What changed in this filing

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Item 1. Financial Statements

2025-05-14 compared with 2024-11-14 · 330 added, 318 removed, 559 unchanged (54% of the section changed)

2 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the three and nine months ended September 30, 2024 and 2023

For the three months ended March 31, 2025 and 2024

(in thousands, except per share amounts)

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Revenues, net $ 22,423 $ 37,093

4 unchanged sentences

Research and development 912 1,171

Impairment of goodwill — 13,226 — 13,226

Total operating expense 10,951 16,420

3 unchanged sentences

Other income (expense), net 653 (199)

Loss on warrant issuance

Change in fair value of derivative liabilities (9) 192

Change in fair value of common warrants

Total other expense (485) (2,614)

6 unchanged sentences

Net loss $ (3,243) $ (7,089)

Other comprehensive loss:

Other comprehensive income (loss):

Foreign currency translation adjustment 570 (811)

Total comprehensive loss $ (2,673) $ (7,900)

Net loss per common share – basic and diluted $ ( 0.34 ) $ ( 1.90 ) $ ( 1.29 ) $ ( 2.39 )

Weighted average number of common shares outstanding – basic and diluted 9,823 9,484 9,775 9,399

Net loss per share of Class A common stock – basic and diluted $ (1.41) $ (3.81)

Weighted average number of shares of Class A common stock outstanding – basic and diluted 2,529 1,943

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Balance Sheets

As of September 30, 2024 and December 31, 2023

(in thousands, except share and per share amounts)

September 30,

As of March 31, 2025 and December 31, 2024

(in thousands, except share amounts)

2025 December 31,

21 unchanged sentences

Deferred revenues, non-current 14,824 15,158

Long-term debt 37,111 39,134

Deferred tax liabilities, net 891 901

Operating lease liabilities, non-current 6,321 6,428

Other long-term liabilities 1,623 165

Total liabilities 96,002 99,692

6 unchanged sentences

Total mezzanine equity 28,509 28,509

Stockholders’ equity:

Stockholders’ deficit:

Preferred stock, $0.0001 par value, 50,000,000 shares authorized;

167,972 and 167,972 shares issued and outstanding, respectively

167,972 shares issued and outstanding, respectively

Common stock, $0.0001 par value, 3,750,000 shares authorized;

3 unchanged sentences

Accumulated other comprehensive income 797 227

Total stockholders’ equity 6,542 16,751

Total stockholders’ deficit (15,815) (12,896)

Total liabilities and stockholders’ equity $ 108,696 $ 115,305

1 unchanged sentence

Boxlight Corporation

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended September 30, 2024

Condensed Consolidated Statements of Changes in Stockholders’ Deficit

For the three months ended March 31, 2025

(in thousands, except share amounts)

5 unchanged sentences

Shares Amount Shares Amount

Balance as of June 30, 2024 167,972 $ — 9,817,875 $ 1 $ 119,882 $ 443 $ ( 112,842 ) $ 7,484

Shares issued for:

Vesting of restricted share units — — 24,440 — — — — —

Stock compensation — — — — 166 — — 166

Foreign currency translation — — — — — 2,270 — 2,270

Fixed dividends Preferred Series B — — — — ( 317 ) — — ( 317 )

Net loss — — — — — — ( 3,061 ) ( 3,061 )

Balance as of September 30, 2024 167,972 $ — 9,842,315 $ 1 $ 119,731 $ 2,713 $ ( 115,903 ) $ 6,542

Boxlight Corporation

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the nine months ended September 30, 2024

(in thousands, except share amounts)

Preferred Stock Class A

Common Stock Additional

Capital Accumulated

Comprehensive

Income Accumulated

Deficit Total

Shares Amount Shares Amount

Balance as of December 31, 2024 167,972 $ — 1,970,615 $ — $ 119,487 $ 227 $ (132,610) $ (12,896)

1 unchanged sentence

Vesting of restricted share units — — 1,930 — — — — —

Reverse stock split fractional adjustment — — 33 — — — — —

Stock compensation — — — — 71 — — 71

Proceeds from issuance of common stock — — 260,000 — — — — —

Foreign currency translation — — — — — 570 — 570

1 unchanged sentence

Net loss — — — — — — (3,243) (3,243)

Balance as of September 30, 2024 167,972 $ — 9,842,315 $ 1 $ 119,731 $ 2,713 $ ( 115,903 ) $ 6,542

Balance as of March 31, 2025 167,972 $ — 2,232,578 $ — $ 119,241 $ 797 $ (135,853) $ (15,815)

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the three months ended September 30, 2023

For the three months ended March 31, 2024

(in thousands, except share amounts)

6 unchanged sentences

Shares Amount Shares Amount

Balance as of June 30, 2023 167,972 $ — 9,465,494 $ 1 $ 118,379 $ 1,366 $ ( 68,854 ) $ 50,892

Shares issued for:

Vesting of restricted share units — — 139,866 — — — — —

Stock compensation — — — — 671 — — 671

Foreign currency translation — — — — — ( 2,854 ) — ( 2,854 )

Fixed dividends Preferred Series B — — — — ( 317 ) — — ( 317 )

Net Loss — — — — — — ( 17,750 ) ( 17,750 )

Balance as of September 30, 2023 167,972 $ — 9,605,360 $ 1 $ 118,733 $ ( 1,488 ) $ ( 86,604 ) $ 30,642

Boxlight Corporation

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the nine months ended September 30, 2023

(in thousands, except share amounts)

Preferred Stock Class A

Common Stock Additional

Capital Accumulated

Comprehensive

Loss Accumulated

Deficit Total

Shares Amount Shares Amount

Balance as of December 31, 2022 167,972 $ — 9,339,587 $ 1 $ 117,849 $ ( 914 ) $ ( 65,043 ) $ 51,893

Cumulative effect of change in accounting principle, net of tax — — — — — — ( 76 ) ( 76 )

Balance as of December 31, 2023 - as adjusted 167,972 $ — 1,940,900 $ — $ 119,725 $ 1,301 $ (104,275) $ 16,751

Shares issued for:

Stock options exercised — — 12,500 — 13 — — 13

Reverse stock split fractional adjustment — — 33,414 — — — — —

Vesting of restricted share units — — 14,646 — — — — —

3 unchanged sentences

Net loss — — — — — — (7,089) (7,089)

Balance as of September 30, 2023 167,972 $ — 9,605,360 $ 1 $ 118,733 $ ( 1,488 ) $ ( 86,604 ) $ 30,642

Balance as of March 31, 2024 167,972 $ — 1,955,546 $ — $ 119,957 $ 490 $ (111,364) $ 9,083

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the nine months ended September 30, 2024 and 2023

For the three months ended March 31, 2025 and 2024

(in thousands)

Nine Months Ended

September 30,

2024 September 30,

Three Months Ended

2025 March 31,

Cash flows from operating activities:

Net loss $ (3,243) $ (7,089)

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

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

Amortization of debt premium, discount and issuance cost 530 592

3 unchanged sentences

Change in allowance for sales returns and volume rebates (947) (418)

Change in fair value of common warrants (1,936) —

Change in inventory reserve (699) 86

2 unchanged sentences

Depreciation and amortization 2,463 2,069

Impairment of goodwill — 13,226

Loss on warrant issuance 578 —

Change in right of use assets and lease liabilities (303) 1

5 unchanged sentences

Accounts payable and accrued expenses (7,269) (7,860)

Other short-term liabilities

Other liabilities 165 3,762

Deferred revenues (691) 105

Net cash (used in) provided by operating activities $ ( 2,089 ) $ 8,242

Net cash used in operating activities $ (4,680) $ (1,942)

Cash flows from investing activities:

6 unchanged sentences

Payments of fixed dividends to Series B Preferred stockholders — (317)

Proceeds from the exercise of options and warrants — 13

Net cash used in financing activities $ ( 4,376 ) $ ( 2,987 )

Proceeds from issuance of common stock and pre-funded warrants

Net cash provided by (used in) financing activities $ 4,608 $ (2,624)

Effect of foreign currency exchange rates 269 (481)

Net (decrease) increase in cash and cash equivalents ( 6,760 ) 3,823

Net increase (decrease) in cash and cash equivalents 70 (5,441)

Cash and cash equivalents, beginning of the period 8,007 17,253

5 unchanged sentences

Addition of operating lease liabilities $ — $ 52

Cash dividends declared to Series B Preferred stockholders $ 317 $ —

See accompanying notes to unaudited condensed consolidated financial statements.

21 unchanged sentences

the fair value and recoverability of intangible assets;

the relative stand-alone selling prices of goods and services;

the fair value of warrants, the relative stand-alone selling prices of goods and services;

variable consideration;

3 unchanged sentences

REVERSE STOCK SPLIT

On June 14, 2023, the Company effected a reverse stock split of the Company’s Class A common stock whereby each eight shares of the Company’s authorized and outstanding Class A common stock was converted into one share of Class A common stock.

In order to regain compliance with NASDAQ Listing Rule 5550(a)(2) (the "Bid Price Rule"), on February 14, 2025, the Company effected a reverse stock split of the Company’s Class A common stock whereby each five shares of the Company’s authorized and outstanding Class A common stock was converted into one share of Class A common stock.

The par value of the Class A common stock was not adjusted.

Following the reverse split, the authorized shares for Class A common stock was adjusted to 18,750,000 , the authorized shares for Class B common stock remained at 50,000,000 shares, and the authorized share of preferred stock remained unchanged at 50,000,000 shares.

All Class A common share and per share amounts for all periods presented in the condensed consolidated financial statements and the notes to the condensed consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in aggregate par value of Class A common stock to additional paid-in capital on the condensed consolidated balance sheets of approximately $ 6 thousand.

quantity of Class A common stock equivalents and the conversion and exercise ratios were adjusted for the effect of the reverse stock split for warrants, stock-based compensation arrangements, and the conversion features on preferred shares.

All of the agreements include existing conversion language in the event of a stock split and thus did not result in modification accounting or additional incremental expense as a result of this transaction.

Following the reverse split, the authorized shares for Class A common stock was adjusted to 3,750,000, the authorized shares for Class B common stock remained at 50,000,000 shares, and the authorized shares of preferred stock remained unchanged at 50,000,000 shares.

All share of Class A common stock and per share amounts for all periods presented in the condensed consolidated financial statements and the notes to the condensed consolidated financial statements have been retrospectively adjusted to give effect to the reverse stock split, including reclassifying an amount equal to the reduction in aggregate par value of Class A common stock to additional

paid-in capital on the condensed consolidated balance sheets of approximately $1 thousand.

The quantity of Class A common stock equivalents and the conversion and exercise ratios were adjusted for the effect of the reverse stock split for warrants, stock-based compensation arrangements, and the conversion features on preferred shares.

There are presently no shares of Class B common stock outstanding and none were outstanding as of March 31, 2025.

The Company issued 33 shares of Class A common stock to adjust fractional shares following the reverse stock split to the nearest whole share.

There are presently no shares of Class B common stock outstanding, and none were outstanding as of September 30, 2024.

GOING CONCERN

The Company’s financial statements are prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business.

As described in Note 8, the Company was not in compliance with the Senior Leverage Ratio financial covenant under its Credit Agreement at December 31, 2023, June 30, 2024 and September 30, 2024.

As described in Note 8, the Company was not in compliance with the Senior Leverage Ratio financial covenant under its Credit Agreement at June 30, 2024, September 30, 2024, December 31, 2024 and March 31, 2025.

Non-compliance was waived by the Agent and Lender under amendments to the Credit Agreement.

On November 14, 2024, the Company obtained a waiver for the Credit Agreement with the Collateral Agent and Lender (the “November 2024 Waiver”) which waived any Event of Default that may have arisen directly as a result of the financial covenant default at September 30, 2024 and in the interim period ended October 31, 2024.

In conjunction with obtaining the waiver, the Company paid down approximately $ 1.1 million under the Credit Agreement, inclusive of $ 60 thousand of prepayment penalties.

In addition, in February 2024, the Company paid $ 1.7 million, inclusive of a $ 0.1 million pre-payment penalty to Whitehawk to maintain compliance with the borrowing base covenant calculation as of January 31, 2024.

Because of the significant decreases in the required Senior Leverage Ratio that have occurred over the past twelve months under the Credit Agreement, the Company’s current forecast projects the Company may not be able to maintain compliance with this ratio.

There can be no assurance that the Lender will not declare an event of default and acceleration of all of our obligations under the Credit Agreement in the event we are unable to comply with the Senior Leverage Ratio financial covenant, borrowing base covenant or any other related covenants thereunder, in the future.

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

We may be required to seek alternative financing arrangements or restructure the terms of the agreement with the Series B preferred shareholders on terms that are not favorable to us if cash and cash equivalents are not sufficient to fully redeem the Series B preferred shares.

We are currently evaluating alternatives to refinance or restructure the Series B preferred shares including extending the maturity of the Series B preferred shares beyond the current optional conversion date.

These conditions raise substantial doubt about the ability of the Company to continue as a going concern within one year after the date of the accompanying unaudited condensed consolidated financial statements.

Continuation as a going concern is dependent upon the Company’s 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 and other financial covenants, or refinance its existing Credit Agreement with a different lender on more favorable terms.

The Company is actively working to refinance its debt with new or existing lenders prior to its maturity.

While the Company is confident in its ability to refinance its existing debt, it does not have written or executed agreements as of the filing of this Form 10-Q.

In addition, the Company was also not in compliance with its borrowing base covenant under the Credit Agreement at December 31, 2024, January 31, 2025 and February 28, 2025.

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 in March 202 5 and (ii) waive any events of default that may have arisen directly as a result of (1) the Financial Covenant Event of Default (as defined in the Eighth Amendment) for the periods ended December 31, 2024 and March 31, 2025 and (2) the Borrowing Base defaults described in the Eighth Amendment for the months ended December 31, 2024, January 31, 2025 and February 28, 2025.

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

In conjunction with obtaining the waiver, the Company must now also comply with the following covenants:

• Initiate recapitalization efforts and/or other financing arrangements with target completion milestones starting on March 21, 2025 through an expected completion of the recapitalization and/or repayment of the debt by June 16, 2025.

Not meeting these dates is an event of default under the credit facility.

• Provide budgets to the lender with variances in excess of specified thresholds resulting in an event of default at the discretion of the lender.

The Company will also be required to meet with a financial advisor, as designated by the lender, if requested.

In addition, the amendment prohibits the Company from paying dividends or distributions to the preferred stockholders and reduces the borrowing base calculations by reducing the value assigned to its intellectual property to $11.2 million.

The Company also was not in compliance with its financial covenant related to the borrowing base under the Credit Agreement at March 31, 2025.

However, the non-compliance was cured by the payment of approximately $1.3 million under the Credit Agreement in April and May 2025.

There can be no assurance that the Lender will not declare an event of default and acceleration of all of our obligations under the Credit Agreement in the event we are unable to maintain full compliance with these covenants in the future.

Because of the significant decreases in the required Senior Leverage Ratio, the Company’s current forecast projects the Company may not be able to maintain compliance with this ratio.

In addition, the Company’s Term Loan, which has an outstanding balance of $39.6 million as of March 31, 2025, matures on December 31, 2025.

As of March 31, 2025, the Company's short-term debt will mature within the next nine months.

The Company is actively working to refinance its debt with new lenders.

However there can be no assurance that these efforts will be successful prior to the maturity date at which time all amounts under the Term Loan will become due.

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

In view of the Term Loans being payable in full within the next nine months and the required Senior Leverage Ratio, continuation as a going concern is dependent upon the Company’s 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, or refinance its Credit Agreement with a different lender on more favorable terms.

The Company is actively working to refinance its debt with new lenders.

While the Company has currently engaged financial advisors and is actively working to refinance its existing debt, it does not have written or executed agreements as of the issuance of this Form 10-Q.

The Company’s ability to refinance its existing debt is based upon credit markets and economic forces that are outside of its control.

The Company has a good working relationship with its current banking partner.

However, there can be no assurance that the Company will be successful in refinancing its debt, or on terms acceptable to the Company.

We believe we have a good working

relationship with our current lender.

However, there can be no assurance that the Company will be successful in refinancing its debt, on a timely basis, or on terms acceptable to the Company, or at all.

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

If all unconverted shares of Series B Preferred Stock were redeemed on March 31, 2025, the total amount payable by the Company would be $15.9 million.

In addition, our Series C preferred stock will become redeemable at the option of the holders at any time or from time to time commencing on January 1, 2026 upon, 30 days’ prior written notice to the Company for a redemption price, payable in cash, equal to the sum of (a) ($10.00) multiplied by the number of shares of Series C preferred stock being redeemed (the “Redeemed Shares”), plus (b) all accrued and unpaid dividends, if any, on such Redeemed Shares.

If all unconverted shares of Series C Preferred Stock were redeemed, the total amount payable by the Company would be $13.2 million.

We may be required to seek alternative financing arrangements or restructure the terms of the agreements with the Series B and C preferred shareholders on terms that are not favorable to us if cash and cash equivalents are not sufficient to fully redeem the Series B and C preferred shares.

We are currently evaluating alternatives to refinance or restructure the Series B and C preferred shares including extending the maturity of the Series B preferred shares beyond the current optional conversion date.

As a result of the aforementioned factors, cash and cash equivalents, along with anticipated cash flows from operations, may not provide sufficient liquidity for our working capital needs, debt service requirements or to maintain minimum liquidity requirements under our Credit Agreement.

These financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern.

REVISIONS OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

During the fourth quarter of 2024, the Company determined that the prior year financial statements contained immaterial errors related to the classification of its rebate liability and sales return reserve.

Specifically, the Company notes that the rebate liability should be recorded as a reduction to revenue with an offset to other current liabilities in the Company’s condensed consolidated balance sheets.

In addition, the Company notes that the offset to its sales return reserve balance should have been recorded as a refund liability included in other current liabilities in the Company’s condensed consolidated balance sheets.

As a result, certain prior year amounts have been revised for consistency with the current presentation.

The Company has evaluated these corrections in accordance with Accounting Standards Codification ("ASC") Topic 250, Accounting Changes and Error Corrections, Financial Accounting Standards Board (“FASB”) Concepts Statement No.

2, Qualitative Characteristics of Accounting Information, and SAB No.

99- Materiality, and determined it was not necessary to amend its previously issued fiscal year condensed consolidated financial statements upon overall considerations of both quantitative and qualitative factors.

The corrections had no impact on the Statement of Operations and Comprehensive Loss or Statement of Changes in Stockholders’ Deficit for the prior period ended, March 31, 2024.

A summary of immaterial corrections to the Company’s previously issued condensed consolidated balance sheet are as follows (in thousands):

March 31, 2024

As reported Adjustments As revised

Accounts receivable – trade, net of allowances 26,519 2,951 $ 29,470

Prepaid expenses and other current assets 8,999 210 $ 9,209

Total assets 142,384 3,161 $ 145,545

Accounts payable and accrued expenses 24,685 (243) $ 24,442

Other short-term liabilities 3,348 3,164 $ 6,512

Total current liabilities 39,894 2,921 $ 42,815

Total liabilities 104,792 2,921 $ 107,713

Total stockholders’ (deficit) equity 142,384 3,161 $ 145,545

A summary of immaterial corrections to the Company’s previously issued condensed consolidated statements of cash flows are as follows (in thousands):

March 31, 2024

As reported Adjustments As revised

Change in allowance for sales returns and volume rebate (175) (243) (418)

Prepaid expenses and other current assets (1,086) (29) (1,057)

Accounts payable and accrued expenses (8,103) 243 (7,860)

Other liabilities

3,791 (29) 3,762

FAIR VALUE OF FINANCIAL INSTRUMENTS

1 unchanged sentence

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

The Company has determined that the estimated fair value of debt is approximately $ 41.2 million while the carrying value, excluding premiums, discounts, and issuance costs, is approximately

$ 40.1 million.

The Company has determined that the estimated fair value of debt is approximately $36 million while the carrying value, excluding premiums, discounts, and issuance costs, is approximately $39.6 million.

The fair value of debt was estimated using market rates the Company believes would be available for similar types of financial instruments and represents a Level 2 measurement.

8 unchanged sentences

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

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

Transfers into Level 3 measurements during the three and nine months ended September 30, 2024 of $ 0.3 million were related to the Company's long-term incentive plan.

There were no transfers into or out of Level 3 measurements in 2023.

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 September 30, 2024 and December 31, 2023 (in thousands):

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.

As of March 31, 2025, the Company classified newly issued warrants to purchase up to an aggregate of 1,323,000

shares of Class A Common Stock (the “2025 Common Warrants”) as a liability due to the Company having insufficient authorized shares to share-settle the 2025 Common Warrants, which were otherwise determined to be equity classified.

The Company also reclassified 32,308 vested stock options from equity classification to liability classification as a result of the Company having insufficient authorized shares of Class A common stock available pursuant to the Company’s articles of incorporation to settle the share-based payment arrangements when the awards are exercised.

Transfers into Level 3 measurements during the three months ended March 31, 2025 of approximately $1.5 million were related to the 2025 Common Warrants.

There were no transfers into or out of Level 3 measurements in the first quarter of 2024.

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, 2025 and December 31, 2024 (in thousands):

Description Markets for

2 unchanged sentences

(Level 3) Carrying

September 30,

Derivative liabilities - warrant instruments — — $ 10 $ 10

Long-term incentive plan — — $ 189 $ 189

Common warrants (1)

— — $ 1,460 $ 1,460

(1) Due to insufficient authorized shares to share-settle the 2025 Common Warrants, these were classified as liabilities and included in the "other long-term liabilities" on the balance sheet.

Description Markets for

3 unchanged sentences

Derivative liabilities - warrant instruments — — $ 1 $ 1

Long-term incentive plan — — $ 358 $ 358

The following tables reconcile the beginning and ending balances of the warrant instruments and long-term incentive plan within Level 3 of the fair value hierarchy, respectively:

1 unchanged sentence

(in thousands) Long-term incentive plan

(in thousands) Common warrants

(in thousands)

Balance, June 30, 2024 $ 9 $ —

Change in fair value ( 6 ) 274

Balance, September 30, 2024 $ 3 $ 274

(in thousands) (in thousands)

Balance, December 31, 2024 $ 1 $ 358 $ —

Change in fair value ( 202 ) 274

Balance, September 30, 2024 $ 3 $ 274

(in thousands) (in thousands)

Balance, June 30, 2023 $ 512 $ —

Common warrants issuance on February 21, 2025

Reclass to accrued expenses

Change in fair value 9 67 (1,936)

Balance, September 30, 2023 $ 422 $ —

(in thousands) (in thousands)

Balance, March 31, 2025 $ 10 $ 189 $ 1,460

(in thousands) (in thousands) (in thousands)

Balance, December 31, 2023 $ 205 $ — $ —

Change in fair value (192) — —

Balance, September 30, 2023 $ 422 $ —

Balance, March 31, 2024 $ 13 $ — $ —

See Note 9 and Note 12 for discussion of the valuation techniques and inputs and reconciliation of the opening and closing balances of the fair value of warrants and long-term incentive plan, respectively.

LOSS PER COMMON SHARE

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

For purposes of this calculation, options to purchase common stock, restricted stock units subject to vesting, and warrants to purchase common stock were considered to be common stock equivalents.

Diluted net loss per share is computed by dividing net 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.

For the three and nine months ended September 30, 2024, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 0.2 million shares issuable upon exercise of options to purchase common stock, 0.1 million of unvested shares of restricted stock and 1.4 million shares issuable upon exercise of warrants.

LOSS PER SHARE OF COMMON STOCK

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

For purposes of this calculation, options to purchase Class A common stock, restricted stock units subject to vesting, and pre-funded warrants to purchase Class A common stock were considered to be Class A common stock equivalents.

Diluted net loss per share of Class A common stock is determined using the weighted-average number of shares of Class A common stock outstanding during the period, adjusted for the dilutive effect of Class A common stock equivalents.

The dilutive effect of convertible instruments is determined using the if-converted method, presuming share settlement.

Under the if-converted method, securities are assumed to be converted at the beginning of the period, and the resulting shares of Class A common stock are included in the denominator of the diluted calculation for the entire period being presented.

In periods when losses are reported, the weighted-average number of shares of Class A common stock outstanding excludes Class A common stock equivalents, because their inclusion would be anti-dilutive .

For the three months ended March 31, 2025, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise $34 thousand shares issuable upon exercise of options to purchase Class A common stock, $12 thousand of unvested shares of restricted stock and 2.7 million shares issuable upon exercise of warrants.

Additionally, potentially dilutive securities of 0.4 million shares issuable from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive.

For the nine months ended September 30, 2023, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 0.3 million shares from options to purchase shares of common stock and 0.5 million of unvested restricted stock units as well as 1.4 million shares of common stock issuable upon exercise of warrants.

For the three months ended March 31, 2024, potentially dilutive securities that were not included in the diluted per share calculation because they would be anti-dilutive comprise 70 thousand shares from options to purchase shares of common stock and 30 thousand of unvested restricted stock units as well as 0.3 million shares of Class A common stock issuable upon exercise of warrants.

Additionally, potentially dilutive securities of 0.4 million from the assumed conversion of preferred stock are excluded from the denominator because they would be anti-dilutive.

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

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

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

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

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

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 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).

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Contract liabilities are reflected in deferred revenue in the accompanying condensed 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 had no material contract assets as of September 30, 2024 or December 31, 2023.

During the three months ended September 30, 2024 and September 30, 2023, respectively, the Company recognized $ 2.1 million and $ 1.9 million of revenue that was included in the deferred revenue balance as of December 31, 2023 and December 31, 2022, respectively.

During the nine months ended September 30, 2024 and September 30, 2023, the Company recognized $ 6.5 million and $ 6.0 million of revenue that was included in the deferred revenue balance as of December 31, 2023 and December 31, 2022, respectively.

The Company had no material contract assets as of March 31, 2025 or December 31, 2024.

During the three months ended March 31, 2025 and March 31, 2024, respectively, the Company recognized $1.9 million and $2.3 million of revenue that was included in the deferred revenue balance as of December 31, 2024 and December 31, 2023, respectively.

Variable Consideration

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

There was no material revenue recognized in the three and nine months ended September 30, 2024 related to changes in estimated variable consideration that existed at December 31, 2023.

There was no material revenue recognized in the three months ended March 31, 2025 related to changes in estimated variable consideration that existed at December 31, 2024.

Remaining Performance Obligations

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

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

the customer.

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

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

As of September 30, 2024 and December 31, 2023, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was $ 25.8 million and $ 25.0 million, respectively.

The Company expects to recognize revenue on 36.6 % of the remaining performance obligations during the next 12 months, 29.0 % in the following 12 months, 19.9 % in the 12 months ended September 30, 2027, 11.1 % in the 12 months ended June 30, 2028, with the remaining 3.4 % recognized thereafter.

As of March 31, 2025 and December 31, 2024, the aggregate amount of the contractual transaction prices allocated to remaining performance obligations was $24.0 million and $24.2 million, respectively.

The Company expects to recognize revenue on approximately 38% of the remaining performance obligations during the next 12 months, 29% in the following 12 months, 19% in the 12 months ended September 30, 2027, 11% in the 12 months ended June 30, 2028, with the remaining 3% 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).

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) (in thousands)

2024 2023 2024 2023

(in thousands)

Product revenue $ 21,643 $ 34,435

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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 current assets and other assets, respectively, in the accompanying condensed consolidated balance sheets.

Total deferred commissions, net of accumulated amortization, as of September 30, 2024 and December 31, 2023 were $ 0.5 million and $ 0.6 million, respectively.

Total deferred commissions, net of accumulated amortization, as of March 31, 2025 and December 31, 2024 were both less than $0.5 million, respectively.

The Company has not historically incurred any material fulfillment cost that meet the criteria for capitalization.

ADVERTISING COSTS

Advertising costs are expensed as incurred and included in General and Administrative expenses in the accompanying consolidated statements of operations.

Advertising expense for the three and nine months ended September 30, 2024 totaled $ 80 thousand and $ 135 thousand, respectively.

Advertising expense for the three and nine months ended September 30, 2023 totaled $ 31 thousand and $ 196 thousand respectively.

SEGMENT REPORTING

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Transfers between segments are generally valued at market and are eliminated in consolidation.

The CODM evaluates the performance of each segment based on revenues, gross profit, and operating income, with operating income being the primary GAAP measure.

Gross margin can influence key decisions as margins can be indicative of the level of saturation in the market with existing products or can be indicative of changes in manufacturing or shipping costs.

If trends are sustained, the CODM may seek to adjust operations to more favorable markets or may evaluate whether the Company should introduce new products in a given area.

Operating income provides the CODM with an overview of the profitability of a given segment and whether resources should be allocated or removed to ensure sustained profitability for both the segment and the consolidated entity.

Since the Company’s operating segments are organized by geography, this structure allows the CODM to be responsive to needs of customers and can execute strategic plans and initiatives accordingly.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development costs are expensed as incurred and consist primarily of personnel related costs, prototype and sample costs, design costs, and global product certifications mostly for wireless certifications.

ACCOUNTING STANDARDS PENDING ADOPTION

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280.

The enhanced disclosure requirements include:

title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances.

This change is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

This change will apply retrospectively to all periods presented.

The adoption of this ASU is not expected to result in significant changes to the Company's current segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements.

The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid.

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The Company is currently evaluating the impact of this ASU on its financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments , to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt-Debt with Conversion and Other Options.

This change is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

The Company is currently evaluating the impact of this ASU on its financial statements.

In January 2025, the FASB ASU 2025-01—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date.

The Board is issuing this Update to clarify the effective date of Accounting Standards Update No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The change is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its financial statements.

NOTE 2 – ACCOUNTS RECEIVABLE - TRADE

Accounts receivable consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

Accounts receivable consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Accounts receivable – trade $ 18,255 $ 18,719

Allowance for credit losses (811) (394)

Allowance for sales returns and volume rebates ( 1,311 ) ( 3,145 )

Accounts receivable - trade, net of allowances $ 17,444 $ 18,325

NOTE 3 – INVENTORIES

Inventories consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

Inventories consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Finished goods $ 39,781 $ 45,352

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NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):

Prepaid expenses and other current assets consisted of the following at March 31, 2025 and December 31, 2024 (in thousands):

Prepayments to vendors $ 2,355 $ 2,212

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Prepaid expenses and other current assets $ 10,078 $ 8,785

Prepaid expenses and other current assets as of September 30, 2024 and December 31, 2023 are net of reserves of $ 1.4 million related to vendor receivables.

Prepaid expenses and other current assets as of March 31, 2025 and December 31, 2024 are net of reserves of $1.4 million related to vendor receivables.

NOTE 5 – INTANGIBLE ASSETS

Intangible Assets

Intangible assets consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

Intangible assets consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Useful lives 2025 2024

4 unchanged sentences

Technology 3-5 years

Domain 7 years 14 14

Non-compete 3 years 391 391

4 unchanged sentences

Intangible assets, net of accumulated amortization $ 24,034 $ 25,944

For the three months ended September 30, 2024 and 2023, the Company recorded amortization expense of $ 1.9 million and $ 2.1 million, respectively.

For the nine months ended September 30, 2024 and 2023, the Company recorded amortization expense of $ 5.7 million and $ 6.4 million, respectively.

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include approximately $ 2.5 million as of September 30, 2024 and ($ 0.1 ) million as of December 31, 2023.

During the quarter ended September 30, 2024, the Company determined that a triggering event had occurred as a result of a decline in the Company’s revenues resulting from lower sales volume primarily resulting from lower global demand for interactive flat panel displays, which suggested one or more of the reporting units may have fallen below the carrying amounts.

As a result, the Company performed an interim impairment test on its finite-lived intangible assets using undiscounted cash flows.

There was no impairment recorded on finite-lived intangible assets during the nine months ended September 30, 2024.

During the quarter ended September 30, 2023, due to further declines in the Company’s market capitalization and a reduction in cashflows resulting from continued softening in the industry leading to a reduction in sales from interactive flat-panel displays, the Company determined that a triggering event had occurred.

As of September 30, 2023, the Company performed an interim goodwill impairment test as a result of the triggering events identified.

In analyzing goodwill for potential impairment in the quantitative impairment test, the Company used a combination of the income and market approaches to estimate the fair value.

Certain estimates and assumptions, including the Company’s operating forecast for 2023 and future periods, were revised based on current industry and Company trends.

For the three and nine months ended September 30, 2023, the Company recorded goodwill impairment charges of $ 10.4 million and $ 2.8 million to the Americas and EMEA reporting units, respectively, which also represents total accumulated goodwill impairment charges for each reporting unit.

For the three months ended March 31, 2025 and 2024, the Company recorded amortization expense of $2.3 million and $1.9 million, respectively.

Changes to gross carrying amount of recognized intangible assets due to translation adjustments include approximately $0.8 million as of March 31, 2025 and ($0.8) million as of December 31, 2024.

NOTE 6 – LEASES

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

As of September 30, 2024, the Company had no leases classified as finance leases.

As of March 31, 2025, the Company had no leases classified as finance leases.

The Company is currently not a lessor in any lease arrangement.

Operating lease expense was $ 595 thousand and $ 712 thousand for the three months ended September 30, 2024 and 2023, respectively and $ 1.8 million for the nine months ended September 30, 2024 and September 30, 2023.

and short-term lease cost was $ 470 thousand and $ 1.4 million for the three and nine months ended September 30, 2024, respectively.

Variable and short-term lease cost were not material for the three and nine months ended September 30, 2023.

Cash paid for amounts included in the measurement of lease liabilities was $ 426 thousand and $ 660 thousand for the three months ended September 30, 2024 and 2023, respectively and $ 1.3 million and $ 1.9 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.

Operating lease expense was $583 thousand and $630 thousand for the three months ended March 31, 2025 and 2024, respectively.

Variable and short-term lease cost was $323 thousand and $528 thousand for the three months ended March 31, 2025 and 2024, respectively.

Cash paid for amounts included in the measurement of lease liabilities was $599 thousand and $466 thousand for the three months ended March 31, 2025 and 2024, respectively.

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

Fiscal year ended,

(in thousands)

Thereafter 6,017

2 unchanged sentences

Present value of lease liabilities $ 8,255

The following is supplemental lease information as of September 30, 2024 and December 31, 2023:

The following is supplemental lease information as of March 31, 2025 and December 31, 2024:

Weighted-average remaining lease term (years) 9.7 9.6

1 unchanged sentence

NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

Accounts payable and accrued expenses consisted of the following as of March 31, 2025 and December 31, 2024 (in thousands):

Accounts payable $ 14,138 $ 20,703

Accrued expenses and other 3,212 3,164

Other 631 345

Accounts payable and accrued expenses $ 17,350 $ 24,176

NOTE 8 – DEBT

The following is a summary of the Company’s debt as of September 30, 2024 and December 31, 2023 (in thousands):

The following is a summary of the Company’s debt as of March 31, 2025 and December 31, 2024 (in thousands):

Debt – Third Parties

4 unchanged sentences

Current portion of debt 39,618 37,148

Long-term debt $ 37,111 $ 39,134

Total debt (net of premium, discount and issuance costs) $ 39,618 $ 37,148

15 unchanged sentences

Under the Third Amendment, the Lender funded an additional $3.0 million delayed draw term loan, which was required to be repaid on or prior to September 29, 2023, and adjusted certain terms of the Credit Agreement, including the test period end dates and corresponding Senior Leverage Ratios (as defined in the Credit Amendment) and the minimum liquidity requirements that the Company must maintain compliance with pertaining to certain Borrowing Base Requirements (as defined in the Credit Agreement), among other adjustments.

Following this

additional draw, no further delayed draws remained under the Credit Agreement.

Following this additional draw, no further delayed draws remained under the Credit Agreement.

In July 2023, the Company repaid the $3.0 million delayed draw term loan with no prepayment penalties or premiums.

2 unchanged sentences

The Fourth Amendment made no other changes to the Credit Agreement.

On March 14, 2024, the Company entered into a fifth amendment to the Credit Agreement with the Collateral Agent and Lender (the "Fifth Amendment") to (i) amend and restate the Senior Leverage Ratio and Minimum Liquidity (each as defined in the Fifth Amendment), and (ii) waive any event of default that may have arisen directly as a result of the Company’s Financial Covenant Default (as defined in the Fifth Amendment) at December 31, 2023.

Under the Fifth Amendment, the Senior Leverage Ratio requirement at March 31, 2024 was amended from 2.00 to 6.00 , at June 30, 2024 remained at 2.00 and thereafter remained at 1.75 .

The Fifth Amendment also added additional financial reporting obligations and additional guarantors under the Credit Agreement.

Covenant Compliance and Liquidity Considerations

The Company's Credit Agreement, as amended to date, requires compliance with certain monthly covenants, which include provisions regarding over advance limitations based upon a borrowing base.

In the second quarter of 2023, as part of obtaining an appropriate waiver, the Company agreed to engage a financial advisor and to use commercial reasonable efforts to refinance the Credit Agreement with an alternative lender and repay the Credit Facility by September 30, 2023, or as soon thereafter as practical.

The waiver did not amend the maturity date of the Credit Agreement.

Upon repayment, the Company will be subject to a prepayment premium that is higher than the prepayment premium included in the original Credit Agreement, as defined in the waiver.

The Company has either implemented or initiated appropriate plans regarding refinancing procedures that are within management’s control to comply with the waiver requirements.

The financial statements do not include any adjustments that might result from the outcome of the Company’s ability to refinance and repay the credit facility.

The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at September 30, 2023.

The Company cured the non-compliance by paying $4.3 million inclusive of $0.3 million in prepayment penalties and accrued interest in November 2023 which would have resulted in the Company being in compliance with the Senior Leverage Ratio at September 30, 2023.

In February 2024, the Company paid $1.7 million, inclusive of a $0.1 million pre-payment penalty, to Whitehawk to maintain compliance with the borrowing base covenant calculation as of January 31, 2024.

After the payment the Company was in compliance with the borrowing base covenant.

The Company was not in compliance with its financial covenant related to the borrowing base under the Credit Agreement at December 31, 2023.

The non-compliance was cured by a waiver applied in accordance with the Fifth Amendment to the Credit Agreement dated March 14, 2024 which waived any Event of Default that may have arisen directly as a result of the financial covenant default at December 31, 2023 and in the interim two-month period ended February 29, 2024.

The Fifth Amendment also amended and restated the Senior Leverage Ratio and Minimum Liquidity requirements.

Under the Fifth Amendment, the Senior Leverage Ratio requirement at March 31, 2024 was amended from 2.00 to 6.00, at June 30, 2024 will remain at 2.00 and thereafter will remain at 1.75.

On April 19, 2024, the Company entered into a sixth amendment to the Credit Agreement w ith the Collateral Agent and Lender (the “Sixth Amendment”).

2 unchanged sentences

$4.0 million).

Both working capital bridge loans, including the related fee, are due and payable in full on November 29, 2024, and are not subject to prepayment penalties.

Both working capital bridge loans, including the related fee were paid in full by November 2024, and were not subject to prepayment penalties.

On August 12, 2024, the Company entered into a seventh amendment to the Credit Agreement with the Collateral Agent and Lender (the “Seventh Amendment”) to (i) reduce the intellectual property sublimit under the borrowing base from $15.0 million to $11.2 million, and (ii) waive the event of default that may have arisen directly as a result of the Financial Covenant Default (as defined in the Seventh Amendment) at June 30, 2024.

1 unchanged sentence

In conjunction with obtaining the waiver, the Company paid down approximately $1.1 million under the Credit Agreement, inclusive of $60 thousand of prepayment penalties.

During the three months ended September 30, 2024, the Company repaid $ 3.5 million of the $ 4.0 million additional borrowings under the Sixth Amendment.

In October 2024, the Company repaid the remaining $ 0.5 million borrowings under the Sixth Amendment and $ 0.2 million in financing fees related to the borrowing.

Covenant Compliance and Liquidity Considerations

The Credit Agreement, as amended to date, requires compliance with certain monthly covenants, which include provisions regarding over advance limitations based upon a borrowing base.

In June 2023, in connection with obtaining a waiver of compliance with those covenants, the Company agreed to engage a financial advisor and to use commercial reasonable efforts to refinance the Credit Agreement with an alternative lender and repay the credit facility by September 30, 2023, or as soon thereafter as practical.

The waiver also increased the prepayment premium from the amount included in the original Credit Agreement.

The Company has either implemented or initiated plans regarding refinancing procedures that are within management’s control to comply with the waiver requirements.

The Company’s financial statements do not include any adjustments that might result from the outcome of the Company’s activities to refinance and repay the credit facility.

The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at September 30, 2023.

The Company cured the non-compliance at September 30, 2023 by paying $ 4.3 million inclusive of $ 0.3 million in prepayment penalties and accrued interest in November 2023 which would have resulted in the Company being in compliance with the Senior Leverage Ratio at September 30, 2023.

The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at December 31, 2024.

The non-compliance was cured through a waiver under the Fifth Amendment.

In February 2024, the Company paid $ 1.7 million, inclusive of a $ 0.1 million pre-payment penalty, to Whitehawk to maintain compliance with the borrowing base covenant calculation as of January 31, 2024.

After the payment the Company was in compliance with the borrowing base covenant.

The Company also was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at June 30, 2024.

The non-compliance was cured through a waiver under the Seventh Amendment.

The Company also was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at September 30, 2024 and its borrowing base covenant for the month ended October 31, 2024.

The non-compliance was cured through a waiver under the November 2024 Waiver.

In conjunction with obtaining the waiver, the Company paid down approximately $ 1.1 million under the Credit Agreement, inclusive of $ 60 thousand of prepayment penalties.

In addition, the Company was not in compliance with its borrowing base covenant under the Credit Agreement at December 31, 2024, January 31, 2024 and February 28, 2025.

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 Company also was not in compliance with its financial covenant related to the borrowing base under the Credit Agreement at March 31, 2025.

However, the non-compliance was cured by the payment of approximately $1.3 million under the Credit Agreement in April and May 2025.

Issuance Cost and Warrants

In conjunction with its receipt of the Initial Loan, the Company issued to the Lender (i) 66,022 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 255,411 shares of Class A common stock (subject to increase to the extent that 3 % of any Series B and Series C convertible preferred stock converted into Class A common stock), exercisable at $ 16.00 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 September 30, 2022, in the event the Company’s stock is then trading below $ 16.00 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) 13,205 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 51,083 shares of Class A common stock (subject to increase to the extent that 3% of any Series B and Series C convertible preferred stock converted into Class A common stock), exercisable at $80.00 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 September 30, 2022, in the event the Company’s stock is then trading below $80.00 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.

1 unchanged sentence

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

The Warrants repriced on March 31, 2022 to $ 9.52 per share and the number of Warrant shares increased to 429,263 .

The warrants repriced on March 31, 2022 to $47.60 per share and the shares increased to 85,853.

On July 22, 2022, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited institutional investor.

According to the terms of the Credit Agreement, as amended, the Purchase Agreement triggered a reduction of the exercise price of the warrants and a revaluation of the derivative liability.

The Whitehawk Warrants were repriced to $ 8.80 and the number of Warrant shares increased to 464,385 .

The Whitehawk warrants were repriced to $44.00, and shares increased to 92,877.

On February 19, 2025, the Company entered into a Securities Purchase Agreement (the “2025 Purchase Agreement”) with certain institutional accredited investors.

According to the terms of the Credit Agreement, as amended, the Purchase Agreement triggered a reduction of the exercise price of the Whitehawk warrants and a revaluation of the derivative liability.

The Whitehawk warrants were repriced to $19.39, and shares increased to 210,723.

NOTE 9 – DERIVATIVE LIABILITIES

3 unchanged sentences

The Company used a Model Monte Carlo Simulation model to determine the fair value of the derivative liabilities.

September 30, 2024

March 31, 2025

Common stock issuable upon exercise of warrants 92,877

13 unchanged sentences

Expected dividend yields (3) — %

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

(2) The historical trading volatility was based on historical fluctuations in stock price for Boxlight and certain peer companies.

(1) The risk-free interest rate was determined using the applicable Treasury Bill as of the measurement date.

(2) The historical trading volatility was based on historical fluctuations in stock price for Boxlight.

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

Following the private placement offering in February 2025, which included the sale of warrants (the “2025 Common Warrants”) to purchase up to an aggregate of 1,323,000 shares of Class A Common Stock, the Company, assisted by third-party valuation experts, used a Monte Carlo Simulation model to determine the fair value of the derivative liabilities.

Three Months Ended

March 31, 2025

Common stock issuable upon exercise of 2025 Common Warrants

Market value of common stock on measurement date $ 1.46

Exercise price $ 2.13

Risk free interest rate (1) 3.99 %

Expected life in years 5.39 years

Expected volatility (2) 119 %

Expected dividend yields (3) — %

(1) The risk-free interest rate was determined using the applicable Treasury Bill as of the measurement date.

(2) The historical trading volatility was based on historical fluctuations in stock price for Boxlight.

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

NOTE 10 – INCOME TAXES

1 unchanged sentence

Three Months Ended

September 30, Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

March 31, Three Months Ended

United States $ (2,232) $ (6,109)

1 unchanged sentence

Total pretax book loss $ (3,393) $ (6,219)

The Company recorded income tax benefit of $ 12 thousand and income tax expense of $ 3.1 million for the three months ended September 30, 2024 and 2023, respectively, and income tax expense of $ 767 thousand and $ 3.4 million for the nine months ended September 30, 2024 and 2023, respectively.

The effective tax rate was ( 7.1 )% and ( 18.7 )% for the nine months ended September 30, 2024 and September 30, 2023.

The negative year to date effective tax rate is due to the Company paying income taxes in various jurisdictions while incurring a worldwide net loss.

The decrease in income tax expense year-over-year is primarily due to an increase in the forecasted worldwide net loss for the nine months ended September 30, 2024 as compared to the prior year.

The Company recorded income tax benefit of $150 thousand and income tax expense of $870 thousand for the three months ended March 31, 2025 and 2024, respectively.

The effective tax rate was 4.4% due to various permanent differences for Boxlight and a change in valuation allowance for certain deferred assets.

The Sahara entities are fully taxable.

The decrease in tax expense year-over-year is largely due to increase in book loss and limitation on interest expense and net operating loss (“NOL”) for the three months ended March 31, 2025 as compared to prior year estimates for the three months ended March 31, 2024.

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.

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 its net operating losses.

The legacy Boxlight entities are in a net deferred tax asset position in the United States 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.

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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 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 September 30, 2024 and December 31, 2023.

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 March 31, 2025 and December 31, 2024.

The Company completed its IRC Sec.

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This caused a limit on the net operating losses generated before 2020.

Due to the full

valuation allowance on net operating loss carryovers, there is no impact to the interim financial statements as a result of this limitation.

Due to the full valuation allowance on net operating loss carryovers, there is no impact to the interim financial statements as a result of this limitation.

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 2011 to 2024 remain open to examination in the U.S.

federal jurisdiction and in most U.S.

state jurisdictions.

federal jurisdiction.

The tax years from 2023 to 2024 remain open to examination in the U.K.

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This amount includes $24 thousand of income tax and $71 thousand of penalties and interest.

The Company has not identified any other material uncertain tax positions during the three months ended September 30, 2024.

The Organization for Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%.

Numerous countries, including European Union member states, have enacted or are expected to enact legislation to be effective as early as January 1, 2024, with general implementation of a global minimum tax rate by January 1, 2025.

We are currently evaluating the potential impact of the rules on our consolidated financial statements and related disclosures.

The Company has not identified any other material uncertain tax positions during the three months ended March 31, 2025.

NOTE 11 – EQUITY

Preferred Shares

Preferred Stock

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

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Each authorized series of preferred stock is described below.

Issuance of Preferred Shares

Issuance of Preferred Stock

Series A Preferred Stock

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

As of September 30, 2024, a total of 167,972 shares of Series A preferred stock remained outstanding which can be converted into 33,461 shares of Class A common stock, at the discretion of the Series A stockholder.

As of March 31, 2025, a total of 167,972 shares of Series A preferred stock remained outstanding which can be converted into 6,693 shares of Class A common stock, at the discretion of the Series A stockholder.

Series B Preferred Stock and Series C Preferred Stock

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

On February 20, 2025, the Company 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.

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

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The aggregate estimated fair value of the Series B and C preferred stock of $28.5 million was included as part of the total consideration paid for the purchase of Sahara.

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

The Company’s authorized common stock consists of 1) 18,750,000 shares of Class A voting common stock and 2) 50,000,000 shares of Class B non-voting common stock.

The Series B Preferred Stock has been recorded at its estimated fair value on the date of issuance of approximately $16.1 million, which includes the conversion and redemption features as they have not been bifurcated from the host instruments.

The Series C Preferred Stock has been recorded at its estimated fair value on the date of issuance of approximately $12.4 million, which includes the redemption features as they have not been bifurcated from the host instrument.

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

Following the Company's one-for-five reverse stock split in February 2025, the Company’s common stock consists of 3,750,000 shares of Class A voting common stock and 50,000,000 shares of Class B non-voting common stock.

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

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

No Class B shares were outstanding as of September 30, 2024 or December 31, 2023.

The Company had equity warrants outstanding of 921,618 and 921,306 as of September 30, 2024 and December 31, 2023, respectively.

Repurchase Plan

On February 14, 2023, the Board of Directors of Boxlight Corporation approved the Company’s establishment of a share repurchase program (the “Repurchase Program”) authorizing the Company to purchase up to $ 15.0 million of the Company’s Class A common stock.

Pursuant to the Repurchase Program, the Company may, from time to time, repurchase its Class A common stock in the open market, in privately negotiated transactions or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in accordance with applicable securities laws and other restrictions.

The timing and total amount of any repurchases made under the Repurchase Program will depend upon business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices, and other considerations.

The authorization expires on January 26, 2027, may be suspended or discontinued at any time, and does not obligate the Company to acquire any amount of Class A common stock.

As of September 30, 2024, the Company has not utilized the Repurchase Program.

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

As of March 31, 2025 and December 31, 2024, the Company had 2,232,578 and 1,970,615 shares of Class A common stock issued and outstanding, respectively.

No Class B shares were outstanding as of March 31, 2025 or December 31, 2024.

Private Placement

On February 19, 2025, the Company entered into a Securities Purchase Agreement (the “2025 Purchase Agreement”) with certain institutional accredited investors, pursuant to which the Company agreed to issue and sell, in a private placement priced at-the-market under the rules of The Nasdaq Stock Market (the “2025 Private Placement”), an aggregate of (i) 260,000 shares (the “2025 Shares”) of the Company’s Class A common stock, (ii) pre-funded warrants (the “2025 Pre-Funded Warrants”) to purchase up to an aggregate of 1,063,000 shares of Class A Common Stock (the “2025 Pre-Funded Warrant Shares”), and (iii) warrants (the “2025 Common Warrants” and, together with the 2025 Pre-Funded Warrants, the “2025 Warrants”) to purchase up to an aggregate of 1,323,000 shares of Class A Common Stock (the “2025 Common Warrant Shares” and, together with the 2025 Pre-Funded Warrant Shares, the “2025 Warrant Shares”).

The purchase price of each 2025 Share and accompanying 2025 Common Warrant was $2.13, and the purchase price of each 2025 Prefunded Warrant and accompanying 2025 Common Warrant was $2.1299.

The 2025 Private Placement closed on February 21, 2025, and the Company issued the 2025 Shares and executed and delivered the 2025 Warrants.

The gross proceeds from the 2025 Private Placement were approximately $2.8 million, before deducting placement agent fees and other private placement expenses.

Each 2025 Pre-Funded Warrant has an initial exercise price of $0.0001 per share (subject to adjustments as set forth therein), is immediately exercisable upon issuance and will expire when exercised in full.

Each 2025 Common Warrant has an initial exercise price of $2.13 per share (subject to adjustments as set forth therein), is exercisable six months following the date of issuance and will expire five and a half years from the date of issuance.

Pursuant to the Purchase Agreement, the Company filed a registration statement on Form S-3 (the “Registration Statement”) with the Securities Exchange Commission (“SEC”) on April 7, 2025 to register the resale of the 2025 Shares and the 2025 Pre-Funded Warrant Shares.

The Registration Statement was declared effective by the SEC on April 24, 2025.

Following the 2025 Private Placement, which included the sale of the 2025 Common Warrants, 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 2025 Common Warrants be exercised.

During 2025, the Company intends to request shareholder approval to amend the Company’s articles of incorporation to increase the number of authorized shares of Class A common stock.

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

Amendments to Certificates of Designation

The Company had equity warrants outstandi ng of 2,663,201 and 277,201 as of March 31, 2025 and December 31, 2024, respectively.

NOTE 12 – STOCK COMPENSATION

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(i) the 2014 Equity Incentive Plan, as amended (the “2014 Plan”), pursuant to which a total of 159,761 shares of the Company’s Class A common stock have been approved for issuance, and (ii) the 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which a total of 125,000 shares of the Company’s Class A common stock have been approved for issuance.

Upon approval of the 2021 Plan in September 2022, any shares remaining available for issuance under the 2014 Plan were cancelled, and all future grants were issued under the 2021 Plan.

Upon approval of the 2021 Plan in March 2023, any shares remaining available for issuance under the 2014 Plan were cancelled, and all future grants were issued under the 2021 Plan.

The 2021 Plan allows for issuance of shares of our Class A common stock, whether through restricted stock, restricted stock units, options, stock appreciation rights or otherwise, to the Company’s officers, directors, employees and consultants.

Stock Options

Under the Company’s stock option program, pursuant to the 2014 Plan and 2021 Plan, employees may be eligible to receive awards 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).

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

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

We record compensation expense based on the

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

Under our Equity Incentive Plans, an employee may receive an award of stock option grants 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 (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.

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

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

The following is a summary of the option activities during the nine months ended September 30, 2024:

The following is a summary of the option activities during the three months ended March 31, 2025:

Number of Units

Outstanding, December 31, 2024 34,141

Forfeited ( 29,302 )

Expired (625)

Outstanding, September 30, 2024 180,832

Exercisable, September 30, 2024 173,013

Outstanding, March 31, 2025 33,516

Exercisable, March 31, 2025 32,558

Restricted Stock Units

Under the Company’s 2014 Plan and 2021 Plan, the Company may grant restricted stock units (“RSUs”) to certain employees and non-employee directors.

Each RSU represents a contingent right to receive one share of Class A common stock.

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 nine months ended September 30, 2024:

The following is a summary of the RSU activities during the three months ended March 31, 2025:

Number of Units

Outstanding, December 31, 2024 14,636

Granted 15,999

Vested (1,930)

Forfeited (639)

Outstanding, September 30, 2024 84,592

Outstanding, March 31, 2025 12,067

The following is a summary of the warrant activities for warrants to purchase Class A common stock during the three months ended March 31, 2025:

Outstanding, December 31, 2024 277,201

Granted 2,386,000

Outstanding, March 31, 2025 2,663,201

Exercisable, March 31, 2025 2,663,201

Stock Compensation Expense

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The LTIP awarded to the Company's Board of Directors have a performance period ending on March 31, 2025, whereas the LTIP awarded to senior management have three consecutive 12-month performance periods ending June 30, 2025, June 30, 2026, and June 30, 2027.

The target payout under the LTIP awarded to the Board of Directors and senior management is $420 thousand and $1.1 million, respectively.

If the Company’s performance relative to the performance goal during the performance cycle is not equal to the performance target, the target Cash LTIP Award will be adjusted based on actual performance.

Consequently, the projected payout under the LTIP awarded to the Board was $236 thousand as of March 31, 2025 due to the change in stock price.

At no time during the performance cycle shall the payout be less than 1/3 or exceed 3 times the target cash LTIP Award, unless a change a control has occurred.

Cash payments are subject to the Company’s compliance with all covenants contained in the Company’s credit facilities in effect at the conclusion of each performance cycle.

There have been no cash payments as of September 30, 2024.

There have been no cash payments as of March 31, 2025.

As amounts earned for the awards are based on changes in the Company's stock price, the Company will recognize a liability for compensation cost each reporting period based on the fair value as of each reporting date proportionally with the elapsed time at each reporting period.

The liability is recognized in other short-term liabilities in the consolidated balance sheets.

The Company used a Model Monte Carlo Simulation model to determine the fair value of the

LTIP as of September 30, 2024 to be $ 274 thousand.

Key inputs to the valuation of the awards include the stock price as of the award effective date and the valuation date, the discount rate, and historical volatility in the Company’s stock price.

September 30, 2024

The Company used a Model Monte Carlo Simulation model to determine the fair value of the LTIP as of March 31, 2025 to be $189 thousand.

Key inputs to the valuation of the

awards include the stock price as of the award effective date and the valuation date, the discount rate, and historical volatility in the Company’s stock price.

March 31, 2025

Market value of common stock on measurement date $ 1.46

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Expected volatility (2) 131 %

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

(2) The historical trading volatility was based on historical fluctuations in stock price for Boxlight and certain peer companies.

For the three and nine months ended September 30, 2024 and 2023, the Company recorded the following stock compensation in general and administrative expense (in thousands):

(1) The risk-free interest rate was determined using the applicable Treasury Bill as of the measurement date.

(2) The historical trading volatility was based on historical fluctuations in stock price for Boxlight.

For the three months ended March 31, 2025 and 2024, the Company recorded the following stock compensation in general and administrative expense (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Stock options $ 5 $ 104

Restricted stock units 66 444

Warrants — 1 1 2

Equity based warrants 30 1

Long-term incentive plan 68 —

Total stock compensation expense $ 169 $ 549

As of March 31, 2025, there was approximately $0.3 million of unrecognized compensation expense related to unvested options, RSU’s, and warrants, which will be amortized over the remaining vesting period.

NOTE 13 – RELATED PARTY TRANSACTIONS

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The agreement, unless cancelled, will automatically renew on December 31, 2025.

For the nine months ended September 30, 2024 and 2023, the Company paid $ 189 thousand and $ 92 thousand under the agreement, respectively.

For the three months ended March 31, 2025 and 2024, the Company paid $42 thousand and $79 thousand under the agreement, respectively.

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

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On January 4, 2024, Mr.

Pope's employment with the Company terminated at which time his Management Agreement became effective.

For the nine months ended September 30, 2024, the Company paid $ 250 thousand under the agreement.

Pope’s employment with the Company terminated.

In accordance with the Management Agreement, Mr.

Pope is expected to continue providing consulting services to the Company for the subsequent 13 months.

For the three months ended March 31, 2025, the Company paid $43 thousand under the agreement.

Pope continues to serve as a director of the Company.

NOTE 14 – COMMITMENTS AND CONTINGENCIES

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

As of September 30, 2024, the total amount of such open inventory purchase orders was $ 12.9 million.

As of March 31, 2025, the total amount of such open inventory purchase orders was $18.1 million.

NOTE 15 – CUSTOMER AND SUPPLIER CONCENTRATION

There was one customer that accounted for greater than 10% of the Company's consolidated revenues for the nine months ended September 30, 2024 and 2023.

Details are as follows:

Customer Total revenues

from the customer

as a percentage of

total revenues

for the nine months ended

September 30,

2024 Accounts

receivable from

the customer as of

September 30,

(in thousands) Total revenues

from the customer

as a percentage of

total revenues

for the nine months ended

September 30,

2023 Accounts

receivable from

the customer as of

September 30,

(in thousands)

1 10.0 % $ 581 12.8 % $ 5,417

For the nine months ended September 30, 2024 and 2023, the Company’s purchases were concentrated primarily with one vendor .

There was no customer that accounted for greater than 10% of the Company's consolidated revenues for the three months ended March 31, 2025 and 2024.

For the three months ended March 31, 2025 and 2024, the Company’s purchases were concentrated primarily with one vendor .

Details are as follows:

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total cost of

the nine months ended

September 30,

the three months ended

2025 Accounts payable

to the vendor

September 30,

(in thousands) Total purchases

2 unchanged sentences

of total cost of

the nine months ended

September 30,

the three months ended

2024 Accounts payable

the vendor as of

September 30,

(in thousands)

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Information about our Company’s operations by operating segment is shown in the following tables (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

March 31, 2025

Americas EMEA Rest of World Eliminations and Adjustments Total

Revenues, net $ 9,888 $ 12,703 $ 317 $ (485) $ 22,423

Americas $ 16,719 $ 25,717 $ 57,044 $ 76,851

EMEA 20,412 24,330 57,955 68,249

Rest of World ( 215 ) 799 412 2,443

Eliminations and Adjustments (1)

Cost of sales $ 5,065 $ 9,461 $ 125 $ (271) $ 14,380

Segment gross profit $ 4,823 $ 3,242 $ 192 $ (214) $ 8,043

General and administrative expenses $ 4,906 $ 5,038 $ 95 $ — $ 10,039

Impairment of goodwill $ — $ — $ — $ — $ —

Interest expense $ 2,367 $ 120 $ — $ — $ 2,487

Income tax expense $ (13) $ (137) $ — $ — $ (150)

Other segment items (3)

$ (406) $ (505) $ — $ (179) $ (1,090)

Total Revenues, net $ 36,289 $ 49,667 $ 111,897 $ 137,909

Income (Loss) from Operations

Americas ( 1,485 ) ( 5,124 ) ( 3,710 ) ( 2,330 )

EMEA 831 ( 6,945 ) 613 ( 8,205 )

Rest of World ( 221 ) 401 ( 114 ) 806

Eliminations and Adjustments (1)

Net Loss $ (2,031) $ (1,274) $ 97 $ (35) $ (3,243)

(1) Eliminations and adjustments represent net sales between the Americas, EMEA and Rest of World segments.

Sales between these segments are generally valued at market.

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the Chief Operating Decision Maker.

(3) Other Segment items for reach reportable segment includes:

Research and development - consists primarily of personnel related costs, prototype and sample costs, design costs, and global product certifications mostly for wireless certifications.

Other Expense - consists of interest expense associated with our debt financing arrangements, the effects of changes in the fair value of derivative liabilities and warrants.

March 31, 2024

Americas EMEA Rest of World Eliminations and Adjustments Total

Revenues, net $ 17,530 $ 21,001 $ 284 $ (1,722) $ 37,093

Cost of sales $ 10,801 $ 14,836 $ 190 $ (1,549) $ 24,278

Segment gross profit $ 6,729 $ 6,165 $ 94 $ (173) $ 12,815

General and administrative expenses $ 9,378 $ 5,787 $ 84 $ — $ 15,249

Impairment of goodwill $ — $ — $ — $ — $ —

Interest expense $ 2,545 $ 62 $ — $ — $ 2,607

Income tax expense $ 720 $ 150 $ — $ — $ 870

Other segment items (3)

$ 951 $ 343 $ — $ (116) $ 1,178

Total Loss from Operations $ ( 859 ) $ ( 11,599 ) $ ( 3,242 ) $ ( 9,703 )

Net Loss $ (6,865) $ (177) $ 10 $ (57) $ (7,089)

(1) Eliminations and adjustments represent net sales between the Americas, EMEA and Rest of World segments.

Sales between these segments are generally valued at market.

September 30,

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the Chief Operating Decision Maker.

(3) Other Segment items for reach reportable segment includes:

Research and development - consists primarily of personnel related costs, prototype and sample costs, design costs, and global product certifications mostly for wireless certifications.

Other Expense - consists of interest expense associated with our debt financing arrangements, (gains) or losses on settlements of debt, and the effects of changes in the fair value of derivative liabilities.

2025 December 31,

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Total Identifiable Assets $ 108,696 $ 115,305

NOTE 17 – SUBSEQUENT EVENTS

Subsequent to the end of the third quarter of 2024, the Company was not in compliance with its borrowing base covenant under the Credit Agreement for the month ended October 31, 2024.

On November 14, 2024, the Company a waiver for the Credit Agreement to waive any events of default that may have arisen directly as a result of (i) the Financial Covenant Default (as defined in the November 2024 Waiver) at September 30, 2024 and (ii) the Borrowing Base Default (as defined in the November 2024 Waiver) for the month ended October 31, 2024.

In conjunction with obtaining the waiver, the Company paid down approximately $ 1.1 million under the Credit Agreement, inclusive of $ 60 thousand of prepayment penalties.

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