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STOCK COMPENSATION | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
STOCK COMPENSATION | STOCK COMPENSATION The Company has issued grants under two equity incentive plans, both of which have been approved by the Company’s shareholders: (i) the 2014 Equity Incentive Plan, as amended (the “2014 Plan”), pursuant to which a total of 159,761 shares of the Company’s Class A common stock have been approved for issuance, and (ii) the 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which a total of 125,000 shares of the Company’s Class A common stock have been approved for issuance. Upon approval of the 2021 Plan in September 2021, any shares remaining available for issuance under the 2014 Plan were cancelled, and all future grants were issued under the 2021 Plan. The 2021 Plan allows for issuance of shares of our Class A common stock, whether through restricted stock, restricted stock units, options, stock appreciation rights or otherwise, to the Company’s officers, directors, employees and consultants. Prior to the second quarter of 2023, the Company had issued 154,981 shares under the 2021 Plan such that the Company was over the authorized share number. The fair value of shares previously issued in excess of the approved shares under the 2021 Plan of approximately $13 thousand was reclassed from liability to equity during the year ended December 31, 2023. Stock Options Under our Equity Incentive Plans, an employee may receive an award of stock grants that provides the opportunity in the future to purchase the Company’s shares at the market price of our stock on the date the award is granted (strike price). The options become exercisable over a range of immediately vested to four-year vesting periods and expire five years from the grant date, unless stated differently in the option agreements, if they are not exercised. We record compensation expense based on the estimated fair value of the awards which is amortized as compensation expense on a straight-line basis over the vesting period. Accordingly, total expense related to the award is reduced by the fair value of options that are forfeited by employees that leave the Company prior to vesting as they occur. Following is a summary of the option activities during the years ended December 31, 2024 and 2023:
| Number of Units |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years)
Outstanding, December 31, 2022 | 97,897 |  | $ | 64.40 |  |  | 2.17
Granted | 72,860 |  | $ | 13.55 |  |  |
Exercised | (2,500) |  | $ | 5.20 |  |  |
Cancelled | (98,605) |  | $ | 50.25 |  |  |
Outstanding, December 31, 2023 | 69,652 |  | $ | 33.25 |  |  | 2.09
Granted | — |  |  | $ | — |  |  |
Exercised | — |  |  | $ | — |  |  |
Forfeited | (5,860) |  | $ | 41.40 |  |  |
Expired | (29,651) |  | $ | 33.20 |  |  |
Outstanding, December 31, 2024 | 34,141 |  | $ | 31.80 |  |  | 0.65
Exercisable, December 31, 2024 | 32,821 |  | $ | 32.05 |  |  | 0.56
As of December 31, 2024 and December 31, 2023, the stock options had no intrinsic value. On February 14, 2022, with an effective date of January 1, 2022, the Company entered into a letter agreement with Michael Pope, our now former Chairman and Chief Executive Officer, extending Mr. Pope’s term of employment with the Company. Under the terms of the agreement, Mr. Pope received a grant 12,352 options to purchase Class A Common Stock, which are valued at approximately $420 thousand. On January 4, 2024, Mr. Pope's employment with the Company terminated resulting in the forfeiture of these options. Restricted Stock Units Under our Equity Incentive Plans, the Company may grant restricted stock units (“RSUs”) to certain employees, contractors and non-employee directors. Upon granting the RSUs, the Company records a fixed compensation expense equal to the fair market value of the underlying shares of RSUs granted on a straight-line basis over the requisite services period for the RSUs. Compensation expense related to the RSUs is reduced by the fair value of units that are forfeited by employees that leave the Company prior to vesting as they occur. The restricted stock units vest over a range of immediately vested to four-year vesting periods in accordance with the terms of the applicable RSU grant agreement. The following is a summary of the restricted stock activities during the years ended December 31, 2024 and 2023.
| Number of Units |  | Weighted Average Grant Date Fair Value
Outstanding, December 31, 2022 | 60,776 |  | $ | 55.20 |
Granted | 99,680 |  | $ | 10.25 |
Vested | (63,799) |  | $ | 29.20 |
Forfeited | (14,967) |  | $ | 17.80 |
Outstanding, December 31, 2023 | 81,690 |  | $ | 26.85 |
Granted | 3,200 |  | $ | 5.20 |
Vested | (29,626) |  | $ | 33.85 |
Forfeited | (40,628) |  | $ | 18.30 |
Outstanding, December 31, 2024 | 14,636 |  | $ | 30.50 |
2024 Grants During the fiscal year 2024, the Company granted 3,200 RSUs to our now former Chairman and Chief Executive Officer, Michael Pope, in conjunction with his transition to a non-executive member of the Board of Directors. 2023 Grants During fiscal year 2023, the Company granted 99,680 RSUs of which 12,460 were subsequently cancelled. On August 25, 2023, the Company granted 42,211 RSUs to its board of directors and 42,999 RSUs to certain members of senior management. Warrants The following is a summary of the warrant activities during the years ended December 31, 2024 and 2023:
| Number of Units |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years)
Outstanding, December 31, 2022 | 277,201 |  | $ | 32.85 |  |  | 5.25
Granted | — |  |  | $ | — |  |  | —
Exercised | — |  |  | $ | — |  |  | —
Outstanding, December 31, 2023 | 277,201 |  | $ | 32.85 |  |  | 3.72
Granted | — |  |  | $ | — |  |  |
Exercised | — |  |  | $ | — |  |  |
Outstanding, December 31, 2024 | 277,201 |  | $ | 32.85 |  |  | 2.70
Exercisable, December 31, 2024 | 277,201 |  | $ | 32.85 |  |  | 2.70
Stock compensation expense Long-term incentive plan On August 15, 2024, the Company granted a long-term incentive plan (LTIP) cash award pursuant to its 2021 Equity Incentive Plan to members of the Company’s Board of Directors and senior management. The amount of each award earned will depend on the performance of the Company relative to certain performance targets related to share price appreciation of the Company’s Class A common stock during the respective performance cycles. The LTIP awarded to the Company's Board of Directors have a performance period ending on March 31, 2025, whereas the LTIP awarded to senior management have three consecutive 12-month performance periods ending June 30, 2025, June 30, 2026, and June 30, 2027. The target payout under the LTIP awarded to the Board of Directors and senior management is $420 thousand and $1.1 million, respectively. If the Company’s performance relative to the performance goal during the performance cycle is not equal to the performance target, the target Cash LTIP Award will be adjusted based on actual performance. At no time during the performance cycle shall the payout be less than 1/3 or exceed 3 times the target cash LTIP Award, unless a change a control has occurred. Cash payments are subject to the Company’s compliance with all covenants contained in the Company’s credit facilities in effect at the conclusion of each performance cycle. There have been no cash payments as of December 31, 2024. As amounts earned for the awards are based on changes in the Company's stock price, the Company will recognize a liability for compensation cost each reporting period based on the fair value as of each reporting date proportionally with the elapsed time at each reporting period. The liability is recognized in other short-term liabilities in the consolidated balance sheets. The Company used a Model Monte Carlo Simulation model to determine the fair value of the LTIP as of December 31, 2024 to be $358 thousand. Key inputs to the valuation of the awards include the stock price as of the award effective date and the valuation date, the discount rate, and historical volatility in the Company’s stock price.
| December 31, 2024
Common stock issuable upon exercise of warrants |
Market value of common stock on measurement date | $ | 1.90 |
Risk free interest rate (1) | 4.17 - 4.28%
Expected life in years | 0.25 - 2.50 years
Expected volatility (2) | 70 - 80%
(1) The risk-free interest rate was determined by management using the applicable Treasury Bill as of the measurement date. (2) The historical trading volatility was based on historical fluctuations in stock price for Boxlight. For the years ended December 31, 2024 and 2023, the Company recorded the following stock compensation expense which is included in general and administrative expense in the Company’s consolidated statement of operations and comprehensive loss (in thousands):
| 2024 |  | 2023
Stock options | $ | 68 |  |  | $ | 1,105 |
Restricted stock units | 962 |  |  | 2,023 |
Equity-based Warrants | 1 |  |  | 3 |
Long-term incentive plan | 358 |  |  | — |
Total stock compensation expense | $ | 1,389 |  |  | $ | 3,131 |
During the year ended December 31, 2023, certain members of senior management voluntarily forfeited certain unvested restricted stock units and stock option awards to increase share availability under the Company’s Equity Incentive Plan. The Company recorded stock compensation expense for the fair value of these cancelled awards of $624 thousand during the year ended December 31, 2023. As of December 31, 2024, there was approximately $0.4 million of unrecognized compensation expense related to unvested options, RSU’s, and warrants, which will be amortized over the remaining vesting period. Of that total, approximately $0.3 million is estimated to be recorded as stock compensation expense in 2025.

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