What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-13 compared with 2025-05-14 · 73 added, 46 removed, 248 unchanged (32% of the section changed)

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• our ability to regain compliance with the Nasdaq Capital Market continued listing requirements and maintain a listing of our Class A common stock on Nasdaq Capital Market;

• our ability to comply with certain covenants, including achievement of a recapitalization and/or repayment of our term loan by June 16, 2025, as well as minimum liquidity and borrowing base requirements under our existing credit agreement, or in the alternative, to continue to obtain forbearances or waivers from the lender thereunder;

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

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

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• our ability to raise additional capital;

• our ability to increase the number of authorized shares of Class A common stock pursuant to our articles of incorporation;

• changes in the sales of our display products;

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

• unfavorable global economic or political conditions, including fluctuations in interest rates, inflation, declining consumer sentiment and market uncertainty, and the ongoing conflicts between Russia and Ukraine, and Israel and Hamas;

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

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

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

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

• changes in market saturation for our products;

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

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

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

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• our ability to protect or monetize our intellectual property;

• and those other risks referenced herein, including those risks referred to in Part II, Item 1A–“Risk Factors” in this Quarterly Report and those risks discussed in our other filings with the Securities and Exchange Commission (“SEC”), including those risks discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which discussion is incorporated herein by this reference.

(“SEC”), including those risks discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which discussion is incorporated herein by this reference.

Given these uncertainties, you should not place undue reliance on these forward-looking statements.

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We are a technology company that is seeking to become a world-wide leading innovator and integrator of interactive products and software for schools, education, business, and government interactive spaces.

We currently design,

produce and distribute interactive displays, collaboration software, supporting accessories and professional services.

We currently design, produce and distribute interactive displays, collaboration software, supporting accessories and professional services.

We also distribute science, technology, engineering, and math (or “STEM”) products, including a robotics and coding system, 3D printing solution and portable science lab.

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We are subject to income taxes in the jurisdictions in which we do business, including the United States, Canada United Kingdom, Mexico, Sweden, Finland, Holland, Australia, Denmark and Germany.

The United Kingdom, Mexico, Sweden, Finland, Holland, Germany, Australia, Canada, and Denmark have a statutory tax rate different from that of the United States.

The United Kingdom, Mexico,

Sweden, Finland, Holland, Germany, Australia, Canada, and Denmark have a statutory tax rate different from that of the United States.

Additionally, certain jurisdictions of the Company’s international earnings are also taxable in the United States.

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Operating Results – Boxlight Corporation

For the three-month periods ended March 31, 2025 and 2024

Total revenues for the three months ended March 31, 2025 were $22.4 million as compared to $37.1 million for the three months ended March 31, 2024, resulting in a 39.5% decrease.

The decrease in revenues was

due to lower sales volum e across all markets primarily resulting from lower global demand for interactive flat panel displays as well as competitive industry pricing .

For the three-month periods ended June 30, 2025 and 2024

Total revenues for the three months ended June 30, 2025 were $30.9 million as compared to $38.5 million for the three months ended June 30, 2024, resulting in a 19.9% decrease .

The decrease in revenues was due to lower sales volum e across all markets primarily resulting from lower global demand for interactive flat panel displays as well as competitive industry pricing .

On a sequential quarter basis, total revenues increased 37.6% from the three months ended March 31, 2025, which we believe is an encouraging sign.

Cost of Revenues.

Cost of revenues for the three months ended March 31, 2025 were $14.4 million as compared to $24.3 million for the three months ended March 31, 2024, resulting in a 40.8% decrease.

Cost of revenues for the three months ended June 30, 2025 were $20.1 million as compared to $24.0 million for the three months ended June 30, 2024, resulting in a 16.4% decrease .

The decrease in cost of revenues was attributable to the decrease in units sold.

Gross Profit.

Gross profit for the three months ended March 31, 2025 was $8.0 million as compared to $12.8 million for the three months ended March 31, 2024, a decrease of 37.2%.

Gross profit margin was 35.9% for the three months ended March 31, 2025 and 34.5% for the three months ended March 31, 2024.

The increase in gross profit margin is primarily related to the difference in product mix offset by increases in pricing pressure within the industry compared to the prior year quarter.

Gross profit for the three months ended June 30, 2025 was $10.8 million as compared to $14.5 million for the three months ended June 30, 2024, a decrease of 25.7% .

Gross profit margin was 35.0% for the three months ended June 30, 2025 and 37.7% for the three months ended June 30, 2024.

The decrease in gross profit margin is primarily related to the difference in product mix offset by increases in pricing pressure within the industry compared to the prior year quarter.

General and Administrative Expenses.

General and administrative expenses for the three months ended March 31, 2025 were $10 million, representing 44.8% of revenue as compared to $15.2 million representing 41.1% of revenue for the three months ended March 31, 2024.

The decrease in general and administrative expenses for the period ended March 31, 2025 was due to ongoing initiatives to reduce operating expenses across all cost groups, with the largest declines in employee-related expenses of $2.4 million, professional fees of $1.3 million, sales and marketing expenses of $0.9 million, travel expenses of $0.5 million and stock compensation expense of $0.4 million.

General and administrative expenses for the three months ended June 30, 2025 were $13.6 million, representing 44.0% of revenue as compared to $12.3 million representing 32.0% of revenue for the three months ended June 30, 2024.

The increase in general and administrative expenses for the period ended June 30, 2025 was primarily due to increase in professional fees of $0.7 million, depreciation and amortization of $0.6 million and other costs of $1.1 million, partially offset by a decrease in employee-related expenses of $1.4 million.

Research and Development Expenses.

Research and development expenses for the three months ended March 31, 2025 and 2024 were $0.9 million and $1.2 million, respectively and represented 4.1% and 3.2% of revenue, respectively.

The decrease can be attributable to management's ongoing initiatives to reduce operating expenses .

Research and development expenses for the three months ended June 30, 2025 and 2024 were $1.1 million and $1.0 million , respectively and represented 3.7% and 2.6% of revenue, respectively.

Other Expense.

Other expense, net for the three months ended March 31, 2025 was $0.5 million as compared to $2.6 million for the three months ended March 31, 2024 , representing a decrease of $2.1 million.

Other expense consists primarily of interest expense on our term loan offset by c hange in fair value of common warrants compared to the prior year quarter .

Net loss was approximately $3.2 million and $7.1 million for the three months ended March 31, 2025 and 2024, respectively, and was a result of the changes noted above.

Other expense, net for the three months ended June 30, 2025 was $0.5 million as compared to $2.8 million for the three months ended June 30, 2024 , representing a decrease of $2.3 million .

Other expense consists primarily of interest expense on our term loan, foreign currency translation, and the change in fair value of common warrants compared to the prior year quarter, and the decrease in the current period relates primarily to the positive impacts of foreign currency translation.

Net loss was approximately $4.7 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively, and was a result of the changes noted above.

For the six-month periods ended June 30, 2025 and 2024

Total revenues for the six months ended June 30, 2025 were $53.3 million as compared to $75.6 million for the six months ended June 30, 2024, resulting in a 29.5% decrease.

The decrease in revenues was due to lower sales volum e across all markets primarily resulting from lower global demand for interactive flat panel displays as well as competitive industry pricing .

Cost of Revenues.

Cost of revenues for the six months ended June 30, 2025 were $34.4 million as compared to $48.3 million for the six months ended June 30, 2024, resulting in a 28.6% decrease.

The decrease in cost of revenues was attributable to the decrease in units sold.

Gross Profit.

Gross profit for the six months ended June 30, 2025 was $18.8 million as compared to $27.3 million for the six months ended June 30, 2024, a decrease of 31.1%.

Gross profit margin was 35.4% for the six months ended June 30, 2025 and 36.2% for the six months ended June 30, 2024.

The decrease in gross profit margin is primarily related to the difference in product mix offset by increases in pricing pressure within the industry compared to the prior year quarter.

General and Administrative Expenses.

General and administrative expenses for the six months ended June 30, 2025 were $23.6 million, representing 44.3% of revenue as compared to $27.6 million representing 36.5% of revenue for the six months ended June 30, 2024.

The decrease in general and administrative expenses for the period ended June 30, 2025 was due to ongoing initiatives to reduce operating expenses across all cost groups, with the largest declines in employee-related expenses of $3.9 million, partially offset by higher depreciation and amortization expenses.

Research and Development Expenses.

Research and development expenses for the six months ended June 30, 2025 and 2024 were $2.0 million and $2.2 million, respectively and represented 3.8% and 2.9% of revenue, respectively.

The decrease was due to management's ongoing initiatives to reduce operating expenses.

Other Expense.

Other expense, net for the six months ended June 30, 2025 was $1.0 million as compared to $5.4 million for the six months ended June 30, 2024 , representing a decrease of $4.4 million.

Other expense consists primarily of interest expense on our term loan, foreign currency translation, and the c hange in fair value of common warrants compared to the prior year .

Net loss was approximately $8.0 million and $8.6 million for the six months ended June 30, 2025 and 2024, respectively, and was a result of the changes noted above.

Use of Non-GAAP financial measures

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EBITDA represents net loss before income tax expense, interest income, interest expense, depreciation and amortization.

Adjusted EBITDA represents EBITDA, plus stock compensation expense, the change in fair value of derivative liabilities, purchase accounting impact of fair valuing inventory and deferred revenue, change in fair value of warrants and severance charges.

Adjusted EBITDA represents EBITDA, plus stock compensation expense, the change in fair value of derivative liabilities, purchase accounting impact of fair valuing inventory and deferred revenue, loss on warrant issuance, change in fair value of warrants and severance charges.

Management uses EBITDA and Adjusted EBITDA as financial measures to evaluate the profitability and efficiency of the Company’s business model, and to assess the strength of the underlying operations of our business.

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(in thousands) Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

June 30, 2025 Three Months Ended

June 30, 2024 Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

Net Loss $ (4,719) $ (1,478) $ (7,962) $ (8,567)

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Change in fair value of derivative liabilities 42 (4) 51 (196)

Loss on warrant issuance — — 578 —

Change in fair value of common warrants

251 — — (1,685) —

Purchase accounting impact of fair valuing inventory — 113 — 225

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Adjusted EBITDA $ 1,273 $ 3,654 $ 1,826 $ 3,831

Note that the Change in fair value of common warrants from the three months ended March 31, 2025 was revised to include the Loss on warrant issuance of $578 thousand recorded in that period, resulting in an Adjusted EBITDA for the three months ended March 31, 2025 of $553 thousand.

Discussion of Effect of Seasonality on Financial Condition

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Liquidity and Capital Resources

As of March 31, 2025, we had cash and cash equivalents of $8.1 million, a working capital balance of $1.6 million, and a current ratio of 1.02.

As of March 31, 2024, we had $11.8 million of cash and cash equivalents, a working capital balance of $46.6 million, and a current ratio of 2.17.

For the three months ended March 31, 2025 and 2024, we had net cash used in operating activities of $4.7 million and $1.9 million, respectively.

Cash used in operating activities primarily relates to net loss for the three months ended March 31, 2025 as well as changes in working capital management.

We had net cash used in investing activities of $127 thousand and $394 thousand for the three months ended March 31, 2025 and 2024, respectively.

As of June 30, 2025, we had cash and cash equivalents of $7.6 million, a working capital balance of ($0.5) million, and a current ratio of 0.99.

As of June 30, 2024, we had $7.5 million of cash and cash equivalents, a working capital balance of $46.7 million, and a current ratio of 2.21.

For the six months ended June 30, 2025 and 2024, we had net cash used in operating activities of $3.1 million and $7.3 million, respectively.

Cash used in operating activities primarily relates to net loss for the six months ended June 30, 2025 as well as changes in working capital management.

We had net cash used in investing activities of $159 thousand and $411 thousand for the six months ended June 30, 2025 and 2024, respectively.

Cash used in investing activities is related to purchases of property and equipment.

For the three months ended March 31, 2025 and 2024, we had net cash provided by and used in financing activities of $4.6 million and $2.6 million, respectively.

Cash provided by financing activities in 2025 is related to proceeds from short-term debt of $2.5 million and proceeds from issuance of common stock and warrants of $2.8 million, partially offset by loss on revaluation of warrants and principal repayment of short-term debt of $0.7 million.

For the six months ended June 30, 2025 and 2024, we had net cash provided by and used in financing activities of $3.3 million and $1.4 million, respectively.

Cash provided by financing activities in 2025 is related to proceeds from short-term debt of $2.5 million and proceeds from issuance of common stock and warrants of $2.8 million, partially offset by the principal repayment of short-term debt of $2.0 million.

Our liquidity needs are funded by operating cash flows and available cash.

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We expect to make future payments on existing leases from cash generated from operations.

We have limited credit available from our major vendors and are required to prepay a percentage of our inventory purchases, which further constrains our cash liquidity.

We have limited credit available from our major vendors and are required to prepay a percentage of our

inventory purchases, which further constrains our cash liquidity.

In addition, our industry is seasonal with many sales to educational customers occurring during the second and third quarters when schools make budget appropriations and classes are not in session limiting disruptions related to product installation.

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

To the extent not previously converted into the Company’s Class A common stock, the outstanding shares of our Series B preferred stock are 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.

To the extent not previously converted into the Company’s Class A common stock, the outstanding shares of our Series B preferred stock are 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 “Series B Redeemed Shares”), plus (b) all accrued and unpaid dividends, if any, on such Series B 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.

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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.

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.

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

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In conjunction with obtaining the waiver pursuant to the Eighth Amendment, the Company must also comply with additional covenants, including meeting target completion milestones related to the Company’s recapitalization process, most notably achieving an expected completion of the recapitalization and/or repayment of its term loan by June 16, 2025.

In conjunction with obtaining the waiver pursuant to the Eighth Amendment, the Company was also required to comply with additional covenants, including meeting target completion milestones related to the Company’s recapitalization process, most notably achieving an expected completion of the recapitalization and/or repayment of its term loan by June 16, 2025 (the "Recapitalization Requirement").

In addition, the Company is required to provide budgets to the lender with variance analysis in excess of specified thresholds resulting in an event of default at the discretion of the lender.

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

The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at June 30, 2025.

In addition, the Company was not in compliance with its borrowing base covenant under the Credit Agreement at April 30, 2025, May 31, 2025, June 30, 2025, and July 31, 2025.

Further, the Company had not complied with the Recapitalization Requirement.

On August 13, 2025, the Company entered into a forbearance agreement and ninth amendment and waiver to the Credit Agreement with the Collateral Agent and Lender (the “Ninth Amendment”) to 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 Ninth Amendment) for the period ended June 30, 2025, (2) the Borrowing Base defaults described in the Ninth Amendment for the months ended April 30, 2024, May 31, 2025, June 30, 2025, and July 31, 2025, and (3) the failure to comply with the Recapitalization Requirement.

In connection with the Ninth Amendment, the Company agreed to increase its quarterly principal payment due on September 30, 2025 from the scheduled $0.7 million to $1.0 million and to change interest payments from being due quarterly to being due monthly beginning in August 2025.

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

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We are actively working to refinance our debt with new lenders.

While we have currently engaged financial advisors and are actively working to refinance our existing debt, we do not have written or executed agreements as of the issuance of this Form 10-K.

While we have currently engaged financial advisors and are actively working to refinance our existing debt, we do not have written or executed agreements as of the issuance of this Form 10-Q.

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

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

On April 7, 2025, the Company received a letter (the “Notice”) from the Listing Qualifications

Department of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b) for the Nasdaq Capital Market.

On April 7, 2025, the Company received a letter (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that it did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b) for the Nasdaq Capital Market.

Rule 5550(b) requires that a listed company must satisfy one of the following three standards:

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In accordance with Nasdaq rules, the Company has 45 calendar days from the date of the notification to submit a plan to regain compliance with Nasdaq Listing Rule 5550(b).

The Company intends to submit a compliance plan within 45 days of the date of the notification and will evaluate available options to resolve the deficiency and regain compliance.

If the Company’s compliance plan is accepted, the Company may be granted up to 180 calendar days from April 7, 2025, to evidence compliance.

There can be no assurance that the Company’s compliance plan will be accepted by Nasdaq, or that the Company will be able to obtain compliance with Rule 5550(b) within the prescribed timeframe.

The Company submitted a compliance plan within 45 days of the date of the notification with available options to resolve the deficiency and regain compliance.

The Company’s compliance plan was accepted on June 20, 2025, and the Company was granted until October 6, 2025, to evidence compliance.

There can be no assurance that the Company will be able to obtain compliance with Rule 5550(b) within the prescribed timeframe.

If the Company’s Class A Common Stock is delisted from the Nasdaq Capital Market, it could have a material adverse effect on the market price and liquidity of the Class A Common Stock and could materially impair the Company’s ability to raise equity capital.

Following a 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, 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.

If the Company’s Class A Common Stock does not receive shareholder approval for an increase in the number of authorized shares of Class A common stock available under its articles of incorporation, it could also materially impair the Company’s ability to raise equity capital.

On August 8, 2025, at the Company's annual meeting of shareholders, the Company’s shareholders approved an amendment to the Company's articles of incorporation to increase the number of authorized shares of Class A common stock from 3,750,000 to 25,000,000.

See Note 8 – Debt for a discussion of our existing debt financing arrangements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis