Boxlight(BOXL) - 2025 Q1 - Quarterly Report

Financial Performance - Total revenues for Q1 2025 were $22.4 million, a 39.5$37.1 million in Q1 2024[180] - Cost of revenues decreased by 40.8% to $14.4 million in Q1 2025 from$24.3 million in Q1 2024, attributed to lower units sold[181] - Gross profit for Q1 2025 was $8.0 million, down 37.2$12.8 million in Q1 2024, with a gross profit margin of 35.9% compared to 34.5% in the prior year[182] - General and administrative expenses for Q1 2025 were $10 million, representing 44.8$15.2 million or 41.1% of revenue in Q1 2024[183] - Research and development expenses for Q1 2025 were $0.9 million, representing 4.1$1.2 million or 3.2% of revenue in Q1 2024[184] - Other expense, net for Q1 2025 was $0.5 million, a decrease of$2.1 million from $2.6 million in Q1 2024[185] - Net loss for Q1 2025 was approximately$3.2 million, down from a net loss of $7.1 million in Q1 2024[186] - For the three months ended March 31, 2025, the company reported a net loss of$3.243 million, compared to a net loss of $7.089 million for the same period in 2024, indicating a 54.4$1.557 million, compared to a negative EBITDA of $1.543 million for the same period in 2024, reflecting a significant turnaround[189] - Adjusted EBITDA for the three months ended March 31, 2025, was a loss of$25 thousand, compared to a positive adjusted EBITDA of $179 thousand for the same period in 2024[189] Cash Flow and Liquidity - As of March 31, 2025, the company had cash and cash equivalents of$8.1 million, down from $11.8 million as of March 31, 2024, representing a decrease of 31.4$4.7 million for the three months ended March 31, 2025, compared to $1.9 million for the same period in 2024, indicating increased cash outflow[192] - The company expects to achieve positive cash flow from operations and is actively working to refinance its existing debt to improve financial flexibility[206] - The company anticipates that cash and cash equivalents, along with anticipated cash flows from operations, will provide sufficient liquidity for working capital needs and debt service requirements[198] - The company is facing significant challenges due to global supply chain uncertainties and increased costs of capital, which may impact its ability to access funding sources[197] Compliance and Financial Covenants - The company was not in compliance with its financial covenant related to the Senior Leverage Ratio under the Credit Agreement at multiple points, including December 31, 2024, and March 31, 2025[199][202] - The Company reported stockholders' equity of ($12,896,000) as of December 31, 2024, failing to meet the Nasdaq requirement of at least $2.5 million[208] - The Company intends to submit a compliance plan to Nasdaq within 45 days to regain compliance with Listing Rule 5550(b)[208] - The market value of the Company's listed securities was$2,830,180 as of April 4, 2025, significantly below the Nasdaq requirement of at least $35 million[208] Shareholder Matters - Following a private placement in February 2025, the Company may need to increase the number of authorized shares of Class A common stock due to the potential exercise of 1,323,000 warrants[209] - There is uncertainty regarding shareholder approval for the increase in authorized shares, which could impair the Company's ability to raise equity capital[209] Accounting and Financial Reporting - The Company has no significant off-balance sheet arrangements that could affect its financial condition or liquidity[211] - The Company’s financial statements are prepared in accordance with GAAP, requiring assumptions and estimates that could materially differ from actual results[212] - Key accounting estimates critical for understanding financial results include revenue recognition, intangible assets, and stock-based compensation expense[213] - Recent accounting pronouncements may materially impact the Company's consolidated financial condition and results of operations[215] Revenue Decline Factors - The decrease in revenues was primarily due to lower global demand for interactive flat panel displays and competitive pricing in the industry[180] - The increase in gross profit margin is primarily related to changes in product mix despite pricing pressures[182] - The company is focused on ongoing initiatives to reduce operating expenses across all cost groups[183]