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Item 9A. Controls and Procedures

2025-03-28 compared with 2024-03-14 · 43 added, 25 removed, 241 unchanged (22% of the section changed)

16 unchanged sentences

Based upon such assessment and due to the existence of the material weaknesses in our internal control over financial reporting described below, our principal executive officer and our principal accounting and financial officer have concluded that, as of December 31, 2024, our internal control over financial reporting was not effective, including:

• Our written policies and procedures over accounting transaction processing and period end financial close and reporting are limited which has resulted in ineffective oversight in the establishment of proper monitoring controls over accounting and financial reporting;

• We lacked sufficient review of certain financial transactions, and critical financial spreadsheets, such that a proper review had not been performed by someone other than preparer, and that process documentation is lacking for review and monitoring controls over accounting and financial reporting.

• Our written policies and procedures over accounting transaction processing and period end financial close and reporting and our formal internal assessment are limited which has resulted in ineffective oversight in the establishment of proper monitoring controls over accounting and financial reporting;

• We lacked sufficient review of certain financial transactions and critical financial spreadsheets, such that a proper review had not been performed by someone other than preparer, and that process documentation is lacking for review and monitoring controls over accounting and financial reporting as well as evaluation of completeness and accuracy of information used in the financial reporting process.

In addition, the Company has certain incompatible responsibilities for certain individuals within our general technology controls environment.

• The Company did not readily maintain evidence of an arrangement for certain revenue transactions, such as purchase order support or evidence of shipping support.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met.

In addition, the design of any control system is based

in part upon certain assumptions about the likelihood of certain events.

In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events.

Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

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GAAP, in all material respects, our financial condition, results of operations and cash flows for the periods presented in this Annual Report.

Remediation Plans for Material Weaknesses in Internal Control Over Financial Reporting

The Company, under oversight by the Audit Committee of the Company’s Board of Directors, is in the process of remediating the above noted material weaknesses.

The Company’s remediation plans include, among other things, the following:

• The Company has added and will continue to add finance and accounting personnel as required to the organization to strengthen our finance and accounting teams.

The additional personnel are expected to provide oversight, structure, reporting lines, and additional review over the Company's disclosures.

• The Company will continue to develop new written accounting policies and procedures over accounting transaction processing and period end financial close and reporting.

• The Company has increased and will continue to increase training for all relevant personnel designed to uphold our internal controls standards.

The identified material weaknesses will not be considered remediated until the remediation plans have been fully implemented, the applicable controls operate for a sufficient period of time, and the Company has concluded that newly implemented controls are operating effectively.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting during the fiscal year ended December 31, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other than the material weaknesses identified related to our general technology control environment and maintaining evidence of certain revenue transactions described above and the related remediation activities, there were no changes made in the internal controls over financial reporting for the year ended December 31, 2024 that have materially affected our internal control over financial reporting.

OTHER INFORMATION

Securities Trading Plans of Directors and Executive Officers

During the three months ended December 31, 2024, none of our directors or officers (as defined in Rule 16a-1 under the Exchange Act) adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement" (as defined in Item 408 of Regulation S-K).

Eighth Amendment to Credit Agreement

On March 24, 2025, the Company entered into an eighth amendment to the Credit Agreement with the Collateral Agent and Lender (the “Eighth Amendment”) to (i) provide the Company with an additional $2.5 million working capital bridge loan and (ii) waive any events of default that may have arisen as a result of the Company’s failure to (A) maintain the required ratio of indebtedness to adjusted EBITDA (defined more specifically as the “Senior Leverage Ratio” in the Credit Agreement) for the periods ended December 31, 2024 and March 31, 2025 and (B) maintain a value of specified

assets in excess of certain borrowings (defined more specifically as a “Borrowing Base” in the Credit Agreement) for the months ended December 31, 2024, January 31, 2025 and February 28, 2025.

In addition, no payments were required to be made by the Company to pay down the borrowing base defaults for December 2024, January 2025 and February 2025.

The Company is required to pay a fee equal to 6% of the working capital bridge loan under the Eighth Amendment.

The bridge loan, including the related fee, is due and payable in full on August 31, 2025, and is not subject to prepayment penalties.

The foregoing description of the Eighth Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Eighth Amendment, a copy of which is filed as Exhibit 10.89 to this Annual Report on Form 10-K and is incorporated herein by reference.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders.

A copy of the Company's insider trading policy is filed as Exhibit 19 to this Form 10-K.

ITEM 11 EXECUTIVE COMPENSATION

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The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders.

The independent registered public accounting firm is FORVIS, LLP (PCAOB Firm ID No.

The independent registered public accounting firm is Forvis Mazars, LLP (PCAOB Firm ID No.

686 ) located in Atlanta, Georgia .

EXHIBITS, FINANCIAL STATEMENT SCHEDULES]

Valuation and Qualifying Accounts

(in thousands)

period Charge

Expense Charged to

Accounts(a) Deductions (b) Balance at

Year Ended December 31, 2022

Allowance for doubtful accounts $ 405 $ 239 $ $ 230 $ 414

Total allowance deducted from assets $ 405 $ 239 $ - $ 230 $ 414

Year Ended December 31, 2023

Allowance for credit losses $ 414 $ 9 $ 76 $ 78 $ 421

Total allowance deducted from assets $ 414 $ 9 $ 76 $ 78 $ 421

__________________________________________

(a) The Company adopted the new standard using a modified retrospective transition approach, with the cumulative impact being charged to Retained Earnings.

(b) Write-offs, net of recoveries

(a) Financial Statements

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3.3 Certificate of Change, filed on June 13, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on June 13, 2023).

3.4 C ertificate of Change, filed on February 12, 2025 (inco rporated by reference to Exhibit 3.1 t o the Current Report on Form 8-K filed on February 13, 2025).

4.1 Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 in the Registration Statement on Form S-1 (Reg.

377-00845) filed on June 9, 2015).

4.2 Amended and Restated Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1/A (Reg.

No 333-204811) filed on December 28, 2015.

4.2 Amended and Restated Certificate of Designations of the Series A Convertible Preferred Stock filed on July 19, 2019.

4.3 Operating Agreement of EOSEDU, LLC, dated September 17, 2018, by and between the Boxlight Corporation and EOSEDU, LLC dated September 17, 2018 (incorporated by reference to Exhibit 4.8 to Amendment No.

10 unchanged sentences

4.11 Form of Warrant, dated July 22, 2022, issued to an accredited institutional investor (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8- K filed July 26, 2022).

4.12 2025 Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8- K filed February 21, 2025).

4.13 2025 Form of Common Warrant (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8- K filed February 21, 2025) .

4.14 Amendment to Certificate of Designation (Series B Preferred Stock) (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8- K filed February 21, 2025).

4.15 Amendment to Certificate of Designation (Series C Preferred Stock) (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8- K filed February 21, 2025).

10.1 Trademark Assignment dated May 27, 2016, between Herbert Myers, Boxlight Corporation and Boxlight Inc.

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333-204811) filed on May 13, 2016.

10.3 $2,000,000 Convertible Promissory Note of Boxlight Corporation to Mim io Holdings, dated as of April 1, 2016 (Incorporated by reference to Exhibit 10.14 in the Registration Statement on Form S-1 (Reg.

10.3 $2,000,000 Convertible Promissory Note of Boxlight Corporation to Mimio Holdings, dated as of April 1, 2016 (Incorporated by reference to Exhibit 10.14 in the Registration Statement on Form S-1 (Reg.

333-204811) filed on May 13, 2016).

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and Calypso Systems LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 1, 2021).

10.71 Credit Agreement dated December 31, 2021, between Boxlight Corporation, its subsidiaries, Whit e h awk Finance LLC., and White Hawk Capital Partners, LP (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 5, 2022).

10.71 Credit Agreement dated December 31, 2021, between Boxlight Corporation, its subsidiaries, Whitehawk Finance LLC., and White Hawk Capital Partners, LP (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 5, 2022).

10.72 Employment Agreement dated February 14, 2022, between Boxlight Corporation and Michael Pope (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 18, 2022).

12 unchanged sentences

10.83 Fifth Amendment to Credit Agreement, dated March 14, 2024, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC.*

10.84 Sixth Amendment to the Credit Agreement, dated April 19, 2024, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC.

(incorporated by reference to exhibit 10.1 to the Current Report on Form 8-K filed April 23, 2024.

10.85 Seventh Amendment and Waiver to Credit Agreement, dated August 12, 2024, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC (incorporated by reference to exhibit 10.3 to the Quarterly Report on Form 10-Q filed August 13, 2024).

10.86 Waiver to Credit Agreement, dated November 14, 2024, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC (incorporated by reference to exhibit 10.2 to the Quarterly Report on Form 10-Q filed November 14, 2024)

10.87 Placement Agent Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8- K filed February 21, 2025).

10.88 Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8- K filed February 21, 2025).

10.89 Eighth Amendment and Waiver to Credit Agreement, dated March 24 , 2025, between Boxlight Corporation, its subsidiaries, Whitehawk Capital Partners, LP and Whitehawk Finance LLC *

14.1 Code of Business Conduct and Ethics *(Incorporated by reference to Exhibit 14.1 to the Annual Report on Form 10-K filed March 16, 2023)

2 unchanged sentences

21.1 Subsidiaries (Incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K filed March 16, 2023)

23.1 Consent of FORVIS LLP*

23.1 Consent of Forvis Mazars, LLP*

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *

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Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

97.1 Clawback Policy adopted April 5, 2024 (incorporated by reference to Exhibit 3.3 to the Quarterly Report on Form 10-Q filed on May 8, 2024).

101.INS Inline XBRL Instance Document.*

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**Furnished herewith

†Management contract or compensatory plan or arrangement

FORM 10-K SUMMARY

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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 9A. Controls and Procedures