What changed in this filing

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Item 1A. Risk Factors

2025-03-28 compared with 2024-03-14 · 175 added, 59 removed, 379 unchanged (38% of the section changed)

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Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not limited to, the following:

• Unfavorable global economic or political conditions, including the ongoing conflicts between Russia and Ukraine, and Israel and Hamas, may adversely affect our business, financial condition, results from operations, or the businesses of our suppliers, vendors and logistics partners;

• our inability to predict or anticipate the duration or adapt to the long-term economic and business consequences of a global pandemic linked to the COVID-19 pandemic or any future pandemics;

• our ability to continue to operate as a going concern;

• our ability to maintain a listing of our Class A common stock on Nasdaq Capital Market;

• our ability to comply with certain covenants, minimum liquidity and borrowing base requirements under our existing credit agreement, or in the alternative, to continue to obtain forbearances or waivers from the lender thereunder;

• our ability to pay the redemption price of our outstanding Series B Preferred Stock and Series C Preferred Stock in the event the holders thereof were to opt to cause the Company to redeem the Series B Preferred Stock or Series C Preferred Stock;

• our indebtedness, a substantial amount of which is bearing interest at a variable rate;

• our history of operating losses;

• our ability to raise additional capital;

• changes in the sales of our display products;

• changes in U.S.

administrative policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any resulting changes in international trade relations, such as trade wars;

• changes in the spending policies or budget priorities for government funding of schools, colleges, universities, other education providers or government agencies;

• seasonal fluctuations in our business;

• changes in our working capital requirements and cash flow fluctuations;

• competition in our industry;

• our ability to enhance our products and to develop, introduce and sell new technologies and products at competitive prices and in a timely manner;

• our reliance on resellers and distributors to promote and sell our products;

• the success of our strategy to increase sales in the business and government market;

• changes in market saturation for our products;

• challenges growing our sales in foreign markets;

• our dependency on third-party suppliers;

• our reliance on highly skilled personnel;

• our ability to enter into and maintain strategic alliances with third parties;

• our inability to successfully complete or manage strategic restructuring;

• unfavorable global economic or political conditions, including the ongoing conflict between Russia and Ukraine, and Israel and Hamas;

• war, terrorism, other acts of violence, or potential effects of future pandemics;

• a breach in security of our electronic data or our information technology systems, including any cybersecurity attack;

• our ability to keep pace with developments in technology;

• consumer product and environmental laws;

• risks inherently related to our foreign operations;

• our compliance with the Foreign Corrupt Practices Act;

• income taxation for our worldwide operations;

• our ability to ship and transport components and final products efficiently and economically across long distances and borders;

• compliance with export control laws;

• fluctuations in foreign currencies;

• unstable market and economic conditions and potential disruptions in the credit markets;

• defects in our products and detection thereof;

• patents or other intellectual property rights necessary to protect our proprietary technology and business;

• assertions against us relating to intellectual property rights;

• our inability to predict or anticipate the duration or adapt to the long-term economic and business consequences of a global pandemic;

• our inability to predict or adapt to the unstable market and economic conditions of the global economy;

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• our ability to raise funds in a timely fashion and successfully manage cash flow needs and financing plans;

• our ability to successfully maintain a competitive position in our industry and market;

• our ability to manage our business and sell our products within a changing and evolving industry environment;

• our ability to locate and leverage potential growth opportunities;

• our ability to achieve expected technological advances by us or by third parties and our ability to leverage them;

• our ability to integrate our business acquisitions fully and successfully into Boxlight’s existing business and platform;

• the effects of future regulation;

• our ability to protect and monetize our intellectual property.

• our ability to anticipate consumer preferences and successfully develop attractive products;

• our ability to develop, implement and maintain an effective system of internal control over financial reporting.

Risks Related to Our Business, Operations and Financial Condition

We have not complied with certain covenants, minimum liquidity and borrowing base requirements under the Credit Agreement and this could cause us to be unable to continue to operate as a going concern.

As mentioned before, we have been unable to comply with certain covenants under our Credit Agreement with the Lender.

Although, to date, we have been successful in obtaining forbearance agreements with respect to these matters and avoid defaults under the agreement, there can be no assurance that the lender will not declare an event of default and acceleration all of our obligations under the Credit Agreement in the event we are unable to get into full compliance with these covenants in the future.

We are considering various alternatives to potentially refinancing such indebtedness.

We believe that our ability to do so will require an improvement of our 2023 financial performance in 2024.

In addition, t here is no assurance that we will refinance the indebtedness, so if so, the terms will be favorable to us.

Additionally, we have disclosed this in our periodic reports filed with the SEC that there is substantial doubt about our ability to continue as a going concern.

As of December 31, 2024, we owed $37.6 million to the Lender under our Credit Agreement.

As previously discussed, we have been unable to comply with certain covenants under our Credit Agreement with the Lender.

Although, to date, we have been successful in obtaining waivers with respect to these matters and avoid defaults under the agreement, there can be no assurance that the lender will not declare an event of default and accelerate all of our obligations under the Credit Agreement in the event we are unable to get into full compliance with these covenants in the future.

Most recently, we were not in compliance with (i) the Senior Leverage Ratio financial covenant under the Credit Agreement at December 31, 2024, and believe we will not be in compliance with this covenant at March 31, 2025 and (ii) our borrowing base covenant under the Credit Agreement at December 31, 2024, January 31, 2024 and February 28, 2025.

Because of the significant decreases in the required Senior Leverage Ratio that have occurred within the past 15 months, our current forecast projects that we may not be able to maintain compliance with this ratio.

These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.

In view of these matters, continuation as a going concern is dependent upon our ability to continue to achieve positive cash flow from operations, obtain waivers or other relief under the Credit Agreement for any future non-compliance with the Senior Leverage Ratio, borrowing base requirements or any other covenants or requirements under the Credit Agreement, or refinance our Credit Agreement with a different lender.

Furthermore, in the event the Lender refuses to grant waivers to avoid a future default, the Lender might accelerate our obligations under the Credit Agreement.

In order to satisfy such obligations, we would similarly have to refinance our obligations or seek additional capital, which we might not be able to do on acceptable terms or on a timely basis, or at all.

Our ability to refinance our existing debt is based upon credit markets and economic forces that are outside of our control.

There can be no assurance that we will be successful in refinancing our debt or raising additional capital, whether on acceptable terms, or on a timely basis, or at all.

Furthermore, if we were attempting to refinance our obligations or raise capital in response to an imminent or declared acceleration and default, we might have to do so on an expedited basis, which might further jeopardize our ability to successfully refinance

or obtain capital.

In the event we fail in any of the efforts described in the preceding sentences, our business may materially suffer or even cease operations.

Additionally, as we have previously disclosed, there is substantial doubt about our ability to continue as a going concern.

We have a substantial amount of indebtedness bearing interest at a variable rate, which may adversely affect our cash flow and our ability to operate our business.

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• limit our ability to service our indebtedness;

• limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or general corporate purpose;

• limit our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, or general corporate purposes.

The occurrence of any one of these events could have a material adverse effect on our business, financial condition, results of operations or prospects.

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While we may enter into agreements limiting our exposure to higher interest rates, any such agreements may not offer complete protection for this risk.

Unfavorable global economic or political conditions, including the ongoing conflict between Russia and Ukraine, and Israel and Hamas may adversely affect our business, financial condition, or results of operations .

If the holders of our Series B Preferred Stock or Series C Preferred Stock were to redeem their shares, we may not be able to pay the redemption price.

On September 25, 2020, we issued 1,586,620 shares of Series B Preferred Stock and 1,320,850 shares of Series C Preferred Stock.

To the extent not previously converted into our Class A common stock, the outstanding shares of Series B Preferred Stock and Series C Preferred Stock were redeemable at the option of the holders at any time or from time to time commencing on January 1, 2024 and January 1, 2026 respectively, upon 30 days prior written notice from the holders, for a redemption price, payable in cash, of $10.00 per share being redeemed plus all accrued and unpaid dividends on such redeemed shares.

If all unconverted shares of Series B Preferred Stock were redeemed on December 31, 2024, the total amount payable by us would be $15.9 million.

On February 20, 2025, we filed with the Secretary of State of the State of Nevada (i) an Amendment to the Certificate of Designation of its Series B Preferred Stock (the “Series B Amendment”) and (ii) an Amendment to the Certificate of Designation of its Series C Preferred Stock (the “Series C Amendment” and, together with the Series B Amendment, the “Amendments”).

Each Amendment was approved by the holders of a majority of the outstanding shares of Series B Preferred Stock or Series C Preferred Stock, as applicable, in accordance with the applicable Certificate of Designation.

Pursuant to the Amendments, neither the Series B Preferred Stock nor the Series C Preferred Stock shall be convertible into Class A Common Stock until the earlier of (1) the effectiveness of an amendment to the articles of incorporation of the Company increasing the number of shares of authorized Class A Common Stock to at least 25,000,000 shares (subject to adjustments as set forth therein) and (2) August 19, 2025.

If the holders of Series B Preferred Stock were to give notice of redemption, there is no guarantee that we would be able to satisfy the redemption price.

Assuming it were unable to, we might have to seek additional capital (including

through the incurrence of additional indebtedness, issuance of securities or sale of assets outside the ordinary course).

There is no guarantee that we would be able to obtain such additional capital on acceptable terms, or at all.

Moreover, redemption of the Series B Preferred Stock might cause a default under the Credit Agreement, and efforts to satisfy it might be effectively prohibited by covenants under the Credit Agreement.

Our failure to be able to timely satisfy any redemption of the Series B Preferred Stock, and other follow-on consequences of such failure, could materially negative affect us, including jeopardizing our ability to continue as a going concern.

As noted above, our Series C Preferred Stock is subject to redemption by the holder starting January 1, 2026, so it is possible the risk of a non-payable redemption price could increase in the future.

If all unconverted shares of Series C Preferred Stock were redeemed on December 31, 2024, the total amount payable by us would be $13.2 million.

Our ability to raise additional capital may be limited by various factors, including doubts as to our ability to continue as a going concern, our substantial indebtedness, the terms of our preferred stock and warrants and potentially limited availability of shares of Class A common stock under our charter.

In order to continue to operate our business, we expect to need to raise additional capital, whether to refinance our outstanding indebtedness, satisfy redemption demands by the holders of our Series B or C Preferred Stock or to fund working capital needs.

Our ability to raise additional capital is based upon equity and credit markets and economic forces that are outside of our control.

Because of doubts about our ability to continue as a going concern, our substantial indebtedness and our potential redemption obligations to holders of preferred stock, there can be no assurance that we will be successful in refinancing our debt or raising additional capital, whether on acceptable terms, or at all.

Furthermore, if we were attempting to refinance our obligations or raise capital in response to an imminent or declared acceleration and default on our indebtedness or to satisfy preferred stock redemption demands, we might have to do so on an expedited basis, which might further jeopardize our ability to successfully refinance or obtain capital.

Certain terms of the warrant we issued to the lender under our credit agreement may discourage potential equity investors.

The warrant was originally issued to the lender in partial consideration for entering into the credit agreement on December 31, 2021.

The warrant was originally exercisable for 51,083 shares of Class A common stock at $80.00 per share.

Pursuant to the terms of the warrant, based on the Class A common stock price on March 31, 2022, the exercise price per share and shares issuable under the warrant adjusted to $47.60 and 85,853, respectively.

Furthermore, under the terms of the warrant, certain subsequent equity issuances at a price per share less than then-effective exercise price per share under the warrant triggers additional adjustments of the exercise price and shares subject to exercise.

Pursuant to such adjustments features, an equity issuance in 2022 caused the exercise price per share and shares issuable under the warrant to adjust to $44.00 and 92,877, respectively.

Following the Company's equity issuance in February 2025, the exercise price per share and shares issuable under the warrant adjusted to $19.39 and 210,723, respectively.

Future equity issuances at a price per share less than $19.39 that are not exempt from the adjustment feature would trigger further adjustments.

These features may discourage future equity investors, thus potentially further hampering our capital raising efforts.

In addition, following a private placement offering in February 2025, which included the issuance of 1,323,000 common warrant shares, our number of authorized but unissued shares of Class A common stock remaining under our articles of incorporation would not be sufficient to issue shares should all of the common warrants be exercised.

The Company intends to request shareholder approval to increase the number of Class A common shares authorized in 2025;

however, there can be no certainty that shareholder approval will be obtained.

In an effort to maintain our Class A common stock's listing with Nasdaq, on February 14, 2025, we conducted a reverse stock split at a ratio of 1-for-5 that also split the authorized but unissued shares, which further exacerbated problems caused by our limited share availability.

Furthermore, while we currently intend to seek approval for an amendment to our articles of incorporation at our 2025 annual meeting of stockholders to increase the number of authorized shares of our Class A common stock, we may not be successful in obtaining the approval of the Company’s stockholders to increase that amount.

Consequently, the Company may be limited in its ability to raise additional capital through sales of Class A common stock or securities convertible or exercisable into Class A common stock.

In the event we are unable to raise capital in the future in sufficient amounts, on a timely basis or on acceptable terms, our business may materially suffer or even cease operations.

We have incurred net losses, our revenues have been declining and our future profitability is not certain.

For the fiscal years ended December 31, 2024 and 2023, we incurred net losses attributable to common stockholders of $29.6 million and $40.4 million, respectively.

Our total revenues declined 23.1% from $176.7 million for the fiscal year ended December 31, 2023 to $135.9 million for the fiscal year ended December 31, 2024.

Our operating results for future periods are subject to numerous uncertainties and we cannot be certain that we will be profitable or that we will not experience further substantial losses in the future.

If we are not able to increase revenue and reduce our costs or otherwise improve our margins, we may not be able to achieve profitability in future periods and our business, financial condition, results of operations and cash flows may be adversely affected.

Unfavorable global economic or political conditions, including the ongoing conflicts between Russia and Ukraine, and Israel and Hamas may adversely affect our business, financial condition, or results of operations .

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.

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Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may have the effect of further increasing economic uncertainty and heightening these risks, which may impact our ability to raise additional capital in the future.

The March 2023 failure of Silicon Valley Bank and its potential near- and long-term effects on the overall banking industry, may also adversely affect our operations and stock price.

In addition, U.S.

Increased or new restrictions on international trade, such as tariffs, can adversely affect the Company’s operations and supply chain and limit the Company’s ability to offer and sell its products and services to customers.

and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the military conflict between Russia and Ukraine.

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Further, in October 2023, a military conflict commenced between Israel and Hamas.

It is not possible to predict the broader or longer-term consequences of these conflicts, which could include further sanctions, embargoes, regional instability, energy shortages, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions,

currency exchange rates and financial markets.

Such geopolitical instability and uncertainty could have a negative impact on our ability to sell to, ship products to, collect payments from, and support customers in certain regions based on trade restrictions, embargoes and export control law restrictions, and logistics restrictions including closures of air space, and could increase the costs, risks and adverse impacts from these new challenges.

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It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions globally, which could adversely affect our operations and could increase the frequency and severity of cyber-based attacks against our information technology systems.

While we have taken actions to mitigate such potential risks, the proliferation of malware from the war into systems unrelated to the war or cyberattacks against U.S.

While we have taken actions to

mitigate such potential risks, the proliferation of malware from the war into systems unrelated to the war or cyberattacks against U.S.

companies in retaliation for U.S.

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The potential effects of these conditions could have a material adverse effect on our business, results of operations and financial condition.

War, terrorism, other acts of violence, changing circumstances related to the COVID-19 Pandemic or potential effects of future pandemics, are unpredictable and could adversely affect our business operations and the market for our products.

War, terrorism, other acts of violence or natural or man-made disasters, including a global pandemic, may affect the markets in which the Company operates, the Company’s customers, the Company’s delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial conditions.

The Company’s business may be adversely affected by instability, disruption or destruction in a geographic region in which it operates, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or man-made disasters, including famine, food, fire, earthquake, storm or pandemic events and spread of disease (including the COVID-19 outbreak which commenced in 2020).

Such events may cause customers to suspend their decisions on using the Company’s products and services, make it impossible to attend or sponsor trade shows or other conferences in which our products and services are presented to customers and potential customers, cause restrictions, postponements and cancellations of events that attract large crowds and public gatherings such as trade shows at which we have historically presented our products, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods or services, commitments to develop new products.

These events also pose significant risks to the Company’s personnel and to physical facilities, transportation and operations, which could materially adversely affect the Company’s financial results.

While conditions surrounding the COVID-19 pandemic seem to have stabilized, there is nonetheless a risk related to modification of the traditional classroom setting, similar to what occurred during 2020 to 2021 when many classrooms were all virtual, that may result in reduced demand for our classroom solutions, including reduced demand for our interactive displays due to extended or indefinite distance and digital learning.

War, terrorism, other acts of violence, natural disasters, changing weather conditions, changing circumstances related to potential effects of future epidemics, pandemics, or other health crises, are unpredictable and could adversely affect our business operations and the market for our products.

War, terrorism, other acts of violence or natural or man-made disasters, changing weather conditions, or any epidemic, global pandemic, or other health crises, may affect the markets in which we operate, our customers, our delivery of products and customer service, and could have a material adverse impact on our business, results of operations, or financial conditions.

Our business may be adversely affected by instability, disruption or destruction in a geographic region in which we operate, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or man-made disasters or changing weather conditions, including famine, food, fire, earthquake, storm, hurricane, epidemic, pandemic events or other health crises.

Such events may cause customers to suspend their decisions on using our products and services, make it impossible to attend or sponsor trade shows or other conferences in which our products and services are presented to customers and potential customers, cause restrictions, postponements and cancellations of events that attract large crowds and public gatherings such as trade shows at which we have historically presented our products, and give rise to sudden significant changes in regional and global economic conditions and cycles that could interfere with purchases of goods or services, commitments to develop new products.

These events also pose significant risks to our personnel and to physical facilities, transportation and operations, which could materially adversely affect our financial results.

With any such future events or circumstances, there may be a risk related to modification of the traditional classroom setting, similar to what occurred during 2020 to 2021 during the COVID-19 pandemic when many classrooms were all virtual, that may result in reduced demand for our classroom solutions, including reduced demand for our interactive displays due to extended or indefinite distance and digital learning.

There is also a risk of reduced borrowing with our factoring and purchase order financing facilities, as well as the risk of inability to raise additional capital.

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If any of our competitors introduces attractive alternatives to our interactive displays, we could experience a significant decrease in sales as customers migrate to those alternative products.

Changes in U.S.

administrative policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any resulting changes in international trade relations, such as trade wars, may have a material adverse impact on impact on our business, results of operations, or financial condition.

In January 2025, the global tariff landscape began to quickly change with the U.S.

implementing new and/or increased tariffs on various foreign countries, either generally or with respect to certain products.

Certain foreign countries have, and may continue to, change their tariff policies in response to changes in the U.S.

tariff policy.

Sales outside the US represented 55% of our revenues for the year ended December 31, 2024.

In addition, we acquire certain products from OEMs that are manufactured in countries that may be subject to new or increased tariffs, including China.

In addition, tariffs could increase the costs of components for note which products that we sell and have the potential to disrupt existing supply chains.

An increase in the costs of the goods that we sell could make them less affordable for customers, which would negatively impact customer demand and have a material adverse impact on our business, results of operations, or financial condition.

It is uncertain whether our OEMs in those countries will pass through increased costs to us, which

would result in a negative impact on our business, results of operations, or financial conditions.

It is impossible to predict with any certainty the effects that any new tariffs may ultimately have on our industry or our financial condition.

Our business is subject to seasonal fluctuations, which may cause our operating results to fluctuate from quarter-to-quarter and adversely affect our working capital and liquidity throughout the year.

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Competitors may be able to respond to new or emerging technologies and changes in customer requirements more effectively and faster than we can or devote greater resources to the development, promotion and sale of products than we can.

Current and potential competitors may establish cooperative relationships among themselves or with third parties, including through mergers or acquisitions, to increase the ability of their products to address the needs of customers.

Current and potential competitors may establish cooperative relationships among themselves or with third parties,

including through mergers or acquisitions, to increase the ability of their products to address the needs of customers.

If these interactive display competitors or other substitute or alternative technology competitors acquire significantly increased market share, it could have a material adverse effect on our business, financial condition or results of operations.

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It is characterized by rapid technological change and frequent new product introductions, many of which may compete with, be considered as alternatives to or replace our interactive displays.

For example, we have recently observed significant sales of tablet computers by competitors to school districts in the U.S.

whose technology budgets could otherwise have been used to purchase interactive displays.

For example, significant sales of tablet computers by competitors to school districts in the U.S.

whose technology budgets could otherwise have been used to purchase interactive displays continue to increase.

Accordingly, our future success will depend upon our ability to enhance our products and to develop, introduce and sell new technologies and products offering enhanced performance and functionality at competitive prices and in a timely manner.

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Our business strategy contemplates expanding our sales in both the education market, as well as the business and government training sectors.

However, to date, there has not been widespread adoption of interactive displays and collaboration solutions in the business and government market, and these solutions may fail to achieve wide acceptance in this market.

However, to date, there has been limited adoption of interactive displays and collaboration solutions in the business and government market, and these solutions may fail to achieve wide acceptance in this market.

Successful expansion into the business and government markets will require us to augment and develop new distribution and reseller relationships, and we may not be successful in developing those relationships.

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Future sales growth in those markets and other developed markets with similar penetration levels may, as a result, be difficult to achieve, and our sales of interactive displays may decline in those countries.

If we are unable to replace the revenue and earnings, we have historically derived from sales of interactive displays to the education market in these developed markets, whether through sales of additional products, sales in other underserved markets, such as Africa, Latin America, and Asia, sales in the business and government market or otherwise, our business, financial condition and results of operations may be materially adversely affected.

in other underserved markets, such as Africa, Latin America, and Asia, sales in the business and government market or otherwise, our business, financial condition and results of operations may be materially adversely affected.

We face significant challenges growing our sales in foreign markets.

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Competition for highly skilled management, technical, research and development and other employees is intense in the high-technology industry, and we may not be able to attract or retain highly qualified personnel in the future.

In making employment decisions, particularly in the high-technology industry, job candidates often consider the value of the equity awards they would receive in connection with their employment.

In making employment decisions, particularly in the high-technology industry, job candidates often consider the value of the equity awards they would receive in

connection with their employment.

Our long-term incentive programs may not be attractive enough or perform sufficiently to attract or retain qualified personnel.

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The anticipated benefits of these arrangements may never materialize and performing under these arrangements may adversely affect our results of operations.

We may be unable to successfully complete or manage strategic restructuring to our brand

We continue to position our organization for future growth through the alignment of our brand strategy.

Based on the long-term outlook of the industry, we believe our recent initiatives to streamline our brands and unify our go-to-market message will position the Company for further success.

However, changes to our brand strategy could negatively impact future revenues if not completed successfully.

We use resellers and distributors to promote and sell our products.

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While we obtain assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the protections of such data by third parties, nonetheless those partners may also be subject to data intrusion or otherwise compromise the protection of such data.

Any compromise of the confidential data of our customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to

this data through breach of our information technology systems or other means could substantially disrupt our operations, harm our customers, consumers, employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant costs and liabilities and result in a loss of business that could be material.

Any compromise of the confidential data of our customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our information technology systems or other means could substantially disrupt our operations, harm our customers, consumers, employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant costs and liabilities and result in a loss of business that could be material.

A failure to keep pace with developments in technology could impair our operations or competitive position.

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Our customers include primary and secondary schools, colleges, universities, other education providers and, to a lesser extent, government agencies, each of which depends heavily on government funding.

The COVID-19 pandemic and resulting economic recession could cause a substantial disruption in, decrease or stagnation of, spending and budget priorities for government funding of schools, colleges, universities and other education providers and government agencies.

Epidemics, pandemics, and other health crises, such as the COVID-19 pandemic, can result in economic recession that could cause a substantial disruption in, decrease or stagnation of, spending and budget priorities for government funding of schools, colleges, universities and other education providers and government agencies.

The economy had only recently experienced a similar disruption from the worldwide recession of 2008 and subsequent sovereign debt and global financial crisis, which resulted in substantial declines in the revenues and fiscal capacity of many national, federal, state, provincial and local governments.

Like in the 2008 financial crisis, where many of those governments have reacted to the decreases in revenues by cutting funding to educational institutions, we anticipate that governments and governmental entities will react similarly to the economic crisis and resulting decreases in revenue caused by the COVID-19 pandemic by cutting funding to educational institutions.

If our products are not a high priority expenditure for such institutions, or if such institutions allocate expenditures to substitute alternative technologies, we could lose revenue.

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Although we believe our tax estimates are reasonable, we cannot assure you that the final determination of any tax audits and litigation will not be materially different from that which is reflected in our historical income tax provisions and accruals.

Should additional taxes be assessed

against us as a result of an audit or litigation, there could be a material adverse effect on our current and future results and financial condition.

Should additional taxes be assessed against us as a result of an audit or litigation, there could be a material adverse effect on our current and future results and financial condition.

Certain of our subsidiaries provide products to and may from time to time undertake certain significant transactions with us and our other subsidiaries in different jurisdictions.

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dollars in consolidation.

If there is a change in foreign currency exchange rates, the translation of any of the group companie's financial statements into U.S.

If there is a change in foreign currency exchange rates, the translation of any of the group companies' financial statements into U.S.

dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income.

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In addition, we are rapidly developing and introducing new products, and new products may have higher rates of errors and defects than our established products.

The Boxlight Group has historically provided product warranties between one and five years, and the failure of our products to operate as described could give rise to warranty claims.

The Boxlight Group has historically provided product warranties, with the average duration being between three and five years, and the failure of our products to operate as described could give rise to warranty claims.

The consequences of such errors, failures and other defects and claims could have a material adverse effect on our business, financial condition, results of operations and our reputation.

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Also, third parties may make infringement claims against us that relate to technology developed and owned by one of our suppliers for which our suppliers may or may not indemnify us.

Even if we are indemnified against such costs, the indemnifying party may be unable to uphold its contractual obligations and determining the extent of such obligations could require additional litigation.

Even if we are indemnified against such costs, the indemnifying party may be unable to uphold its

contractual obligations and determining the extent of such obligations could require additional litigation.

Claims of intellectual property infringement against us or our suppliers might require us to redesign our products, enter into costly settlements or license agreements, pay costly damage awards or face a temporary or permanent injunction prohibiting us from marketing or selling our products or services.

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Risks Related to Our Class A Common Stock

We may not be able to maintain a listing of our Class A common stock on Nasdaq Capital Market, or Nasdaq.

We may not be able to maintain a listing of our Class A common stock on Nasdaq.

Because our Class A common stock is listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing.

At present, we are in the initial period of 180-day compliance period provided by Nasdaq relating to our failure to maintain the $1.00 minimum bid price requirement.

On February 29, 2024, we received a letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq notifying us that based upon the closing bid price for the last 30 consecutive business days, we no longer meet the Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

We have been provided an initial period of 180 calendar days, or until August 26, 2024, to regain compliance with the Bid Price Rule.

If we are not in compliance with the Bid Price Rule by August 26, 2024, we may be afforded a second 180 calendar day period to regain compliance.

We will continue to actively monitor the closing bid price of our Class A common stock and will evaluate available options, including, without limitation, seeking to effect a reverse stock split, in order to resolve the deficiency and regain compliance with the Bid Price Rule.

If we fail to regain compliance, or otherwise violate or fail to meet any Nasdaq listing requirements, our Class A common stock may be delisted.

In addition, our Board may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

On February 28, 2024, we received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market (“Nasdaq”), notifying us that, based upon the closing bid price of our Class A common stock for the previous 30 consecutive business days, we no longer met the requirements of Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial period of 180 calendar days, or until August 26, 2024, to regain compliance with the Bid Price Rule.

On August 27, 2024, Nasdaq advised us in writing that, while we had not regained compliance with the Bid Price Rule, we had been granted an additional 180 calendar day extension, or until February 24, 2025 (the “Second Deadline”), to regain compliance with the Bid Price Rule.

We effected a reverse stock split of our authorized, issued and outstanding shares of Class A common stock, at a ratio of 1-for-5 (the “2025 Reverse Stock Split”).

The 2025 Reverse Stock Split became effective at 5:01 p.m., Eastern Time, on February 14, 2025, with the Class A common stock trading on Nasdaq on a reverse split-adjusted basis under our existing trading symbol “BOXL” at the market open on February 18, 2025.

We effectuated the Reverse Stock Split to raise the per share bid price of our Class A Common Stock above $1.00 per share in an effort to regain compliance with the Bid Price Rule.

We were eligible to regain compliance with the Bid Price Rule if our Class A Common Stock traded at or above $1.00 for a minimum of 10 consecutive trading days on or before the Second Deadline.

On February 25, 2025, the Staff of Nasdaq notified us in writing that we had not regained compliance with Nasdaq Listing Rule 5550(a)(2) by the Second Deadline, and that trading in our Class A common stock would be suspended at the opening of business on March 4, 2025, and a Form 25-NSE would be filed with the Securities and Exchange Commission (the “SEC”) to remove our securities from listing and registration on Nasdaq.

However, as of close of market on March 3, 2025, our Class A Common Stock had traded above $1.00 for 10 consecutive trading days, and, as a result, Nasdaq notified us in writing that the Staff had determined that we had regained compliance with the Bid Price Rule, and that suspension of trading in, and delisting of, our stock had been cancelled.

Accordingly, we regained compliance with the Bid Price Rule and continued trading on Nasdaq under our existing trading symbol “BOXL” at the market open on March 4, 2025.

While the Company has regained compliance with the Bid Price Rule, there can be no assurance that the Company will maintain compliance with the Bid Price Rule, or the other continued listing requirements of Nasdaq, in the future.

In addition, in accordance with Nasdaq Listing Rule 5810(c)(3)(A)(iv), if our stock price were to decline below $1.00 per share in the twelve months following our reverse stock split on February 14, 2025, we would not be eligible for any compliance period and the Nasdaq Listing Qualifications Department will issue a Staff Delisting Determination.

In addition, our Board may determine in the future that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such listing.

A delisting of our Class A common stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our Class A common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our Class A common stock.

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From time to time, we may seek additional equity or debt financing to finance working capital requirements, continue our expansion, develop new products or make acquisitions or other investments.

Most recently, on February 19, 2025, we sold, in a private placement, an aggregate of (i) 260,000 shares of Class A common stock, (ii) pre-funded warrants to purchase up to an aggregate of 1,063,000 shares of Class A common stock, and (iii) warrants to purchase up to an aggregate of 1,323,000 shares of Class A common stock.

In addition, if our business plans change, general economic, financial or political conditions in our industry change, or other circumstances arise that have a material effect on our cash flow, the anticipated cash needs of our business, as well as our conclusions as to the adequacy of our available sources of capital, could change significantly.

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If financing is not available on satisfactory terms, or at all, we may be unable to expand our business or to develop new business at the rate desired and our results of operations may suffer.

The market price of our Class A common stock may be volatile, which could cause the value of our common stock to fluctuate and possibly decline significantly.

The market price of our Class A common stock may continue to be volatile, which could cause the value of our common stock to fluctuate and possibly decline significantly.

The market price of our Class A common stock may be highly volatile and subject to wide fluctuations.

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As of March 24, 2025, our Class A common stock closed at $1.57 per share.

In addition, our financial performance, government regulatory action, tax laws and market conditions in general, including the ongoing COVID-19 pandemic and conflicts between Ukraine and Russia, and Israel and Hamas, and their resulting impact on the economy at large, could have a significant impact on the future market price of our Class A common stock.

In addition, our financial performance, government regulatory action, the imposition of tariffs or trade wars, tax laws and market conditions in general, and conflicts between Ukraine and Russia, and Israel and Hamas, and their resulting impact on the economy at large, could have a significant impact on the future market price of our Class A common stock.

Some of the factors that could negatively affect our share price or result in fluctuations in the price of our common stock include:

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• new laws and governmental regulations, or other regulatory developments, applicable to our industry;

• changes in general conditions in the United States and global economies or financial markets, including both social and economic conditions resulting from the ongoing COVID-19 pandemic and, conflicts between Ukraine and Russia, and Israel and Hamas, war, incidents of terrorism or responses to such events;

• changes in government spending levels on education;

• changes in U.S.

administrative policy, including the imposition of or increases in tariffs, changes to existing trade agreements and any resulting changes in international trade relations, such as trade wars;

• changes in general conditions in the United States and global economies or financial markets, including both social and economic conditions resulting from any epidemcis, pandemics, or other health crises, and conflicts between Ukraine and Russia, and Israel and Hamas, war, incidents of terrorism, natural disasters, changing weather conditions or responses to such events;

• continued decreases in government spending levels on education;

• changes in key personnel;

• sales of common stock by us, members of our management team or our stockholders;

• sales of our common stock by us, members of our management team or our stockholders;

• the granting or exercise of employee stock options or other equity awards;

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In addition, our senior management is entitled to certain payments upon a change in control and certain of the stock options and restricted shares we have granted provide for the acceleration of vesting in the event of a change in control of our Company.

Certain provisions of our outstanding warrants could discourage an acquisition of us by a third party .

On July 22, 2022, we sold, in a registered direct offering, an aggregate of:

(i) 175,000 shares of Class A common stock, (ii) prefunded warrants to purchase up to an aggregate of 8,824 shares of Class A common stock, and (iii) common warrants to purchase up to an aggregate of 183,824 shares of Class A common stock.

In addition, following our reverse stock split at a ratio of 1-for-5, on February 19, 2025, we sold, in a private placement, an aggregate of (i) 260,000 shares of Class A common stock, (ii) pre-funded warrants to purchase up to an aggregate of 1,063,000 shares of Class A common stock, and (iii) common warrants to purchase up to an aggregate of 1,323,000 shares of Class A common stock.

Certain provisions of our outstanding prefunded warrants and outstanding common warrants could make it more difficult or expensive for a third party to acquire us.

Certain of our outstanding warrants provide that, in the event of certain transactions constituting “fundamental transactions” (defined in the warrant forms, but including transactions such as mergers in which the company is not the surviving entity and transactions in which more than 50% of the Company’s voting power is acquired), holders of such warrants will have the right to receive from us or a successor entity upon exercise of the warrant the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of our Class A common stock in the fundamental transaction.

Additionally, in the event of a fundamental transaction, holders of our privately placed common warrants may instead opt to require us or our successor to purchase the unexercised portion of the common warrants at their “Black Scholes Value” (as described in the common warrant).

These fundamental transaction provisions could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to the holders of our Class A common stock.

We have no intention of declaring dividends in the foreseeable future.

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We have identified control deficiencies that constituted a material weakness in our internal controls and procedures in the past and may experience a material weakness in future years.

If we fail to maintain adequate internal controls, our financial statements may not accurately reflect our financial condition.

Any material misstatements could require a restatement of our consolidated financial statements, cause us to fail to meet our reporting

obligations or cause investors to lose confidence in our reported financial information, leading to a decline in the market value of our securities.

If we fail to maintain

adequate internal controls, our financial statements may not accurately reflect our financial condition.

Any material misstatements could require a restatement of our consolidated financial statements, cause us to fail to meet our reporting obligations or cause investors to lose confidence in our reported financial information, leading to a decline in the market value of our securities.

Unstable market and economic conditions and potential disruptions in the credit markets may adversely affect our business, including the availability and cost of short-term funds for liquidity requirements and our ability to meet long-term commitments, which could adversely affect our results of operations, cash flows and financial condition.

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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-K

Item 1A. Risk Factors