Boxlight Corp
For the period ended Mar 31, 2025. Filed May 14, 2025.
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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.
Mar 31, 2025 · Filed May 14, 2025
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 2024-09-30; filed 2024-11-14.
0001628280-24-047932
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-14.
0001628280-25-025565
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 133 previous paragraphs and 136 current paragraphs.
91 unchanged; 25 reworded; 19 added; 12 removed; 5 previous and 1 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 (19)
Current report
•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;
Current report
•our history of operating losses;
Current report
•our ability to raise additional capital;
Current report
•our ability to increase the number of authorized shares of Class A common stock pursuant to our articles of incorporation;
Current report
•changes in U.S. 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;
Current report
•our possible or assumed future results of operations;
Current report
•our ability to attract and retain customers;
Current report
•our ability to sell additional products and services to customers;
Current report
•our cash needs and financing plans;
Current report
•our potential growth opportunities;
Current report
•expected technological advances by us or by third parties and our ability to leverage them;
Current report
•the effects of future regulation;
Current report
•our ability to protect or monetize our intellectual property; and
Current report
On February 20, 2025, we filed with the Secretary of State of the State of Nevada (i) an Amendment to the Certificate of Designation of our Series B Preferred Stock (the “Series B Amendment”) and (ii) an Amendment to the Certificate of Designation of our 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.
Current report
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. In addition, the Company was also 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. 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.
Current report
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 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. The amendment also prohibits the Company from paying dividends or distributions to its preferred stockholders and reduces the value assigned to its intellectual property under its borrowing base calculation.
Current report
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.
Current report
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: (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 $500,000 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 ($12,896,000) at December 31, 2024, and (ii) net losses of ($28,335,000) and ($39,156,000) 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 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. 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.
Current report
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.
Removed paragraphs (12)
Previous report
Acquisition Strategy and Challenges
Previous report
The Company completed multiple acquisitions from 2015 through 2021 and may target additional acquisition opportunities in the future. The Company’s growth strategy includes acquiring assets and technologies of companies that have products, technologies, industry specializations or geographic coverage that extend or complement our existing business. The process to undertake a potential acquisition is time-consuming and costly. In the event we pursue additional acquisitions, we expect to expend significant resources to undertake business, financial and legal due diligence on our potential acquisition targets, and there is no guarantee that we will complete any acquisition that we pursue.
Previous report
We believe we can achieve significant cost-savings by merging the operations of the companies we acquire and after their acquisition, leverage the opportunity to reduce costs through the following methods:
Previous report
•Staff reductions – consolidating resources, such as accounting, marketing and human resources;
Previous report
•Economies of scale – improved purchasing power with a greater ability to negotiate prices with suppliers; and
Previous report
•Improved market reach and industry visibility – increasing our customer base and entry into new markets.
Previous report
Gross Profit. Gross profit for the three months ended September 30, 2024 was $12.3 million as compared to $18.0 million for the three months ended September 30, 2023, a decrease of 32.0%. The gross profit margin was 33.8% for the three months September 30, 2024 and 36.3% for the three months ending September 30, 2023. The decrease in gross profit margin percentage is primarily related to competitive industry pricing in the interactive flat panel market coupled with a shift in product mix as audio revenues comprised a smaller percentage of total sales for the quarter compared with the prior year.
Previous report
Research and Development Expenses. Research and development expenses were $1.0 million and $979 thousand for the three months ended September 30, 2024 and 2023, respectively, and representing 2.8% of revenue for the three months ended September 30, 2024, and 2.0% of revenue for the three months ended September 30, 2023.
Previous report
Other Income (Expense). Other expense, net for the three months ended September 30, 2024 was$2.2 million as compared to$3.1 million for the three months ended September 30, 2023, representing a decrease of$0.9 million. Other income for the three months ended September 30, 2024 consisted primarily of realized foreign currency gains and losses. Other expense consists primarily of interest expense on our term loan.
Previous report
Income Tax Benefit (Expense). Income tax benefit for the three months ended September 30, 2024 was$12 thousand, as compared to income tax expense of$3.1 million for the three months September 30, 2023. The decrease in tax expense year-over-year is largely due to foreign pretax book income for the three months ended September 30, 2024 as compared to foreign pretax loss for the three months ended September 30, 2023.
Previous report
Income Tax Expense. Income tax expense for the nine months ended September 30, 2024 was $767 thousand, as compared to a $3.4 million for the nine months ended September 30, 2023. The decrease in tax expense is primarily due to an increase in the forecasted worldwide net loss as compared to the prior year.
Previous report
During the three months ended September 30, 2024, we repaid $3.5 million of the $4.0 million additional borrowings under the Sixth Amendment. In October 2024, we repaid the remaining $0.5 million borrowings under the Sixth Amendment and $0.2 million in financing fees related to the borrowing.
Reworded paragraphs (25)
Previous wording
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 September 30 th.
Current wording
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 March 31st.
Previous wording
•our ability to maintain a listing of our Class A common stock on Nasdaq Capital Market;
Current wording
•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;
Previous wording
•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 wording
•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;
Previous wording
•war, terrorism, other acts of violence, or potential effects of future pandemics;
Current wording
•war, terrorism, other acts of violence, or potential effects of future epidemics, pandemics, or other health crises;
Previous wording
We have also implemented a comprehensive plan to reach and maintain profitability both from our core business operations and as a result of making strategic business acquisitions. Highlights of the plan include:
Current wording
We have also implemented a comprehensive plan to reach and maintain profitability both from our core business operations. Highlights of the plan include:
Previous wording
Other (expense) income, net primarily consists of interest expense associated with our debt financing arrangements, and the effects of changes in the fair value of derivative liabilities.
Current wording
Other (expense) income, net primarily consists of interest expense associated with our debt financing arrangements, the effects of changes in the fair value of derivative liabilities and changes in the fair value of warrants.
Previous wording
Revenues. Total revenues for thenine months ended September 30, 2024 were $111.9 million as compared to $137.9 million for thenine months ended September 30, 2023, resulting in a 18.9% 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.
Current wording
Revenues. Total revenues for thethree months ended March 31, 2025 were $22.4 million as compared to $37.1 million for thethree months ended March 31, 2024, resulting in a 39.5% decrease. The decrease in revenues was due to lower sales volume across all markets primarily resulting from lower global demand for interactive flat panel displaysas well as competitive industry pricing.
Previous wording
Cost of Revenues. Cost of revenues for thenine months ended September 30, 2024 were $72.3 million as compared to $86.9 million for thenine months ended September 30, 2023, resulting in a 16.8% decrease. The decrease in cost of revenues was attributable to the decrease in units sold.
Current wording
Cost of Revenues. Cost of revenues for thethree months ended March 31, 2025 were $14.4 million as compared to $24.3 million for thethree months ended March 31, 2024, resulting in a 40.8% decrease. The decrease in cost of revenues was attributable to the decrease in units sold.
Previous wording
Gross Profit. Gross profit for thenine months ended September 30, 2024 was $39.6 million as compared to $51.0 million for thenine months ended September 30, 2023, a decrease of 22.3%. Gross profit margin was 35.4% for thenine months ended September 30, 2024 and 37.0% for thenine months ended September 30, 2023. The decrease in gross profit margin is primarily related to the continuous increase in pricing pressure within the industry as well as a difference in product mix compared to the prior year quarter.
Current wording
Gross Profit. Gross profit for thethree months ended March 31, 2025 was $8.0 million as compared to $12.8 million for thethree months ended March 31, 2024, a decrease of 37.2%. Gross profit margin was 35.9% for thethree months ended March 31, 2025 and 34.5% for thethree 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.
Previous wording
General and Administrative Expenses. General and administrative expenses for thenine months ended September 30, 2024 were $39.7 million, representing 35.4% of revenue as compared to $45.4 million representing 32.9% of revenue for thenine months ended September 30, 2023. The decrease in general and administrative expenses for the period ended September 30, 2024 was due to planned initiatives to reduce operating expenses across all cost groups, with the largest declines in employee-related expenses of $2.4 million, sales and marketing expense of $0.8 million, stock compensation expense of $0.6 million, depreciation and amortization expense of $0.7 million, and travel expense of $0.6 million.
Current wording
General and Administrative Expenses. General and administrative expenses for thethree 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 thethree 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.
Previous wording
Research and Development Expenses. Research and development expenses for the nine months ended September 30, 2024 and 2023 were $3.2 million and $2.1 million, respectively and represented 2.8% and 1.5% 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.
Current wording
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.
Previous wording
Other Expense. Other expense, net for the nine months ended September 30, 2024 was $7.6 million as compared to$8.4 million for the nine months ended September 30, 2023, representing a decrease of$0.8 million. Other expense consists primarily of interest expense on our term loan.
Current wording
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 change in fair value of common warrants compared to the prior year quarter.
Previous wording
Net (Loss) Income. Net loss was $3.1 million and $17.8 million for the three months ended September 30, 2024 and September 30, 2023 and was a result of the changes noted above.
Current wording
Net Loss. 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.
Previous wording
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, goodwill impairment 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. These adjustments, and the non-GAAP financial measure that is derived from them, provide supplemental information to analyze our operations between periods and over time. Investors should consider the Company’s non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
Current wording
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. 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. These adjustments, and the non-GAAP financial measure that is derived from them, provide supplemental information to analyze our operations between periods and over time. Investors should consider the Company’s non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
Previous wording
As of September 30, 2024, we had cash and cash equivalents of $10.5 million, a working capital balance of $45.8 million, and a current ratio of 2.10. As of September 30, 2023, we had $18.4 million of cash and cash equivalents, a working capital balance of $61.4 million, and a current ratio of 2.24.
Current wording
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.
Previous wording
For the nine months ended September 30, 2024 and 2023, we had net cash used in and provided by operating activities of $2.1 million and $8.2 million, respectively. Cash used in operating activities primarily relates to net loss for the nine months ended September 30, 2024 as well as changes in working capital primarily related to a reduction in accounts payable in 2024 resulting from large inventory purchases in 2023. We had net cash used in investing activities of $279 thousand and $226 thousand for the nine months ended September 30, 2024 and 2023, respectively. Cash used in investing activities is related to purchases of property and equipment. For the nine months ended September 30, 2024 and 2023, we had net cash used in financing activities of $4.4 million and $3.0 million, respectively. Cash used in financing activities in 2024 is related to principal payments on debt of $7.4 million and $0.9 million in payments of fixed dividends to our Series B preferred shareholders, partially offset by $4.0 million proceeds from short-term debt.
Current wording
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. 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.
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 pursuant to our Credit Agreement with Whitehawk. On April 19, 2024, as a part of the Sixth Amendment to the Credit Agreement, 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 $2 million of the $3 million working capital bridge loan. We were 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.
Current wording
On April 19, 2024, the Company entered into a sixth amendment to the Credit Agreement with the Collateral Agent and Lender (the “Sixth Amendment”). The Sixth Amendment provided the Company with an additional $2 million working capital bridge loan in April 2024, and an additional $3 million working capital bridge loan in June 2024, of which $2 million was advanced to the Company. The Company was required to pay a fee equal to 6% of the aggregate amount of borrowings under the Sixth Amendment (i.e. $4.0 million). Both working capital bridge loans, including the related fee were paid in full by November 2024, and were not subject to prepayment penalties.
Previous wording
Our current levels of indebtedness and market conditions may affect 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 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 new U.S. tariff policy, trade wars, and the ongoing conflicts between Russia and Ukraine and Israel and Hamas, 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, there can be no guarantee we will be able to access capital when needed or 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
Our 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.
Current wording
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.
Previous wording
We were not in compliance with our financial covenant related to the Senior Leverage Ratio under the Credit Agreement at December 31, 2023. On March 14, 2024, we entered into the Fifth Amendment with the Collateral Agent and the Lender to (1) amend and restate the Senior Leverage Ratio and Minimum Liquidity (as defined in the Fifth Amendment), and (2) waive any event of default that may have arisen directly as a result of the 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 it remained at 2.00, and thereafter it remained at 1.75.
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. On March 14, 2024, we entered into the Fifth Amendment with the Collateral Agent and the Lender to (1) amend and restate the Senior Leverage Ratio and Minimum Liquidity (as defined in the Fifth Amendment), and (2) waive any event of default that may rise directly as a result of the 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 it remained at 2.00, and thereafter it remained at 1.75.
Previous wording
We were also not in compliance with our Senior Leverage Ratio financial covenant under the Credit Agreement at June 30, 2024. On August 12, 2024, we entered into the Seventh Amendment with the Collateral Agent and the Lender to (1) reduce the intellectual property sublimit under the borrowing base from $15.0 million to $11.2 million, and (2) 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.
Current wording
The Company was not in compliance with its Senior Leverage Ratio financial covenant under the Credit Agreement at June 30, 2024. On August 12, 2024, we entered into the Seventh Amendment with the Collateral Agent and the Lender to (1) reduce the intellectual property sublimit under the borrowing base from $15.0 million to $11.2 million, and (2) 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.
Previous wording
We were also not in compliance with our Senior Leverage Ratio financial covenant under the Credit Agreement at September 30, 2024. Subsequent to the end of the third quarter of 2024, we were also not in compliance with our borrowing base covenant under the Credit Agreement for month ended October 31, 2024. On November 14, 2024, we obtained a waiver for the Credit Agreement from the Collateral Agent and Lender (the “November 2024 Waiver”) 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. 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.
Current wording
The Company was also not in compliance with its Senior Leverage Ratio financial covenant under the Credit Agreement at September 30, 2024. Subsequent to the end of the third quarter of 2024, we were also not in compliance with our borrowing base covenant under the Credit Agreement for month ended October 31, 2024. On November 14, 2024, we obtained a waiver for the Credit Agreement from the Collateral Agent and Lender (the “November 2024 Waiver”) 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. 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.
Previous wording
Because of the significant decreases in the required Senior Leverage Ratio that have occurred within the past twelve months, our current forecast projects that we 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
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. 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.
Previous wording
In view of this matter, continuation as a going concern is dependent upon our 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 our Credit Agreement with a different lender on a basis with more favorable terms. We are actively working to refinance our debt with new lenders. While we are confident in our ability 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. We have a good working relationship with our current banking partner and have seen a positive trend in the credit markets as of late. However, there can be no assurance that we will be successful in refinancing our debt, or on terms acceptable to us.
Current wording
In view of this matter, continuation as a going concern is dependent upon our 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, the borrowing base covenant, or any other financial covenants, or refinance our Credit Agreement with a different lender on a basis with more favorable terms. As part of our ongoing efforts to strengthen our financial position, the Company has initiated plans to recapitalize its balance sheet and refinance our current Credit Agreement. This initiative is part of our broader strategy to improve financial flexibility, reduce our cost of capital, and position the Company for sustainable growth in the long term. 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. Our ability to refinance our existing debt is based upon credit markets and economic forces that are outside of our control. We have a good working relationship with our current banking partner, however, there can be no assurance that we will be successful in refinancing our debt, or on terms acceptable to us.
Previous wording
Because our Class A common stock is listed on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. On February 28, 2024, we received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, based upon the closing bid price of our Class A Common Stock for the previous 30 consecutive business days, we no longer met the requirements of Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we were provided an initial period of 180 calendar days, or until August 26, 2024, to regain compliance with the Bid Price Rule. On August 27, 2024, Nasdaq advised us in writing that, while we had not regained compliance with the Bid Price Rule, we had been granted an additional 180 calendar day extension, or until February 24, 2025, to regain compliance with the Bid Price Rule. Nasdaq’s determination was based on our having met the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market, with the exception of the Bid Price Rule, and on our written notice to Nasdaq of our intention to cure the deficiency during the extended compliance period by effecting a reverse stock split, if necessary. If we do not regain compliance with the Bid Price Rule by the end of the extended compliance period, the Staff will provide written notification to us that our Class A Common Stock will be subject to delisting. At that time, we may appeal the Staff’s delisting determination to a hearings panel. There can be no assurance that we will regain compliance with the Bid Price Rule or that we will otherwise maintain compliance with any of the other listing requirements for The Nasdaq Capital Market. 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.
Current wording
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
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•our ability to continue to operate as a going concern;
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Revenues. Total revenues for the three months ended September 30, 2024 were $36.3 million as compared to $49.7 million for the three months ended September 30, 2023, resulting in a 26.9% 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.
Previous report — wording carried elsewhere
Cost of Revenues. Cost of revenues for the three months ended September 30, 2024 were $24.0 million as compared to $31.7 million for the three months ended September 30, 2023, resulting in a 24.1% decrease. The decrease in cost of revenues was attributable to the decrease in units sold.
Previous report — wording carried elsewhere
General and Administrative Expenses. General and administrative expenses for the three months ended September 30, 2024 were $12.1 million, representing 33.3% of revenue as compared to $15.4 million or 31.0% of revenue for the three months ended September 30, 2023. The decrease was due to planned initiatives to reduce operating expenses across all cost groups, with the largest declines in employee-related expenses of $2.0 million, sales and marketing expense of $0.4 million, travel expense of $0.3 million, depreciation and amortization expense of $0.2 million, and stock compensation expense of $0.2 million.
Previous report — wording carried elsewhere
For the nine-month periods ended September 30, 2024 and 2023
Previous report — wording carried elsewhere
Net Loss. Net loss was$11.6 million and$21.5 million for the nine months ended September 30, 2024 and 2023, respectively, and was a result of the changes noted above.