP.

During 2021, the Company applied for forgiveness in the amount of $ 835,500 .

On March 2, 2022, we received a decision letter from our lender that our forgiveness application had been approved, leaving a remaining balance of $ 173,100 to be paid.

The remaining balance is expected to be paid by the Company in May 2022.

Everest Display, Inc.

On January 26, 2021, the Company entered into an agreement with EDI and EDI’s subsidiary, AMAGIC, pursuant to which $ 1,983,436 in accounts payable owed by the Company to EDI was settled in exchange for the Company’s issuance of 793,375 shares (the “2021 Shares”) of its Class A common stock to AMAGIC at a $ 2.50 per share purchase price.

The 2021 Shares were issued to AMAGIC pursuant to an exemption from registration provided by Rule 506 of Regulation D under Section 4(a)(2) of the Securities Act.

Accounts Receivable Financing – Sallyport Commercial Finance

On August 15, 2017, our subsidiaries, Boxlight Inc.

and Genesis entered into a 12-month term account sale and purchase agreement with Sallyport Commercial Finance, LLC (“Sallyport”).

According to the agreement, Sallyport agreed to purchase 85 % of the eligible accounts receivable during the term with a right of recourse back to the Company if the receivables were not collectible.

This agreement required a minimum monthly sales volume of $ 1,250,000 with a maximum facility limit of $ 6,000,000 .

Advances against this agreement accrued interest at the rate of 4 % in excess of the highest prime rate publicly announced from time to time with a floor of 4.25 %.

In addition, the Company was required to pay a daily audit fee of $ 950 per day.

In exchange, the Company granted Sallyport a security interest in all of Boxlight Inc.

and Genesis’ assets.

This agreement was terminated and replaced with an asset-based lending agreement effective September 30, 2020.

On September 30, 2020, Boxlight Inc., and EOS EDU LLC.

entered into a 12-month term asset-based lending agreement with Sallyport.

Sallyport agreed to purchase 90 % of the eligible accounts receivable of the Company with a right of recourse back to the Company if the receivables were not collectible.

This agreement requires a minimum monthly sales volume of $ 1.25 million with a maximum facility limit of $ 8 million.

Advances against this agreement accrued interest at the rate of 3.50 % in excess of the highest prime rate publicly announced from time to time with a floor of 3.25 %.

In addition, the Company was required to pay a daily audit fee of $ 950 per day.

In exchange, the Company granted Sallyport a security interest in all of the assets of Boxlight Inc.

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 paid a fee of $ 50,000 , representing one percent of the increased maximum facility limit amount.

Other terms of the accounts receivable agreement remain unchanged.

On August 6, 2021, Boxlight and Sallyport entered into an

additional amendment of the Accounts Receivable Agreement (the “Second ARC Amendment”), which further increased the Maximum

Facility Limit Amount to $ 15,000,000 .

In exchange for entry into the Second ARC Amendment, Boxlight agreed to a fee of $ 20,000 , representing

one percent of the increased Maximum Facility Limit Amount.

Other terms of the Accounts Receivable Agreement remained unchanged.

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.

8 – DERIVATIVE LIABILITIES

Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification as equity instruments

due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole control of the Company.

and exercise prices may be lowered if the Company issues securities at lower prices in the future.

Such warrants are measured at fair

value at each reporting date, and the changes in fair value are included in determining net income (loss) for the period.

In determining

the fair value of the derivative liabilities, the Company used the Black-Scholes option pricing model at September 30, 2021 and December

OF FAIR VALUE OF DERIVATIVE LIABILITIES

stock issuable upon exercise of warrants

value of common stock on measurement date

free interest rate (1)

life in years

volatility (2)

dividend yields (3)

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 paid a fee of $ 20,000 , representing one percent of the increased maximum facility limit amount.

Other terms of the Agreement remained unchanged.

On August 23, 2021, the Company and Sallyport, as first lien creditor and LGMF and 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 $ 6,000,000 million to $ 20,000,000 million.

On December 31, 2021, the Company obtained funds from its new credit agreement with Whitehawk to pay off the remaining $ 8,400,000 owed to Sallyport.

As a result of paying off the Sallyport lending agreement, the Company recorded a loss on extinguishment of debt of $ 812,000 .

NOTE 10 – DERIVATIVE LIABILITIES

The Company determined that certain warrants to purchase common stock do not satisfy the criteria for classification as equity instruments due to the existence of certain net cash and non-fixed settlement provisions that are not within the sole control of the Company.

Conversion and exercise prices may be lowered if the Company issues securities at lower prices in the future.

Such warrants are measured at fair value at each reporting date, and the changes in fair value are included in determining net income (loss) for the period.

The Company hired a third party to determine the fair value of the derivative liabilities at March 31, 2022 and December 31, 2021 using a Monte Carlo Simulation model to determine the fair value.

March 31, 2022

Common stock issuable upon exercise of warrants

Market value of common stock on measurement date

Exercise price

Risk free interest rate (1)

Expected life in years

Expected volatility (2)

Expected dividend yields (3)

December 31, 2021

6 unchanged sentences

Expected dividend yields (3)

risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date.

expected volatility was determined by calculating the volatility of the Company’s common stock.

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

following table shows the change in the Company’s derivative liabilities rollforward for the nine months ended September 30, 2021,

and 2020 (in thousands):

OF CHANGE IN DERIVATIVE LIABILITIES

The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date.

(2) For March 31, 2022, the information was obtained from the third- party model.

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

The following table shows the change in the Company’s derivative liabilities roll-forward for the period ended March 31, 2022 and 2021, respectively (in thousands):

Balance, December 31, 2021

Exercise of warrants

Change in fair value of derivative liabilities

Balance, September 30, 2021

Change in fair value of warrants (1)

Balance, March 31, 2022

(1) Under the terms of the warrant issued to Whitehawk on December 31, 2021, the exercise price of the warrants would reprice if the stock price on March 31, 2022 was less than the original exercise price, at which time the number of warrants would also be increased proportionately, so that after such adjustment the aggregate exercise price payable for the increased number of warrant shares would be the same as the aggregate exercise price previously in effect.

Balance, December 31, 2020

Change in fair value of derivative liabilities

Balance, September 30, 2020

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

9 – INCOME TAXES

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

OF PRETAX INCOME (LOSS)

Three Months Ended

September 30,

United States

Total pretax book income, (loss)

Nine Months Ended

September 30,

Exercise of warrants

Change in fair value of warrants

Balance March 31, 2021

NOTE 11 – INCOME TAXES

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

United States

Total pretax book loss

Total pretax book income, (loss)

Company recorded income tax expense of $ 3.9

million and zero

tax for the nine months ended September 30, 2021

and September 30, 2020, respectively.

The company recorded a significant tax impact of $ 2.2

million in second quarter of this year 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 £ 250 K

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 under U.S.

As such, we had to reflect the tax impact as a discrete

event in our results.

The year-to-date 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.

Company operates in the United States, United Kingdom, and other jurisdictions.

Income taxes have been provided based upon the tax laws

and rates of the countries in which operations are conducted and income is earned.

to the Sahara acquisition, the Company had a net deferred tax asset position in the United States, the United Kingdom, and other jurisdictions,

primarily driven by net operating losses.

The recoverability of these deferred tax assets depends on the Company’s ability to generate

taxable income in the jurisdiction to which the loss carryforward applies.

The Company also depends on specific tax provisions in each

jurisdiction that could impact utilization.

The Company has evaluated both positive and negative evidence as to the ability of its legacy

entities in each jurisdiction to generate future taxable income.

Based on its history of cumulative losses in those jurisdictions, we

believe it is appropriate to maintain a full valuation allowance on the Company’s net deferred tax asset at September 30, 2021

and December 31, 2020.

to the Sahara and Interactive Concepts acquisitions, the Company has recognized a net deferred tax liability for the acquired entities,

primarily driven by acquired intangible assets for which it does not have tax basis in the jurisdictions in which operates (primarily

the United Kingdom, the Netherlands, and the United States).

The Company does not expect to qualify for any consolidated filing positions

in any of these countries, so there is no ability to net the deferred tax liabilities of the Sahara companies against the deferred tax

assets of the legacy Boxlight companies.

tax years from 2016 to 2020 remain open to examination by the major taxing jurisdictions to which the Company is subject.

has not identified any uncertain tax positions at this time.

the second quarter of 2021, the Company became aware of a potential state tax exposure for failure to file minimum tax returns in a

state for several years.

The Company has tentatively agreed to the proposed tax assessment, but it is appealing the associated

interest and penalty assessment.

The Company has recorded an exposure item of $ 82 K

for its best estimate of the amount for which it will settle the exposure.

This amount includes $ 24 K

of income tax and $ 58 K

of penalties and interest.

Company’s articles of incorporation provide that the Company is authorized to issue 50,000,000 shares of preferred stock consisting

The Company recorded an income tax benefit of $ 86 thousand and an expense of $ 21 thousand for the three months ended March 31, 2022 and March 31, 2021, respectively.

The year-to-date 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.

The Company operates in the United States, United Kingdom, and other jurisdictions.

Income taxes have been provided based upon the tax laws and rates of the countries in which operations are conducted and income is earned.

Prior to the Sahara acquisition, the Company had a net deferred tax asset position in the United States, the United Kingdom, and other jurisdictions, primarily driven by net operating losses.

The recoverability of these deferred tax assets depends on the Company’s ability to generate taxable income in the jurisdiction to which the loss carryforward applies.

The Company also depends on specific tax provisions in each jurisdiction that could impact utilization.

The Company has evaluated both positive and negative evidence as to the ability of its legacy entities in each jurisdiction to generate future taxable income.

Based on its history of cumulative losses in those jurisdictions, we believe it is appropriate to maintain a full valuation allowance on the Company’s net deferred tax asset at March 31, 2022 and December 31, 2021.

Due to the Sahara and Interactive Concepts acquisitions, the Company has recognized a net deferred tax liability for the acquired entities, primarily driven by acquired intangible assets for which it does not have tax basis in the jurisdictions in which operates (primarily the United Kingdom, the Netherlands, and the United States).

The Company does not expect to qualify for any consolidated filing positions in any of these countries, so there is no ability to net the deferred tax liabilities of the Sahara companies against the deferred tax assets of the legacy Boxlight companies.

The tax years from 2016 to 2021 remain open to examination by the major taxing jurisdictions to which the Company is subject.

The Company has not identified any uncertain tax positions at this time.

During the second quarter of 2021, the Company became aware of a potential state tax exposure for failure to file minimum tax returns in a state for several years.

The Company has tentatively agreed to the proposed tax assessment, but it is appealing the associated interest and penalty assessment.

The Company has recorded an exposure item of $ 82 thousand for its best estimate of the amount for which it will settle the exposure.

This amount includes $ 24 thousand of income tax and $ 58 thousand of penalties and interest.

NOTE 12 – EQUITY

Preferred Shares

The Company’s articles of incorporation provide that the Company is authorized to issue 50,000,000 shares of preferred stock consisting of:

1) 250,000 shares of non-voting Series A preferred stock, with a par value of $ 0.0001 per share;

2) 1,200,000 shares of voting Series

B preferred stock, with a par value of $ 0.0001 per share;

3) 270,000 shares of voting Series C preferred stock, with a par value of $ 0.0001

2) 1,200,000 shares of voting Series B preferred stock, with a par value of $ 0.0001 per share;

3) 270,000 shares of voting Series C preferred stock, with a par value of $ 0.0001 per share;

and 4) 48,280,000 shares of “blank check” preferred stock to be designated by the Company’s board of directors.

of preferred shares

A Preferred Stock

the time of the Company’s initial public offering, the Company issued 250,000

shares of the Company’s non-voting convertible

Series A preferred stock to Vert Capital for the acquisition of Genesis.

All of the Series A preferred stock was convertible

shares of Class A common stock.

2019, a total of 82,028

shares of Series A preferred stock were converted

into a total of 130,721

shares of Class A common stock.

B Preferred Stock and Series C Preferred Stock

discussed in Note 2 above, on September 25, 2020, in connection with the acquisition of Sahara, the Company issued 1,586,620 shares of

Series B Preferred Stock and 1,320,850 shares of Series C Preferred Stock.

The Series B Preferred Stock has a stated and liquidation

value of $ 10.00 per share and pays a dividend out of the earnings and profits of the Company at the rate of 8 % per annum, payable quarterly.

The Series B Preferred Stock is convertible into the Company’s Class A common stock at a conversion price of $1.66 per share which

was the closing price of the Company’s Class A common stock on the Nasdaq Stock Market on September 25, 2020 (the “Conversion

Such conversion may occur either (i) at the option of the holder at any time after January 1, 2024, or (ii) automatically

upon the Company’s Class A common stock trading at 200% of the Conversion Price for 20 consecutive trading days (based on a volume

weighted average price).

The Series C Preferred Stock has a stated and liquidation value of $10.00 per share and is convertible into

the Company’s Class A common stock at the Conversion Price either (i) at the option of the holder at any time after January 1,

2026, or (ii) automatically upon the Company’s Class A common stock trading at 200% of the Conversion Price for 20 consecutive

trading days (based on a volume weighted average price).

the extent not previously converted into the Company’s Class A common stock, the outstanding shares of Series B Preferred Stock

shall be redeemable at the option of the holders at any time or from time to time commencing on January 1, 2024, upon thirty (30) days

prior written notice to the holders, for a redemption price, payable in cash, equal to the sum of (a) ($10.00) multiplied by the number

of shares of Series B Preferred Stock being redeemed (the “Redeemed Shares”), plus (b) all accrued and unpaid dividends,

if any, on such Redeemed Shares.

Issuance of preferred shares

Series A Preferred Stock

At the time of the Company’s initial public offering, the Company issued 250,000 shares of the Company’s non-voting convertible Series A preferred stock to Vert Capital for the acquisition of Genesis.

All of the Series A preferred stock was convertible into 398,406 shares of Class A common stock, at the discretion of the Series A stockholder.

On August 5, 2019, a total of 82,028 shares of Series A preferred stock were converted into a total of 130,721 shares of Class A common stock.

As of March 31, 2022, a total of 167,972 shares of Series A preferred stock remained outstanding.

Series B Preferred Stock and Series C Preferred Stock

On September 25, 2020, in connection with the acquisition of Sahara, the Company issued 1,586,620 shares of Series B Preferred Stock and 1,320,850 shares of Series C Preferred Stock.

The Series B Preferred Stock has a stated and liquidation value of $ 10.00 per share and pays a dividend out of the earnings and profits of the Company at the rate of 8 % per annum, payable quarterly.

The Series B Preferred Stock is convertible into the Company’s Class A common stock at a conversion price of $ 1.66 per share which was the closing price of the Company’s Class A common stock on the Nasdaq Stock Market on September 25, 2020 (the “Conversion Price”).

Such conversion may occur either (i) at the option of the holder at any time after January 1, 2024, or (ii) automatically upon the Company’s Class A common stock trading at 200 % of the Conversion Price for 20 consecutive trading days (based on a volume weighted average price).

The Series C Preferred Stock has a stated and liquidation value of $ 10.00 per share and is convertible into the Company’s Class A common stock at the Conversion Price either (i) at the option of the holder at any time after January 1, 2026, or (ii) automatically upon the Company’s Class A common stock trading at 200 % of the Conversion Price for 20 consecutive trading days (based on a volume weighted average price).

To the extent not previously converted into the Company’s Class A common stock, the outstanding shares of Series B Preferred Stock shall be redeemable at the option of the holders at any time or from time to time commencing on January 1, 2024, upon , 30 days prior written notice to the holders, for a redemption price, payable in cash, equal to the sum of (a) ($ 10.00 ) multiplied by the number of shares of Series B Preferred Stock being redeemed (the “Redeemed Shares”), plus (b) all accrued and unpaid dividends, if any, on such Redeemed Shares.

The Series C Preferred Stock is also subject to redemption on the same terms commencing January 1, 2026.

disclosed in in Note 2, the aggregate estimated fair value of the Series B and C Preferred Stock of $ 28.9 million was included as part

of the total $ 94.9 million consideration paid for the purchase of Sahara.

the redemption features in the Series B Preferred Stock and Series C Preferred Stock are not solely within the control of the Company,

the Company has classified the Series B Preferred Stock and Series C Preferred Stock as mezzanine or temporary equity in the Company’s

condensed consolidated balance sheet.

March 24, 2021, the Company entered into a share redemption and conversion agreement with certain holders of Series B and Series C preferred

stock (the “Redemption Agreement”) which allows the Company to redeem and repurchase each such stockholder’s

shares of Series B preferred stock on or before June 30, 2021 for the stated or liquidation value of approximately £ 11.5

million (or approximately $ 15.9

million) plus accrued dividends from January

1, 2021 to the date of purchase.

The aggregate estimated fair value of the Series B and C Preferred Stock of $ 28.9 million was included as part of the total $ 94.9 million consideration paid for the purchase of Sahara.

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

On March 24, 2021, the Company entered into a share redemption and conversion agreement with certain holders of Series B and Series C preferred stock (the “Redemption Agreement”) which allows the Company to redeem and repurchase each such stockholder’s shares of Series B preferred stock on or before June 30, 2021 for the stated or liquidation value of approximately £ 11.5 million (or approximately $ 15.9 million) plus accrued dividends from January 1, 2021 to the date of purchase.

Such stockholders hold 96 % of the Series C preferred stock.

Upon redemption, the Series C shares

held by such stockholders would convert into approximately 7.6

million shares of Class A Common Stock at the

stated conversion price of $ 1.66

June 14, 2021, the Company entered into an amendment to the Redemption Agreement (the “Amended Redemption Agreement”) for

purposes of extending the completion date to on or before December 31, 2021.

In addition, the Amended Redemption Agreement changed the

definition of “Redemption Payments” such that the redemption payment schedule would begin on or before May 31, 2021, for

the quarter then ended and continue quarterly until the date of completion.

these amendments, the Company applied the accounting guidance from ASC 470-50 pertaining to determining whether an amendment to an equity-classified

preferred share is an extinguishment or modification, and concluded that the Amended Redemption Agreement on June 14, 2021, as it effected

the Series B Preferred Stock, resulted in an extinguishment of the original equity instruments subject to redemption agreement.

the Series B Preferred Stock subject to the Amended Redemption Agreement was recorded at its fair value as of June 14, 2021, and a $367

thousand deemed contribution was credited to additional-paid-in-capital.

With the Redemption Agreement, the Series B Preferred Stock

includes a beneficial conversion feature, but in accordance with ASC 470-20, since it is dependent upon contingencies that are not solely

in the control of the holder, the beneficial conversion feature was not recognized for accounting purposes.

Company’s common stock consists of 1) 150,000,000 shares of Class A voting common stock and 2) 50,000,000 shares of Class B non-voting

common stock.

Class A and Class B common stock have the same rights except that Class A common stock is entitled to one vote per share

while Class B common stock has no voting rights.

Upon any public or private sale or disposition by any holder of Class B common stock,

such shares of Class B common stock would automatically convert into shares of Class A common stock.

As of September 30, 2021, and December

31, 2020, the Company had 61,310,899 and 53,343,518 shares of Class A common stock issued and outstanding, respectively.

No Class B shares

were outstanding at September 30, 2021 or December 31, 2020.

of common stock

July 31, 2020, the Company issued 17,250,000 shares of the Company’s Class A common stock at a public offering price of $ 2.00 per

Gross proceeds from the issuances were $ 34,500,000 , including the underwriting overallotment.

Net proceeds were $ 32.0 million

after deducting underwriting discounts and offering expenses of $ 2.5 million.

June 11, 2020, the Company issued 13,333,333 shares of the Company’s Class A common stock at a public offering price of $ 0.75 per

In addition, on June 24, 2020, the Company issued an additional 1,999,667 shares of Class A common stock to the underwriter at

$ 0.75 per share.

Gross proceeds from the issuances were $ 11.5 million.

Net proceeds were $ 10.6 million after deducting underwriting discounts

and offering expenses of $ 906 thousand.

the nine months ended September 30, 2021, the Company repaid principal of $ 9.9 million and interest of $ 511 thousand by issuing 5.7 million

shares Class A common stock with an aggregate value of $ 13.8 million to Lind and recognized a $ 3.4 million loss.

Payable and Other Liabilities Conversions

the nine months ended September 30, 2021, the Company converted $ 2.0 million of EDI accounts payable in exchange for 793 thousand shares

of Class A common stock with an aggregate value of $ 1.6 million and recognized a $ 357 thousand gain.

the nine months ended September 30, 2021, and in accordance with the terms of his employment agreement, Michael Pope, our Chairman and

Chief Executive Officer, received 875,000 shares of restricted Class A common stock, which shares remain subject to certain vesting conditions.

The shares will vest in substantially equal monthly installments over a period of 12 months.

of stock options

the nine months ended September 30, 2021, options to purchase a total of 485 thousand shares of Class A common stock were exercised.

11 – STOCK COMPENSATION

total number of underlying shares of the Company’s Class A common stock available for grant to directors, officers, key employees

and consultants of the Company or a subsidiary of the Company under the Company’s 2021 Equity Incentive Plan and 2014 Equity Inventive

Plan, as amended (together “Equity Incentive Plans”), in the aggregate were 5,000,000

shares, respectively.

The 2021 Equity Incentive

Plan was approved by the Company’s Board on April 12, 2021 and approved by the shareholders at the Company’s Annual

Shareholders Meeting held on June 11, 2021.

All grants made under the Equity Incentive Plans must be approved by the Company’s

Board prior to issuance.

our stock option program, pursuant to the Equity Incentive Plans, an employee receives an award that provides the opportunity in the

future to purchase the Company’s shares at the market price of our stock on the date the award is granted (the strike price).

options become exercisable over a range of immediately vested to four-year vesting periods and expire five years from the grant date,

unless stated differently in the option agreements, if they are not exercised.

Stock options have no financial statement effect on the

date they are granted but rather are reflected over time through compensation expense.

We record compensation expense based on the estimated

fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period.

Accordingly, total

expense related to the award is reduced by the fair value of options that are forfeited by employees that leave the Company prior to

following is a summary of the option activities during the nine months ended September 30, 2021:

SCHEDULE OF STOCK OPTION ACTIVITY

Number of Units

Upon redemption, the Series C shares held by such stockholders would convert into approximately 7.6 million shares of Class A Common Stock at the stated conversion price of $ 1.66 per share.

On June 14, 2021, the Company entered into an amendment to the Redemption Agreement (the “Amended Redemption Agreement”) for purposes of extending the completion date to on or before December 31, 2021.

In addition, the Amended Redemption Agreement changed the definition of “Redemption Payments” such that the redemption payment schedule would begin on or before May 31, 2021, for the quarter then ended and continue quarterly until the date of completion.

Regarding these amendments, the Company applied the accounting guidance from ASC 470-50 pertaining to determining whether an amendment to an equity-classified preferred share is an extinguishment or modification, and concluded that the Amended Redemption Agreement on June 14, 2021, as it effected the Series B Preferred Stock, resulted in an extinguishment of the original equity instruments subject to redemption agreement.

Accordingly, the Series B Preferred Stock subject to the Amended Redemption Agreement was recorded at its fair value as of June 14, 2021, and a $ 367 thousand deemed contribution was credited to additional-paid-in-capital.

With the Redemption Agreement, the Series B Preferred Stock includes a beneficial conversion feature, but in accordance with ASC 470-20, since it is dependent upon contingencies that are not solely in the control of the holder, the beneficial conversion feature was not recognized for accounting purposes.

Since we early adopted (as of January 1, 2021) ASU No.

2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, which includes a key provision eliminating the beneficial conversion feature guidance in ASC Subtopic 470-20, “Debt with Conversion and Other Options”, we will not record the beneficial conversion feature.

The amendments in ASU 2020-06 further revise the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares.

The Company’s common stock consists of 1) 150,000,000 shares of Class A voting common stock and 2) 50,000,000 shares of Class B non-voting common stock.

Class A and Class B common stock have the same rights except that Class A common stock is entitled to one vote per share while Class B common stock has no voting rights.

Upon any public or private sale or disposition by any holder of Class B common stock, such shares of Class B common stock would automatically convert into shares of Class A common stock.

As of March 31, 2022 and December 31, 2021, the Company had 65,522,438 and 63,821,901 shares of Class A common stock issued and outstanding , respectively.

No Class B shares were outstanding at March 31, 2022 or December 31, 2021.

Issuance of common stock

Credit Facility

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

Debt Conversion

During the three months ended March 31, 2021, the Company repaid principal of $ 3.6 million and interest of $ 204 thousand by issuing 2.25 million shares Class A common stock to Lind and recognized a $ 2.2 million loss.

Accounts Payable and Other Liabilities Conversion

During the three months ended March 31, 2021, the Company converted $ 1.98 million of EDI accounts payable in exchange for 793 thousand shares of Class A common stock with an aggregate value of $ 1.63 million and recognized a $ 357 thousand gain.

Conversion of restricted stock units

During the three months ended March 31, 2022, 1,119,118 restricted stock units vested and were converted into Class A common stock.

During the three months ended March 31, 2021, 58,818 restricted stock units vested and were converted into Class A common stock.

Exercise of stock options

During the three months ended March 31, 2022, options to purchase a total of 53,250 shares of Class A common stock were exercised and during the three months ended March 31, 2021, options to purchase a total of 319,434 shares of Class A common stock were exercised.

Exercise of warrants

No warrants were exercised during the three months ending March 31, 2022.

During the three months ended March 31, 2021, 20,749 warrants were exercised, with an exercise price of $ 0.42 per share.

NOTE 13 – STOCK COMPENSATION

Grants made under the Equity Incentive Plans must be approved by the Company’s board of directors.

As of March 31, 2022, the total number of underlying shares of the Company’s Class A common stock available for grant to directors, officers, key employees and consultants of the Company or a subsidiary of the Company under the Company’s 2021 Equity Incentive Plan and 2014 Equity Inventive Plan, as amended (together “Equity Incentive Plans”), in the aggregate were 5,000,000 and 725,381 shares, respectively.

The 2021 Equity Incentive Plan was approved by the Company’s Board on April 12, 2021 and approved by the shareholders at the Company’s 2021 Annual Shareholders Meeting held on June 25, 2021.

On April 15, 2020, the Company’s 2014 Equity Incentive Plan was amended, whereby the board of directors approved increasing the shares available for issuance under the 2014 Equity Incentive Plan by 3,700,000 shares.

The Company obtained shareholder approval of the aforementioned action at the Company’s 2020 annual meeting of stockholders, which was held on September 4, 2020.

The number of underlying shares available under the 2014 Equity Incentive Plan, as amended, was 6,390,438 .

Stock Options

Under our stock option program, pursuant to the Equity Incentive Plans, an employee receives an award that provides the opportunity in the future to purchase the Company’s shares at the market price of our stock on the date the award is granted (the strike price).

The options become exercisable over a range of immediately vested to four-year vesting periods and expire five years from the grant date, unless stated differently in the option agreements, if they are not exercised.

Stock options have no financial statement effect on the date they are granted but rather are reflected over time through compensation expense.

We record compensation expense based on the estimated fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period.

Accordingly, total expense related to the award is reduced by the fair value of options that are forfeited by employees that leave the Company prior to vesting.

The following is a summary of the option activities during the three months ended March 31, 2022:

Exercise Price

Weighted Average

Remaining Contractual

Term (in years)

Outstanding, December 31, 2021

Outstanding, September 30, 2021

Exercisable, September 30, 2021

Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model.

As of September

30, 2021, and December 31, 2020, the stock options had an intrinsic value of approximately $ 4.5 million and $ 2.9 million, respectively.

our Equity Incentive Plans the Company may grant restricted stock units (“RSUs”) to certain employees and non-employee directors.

Upon granting the RSUs, the Company recognizes a fixed compensation expense equal to the fair market value of the underlying shares of

RSUs granted on a straight-line basis over the requisite services period for the RSUs.

Compensation expense related to the RSUs is reduced

by the fair value of units that are forfeited by employees that leave the Company prior to vesting.

The restricted stock units vest over

a range of immediately vested to four-year vesting periods in accordance with the terms of the applicable RSU grant agreement.

following is a summary of the restricted stock activities during the nine months ended September 30, 2021.

SCHEDULE OF RSU ACTIVITIES

Number of Units

Grant Date Fair Value

Outstanding, December 31, 2020

( 1,126,391 )

Outstanding, September 30, 2021

February 24, 2021, the Company granted an aggregate of 130,547 RSUs to its board members.

These RSUs vest ratably over one year and had

an aggregated fair value of approximately $ 374 thousand on the grant date.

addition, on March 20, 2021, the Company granted an aggregate of 875,245

shares of restricted common stock to Michael

Pope, the Company’s CEO and Chairman, pursuant to his employment agreement.

These shares were issued pursuant to the 2014

Equity Incentive Plan, vest ratably over one

year , are issued monthly as they vest, and had

an aggregated fair value of approximately $ 2.5

million on the grant date.

The following

is a summary of the warrant activities during the nine months ended September 30, 2021:

SCHEDULE OF WARRANT ACTIVITY

Outstanding, March 31, 2022

Exercisable, March 31, 2022

The Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option pricing model.

As of March 31, 2022 and December 31, 2021, the stock options had an intrinsic value of approximately $ 1.1 million and $ 1.9 million, respectively.

Restricted Stock Units

Under our Equity Incentive Plans the Company may grant restricted stock units (“RSUs”) to certain employees and non-employee directors.

Upon granting the RSUs, the Company recognizes a fixed compensation expense equal to the fair market value of the underlying shares of RSUs granted on a straight-line basis over the requisite services period for the RSUs.

Compensation expense related to the RSUs is reduced by the fair value of units that are forfeited by employees that leave the Company prior to vesting.

The RSUs vest over a range of immediately vested to four-year vesting periods in accordance with the terms of the applicable RSU grant agreement.

The following is a summary of the RSU activities during the three months ended March 31, 2022.

Grant Date Fair

Number of Units

Exercise Price

Weighted Average

Term (in years)

Outstanding, December 31, 2021

Outstanding, September 30, 2021

Exercisable, September 30, 2021

compensation expense

the nine months ended September 30, 2021, and 2020, the Company recorded the following stock compensation in general and administrative

expense (in thousands):

SCHEDULE OF STOCK COMPENSATION EXPENSES

Outstanding, March 31, 2022

On March 21, 2022, the Company granted an aggregate of 348,840 RSUs to its board members.

These RSUs vest ratably over one year and had an aggregated fair value of approximately $ 450 thousand on the grant date.

On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with Michael Pope, our Chairman and Chief Executive Officer, extending Mr.

Pope’s term of employment with the Company.

Under the terms of the agreement, Mr.

Pope received a grant of 163,637 RSU’s, valued at approximately $ 180,000 , and $ 420,000 in the form of options to purchase Class A Common Stock, both of which are valued using the Black-Scholes Model with the Company’s customary inputs.

On February 24, 2022, following approval by the Company’s board of directors, the Company’s senior management issued a total of 1,771,950 RSUs under the terms of Amendment No.

2 to the Boxlight Corporation 2014 Stock Incentive Plan, as long-term incentive awards to its employees in the U.S.

The aggregate fair value of the shares was $ 2.1 million.

During the three months ended March 31, 2022, Jens Holstebro, a former FrontRow employee, received 39,683 in restricted shares of Class A common stock, valued at $ 50,000 , as a bonus, which immediately vested.

During the three months ended March 31, 2022, and in accordance with the terms of his employment agreement, Michael Pope, our Chairman and Chief Executive Officer, received 166,137 shares of restricted Class A common stock units, and 494,069 of stock options, which shares remain subject to certain vesting conditions.

The shares vest in substantially equal monthly installments over a period of twelve months .

During the three months ended March 31, 2021 and in accordance with the terms of his employment agreement, Michael Pope, our Chairman and Chief Executive Officer, received 875,000 shares of restricted Class A common stock.

The shares vested in substantially equal monthly installments over a period of 12 months .

Stock compensation expense

For the three months ended March 31, 2022 and 2021, the Company recorded the following stock compensation in general and administrative expense (in thousands):

Stock options

1 unchanged sentence

Total stock compensation expense

of September 30, 2021, there was approximately $ 5.7 million of unrecognized compensation expense related to unvested options, restricted

stock units, and warrants, which will be amortized over the remaining vesting period.

Of that total, approximately $ 1.1 million is

estimated to be recorded as compensation expense in the remaining three months of 2021.

12 – RELATED PARTY TRANSACTIONS

January 31, 2018, the Company entered into a management agreement (the “Management Agreement”) with an entity owned and controlled

by our Chief Executive Officer and Chairman, Michael Pope.

As of March 31, 2022, there was approximately $ 6.3 million of unrecognized compensation expense related to unvested options, restricted stock units, and warrants, which expense will be amortized over the remaining vesting period of such awards.

Of that total, approximately $ 1.9 million is estimated to be recorded as compensation expense in the remaining nine months of 2022.

NOTE 14 – RELATED PARTY TRANSACTIONS

Management Agreement

On January 31, 2018, the Company entered into a management agreement (the “Management Agreement”) with an entity owned and controlled by our Chief Executive Officer and Chairman, Michael Pope.

The Management Agreement is separate and apart from Mr.

Pope’s employment

agreement with the Company.

Under the Management Agreement, effective as of the first day of the same month that Mr.

Pope’s employment

with the Company shall terminate.

Pope’s employment agreement with the Company.

The Management Agreement will become effective as of the first day of the same month that Mr.

Pope’s employment with the Company shall terminate.

Thereafter, and for a term of 13 months , Mr.

Pope shall provide consulting services to the Company

including sourcing and analyzing strategic acquisitions, assisting with financing activities, and other services.

As consideration for

the services provided, the Company shall pay a management fee equal to 0.375 % of the consolidated net revenues of the Company, payable

in monthly installments, not to exceed $ 250,000 in any calendar year.

Pope shall provide consulting services to the Company including sourcing and analyzing strategic acquisitions, assisting with financing activities, and other services.

As consideration for the services provided, the Company will pay a management fee equal to 0.375 % of the consolidated net revenues of the Company, payable in monthly installments, not to exceed $ 250,000 in any calendar year.

At his option, Mr.

Pope may defer payment until the end of each

year and receive payment in the form of shares of Class A common stock of the Company.

June 21, 2018, the Company issued a warrant to purchase 270,000

Class A common stock, at an exercise price of

per share, to an entity wholly owned by Mr.

in exchange for the cancellation of a warrant that had been issued to him in November 2014 as compensation for certain advisory

services rendered.

13 – COMMITMENTS AND CONTINGENCIES

Lease Commitments

Company leases six office building facilities located in Lawrenceville, Georgia;

Pope may defer payment until the end of each year and/or receive payment in the form of shares of Class A common stock of the Company.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments

The Company leases seven office building facilities located in Lawrenceville, Georgia and Duluth, Georgia;

Poulsbo, Washington;

1 unchanged sentence

Scottsdale, Arizona;

Miami, Florida and Utica, New York in the U.S., and two office building facilities in Dartford and Kent

Miami, Florida and Utica, New York in the U.S., and two office building facilities in Dartford and Kent in the U.K.

for sales, marketing, technical support, and service staff.

All such facilities are under non-cancelable lease agreements

with terms ending in 2023.

the nine months ended September 30, 2021, and 2020, aggregate rent expense was $ 1.3 million and $ 351 thousand respectively.

Company is legally obligated to fulfill certain purchase commitments made to vendors that supply materials used in the Company’s

As of September 30, 2021, the total amount of such open inventory purchase orders was $51.5 million.

14 – CUSTOMER AND SUPPLIER CONCENTRATION

were two customers that account for greater than 10% of the Company’s consolidated revenues for the nine months ended September

All such facilities are under non-cancelable lease agreements with terms ending from 2023 to 2027.

Purchase Commitments

The Company is legally obligated to fulfill certain purchase commitments made to vendors that supply materials used in the Company’s products.

As of March 31, 2022, the total amount of such open inventory purchase orders was $ 55.5 million.

NOTE 16 – CUSTOMER AND SUPPLIER CONCENTRATION

There was one customer that accounts for greater than 10% of the Company’s consolidated revenues for the three months ended March 31, 2022.

There was no one customer that accounted for greater than 10% of the Company’s consolidated revenues for the three months ended March 31, 2021.

Details are as follows:

SCHEDULE OF CONCENTRATION RISK

as a percentage of total revenues

the nine months ended September 30, 2021

from this customer as of

30, 2021 (in thousands)

the nine months ended September 30, 2021, the Company’s purchases were concentrated amongst two vendors.

Total revenues

Total revenues from the

from the customer

receivable from

as a percentage of

receivable from

as a percentage

the customer as

total revenues

this customer as of

of total revenues

for the year ended

For the three months ended March 31, 2022, the Company’s purchases were concentrated primarily with one vendor.

Details are as follows:

Total purchases

from the vendor

Accounts payable

from the vendor

Accounts payable

as a percentage of

cost of sales

Company believes there are other suppliers that could be substituted should the above cited suppliers become unavailable or non-competitive.

15 – SUBSEQUENT EVENTS

Company signed an agreement on October 29, 2021 to acquire FrontRow Calypso LLC, a leader in classroom and campus communication solutions

for the education market.

The acquisition will be effective as of October 31, 2021, and is expected to close in the fourth quarter.

(prepayment) to

as a percentage

(prepayment) to

total cost of

of total cost of

the year ended

(in thousands)

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

NOTE 17 – SUBSEQUENT EVENTS

On April 5, 2022, the Company received notice from its Chief Financial Officer, Patrick Foley, that he was resigning from the Company, effective October 4, 2022.

Foley provided the Company the six months advance notice in compliance with the terms of his employment agreement and stated that he is resigning for personal reasons and not due to any dispute with the Company.

As of this time, the Company has not yet located an interim or permanent replacement for the position of Chief Financial Officer and Mr.

Foley has agreed to assist the Company in its search.

On May 3, 2022, the Boxlight board of directors adopted a resolution, in exchange for a three year non-compete agreement, to grant James Mark Elliott, a member of the board and former CEO of the Company, an extension of previously granted stock options to purchase a total of 577,675 shares of Class A common stock, par value $ 0.001 per share, which had expired on January 12, 2022.

The stock price on the remeasurement date was $ 1.04 and the fair value of the stock is $ 314,000 .

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 1. Financial Statements