Boxlight Corp
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
BOXL$1.99+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-08.
0001628280-24-021699
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001628280-24-036937
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 82 previous paragraphs and 130 current paragraphs.
63 unchanged; 15 reworded; 48 added; 3 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (48)
Current report
Unless the context otherwise requires, the terms “the Company,” “we,” “us,” and “our” in this Quarterly Report refer to Boxlight Corporation and its consolidated direct and indirect subsidiaries, and the term “Boxlight” refers to Boxlight Inc., a Washington corporation and a wholly owned subsidiary of Boxlight Corporation. The terms “quarter” and “year to date” refer to our quarter ending June 30 th.
Current report
FORWARD LOOKING STATEMENTS
Current report
This Quarterly Report on Form 10-Q (including the section regarding Management’s Discussion and Analysis and Results of Operations, the "Quarterly Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these terms or other comparable terminology. These statements are only prediction, and are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Current report
Factors that may cause actual results to differ materially from current expectations include, among other things
Current report
•our ability to comply with certain covenants, minimum liquidity and borrowing base requirements under our existing credit agreement and our ability to continue to operate as a going concern;
Current report
•our indebtedness, a substantial amount of which is bearing interest at a variable rate;
Current report
•our ability to maintain a listing of our Class A common stock on Nasdaq Capital Market;
Current report
•changes in the sales of our display products;
Current report
•seasonal fluctuations in our business;
Current report
•changes in our working capital requirements and cash flow fluctuations;
Current report
•competition in our industry;
Current report
•our ability to enhance our products and to develop, introduce and sell new technologies and products at competitive prices and in a timely manner;
Current report
•our reliance on resellers and distributors to promote and sell our products;
Current report
•the success of our strategy to increase sales in the business and government market;
Current report
•changes in market saturation for our products;
Current report
•challenges growing our sales in foreign markets;
Current report
•our dependency on third-party suppliers;
Current report
•our reliance on highly skilled personnel;
Current report
•our ability to enter into and maintain strategic alliances with third parties;
Current report
•unfavorable global economic or political conditions, including the ongoing conflict between Russia and Ukraine, and Israel and Hamas;
Current report
•war, terrorism, other acts of violence, or potential effects of future pandemics;
Current report
•a breach in security of our electronic data or our information technology systems, including any cybersecurity attack;
Current report
•our ability to keep pace with developments in technology;
Current report
•changes in the spending policies or budget priorities for government funding of schools, colleges, universities, other education providers or government agencies;
Current report
•consumer product and environmental laws;
Current report
• risks inherently related to our foreign operations;
Current report
•our compliance with the Foreign Corrupt Practices Act;
Current report
•income taxation for our worldwide operations;
Current report
•our ability to ship and transport components and final products efficiently and economically across long distances and borders;
Current report
•compliance with export control laws;
Current report
•fluctuations in foreign currencies;
Current report
•unstable market and economic conditions and potential disruptions in the credit markets;
Current report
•defects in our products and detection thereof;
Current report
• patents or other intellectual property rights necessary to protect our proprietary technology and business;
Current report
•assertions against us relating to intellectual property rights;
Current report
•our ability to anticipate consumer preferences and successfully develop attractive products;
Current report
•our ability to develop, implement and maintain an effective system of internal control over financial reporting;
Current report
•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, 2023, which discussion is incorporated herein by this reference.
Current report
Given these uncertainties, you should not place undue reliance on these forward-looking statements. You should read this Quarterly Report and the documents that we reference in this Quarterly Report and have filed as exhibits thereto completely and with the understanding that our actual future results may be materially different from what we expect. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Current report
Revenues. Total revenues for the three months ended June 30, 2024 were $38.5 million as compared to $47.1 million for the three months ended June 30, 2023, resulting in a 18.1% decrease. The decrease in revenues was primarily due to lower sales volume across all markets primarily resulting from lower global demand for interactive flat panel displays.
Showing the first 40 of 48 passages. Open the source sections for the rest.
Removed paragraphs (3)
Previous report
General and Administrative Expenses. General and administrative expenses for thethree months ended March 31, 2024 were $15.2 million, representing 41.1% of revenue as compared to $14.7 million representing 35.8% of revenue for thethree months ended March 31, 2023. The increase in general and administrative expenses for the period ended March 31, 2024 can be attributed primarily to severance charges of approximately$0.9 million related to recent headcount reductions.
Previous report
Other Expense. Other expense, net for the three months ended March 31, 2024 was $2.6 million as compared to$2.7 million for the three months ended March 31, 2023, representing a decrease of$0.1 million. The decrease was due to a$0.4 million change in the fair value of derivative liabilities, offset by a$0.2 million increase in interest expense, and a $0.1 million increase in foreign currency transaction losses during the three months ended March 31, 2023.
Previous report
Derivative Warrant Liabilities
Reworded paragraphs (15)
Previous wording
Our operations are organized, managed, and classified into three reportable segments – Europe, Middle East, and Africa (“EMEA”), North and Central America (“Americas”), and all other geographic regions (“Rest of World”). Our EMEA segment consists of the operations of Sahara Holding Limited and its subsidiaries. Our Americas segment consists primarily of Boxlight, Inc. and its subsidiaries, and the Rest of World segment consists primarily of Boxlight Australia, PTY LTD (“Boxlight Australia”).
Current wording
Our operations are organized, managed, and classified into three reportable segments – Europe, Middle East, and Africa (“EMEA”), North and Central America (“Americas”), and all other geographic regions (“Rest of World”). Our EMEA segment consists of the operations of Sahara Holding Limited and its subsidiaries. Our Americas segment consists primarily of the operations of Boxlight, Inc. and its subsidiaries, and the Rest of World segment consists primarily of the operations of Boxlight Australia, PTY LTD (“Boxlight Australia”).
Previous wording
•Professional development revenue. We receive revenue from providing professional development services through third parties and our network of distributors.
Current wording
•Professional service revenue. We receive revenue from providing professional development services through third parties and our network of distributors.
Previous wording
Gross profit and gross profit margin have been, and may in the future be, influenced by several factors including: product, channel and geographical revenue mix; changes in product costs related to the release of projector models; and component, contract manufacturing and supplier pricing and foreign currency exchange. As we primarily procure our product components and manufacture our products in Asia, our suppliers incur many costs, including labor costs, in other currencies. To the extent that exchange rates move unfavorably for our suppliers, they may seek to pass these additional costs on to us, which could have a material impact on future average selling prices and unit costs. Gross profit and gross profit margin may fluctuate over time based on the factors described above.
Current wording
Gross profit and gross profit margin have been, and may in the future be, influenced by several factors including: product, channel and geographical revenue mix; changes in product costs related to the release of projector models; and component, contract manufacturing and supplier pricing, freight, duties, and other shipping costs, and foreign currency exchange. As we primarily procure our product components and manufacture our products in Asia, our suppliers incur many costs, including labor costs, in other currencies. To the extent that exchange rates move unfavorably for our suppliers, they may seek to pass these additional costs on to us, which could have a material impact on future average selling prices and unit costs. Gross profit and gross profit margin may fluctuate over time based on the factors described above.
Previous wording
Net Loss. Net loss was$7.1 million and$2.9 million for the three months ended March 31, 2024 and 2023, respectively, and was a result of the changes noted above.
Current wording
Net (Loss) Income. Net loss was $1.5 million and$0.8 million for the three months ended June 30, 2024 and June 30, 2023 and was a result of the changes noted above.
Previous wording
Revenues. Total revenues for thethree months ended March 31, 2024 were $37.1 million as compared to $41.2 million for thethree months ended March 31, 2023, resulting in a 9.9% decrease. The decrease in revenues was due to lower sales volume primarily in the U.S. markets.
Current wording
Revenues. Total revenues for thesix months ended June 30, 2024 were $75.6 million as compared to $88.2 million for thesix months ended June 30, 2023, resulting in a 14.3% decrease. The decrease in revenues was due to lower sales volume across all markets primarily resulting from lower global demand for interactive flat panel displays.
Previous wording
Cost of Revenues. Cost of revenues for thethree months ended March 31, 2024 were $24.3 million as compared to $26.0 million for thethree months ended March 31, 2023, resulting in a 6.8% decrease. The decrease in cost of revenues was attributable to the decrease in units sold.
Current wording
Cost of Revenues. Cost of revenues for thesix months ended June 30, 2024 were $48.3 million as compared to $55.3 million for thesix months ended June 30, 2023, resulting in a 12.7% decrease. The decrease in cost of revenues was attributable to the decrease in units sold.
Previous wording
Gross Profit. Gross profit for thethree months ended March 31, 2024 was $12.8 million as compared to $15.1 million for thethree months ended March 31, 2023, a decrease of 15.4%. Gross profit margin was 34.5% for thethree months ended March 31, 2024 and 36.8% for thethree months ended March 31, 2023. The decrease in gross profit margin is primarily related to a difference in product mix compared to the prior year quarter.
Current wording
Gross Profit. Gross profit for thesix months ended June 30, 2024 was $27.3 million as compared to $33.0 million for thesix months ended June 30, 2023, a decrease of 17.1%. Gross profit margin was 36.2% for thesix months ended June 30, 2024 and 37.4% for thesix months ended June 30, 2023. The decrease in gross profit margin is primarily related to a difference in product mix compared to the prior year quarter.
Previous wording
Research and Development Expenses. Research and development expenses for the three months ended March 31, 2024 and 2023 were $1.2 million and $0.6 million, respectively and represented 3.2% and 1.4% of revenue, respectively. The increase can be attributable to new research and development projects that began during the prior year.
Current wording
Research and Development Expenses. Research and development expenses for the six months ended June 30, 2024 and 2023 were $2.2 million and $1.1 million, respectively and represented 2.9% and 1.3% of revenue, respectively. The increase can be attributable to the allocation of certain general and administrative expenses to new and ongoing research and development projects.
Previous wording
Income Tax Expense. Income tax expense for the three months ended March 31, 2024 was $0.9 million, as compared to a $51 thousand for the three months ended March 31, 2023. The increase in tax expense is primarily due to higher U.S. taxes related to interest expense and increased net operating loss limitations.
Current wording
Income Tax Expense. Income tax expense for the six months ended June 30, 2024 was $779 thousand, as compared to a $306 thousand for the six months ended June 30, 2023. The increase in tax expense is primarily due to higher U.S. taxes related to interest expense and increased net operating loss limitations.
Previous wording
As of March 31, 2024, we had cash and cash equivalents of $11.8 million, a working capital balance of $46.6 million, and a current ratio of 2.17. On March 31, 2023, we had $11.3 million of cash and cash equivalents, a working capital balance of $61.6 million, and a current ratio of 2.75.
Current wording
As of June 30, 2024, we had cash and cash equivalents of $7.5 million, a working capital balance of $46.7 million, and a current ratio of 2.21. On June 30, 2023, we had $15.6 million of cash and cash equivalents, a working capital balance of $64.8 million, and a current ratio of 2.79.
Previous wording
For the three months ended March 31, 2024 and 2023, we had net cash used in operating activities of $1.9 million. We had net cash used in investing activities of $394 thousand and $81 thousand for the three months ended March 31, 2024 and 2023, respectively. Cash used in investing activities is related to purchases of property and equipment. For the three months ended March 31, 2024 and 2023, we had net cash used in financing activities of $2.6 million and $1.0 million, respectively. Cash used in financing activities is related to principal payments on debt of $2.3 million and $0.3 million in payments of fixed dividends to our Series B preferred shareholders.
Current wording
For the six months ended June 30, 2024 and 2023, we had net cash used in and provided by operating activities of $7.3 million and $10 thousand. Cash used in operating activities primarily relates to an increase in net loss due to a decrease in sales volume. We had net cash used in investing activities of $411 thousand and $100 thousand for the six months ended June 30, 2024 and 2023, respectively. Cash used in investing activities is related to purchases of property and equipment. For the six months ended June 30, 2024 and 2023, we had net cash used in financing activities of $1.4 million and cash provided by financing activities of $1.0 million, respectively. Cash used in financing activities in 2024 is related to principal payments on debt of $3.1 million and $0.6 million in payments of fixed dividends to our Series B preferred shareholders, partially offset by $2.0 million proceeds from short-term debt.
Previous wording
Our liquidity needs are funded by operating cash flow and available cash. Our cash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to facility leases. We lease all of our office facilities. 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. 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. This seasonality makes our needs for cash vary significantly from quarter to quarter.
Current wording
Our liquidity needs are funded by operating cash flows and available cash. Our cash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to facility leases. We lease all of our office facilities. 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. 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. This seasonality makes our needs for cash vary significantly from quarter to quarter.
Previous wording
In addition to the cash flows generated by our ongoing operating activities we financed our operations during 2024 and 2023 with our Credit Facility with Whitehawk. On April 19, 2024, we took out a working capital loan with
Current wording
In addition to the cash flows generated by our ongoing operating activities we financed our operations during 2024 and 2023 with our credit facility pursuant to our Credit Agreement with Whitehawk. On April 19, 2024, we entered into a working capital loan with Whitehawk for $5.0 million, with $2.0 million funded on April 19, 2024 and the remaining $3.0 million to be made available in June 2024 provided the Company was in compliance with certain covenants. On July 2, 2024, we requested and received an additional $2 million working capital bridge loan. We are required to pay a fee equal to 6% of the aggregate amount of borrowings under the Sixth Amendment. Both working capital bridge loans are due and payable in full on November 29, 2024.
Previous wording
Given the uncertainty surrounding global supply chains, global markets, and general global uncertainty as a result of the ongoing conflict between Russia and Ukraine, the availability of debt and equity capital has been reduced and the cost of capital has increased. Furthermore, recent adverse developments affecting the financial services industry including events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions may lead to market-wide liquidity problems. This in turn could result in a reduction in our ability to access funding sources and credit arrangements in amounts adequate to finance our current and future business operations. Increasing our capital through equity issuance at this time could cause significant dilution to our existing stockholders. However, while there can be no guarantee we will be able to access capital when needed, we are confident that the Company will be able to manage through the current challenges in the equity and debt finance markets by managing payment terms with our customers and vendors.
Current wording
Given the uncertainty surrounding global supply chains, global markets, and general global uncertainty as a result of the ongoing conflict between Russia, Ukraine and Israel, the availability of debt and equity capital has been reduced and the cost of capital has increased. Furthermore, recent adverse developments affecting the financial services industry including events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions may lead to market-wide liquidity problems. This in turn could result in a reduction in our ability to access funding sources and credit arrangements in amounts adequate to finance our current and future business operations. Increasing our capital through equity issuance at this time could cause significant dilution to our existing stockholders. However, while there can be no guarantee we will be able to access capital when needed, we are confident that the Company will be able to manage through the current challenges in the equity and debt finance markets by managing payment terms with our customers and vendors.
Previous wording
The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at December 31, 2023. Although on March 14, 2024, the Loan Parties entered into the Fifth Amendment with the Collateral Agent and the Lender mainly for the purpose of (1) amending and restating the Senior Leverage Ratio and Minimum Liquidity (as defined in the Fifth Amendment), and (2) waiving any Event of Default that may have arisen directly as a result of the Financial Covenant Default (as defined in the Fifth Amendment), 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 get into full compliance with these covenants in the future. Following the Fifth Amendment to the Credit Agreement, the Senior Leverage ratio increased to 6.00 at March 31, 2024, remained at 2.00 at June 30, 2024 and 1.75 thereafter. Because of the significant decreases in the required Senior Leverage Ratio within the next twelve months, the Company’s current forecast projects the Company may not be able to maintain compliance with this ratio. 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.
Current wording
The Company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at December 31, 2023. Although on March 14, 2024, the Loan Parties entered into the Fifth Amendment with the Collateral Agent and the Lender mainly for the purpose of (1) amending and restating the Senior Leverage Ratio and Minimum Liquidity (as defined in the Fifth Amendment), and (2) waiving any Event of Default that may have arisen directly as a result of the Financial Covenant Default (as defined in the Fifth Amendment), 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 get into full compliance with these covenants in the future. Following the Fifth Amendment to the Credit Agreement, the Senior Leverage ratio increased to 6.00 at March 31, 2024, remained at 2.00 at June 30, 2024 and 1.75 thereafter. The Company was not in compliance with its Senior Leverage Ratio financial covenant under the Credit Agreement at June 30, 2024. The non-compliance was cured by the Company obtaining a waiver for the leverage ratio default for the quarter ended June 30, 2024. As part of the waiver, the lender reduced the intellectual property sublimit under the borrowing base from $15.0 million to $11.2 million.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Cost of Revenues. Cost of revenues for the three months ended June 30, 2024 were $24.0 million as compared to $29.2 million for the three months ended June 30, 2023, resulting in a 17.9% decrease. The decrease in cost of revenues was attributable to the decrease in units sold.
Current report — wording carried from elsewhere
For the six-month periods ended June 30, 2024 and 2023
Current report — wording carried from elsewhere
Net Loss. Net loss was$8.6 million and$3.7 million for the six months ended June 30, 2024 and 2023, respectively, and was a result of the changes noted above.
Current report — wording carried from elsewhere
Because of the significant decreases in the required Senior Leverage Ratio within the next twelve months, the Company’s current forecast projects the Company may not be able to maintain compliance with this ratio. 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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Whitehawk for $5.0 million, with $2.0 million funded on April 19, 2024 and the remaining $3.0 million to be made available in June 2024 provided the Company is in compliance with certain covenants.