Boxlight Corp 8-K Summary: Acquisition of Qwizdom
Business Context and Reporting Period
This Form 8-K, dated June 28, 2018, reports a material definitive agreement entered into by Boxlight Corporation (Nevada). The filing details the acquisition of 100% of the capital stock of Qwizdom, Inc. and its subsidiary Qwizdom UK Limited, effective June 25, 2018. Qwizdom develops software and hardware solutions for education and training, operating in Seattle, WA, and Belfast, Northern Ireland, with products available in 44 languages.
Key Financial Metrics and Transaction Structure
The total consideration for the acquisition is valued at $2,476,000, structured as follows:
- Cash Payment: $410,000 paid at closing.
- Debt Instrument: A 6% promissory note for $656,000.
- Equity Payment: 142,857 shares of Boxlight Class A common stock, valued at $7.00 per share ($1,000,000 total).
- Contingent Consideration: A maximum earn-out of $410,000 based on future revenues.
The filing does not provide Boxlight's consolidated revenue, profit, cash flow, or liquidity metrics for the reporting period, as this is a current report focused solely on the acquisition event.
Material Changes and Terms
The primary material change is the expansion of Boxlight's product portfolio and geographic footprint through the Qwizdom acquisition. Key terms include:
- Note Repayment: The $656,000 note is payable in 12 equal quarterly installments, commencing March 2019. The maturity date is the earlier of Boxlight raising $10,000,000 in gross proceeds from a financing or July 2021.
- Earn-Out Structure: Former shareholders receive 16.4% of consolidated net sales revenues from Qwizdom in excess of $750,000 annually for three years (ending Dec 31, 2018, 2019, and 2020), capped at $410,000 aggregate.
- Executive Retention: Three-year employment agreements were executed for Qwizdom CEO Darin Beamish and President Dermot Sweeney. Stock options were granted for 20,000 and 40,000 shares respectively at an exercise price of $5.78.
- Lock-Up: Former Qwizdom shareholders agreed to a one-year lock-up period on their shares.
Guidance, Risks, and Unusual Items
The filing contains no forward-looking guidance, management commentary on future financial performance, or specific risk factors beyond the standard contingencies of the earn-out and note repayment. The unusual item is the specific maturity trigger for the promissory note, which accelerates upon a significant financing event ($10M+).
Investor Verification Checklist
- Verify the valuation of the 142,857 shares issued ($7.00/share) against the market price of Boxlight stock on June 25, 2018.
- Confirm the cash liquidity available to Boxlight to fund the $410,000 closing payment and future note installments.
- Review the integration plan for Qwizdom's operations in the US and Northern Ireland.
- Monitor the $750,000 revenue threshold required to trigger the first earn-out payment.
- Assess the impact of the new debt obligation ($656,000) on Boxlight's leverage ratios.