What changed in this filing

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Item 1. Financial Statements

2022-08-11 compared with 2022-05-16 · 287 added, 239 removed, 526 unchanged (50% of the section changed)

1 unchanged sentence

Boxlight Corporation

Consolidated Condensed Statements of Operations and Comprehensive Loss

For the three months ended March 31, 2022 and 2021

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the three and six months ended June 30, 2022 and 2021

(in thousands, except per share amounts)

Three Months Ended

Six Months Ended

Revenues, net

4 unchanged sentences

Total operating expense

Loss from operations

Income (loss) from operations

Other income (expense):

4 unchanged sentences

Total other income (expense)

Loss before income taxes

Income tax benefit (expense)

Income (loss) before income taxes

Income tax (expense) benefit

Net income (loss)

Fixed dividends - Series B Preferred

Deemed contribution -Series B Preferred

Net loss attributable to common stockholders

Comprehensive loss:

Other comprehensive loss:

Net income (loss)

Other comprehensive (loss) income:

Foreign currency translation adjustment

2 unchanged sentences

Weighted average number of common shares outstanding – basic and diluted

See accompanying notes to unaudited consolidated condensed financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

Boxlight Corporation

Consolidated Condensed Balance Sheets

As of March 31, 2022 and December 31, 2021

(in thousands)

Condensed Consolidated Balance Sheets

As of June 30, 2022 and December 31, 2021

(in thousands, except share and per share amounts)

Current assets:

34 unchanged sentences

Accumulated deficit

Accumulated other comprehensive income

Accumulated other comprehensive (loss) income

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to unaudited consolidated condensed financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

Boxlight Corporation

Consolidated Condensed Statements of Changes in Stockholders’ Equity

For the three months ended March 31, 2022 and 2021

(in thousands)

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three and six months ended June 30, 2022

(in thousands, except share amounts)

Preferred Stock

Comprehensive

(Loss) Income

Balance as of March 31, 2022

Shares issued for:

Stock options exercised

Conversion of restricted shares

Stock compensation

Foreign currency translation

Fixed dividends Preferred Series B

Balance as of June 30, 2022

Balance as of December 31, 2021

6 unchanged sentences

Fixed dividends Preferred Series B

Balance as of June 30, 2022

See accompanying notes to unaudited condensed consolidated financial statements.

Boxlight Corporation

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three and six months ended June 2021

(in thousands, except share amounts)

Preferred Stock

Comprehensive

Balance as of March 31, 2021

Balance as of December 31, 2020

Shares issued for:

Conversion of restricted shares

Conversion of debt obligations

Stock compensation

Shares issued for acquisition

Fixed dividends Preferred Series B

Deemed contribution from Series B preferred

Foreign currency translation

Balance as of June 30, 2021

Balance as of December 31, 2020

Shares issued for:

Conversion of accounts payable liabilities

Conversion of debt obligations

Conversion of Restricted Shares

Stock compensation

Stock options exercised

Warrants exercised

Stock compensation

Foreign currency translation

Shares issued for acquisition

Fixed dividends Preferred Series B

Balance as of March 31, 2021

See accompanying notes to unaudited consolidated condensed financial statements.

Deemed contribution from Series B preferred

Foreign currency translation

Balance as of June 30, 2021

See accompanying notes to unaudited condensed consolidated financial statements

Boxlight Corporation

Consolidated Condensed Statements of Cash Flows

For the three months ended March 31, 2022 and 2021

Three Months Ended

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2022 and 2021

Six Months Ended

Cash flows from operating activities:

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

Adjustments to reconcile net loss to net cash provided by operating activities:

Amortization of debt discount and issuance cost

Change in debt issuance cost

Bad debt expense (recovery)

Loss on settlement of liabilities

(Gain) loss on settlement of liabilities

Changes in deferred tax assets and liabilities

1 unchanged sentence

Change in inventory reserve

Forgiveness of PPP debt

Change in fair value of derivative liability

2 unchanged sentences

Depreciation and amortization

Non-cash lease expense

Changes in operating assets and liabilities:

Accounts receivable – trade

Prepaid expenses and other current assets

Operating lease liability and right of use asset

Prepaid expenses and other assets

Accounts payable and accrued expenses

Other short-term liabilities

Warranty liability

Accounts payable and accrued expenses - related parties

Deferred revenues

Other liabilities

Deferred revenues

Net cash used in operating activities

1 unchanged sentence

Business acquisitions (net of cash acquired)

Settlement of earnout obligations

Purchases of furniture and fixtures, net

2 unchanged sentences

Proceeds from short-term debt

Principal payments on short-term debt

Principal payments on debt

Payments of fixed dividends to Series B Preferred stockholders

Proceeds from the exercise of options and warrants

Net cash used by financing activities

Net cash provided by (used in) financing activities

Effect of foreign currency exchange rates

7 unchanged sentences

Shares issued to settle accounts payable

Shares issued to convert notes payable – Lind Global

Exercise of warrants

Deemed contribution - Series B Preferred

Deferred consideration for acquisition

Shares issued to convert notes payable and accrued interest

Shares issued for acquisition

Declared but unpaid fixed dividends on Series B Preferred Stock

See accompanying notes to unaudited consolidated condensed financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

Boxlight Corporation

Notes to the Unaudited Consolidated Condensed Financial Statements

Notes to the Unaudited Condensed Consolidated 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.

NATURE OF OPERATIONS

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

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

2 unchanged sentences

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

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.

The accompanying unaudited condensed consolidated 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 condensed consolidated 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 condensed consolidated financial statements.

The unaudited condensed consolidated 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.

These unaudited condensed consolidated 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.

2 unchanged sentences

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.

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

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

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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.

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

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

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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):

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 June 30, 2022 and December 31, 2021 (in thousands):

Derivative liabilities - warrant instruments

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

The following tables reconcile the beginning and ending balances of the warrant instruments within Level 3 of the fair value hierarchy (in thousands):

(in thousands)

Balance, March 31, 2022

Change in fair value of derivative liabilities

Balance, June 30, 2022

(in thousands)

Balance, December 31, 2021

Change in fair value of derivative liabilities

Balance, June 30, 2022

(in thousands)

Balance, March 31, 2021

Change in fair value of derivative liabilities

Balance, June 30, 2021

(in thousands)

Balance, December 31, 2020

Exercise of warrants

Change in fair value of derivative liabilities

Balance, June 30, 2021

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.

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

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

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

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

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.

For the three months ended June 30, 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 3.5 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.

For the three months ended June 30, 2021, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 7.3 million shares from options to purchase common shares and unvested restricted shares as well as 344,000 shares issuable upon exercise of warrants.

Since the Company was in a loss position for the periods presented, basic net loss per common 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 six months ended June

30, 2022 potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 7.4 million shares from options to purchase common shares and unvested restricted shares as well as 344,000 shares issuable upon exercise of warrants.

For the six months ended June 30, 2021, $ 6.6 million shares were not includable.

REVENUE RECOGNITION

17 unchanged sentences

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.

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 the Company 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.

3 unchanged sentences

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.

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.

12 unchanged sentences

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;

2 unchanged sentences

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.

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

Contract liabilities are reflected in deferred revenue in the accompanying 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.

The Company has no material contract assets as of June 30, 2022 or December 31, 2021.

During the three months ended June 30, 2022 and June 30, 2021, respectively, the Company recognized $ 1.8 million and $ 513 thousand of revenue that was included in the deferred revenue balance as of December 31, 2021 and December 31, 2020, respectively.

During the six months ended June 30, 2022 and June 30, 2021, respectively, the Company recognized $ 3.7 million and $ 1.5 million of revenue that was included in the deferred revenue balance as of December 31, 2021 and December 31, 2020, respectively.

Variable Consideration

2 unchanged sentences

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.

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.

1 unchanged sentence

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.

There was no material revenue recognized in the three and six months ended June 30, 2022 related to changes in estimated variable consideration that existed at December 31, 2021.

Remaining Performance Obligations

3 unchanged sentences

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 .

As of June 30, 2022 and December 31, 2021, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was $ 22.5 million and $ 21.5 million, respectively.

The Company expects to recognize revenue on 33 % of the remaining performance obligations during the next twelve months , 27 % in the following twelve months , 21 % in the twelve months ended June 30, 2025, 14 % in the twelve months ended June 30, 2026, 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).

4 unchanged sentences

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.

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

Six Months Ended

(in thousands)

Product Revenues:

4 unchanged sentences

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 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:

5 unchanged sentences

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.

Total deferred commissions, net of accumulated amortization, was $ 328 thousand at June 30, 2022.

RECENTLY ADOPTED ACCOUNTING STANDARDS

4 unchanged sentences

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.

The Company’s operating leases relate primarily to office space.

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

ACCOUNTING STANDARDS PENDING ADOPTION

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

The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

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.

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 the Company’s financial position, operations, or cash flows.

SUBSEQUENT EVENTS

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

NOTE 2 – RECENT BUSINESS ACQUISITIONS

2 unchanged sentences

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.

and Calypso Systems LLC, the equity holders of FrontRow.

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

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

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.

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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.

The Company has early adopted ASU 2021-08, “Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” and therefore, the acquired contract liabilities of FrontRow have been recognized and measured in accordance with Topic 606 as follows.

(in thousands)

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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.

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NOTE 3 – ACCOUNTS RECEIVABLE - TRADE

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

Accounts receivable consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

Accounts receivable – trade

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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):

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 June 30, 2022 and December 31, 2021 (in thousands):

Finished goods

3 unchanged sentences

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):

Prepaid expenses and other current assets consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

Prepayments to vendors

2 unchanged sentences

NOTE 6 – INTANGIBLE ASSETS

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

Intangible assets consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

Customer relationships

2 unchanged sentences

Intangible assets, net of accumulated amortization

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

For the three months ended June 30, 2022 and 2021, the Company recorded amortization expense of $ 2.2 million and $ 1.8 million, respectively.

For the six months ended June 30, 2022 and 2021, the Company recorded amortization expense of $ 4.4 million and $ 3.5 million, respectively.

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include approximately $ 2.2 million reduction as of the six months ended June 30, 2022 and $ 3.0 million increase for the year ended December 31, 2021.

NOTE 7 – LEASES

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

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

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

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

Certain of our lease agreements contain early termination options.

Certain of the Company’s lease agreements contain early termination options.

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

Certain of 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.

Certain of the Company’s lease agreements provide for periodic adjustments to rental payments for inflation.

As the majority of the

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

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

2 unchanged sentences

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.

At June 30, 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.

Operating lease expense was $ 579 thousand for the three months ended June 30, 2022 and $ 1.0 million for the six months ended June 30, 2022.

Variable lease cost and short-term lease cost were not material for the three and six months ended June 30, 2022.

Cash paid for amounts included in the measurement of lease liabilities was $ 684 thousand for the three months ended June 30, 2022 and $ 1.1 million for the six months ended June 30, 2022.

During the three months ended June 30, 2022, the Company obtained new operating lease right-of-use assets totaling $ 44 thousand and for the six months ended June 30, 2022, the Company obtained $ 1.9 million in operating right-of-use assets.

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

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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):

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expense consisted of the following at June 30, 2022 and December 31, 2021 (in thousands):

Accounts payable

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NOTE 9 – DEBT

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

The following is a summary of the Company’s debt as of June 30, 2022 and December 31, 2021 (in thousands):

Debt – Third Parties

8 unchanged sentences

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

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

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

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

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

The Term Loans 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 %.

provided that after March 31, 2022, if the Company’s Senior Leverage Ratio (as defined in the Credit Agreement) is less than 2.25 , the interest rate would be reduced to LIBOR plus 10.25 %.

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

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

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

2 unchanged sentences

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

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

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

In February 2022, WhiteHawk and the Company agreed in principle to an extension of the February 2022 Payment.

Pursuant to amendment to the Credit Agreement, 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.

In July 2022, the Company and Whitehawk agreed that the notice had inadvertently included the default with respect to the failure to repay $ 8.5 million of the facility.

As a result, notwithstanding the notice, both WhiteHawk and the Company have agreed that the Company was not in default in making the February 2022 Payment to WhiteHawk.

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

On June 21, 2022, the Company and substantially all of its direct and indirect subsidiaries (together with the Company, the “Loan Parties”), entered into a second amendment (the “Second Amendment”) to the four year term loan credit facility, originally entered into December 31, 2021 and as amended on April 4, 2022 (the “Credit Agreement”), with the Collateral Agent and Lender.

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

During the six-month period ending June 30, 2022, the Company repaid principal of $ 1.3 million and interest of $ 3.6 million to Whitehawk.

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.

During the six months ended June 30, 2021, the Company repaid principal of $ 6.8 million and interest of $ 373 thousand, to Lind Global by issuing a total of 3.9 million shares of Class A common stock with an aggregate value of $ 9.9 million to Lind Global and recognized a loss extinguishment of debt of approximately $ 2.7 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.

On May 22, 2020, the Company received loan proceeds of $ 1.09 million under the Paycheck Protection Program.

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.

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

The Company received a payment schedule from our lender on May 5, 2022, extending the payoff date until May 2025.

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”) 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 September 30, 2020, Boxlight Inc., and EOS EDU LLC 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 Company during the Term with a right of recourse back to the Company 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 Company is required to pay a daily audit fee of $ 950 per day.

The Company granted Sallyport a security interest in all of the assets of Boxlight Inc.

and Genesis Collaboration, LLC.

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.

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

Other terms of the Accounts Receivable Agreement remain unchanged.

On August 6, 2021, Boxlight and Sallyport entered into an additional amendment of the Accounts Receivable Agreement (the “Second ARC Amendment”), which further increased the Maximum Facility Limit Amount to $ 15,000,000 .

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

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

Other terms of the Accounts Receivable Agreement remain unchanged.

NOTE 10 – DERIVATIVE LIABILITIES

2 unchanged sentences

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

The Company used a Monte Carlo Simulation model to determine the fair value of the derivative liabilities at June 30, 2022 and December 31, 2021.

June 30, 2022

Common stock issuable upon exercise of warrants

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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

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

Exercise of warrants

Change in fair value of warrants

Balance March 31, 2021

NOTE 11 – INCOME TAXES

1 unchanged sentence

United States

Total pretax book income, (loss)

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.

Total pretax book income

Six Months Ended

United States

Total pretax book loss

The Company recorded income tax expense of $ 41 thousand and $ 2.5 million for the three months ended June 30, 2022 and June 30, 2021, respectively and income tax benefit of $ 45 thousand and income tax expense of $ 2.5 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

The year-to-date effective tax rate is 0.9 % due to there being no material tax expense/benefit for the legacy Boxlight entities, due to their valuation allowance position, while the Sahara entities are fully taxable.

The decrease in tax expense year-over-year is largely due to foreign pretax book loss for the three months ended June 30, 2022 as compared to foreign pretax income for the three months ended June 30, 2021, as well as the impact of a significant tax rate change in the UK on the Company’s deferred tax liability that was recorded in the three months ended June 30, 2021.

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 legacy Boxlight entities are in a net deferred tax asset position in the United States, the United Kingdom, and other jurisdictions, primarily driven by the aforementioned net operating losses.

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

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

For example, in the United States, a change in ownership, as defined by federal income tax regulations, could significantly limit the Company’s ability to utilize its U.S.

net operating loss carryforwards.

Additionally, because U.S.

tax laws limit the time during which the net operating losses generated prior to 2018 may be applied against future taxes, if the Company fails to generate U.S.

taxable income prior to the expiration dates, the Company may not be able to fully utilize the net operating loss carryforwards to reduce future income taxes.

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

Based on its 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.

Based on its long history of cumulative losses in those jurisdictions, it believes it is appropriate to maintain a full valuation allowance on its net deferred tax asset at June 30, 2022 and December 31, 2021.

The Sahara entities have recorded a net deferred tax liability, which is primarily driven by the net deferred tax liability on the intangibles for which it does not have tax basis.

This includes the deferred tax liability recorded during 2021 for the acquisition of Interactive Concepts.

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

The tax years from 2009 to 2022 remain open to examination in the U.S.

federal jurisdiction.

The tax years from 2020 to 2022 remain open to examination in the U.K.

Statutes of limitations vary in other immaterial jurisdictions.

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.

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

NOTE 12 – EQUITY

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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.

As of June 30, 2022, a total of 167,972 shares of Series A preferred stock remained outstanding.

Series B Preferred Stock and Series C Preferred Stock

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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.

As of June 30, 2022 and December 31, 2021, the Company had 66,207,717 and 63,821,901 shares of Class A common stock issued and outstanding , respectively.

No Class B shares were outstanding at June 30, 2022 or December 31, 2021.

Issuance of common stock

2 unchanged sentences

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.

During the three months ended June 30, 2021, the Company repaid principal of $ 3.2 million and interest of $ 169 thousand by issuing 1.65 million shares Class A common stock to Lind and recognized a $ 0.5 million loss.

During the six months ended June 30, 2021, the Company repaid principal of $ 6.8 million and interest of $ 373 thousand by issuing 3.9 million shares Class A common stock with an aggregate value of $ 9.9 million to Lind and recognized a $ 2.7 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.

During the six months ended June 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.

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.

During the three and six months ended June 30, 2022, respectively, 544,688 and 1,660,806 restricted stock units vested and were converted into Class A common stock.

During the three and six months ended June 30, 2021, 484,824 and 543,642 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.

During the three and six months ended June 30, 2022, options to purchase a total of 140,591 and 196,841 shares of Class A common stock were exercised.

During the three months ended June 30, 2021, no shares options were exercised and during the six months ended June 30, 2021, options to purchase a total of 322,434 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.

No warrants were exercised during the six months ending June 30, 2022.

No warrants were exercised during the three months ended June 30, 2021.

During the six months ended June 30, 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 .

As of June 30, 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 were 2,663,454 shares.

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).

Under the Company’s 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 the stock on the date the award is granted (the strike price).

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

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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:

The following is a summary of the option activities during the six months ended June 30, 2022:

Exercise Price

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Outstanding, December 31, 2021

Outstanding, March 31, 2022

Exercisable, March 31, 2022

Outstanding, June 30, 2022

Exercisable, June 30, 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.

As of June 30, 2022 and December 31, 2021, the stock options had an intrinsic value of approximately $ 168 thousand and $ 1.9 million, respectively.

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 for one year, 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 .

Restricted Stock Units

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

Under the Company’s 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.

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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.

The following is a summary of the RSU activities during the six months ended June 30, 2022.

Grant Date Fair

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Outstanding, December 31, 2021

Outstanding, March 31, 2022

Outstanding, June 30, 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.

On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with Michael Pope, the 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.

Pope received a grant of 163,637 RSU’s, valued at approximately $ 180,000 , and vesting over three years and 494,069 options to purchase Class A Common Stock, 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.

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

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 .

During the first quarter 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.

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):

For the three and six months ended June 30, 2022 and 2021, the Company recorded the following stock compensation in general and administrative expense (in thousands):

Three months ended June 30,

Six months ended June 30,

Stock options

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Total stock compensation expense

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.

As of June 30, 2022, there was approximately $ 5.7 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 $ 1.3 million is estimated to be recorded as compensation expense in the remaining six 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.

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

The Management Agreement is separate and apart from Mr.

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

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

During the second quarter of 2022, FrontRow entered into a building lease in Australia and assumed a lease from FrontRow’s former owner in Denmark.

All such leased 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.

As of June 30, 2022, the total amount of such open inventory purchase orders was $ 11.6 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.

There was one customer that accounts for greater than 10% of the Company’s consolidated revenues for the six months ended June 30, 2022.

There were two customers that accounted for greater than 10% of the Company’s consolidated revenues for the six months ended June 30, 2021.

Details are as follows:

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for the year ended

For the three months ended March 31, 2022, the Company’s purchases were concentrated primarily with one vendor.

ended June 20, 2021

For the six months ended June 30, 2022 and 2021, the Company’s purchases were concentrated primarily with two vendors.

Details are as follows:

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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.

On July 22, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited institutional investor (the “Investor”) pursuant to which the Company agreed to issue and sell, in a registered direct offering directly to the Investor, 7 million shares (the “Shares”) of the Company’s Class A common stock, par value $ 0.0001 per share (“Common Stock”), pre-funded warrants (the “Pre-Funded Warrants”) to purchase 352,940 shares of Common Stock at an exercise price of $ 0.0001 per share, which Pre-Funded Warrants are to be issued in lieu of shares of Common Stock to ensure that the Investor does not exceed certain beneficial ownership limitations, and warrants to purchase an aggregate of 7,352,940 shares of Common Stock at an exercise price of $ 0.68 per share (the “Warrants”, and collectively with the Pre-Funded Warrants and the Shares, the “Securities”).

The Securities were sold at a price of $ 0.68 per share for total gross proceeds to the Company of $ 5.0 million (the “Offering”), before deducting estimated offering expenses, and excluding the exercise of any Warrants or Pre-Funded Warrants.

The Pre-Funded Warrants are exercisable immediately and the Warrants will be exercisable six months after the date of issuance and will expire five and a half years from the date of issuance.

The net proceeds to the Company from the Offering were approximately $ 4.6 million, after deducting placement agent’s fees and estimated expenses payable by the Company, and excluding the exercise of any Warrants or Pre-Funded Warrants.

The net proceeds received by the Company will be used for working capital purposes.

The Purchase Agreement contains customary representations and warranties and agreements of the Company and the Investors and customary indemnification rights and obligations of the parties.

Pursuant to the terms of the Purchase Agreement, the Company has agreed to certain restrictions on the issuance and sale of its Common Stock or Common Stock Equivalents (as defined in the Purchase Agreement) during the 60-day period following the closing of the Offering, which closed on July 26, 2022.

The Securities were offered by the Company pursuant to the Company’s effective shelf registration statement on Form S-3 (SEC File No.

333-239939), which was declared effective on July 28, 2020 (the “Registration Statement”) and the prospectus supplement, filed July 26, 2022.

On July 6, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Company’s Class A common stock was trading below the minimum $ 1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”).

The notification has no immediate effect on the Company’s Nasdaq listing and the Company’s Common Stock will continue to trade on Nasdaq under the ticker symbol “BOXL”.

In accordance with Nasdaq Rules, the Company has been provided an initial period of 180 calendar days, or until January 2, 2023 (the “Compliance Date”), to regain compliance with the Bid Price Requirement.

If at any time before the Compliance Date the closing bid price for the Company’s Common Stock is at least $ 1.00 for a minimum of 10 consecutive business days, the Staff will provide the Company written confirmation of compliance with the Bid Price Requirement.

If the Company does not regain compliance with the Bid Price Requirement by the Compliance Date, the Company may be eligible for an additional 180 calendar day compliance period.

To qualify, the Company would then be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the Bid Price Requirement, and will need to provide written notice of its intention to cure the deficiency during the additional 180 calendar day compliance period, which compliance could be achieved by effecting a reverse stock split, if necessary.

If the Company does not regain compliance with the Bid Price Requirement by the Compliance Date and is not eligible for an additional compliance period at that time, the Staff will provide written notification to the Company that its common stock will be subject to delisting.

At that time, the Company may appeal the Staff’s delisting determination to a Nasdaq Hearings Panel.

There can be no assurance that the Company will regain compliance or otherwise maintain compliance with any of the other listing requirements.

Nonetheless, the Company intends to monitor the closing bid price of its Common Stock and may, if appropriate, consider available options to regain compliance with the Bid Price Requirement.

On June 13, 2022, the Company entered into an employment agreement with Greg Wiggins, pursuant to which Mr.

Wiggins commenced service as the Company’s Chief Financial Officer on July 5, 2022.

Wiggins will receive annual base compensation of $ 250,000 and be eligible to receive a performance-based bonus of up to $ 75,000 per year.

In addition, Mr.

Wiggins was granted stock options entitling him to purchase 150,000 shares of the Company’s Class A common stock pursuant to the terms of Boxlight’s 2021 Equity Incentive Plan, and which options will vest in equal quarterly installments over a four-year term commencing on July 5, 2022.

Wiggins is required to provide three months’ advance written notice to the Company prior to resignation.

On April 5, 2022, the Company received notice from its Chief Financial Officer, Patrick Foley, that he was resigning from the Company.

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 .

The Company and Mr.

Foley agreed that his resignation is effective July 5, 2022.

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