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Item 1A. Risk Factors

2025-11-14 compared with 2025-08-13 · 50 added, 64 removed, 19 unchanged (86% of the section changed)

For information regarding other risk factors pertinent to the Company’s business please refer to Part I Item 1A of the Company’s 2024 Annual Report on Form 10-K, which was filed with the SEC on March 28, 2025 and is incorporated by reference herein, as further updated and supplemented by the risk factors set forth below.

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

On April 7, 2025, the Company received a letter (the “Notice”) from the staff at 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:

(1) stockholders’ equity of at least $2.5 million;

(2) market value of listed securities of at least $35 million;

or (3) net income from continuing operations of $0.5 million in the most recently completed fiscal year or in two of the three most recently completed fiscal years.

In its Annual Report on Form 10-K for the year ended December 31, 2024, the Company reported (i) stockholders’ equity of $12.9 million at December 31, 2024, and (ii) net losses of $28.3 million and $39.2 million for the years ended December 31, 2024, and 2023, respectively.

In addition, based on the consolidated closing bid price of the Company’s Class A Common Stock on the Nasdaq Capital Market on April 4, 2025 of $1.27, the market value of the Company’s listed securities was $2,830,180 as of such date.

The Notice has no immediate effect on the Company’s listing on the Nasdaq Capital Market.

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 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.

In addition, on May 23 2025, R.

Wayne Jackson, 67, resigned as a director of the Company for personal reasons.

As a result of Mr.

Jackson’s resignation, the Company is not in compliance with Nasdaq Rule 5605(c)(2)(A), which requires, among other things, that audit committees have at least three members and that at least one member have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication.

Pursuant to Nasdaq Rule 5605(c)(4)(B), the Company has 180 days from the date of Mr.

Jackson’s resignation, or until November 19, 2025, to cure the noncompliance, which the Company currently expects to do by recruiting another director with the requisite qualifications to serve on the Audit Committee.

There is no guarantee, however, that the Company will be able to recruit a qualified individual, or that the Company will regain compliance with Nasdaq Rule 5605(c)(2)(A).

Jackson’s resignation has also resulted in the Company not being in compliance with Nasdaq Rule 5605(b)(1), which requires that a majority of the Board of Directors must be comprised of independent directors as defined in Nasdaq listing standards.

Pursuant to Nasdaq Rule 5605(b)(1)(A), the Company also has 180 days from the date of Mr.

Jackson’s resignation, or until November 19, 2025, to cure this noncompliance.

Subsequently, on June 6, 2025, Charles P.

Amos resigned as a director of the Company.

Amos’ resignation, regaining compliance with Nasdaq’s majority-independent board requirement required additional action by the Company beyond replacing Mr.

Jackson with a suitable successor.

In connection therewith, on June 16, 2025, James Mark Elliott, 72, resigned as a non-executive director of the Company, in an effort to help the Company begin to address its non-compliance with Nasdaq Rule 5605(b)(1), The Company currently intends to retain Mr.

Elliott as an advisor to the Board and re-elect Mr.

Elliott as a board member once the Company has regained compliance with the Nasdaq listing standards regarding independent directors.

However, there is no guarantee that the Company will be able to recruit a qualified individual, or that the Company will regain compliance with Nasdaq Rule 5605(b)(1)(A).

In addition, as previously reported, on February 28, 2024, Boxlight Corporation, a Nevada corporation (the “Company”), received a letter from the staff of Nasdaq, notifying the Company that, based upon the closing bid price of the Company’s Class A common stock for the previous 30 consecutive business days, the Company no longer met the requirements of Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

The Company was provided an initial period of 180 calendar days, or until August 26, 2024, to regain compliance with the Bid Price Rule.

As previously reported, on

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

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

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

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

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

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

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

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

While the Company regained compliance with the Bid Price Rule at that time, there can be no assurance that the Company will maintain compliance with the Bid Price Rule, in the future.

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

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

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

In the event our stock is delisted from Nasdaq, whether by choice or otherwise, the delisting of our Class A common stock could significantly impair our ability to raise capital and stockholder value.

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

As of June 30, 2025, we owed $39.0 million to the Lender under our Credit Agreement.

We have a substantial amount of indebtedness maturing December 31, 2025.

We do not anticipate being able to repay such indebtedness by such date.

We have a significant amount of indebtedness.

As September 30, 2025, we owed $36.7 million to the lender under our credit agreement, all of which is secured.

The loans mature on December 31, 2025.

As of September 30, 2025, our cash and cash equivalents were approximately $11.8 million.

We do not expect to be in a position to be able to repay the loans by December 31, 2025.

While the Company is actively working to refinance its debt, there can be no assurance that these efforts will be successful prior to the maturity date, at which time all amounts under the credit agreement will become due.

If the lender forecloses on the loan, it is unlikely that the Company will able to continued as a going concern, and the Company would be insolvent, and common stockholders could lose most or all of their investment.

Our substantial amount of indebtedness could have other important consequences.

For example, it could:

• increase our vulnerability to adverse economic, industry or competitive developments;

• require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use cash flow to fund our operations, capital expenditures and future business opportunities;

• limit our ability to service our indebtedness;

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

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

In addition, borrowings under the credit agreement bear interest at variable rates.

If these rates were to increase significantly, the risk related to our substantial indebtedness would intensify.

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

We have not complied with certain covenants, including minimum liquidity and borrowing base requirements, under the credit agreement and, if the lender declared an event of default and accelerated the loans, this could cause us to be unable to continue to operate as a going concern.

As of September 30, 2025, we owed $36.7 million to the lender under our credit agreement.

As previously disclosed, we have been unable to comply with certain covenants under our credit agreement with the lender.

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

Recently, 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, March 31, 2025 and June 30, 2025.

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, March, 31, 2025, April 30, 2025 and May 31, 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 2025 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 is not subject to prepayment penalties.

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

Recently, 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, March 31, 2025, June 30, 2025 and September 30, 2025.

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, February 28, 2025, March, 31, 2025, April 30, 2025, May 31, 2025, June 30, 2025, July 31, 2025, August 31, 2025 or September 30, 2025.

On March 24, 2025, the Company entered into an eighth amendment to the credit agreement with the collateral agent and lender to (i) provide the Company with an additional $2.5 million working capital bridge loan in March 2025 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, was due and payable in full on August 31, 2025.

In conjunction with obtaining the waiver, the Company also was required to 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 (the “Recapitalization Requirement”).

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

The Company did not meet the Recapitalization Requirement.

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

The Company did not meet this requirement.

• 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 Eighth 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.

The Company applied these payments to the bridge loan and related fee, leaving a balance due at August 31, 2025 of $1.4 million.

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.

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

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

As noted above, the Company was not in compliance with its financial covenant related to the borrowing base under the credit agreement at March 31, 2025.

However, the noncompliance was cured by the payment of approximately $1.3 million under the credit agreement in April and May 2025.

The Company applied these payments to the bridge loan and related fee, leaving a balance due on August 29, 2025 of $1.4 million, which the Company paid by the due date.

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 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 set forth in the eighth amendment.

Pursuant to 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.

Although prior defaults have been waived or cured as set forth above, the Company’s noncompliance with the borrowing base covenant at August 31, 2025 and September 30, 2025 and the Senior Leverage Ratio at September 30, 2025 remain open, as well as noncompliance with certain non-financial covenants.

Because of the significant decreases in the required senior leverage ratio that have occurred within the past 18 months, our current forecast projects that we may not be able to maintain compliance with this ratio.

7 unchanged sentences

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

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

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

From time to time, the Company has been out of compliance with Nasdaq’s listing standards.

On April 7, 2025, the Company received a letter from Nasdaq notifying the company that it did not satisfy the continued listing requirements under Nasdaq Listing Rule 5550(b), specifically the requirements that listed companies maintain stockholders’ equity of at least $2.5 million.

The Company subsequently submitted a compliance plan to Nasdaq and took steps to remedy the noncompliance, which resulted in Nasdaq confirming on October 8, 2025 that the Company was in compliance with the stockholders’ equity rule.

Nasdaq however indicated that it will continue to monitor the Company’s compliance with the minimum stockholders’ equity requirements and, if at the time of its next periodic report the Company does not comply, the Company may be subject to delisting.

T he Company also previously reported, due to director resignations, noncompliance with Nasdaq Rule 5605(c)(2)(A), which requires, among other things, that audit committees have at least three members, of which at least one member have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual’s financial sophistication.

The resignations also resulted in the Company not being in compliance with Nasdaq Rule 5605(b)(1), which requires that a majority of the board of directors must be comprised of independent directors as defined in Nasdaq listing standards.

The Company was subsequently able to regain compliance with these requirements through election of new directors, as confirmed by Nasdaq on October 8, 2025.

In addition, the Company has previously not been compliant with Nasdaq Listing Rule 5550(a)(2), which requires that listed companies maintain a minimum closing bid price.

The Company resolved that issue with a reverse stock split of

its authorized, issued and outstanding shares of Class A common stock, at a ratio of 1-for-5 which became effective on February 14, 2025.

While the Company has resolved prior instances of Nasdaq listing noncompliance, and the Company believes, as of the date hereof, that it is in compliance with Nasdaq’s listing standards, the Company’s history of noncompliance could suggest that further incidents of noncompliance could occur in the future.

In particular, Nasdaq has informed the Company that it will review this Quarterly Report on Form 10-Q for compliance with the stockholders’ equity standard.

UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASE OF EQUITY SECURITIES

4 unchanged sentences

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 1A. Risk Factors