Thank you, and welcome to the Boxlight Third Quarter 2021 Earnings Conference Call. By now, everyone should have access to the press release issued this afternoon. This call is being webcast and is available for replay. The remarks today will include statements that are considered forward-looking within the meaning of the Securities Laws, including forward-looking statements about future results of operations, business strategies and plans, customer relationships, market trends and potential growth opportunities. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current knowledge and expectations as of today and are subject to certain risks and uncertainties that may cause the actual results to differ materially from the forward-looking statements. A detailed discussion of such risks and uncertainties are contained in the company's most recent Form 10-K, Form 10-Q, and other reports filed with the SEC. The company undertakes no obligation to update any forward-looking statements. On this call, management will refer to non-GAAP measures that when used in combination with GAAP results, provide additional and analytical tools to understand the company's operations. The company has provided reconciliation to the most direct compatible GAAP financial measures in the earnings press release, which will be posted on the Investor Relations section of the company's website at investors.boxlight.com. And with that, I'll hand the call over to Boxlight's Chairman and Chief Executive Officer, Michael Pope.

Hi everyone, and thank you for joining the third quarter with yet another tremendous result. We again exceeded our guidance and delivered our strongest quarter to date with $61 million in revenue, $7 million in adjusted EBITDA. And for the first time as a company, positive net income and positive earnings per share. For five consecutive quarters, we have now reported both above-market revenue growth and positive adjusted EBITDA. For the trailing 12 months ended Q3, we reported $214 million in orders, $173 million in revenue and $15 million in adjusted EBITDA. We concluded the third quarter with an improved balance sheet, including $32 million in working capital and $55 million in net assets. We continue to see double-digit growth globally and expect to deliver $40 million in revenue for the fourth quarter representing 26% growth over the same quarter last year. For the full year 2022, we are forecasting $230 million in revenue representing approximately 27% growth over our 2021 guidance and greater than 10% adjusted EBITDA. Headquartered in Petaluma, California, FrontRow provides solutions for classroom audio, campus communication, emergency communication, and audio-visual control. The company's product suite includes the Juno all-in-one line array tower with teacher and student microphones, installed distributed audio solutions, and IP-based campus communication, including bells, paging, and intercom. The company was founded in 1963 and has sold solutions into over 25 countries, including 9,600 school districts in the United States. Jens Holstebro, CEO at FrontRow, will accept the position of Senior Vice President of Audio Solutions at Boxlight and manage Boxlight's audio strategy going forward. Today, the company has 44 employees, of which 17 are sales representatives located in the US, Canada, the UK, and Australia. On an unaudited basis for the trailing 12 months ended October 31, FrontRow generated approximately $25 million in sales, greater than 50% gross profit, and $6 million in EBITDA. We identified classroom and campus audio as our top growth opportunity outside of displays last year, and we actively pursued FrontRow with its standout solutions. We look forward to fully integrating the FrontRow products into our Boxlight ecosystem. We also expect to substantially increase demand for the FrontRow solutions as we leverage our global sales team and resell the channel. During the third quarter, we published another nine case studies bringing the total to 39 customer success stories. Since the beginning of the year, you can read the case studies by visiting both Boxlight.com and CleverTouch.com or by following Boxlight and CleverTouch on the various social media platforms. The case studies cover the implementation of our broad solutions, including interactive displays, digital signage solutions, STEM education, and professional development services. The examples also cover both the education and enterprise markets and are evidence of our commitment to be a trusted partner to our customers, providing and supporting our solutions in varying environments. In July, we released our updated STEM guide, reflecting our robust portfolio of STEM solutions, including standards-aligned lessons and activities, 3D printers, robotics, and coding and sensor technologies. Our STEM offering provides turnkey solutions with teacher training by our STEM subject matter experts. In August, our professional development division earned recognition as a Google for Education service partner with the Google Cloud Partner Advantage Program. This allows us to offer educators customized professional development and support specific to Google Workspace for Education and Google Cloud functions. By earning this upgrade, we are recognized as a Google partner with an education partner, enterprise designation, further broadening our service market to provide professional development and training to organizations outside the US. We continue to receive industry recognition for our innovation and cutting-edge solutions. In August, we were winners of Tech & Learning's 2021 best tools for back to school for both primary and secondary levels for four of our solutions: Armenio Connect, Blend Learning Platform, Pro Color Interactive Displays, Robo 3D Printer, and My STEM Kits Platform Bundle and Professional Development by EOS Education. Earlier this month, we were recognized for two Tech & Learning awards at this year's InfoComm, the largest pro-AV event in North America. Our CleverTouch Impact Plus interactive touch screen and CleverTouch Live content management platform were both recognized as Best in Show winners. We also recently expanded our partnership with Samsung to offer our Samsung Boxlight Chromebook Class Collection, a state-of-the-art one-to-one technology solution. The collection combines the best-in-class technology, Samsung Chromebook with our Mimio View document camera, Mimio Connect blended learning platform, and Boxlight professional development content. Lastly, I'd like to take a moment to recognize our amazing leadership team and talented, diligent employees. Our success as a company is a direct result of our ability to hire and retain tremendous talent. As a growing company, we are conscientious about nurturing a positive, collaborative, and supportive culture where every member of our team is enabled and motivated to contribute to our collective mission. Our recent company-wide survey confirmed that 96% of our employees enjoy working with each other and feel that they receive the support they need from their managers. We will continue to foster a positive and winning culture, which will propel us to our goal to lead the industry. With that, I will now turn the call over to our President Mark Starkey to provide additional insights.

Thank you, Michael. Q3 was another quarter of rapid growth for Boxlight, and I want to take this opportunity to thank our employees, our customers, and our investors, as this performance would not have been possible without their continued support. As Michael stated earlier, we booked $50 million of orders in Q3, representing a 756% growth in order intake year on year. If we include ARA in the pro forma numbers for last year, then the organic growth rate in orders for Q3 is impressive at 55%. The growth in order intake reflects a huge market opportunity that we see in both education and corporate sectors. The value of orders booked for the first nine months of this year is $179 million compared with $20 million booked in the first nine months of the previous year, that represents nearly a nine-fold year on year increase in orders booked. We are now forecasting order intake of excess of $210 million for this financial year, and we will enter the FY '22 with a healthy backlog. Our largest customer in Q3 in terms of order intake was ASI in Australia, with $6.7 million of orders received. Our growth in Australia has been very significant with our partner, ASI being recognized as the fastest growing private company and taking us to the number one market share position over the past 18 months. In the US, our partner network continues to grow with over 350 active partners. We received $3.1 million of orders from our US distribution partner, D, and a further $2.1 million of orders from trucks. To highlight some of the US orders that we received during Q3, in Spain, we received $2.9 million of orders from our partner Charma International, and in Northern Ireland, we received $1.7 million of orders from our partner NIAC. Back in Denmark, we received $1.6 million of orders from Unit DK, and in Finland, we received $1.3 million of orders from ET Euro Parts. In the UK, where we have over 600 active partners, we received $1.2 million of orders from DNS and just over $1 million of orders from Roche Audio Visual. To highlight a few of our key customers, the US and the UK both accounted for 27% of our orders booked during Q3, with Canada, excluding the UK, accounting for 32% and the rest of the world 14%. In Q3, 81% of our revenues came from sales of interactive flat panels, both Pro and CleverTouch. Our overall global market share of IPDs, excluding China, increased from 6.1% to 7.1%. According to the latest report from Futuresource, we remain in the top two IPD providers with 15.2% market share and are confident that we will become the market leader very soon. Our biggest opportunity for significant growth remains in the US, where we are ranked number five with 8.6% market share. It should be noted that our growth in the US has seen our market share nearly double from 4.6% to 8.6% over the past 12 months. In terms of market size, the US market for IFDS is estimated to be worth $1.8 billion in 2021, growing to $2.2 billion in 2022, according to Futuresource. The market in AMEA is slightly smaller, at $1.5 billion growing to $1.7 billion by 2022. Overall, this gives us an addressable IFBD market of about $3.3 billion in 2021, growing to about $3.9 billion in 2022. Given that our overall market share has grown from about 6% to approximately 7% this year, it gives us plenty of room for substantial organic growth over the next few years. In terms of energy users, we had another quarter of great wins across the globe in Germany. We have a fantastic win with the pension authorities. The win includes a commitment for a minimum of 500 units of UX Pro IPDs over the next four years, a minimum of 100 units of the CM series, and a minimum of 25 of our newly released 98 UX Pro solutions. The deal is worth at least $1.4 million and will help power our growth into corporate solutions in the German public sector. In Holland, we won a contract to supply our UX Pro solution to GD, the Dutch national health provider, putting our CleverTouch solution into their offices, vaccination centers, and COVID test locations. In the UK, we had some fantastic wins with schools, such as Camden in London and Barry Grammar School. In both instances, it was our software, including Links Whiteboard and CleverTouch Live that enabled us to differentiate from the competition. In Northern Ireland, our partner NIAC won a large deal with Belfast Metropolitan College for nearly 400 screens, and in the US, we won a fantastic deal with Everett School District near Seattle for 800 classrooms with our MI Pro Tele solution. The school district really liked our unplug cast solution, which differentiated us from the competition. We also had another great win at Harford County in Maryland, with 500 classrooms replacing their old screens. The teachers evaluated our solution and again, really liked the ease of use and the solution. Finally, with our Cal Ripkin partnership, we have already installed our STEM 3D printers in over 138 centers around the country, and we are looking to expand the offering to build super STEM centers that are made up of both STEM products, IPDs, and audio equipment from Boxlight. During Q3, we sold more than 3,300 MI Connect software licenses for Samsung products. These are three-year term-based licenses and will create future repeat software business on an ongoing basis when they're renewed. In total, we have $1.4 million of software revenue in Q3, and I've invoiced over $3.4 million of software revenue during the first nine months. We expect software revenues greater than $4.8 million for the full year, and we are continuing the monetization of our software suite. Our expectation is that Mimeo Connect, Links Whiteboard, and our App Store will be the foundation of our sales-based solutions and create a high-margin annuity stream moving forward. The addition of FrontRow to our Boxlight family means that we extend our reach into the classroom. We now have a comprehensive solution set that includes IPDs, both Mimeo and CleverTouch STEM solutions, including 3D printers, lab desks, portable science devices, Mimeo MyBot robotics, and coding solutions for utilizing our STEM kits platform. We also have a multitude of software such as MimeoConnect, Mimeo Studio, Octopus and Links Whiteboard, along with professional development solutions from EOS. The addition of market-leading audio solutions from FrontRow means that we are very well positioned to lead the growth in EdTech and become the natural choice for many schools, districts, and colleges across the globe. As Michael mentioned earlier, during the quarter, we expanded our Samsung partnership to introduce a student Chromebook bundle as part of our CLA classroom solutions, including our MI Connect software and our MI View camera. This deepens our relationship with Samsung and widens our solution set to include devices in the classroom. In summary, Q3 was an outstanding quarter in terms of order intake with record revenues and profitability. Our solutions are gaining traction in the market, and we continue to build out our sales channel. As Michael stated earlier, our current revenue guidance for Q4 is $40 million, giving a full-year revenue guidance of at least $181 million. We expect our order intake number to be north of $210 million for the full year, providing a substantial increase to our sales backlog. Our adjusted EBITDA percentage has continued to improve throughout the year from 4.8% in Q1 to 11.5% in Q2, and then 11.9% in Q3 despite strong pressure due to increased rates and shipping costs. The improvement in profitability and adjusted EBITDA percentage is due to the ability of the business to leverage higher revenues and gross margins without substantial increase in the cost base. With that, I will now turn the call over to our CFO, Patrick Foley.

Thanks, Mark, and good afternoon, everyone. To further expand on what you've already heard from both Michael and Mark, I'd like to add a few details to provide context to Boxlight's international operations on a revenue by country and region. As you've heard, our total revenues in Q3 were $61 million. EMEA was 46% of the total or $28 million, of which the UK represented 57%. The Americas were 45%, or $27.7 million and the rest of the world 9%, or $5.3 million, which was mainly Australia. In terms of our customers, the top 10 customers represent approximately 54% of total sales in Q3, with the single largest customer at about 15%. These are spread across a number of markets, namely the US, Australia, UK, and Denmark. Two-thirds of total sales are covered by the top 20 customers, approximately 66%, which is pretty similar and consistent with our positions of Q1 and Q2. The sales product mix and gross margin in Q3 hardware remained the largest proportion of total revenues at about 85%. These were largely sales of interactive flat panel displays (IPDs) and represented 91% of this total, with related accessories being the balance of 9%. The balance of total revenues came from our software services and STEM solutions, whereas margin for the quarter was 25.9%. The FPD margin was about 23%, which would have been slightly higher. However, as reported previously, increased global shipping costs, where we are seeing four times normal rates, have reduced margins by up to four percentage points. We anticipate the higher costs will remain throughout 2021. As noted in previous quarters, we have experienced some supply chain challenges, including interruptions to our inventory production schedules as a result of component shortages, along with continued delays in the shipping and receiving of goods. We've seen manufacturing costs increase due to these issues, which has reduced gross profit margins. These are global challenges that are not unique to us. However, we are managing well and extending our production planning and increasing prices to customers. In terms of screen sizes, in Q3, the education sector represented 96.5% of all interactive display sales, with approximately 73% of these being 75-inch and 86-inch panels, and following our trend formats. I'll now review the third quarter results. The financial results for the three months ended September 30, 2021 revenues for the three months ended September 30, 2021 were $61 million as compared to $9.5 million for the three months ended September 30, 2020, resulting in a 544% increase, due primarily to the acquisition of Sahara in September 2020 and increased demand for our solutions. Gross profit for the three months ended September 30, 2021 was $15.8 million as compared to $2 million for the three months ended September 30, 2020. The gross profit margin for the three months ended September 30, 2021 was 25.9%, which is an improvement of 45 basis points compared to the three months ended September 30, 2020. Gross profit margin adjusted for the net effect of acquisition-related purchase accounting was 27.1% as compared to the 30.4% as adjusted reported for the three months ended September 30, 2020. As reported in previous quarters this year, gross margins have been adversely impacted by approximately four percentage points due to increased freight and customs costs caused by supply chain challenges associated with the effects of the COVID-19 pandemic. This is anticipated to continue for the remainder of 2021. Additional pressure on margin has been seen on the cost of manufacturing as a result of the component shortages, which have had an adverse impact of approximately 5% in the quarter. To mitigate this, we have increased pricing to customers. Total operating expenses for the three months ended September 30, 2021 were $12.3 million as compared to $3.8 million for the three months ended September 30, 2020. The increase primarily resulted from additional overheads associated with the acquired Sahara operations in September 2020. Other income and expense for the three months ended September 30, 2021 was a net expense of $1.4 million as compared to a net expense of $2.5 million for the three months ended September 30, 2020. Other expense decreased primarily due to $1.1 million fewer losses recognized upon the settlement of certain debt obligations in exchange for the issuance of common shares, offset by a $339,000 increase in interest expense associated with increased borrowings. The company reported net income of $729,000 for the three months ended September 30, 2021 as compared to a net loss of $4.2 million for the three months ended September 30, 2020. The net income attributable to common shareholders was $412,000 and a $4.2 million loss for the three months ended September 30, 2021 and 2020, respectively, after deducting the fixed dividends to Series B preferred shareholders of $317,000 in 2021 and zero in 2020. Total comprehensive loss was $1.2 million and $3.7 million loss for the three months ended September 30, 2021 and 2020, reflecting the effect of cumulative foreign currency translation adjustments on consolidation with the net effect in the quarter of a $2 million loss and $536,000 for the three months ended September 30, 2021 and 2020, respectively. The EPS for the three months ended September 30, 2021 was a one cent per basic and diluted share compared to a ten cents loss per basic and diluted share for the three months ended September 30, 2020. EBITDA for the three months ended September 30, 2021 was $4.7 million as compared to a $3.4 million EBITDA loss for the three months ended September 30, 2020. Adjusted EBITDA for the three months ended September 30, 2021 was $7.2 million as compared to a $0.8 million loss for the three months ended September 30, 2020. Adjustments to EBITDA include stock-based compensation expense, gains and losses recognized upon the settlement of certain debt instruments and the effects of purchase accounting adjustments in connection with acquisitions. At September 30, 2021, Boxlight had $6.2 million in cash and cash equivalents, $32 million in working capital, $31 million in inventory, $173.6 million in total assets, $23.9 million of debt, and $54.9 million in stockholders' equity. $61.1 million in common shares issued and outstanding and $3.1 million in preferred shares issued and outstanding. The financial results for the nine months ended September 30, 2021 revenues for the nine months ended September 30 will be $141.2 million as compared to $23 million for the nine months ended September 30, 2020, resulting in a 513% increase due primarily to the acquisition of Sahara in September 2020 and increased demand for our solutions. Gross profit for the nine months ended September 30, 2021 was $37.2 million as compared to $6.3 million for the nine months ended September 30, 2020. The gross profit margin for the nine months ended September 30, 2021 was 26.3% compared to 27.4% for the nine months ended September 30, 2020. Gross profit margin adjusted for the net effect of acquisition-related purchase accounting was 28.0% as compared to 28.4% as adjusted and reported for the nine months ended September 30, 2020. As reported in previous quarters this year, gross margins have been adversely impacted by approximately four percentage points due to increased rates caused by supply chain challenges associated with the effects of the COVID-19 pandemic. This is anticipated to continue for the remainder of 2021. Additional pressures on margin have been seen through the cost of manufacturing. As a result of component shortages mentioned above, which have had an adverse impact of approximately 3.9% in the nine months to September 30, 2020. To mitigate this, we've increased pricing for customers. Total operating expenses for the nine months ended September 30, 2021 were $34.2 million as compared to $11.5 million for the nine months ended September 30, 2020. The increase primarily resulted from the additional overheads associated with the acquired Sahara operations in September 2020. Other income and expense for the nine months ended September 30, 2021 was a net expense of $5.8 million as compared to a net expense of $2.4 million for the nine months in September 30, 2020. The increase in other expense was due to $1 million of increased interest expense associated with increased borrowings and $2.5 million of losses recognized on the settlement of certain debt obligations that were exchanged for common shares. The company reported a net loss of $6.7 million for the nine months ended September 30, 2021, as compared to a net loss of $7.6 million for the nine months ended September 30, 2020. The net loss attributable to the common shareholders was $7.2 million and a $7.6 million loss for the nine months ended September 30, 2021 and 2020 respectively after deducting the fixed dividends for Series B preferred shareholders of $952,000 in 2021 and the fair value reevaluation deemed contribution of $367,000 for the redemption amendment with the Series B shareholders signed on June 14, 2021. Total comprehensive loss was $8.4 million and $7.2 million for the nine months ended September 30, 2021 and 2020, reflecting the effect of cumulative foreign currency translation adjustments on consolidation with a net effect year to date of a $1.7 million loss and $0.4 million loss for the nine months ended September 30, 2021 and 2020 respectively. The EPS loss for the nine months ended September 30, 2021 was $0.12 cents loss per basic and diluted share compared to a $0.31 loss per basic and diluted share for the nine months ended September 30, 2020. EBITDA for the nine months ended September 30, 2021 was $5.2 million as compared to a $5.2 million EBITDA loss for the nine months ended September 30, 2020. Adjusted EBITDA for the nine months ended September 30, 2021 was $14.1 million as compared to a loss of $1.5 million for the nine months ended September 30, 2020. Adjustments to EBITDA include stock-based compensation expense gains losses recognized upon the settlement of certain debt instruments gains losses from the re-measurement of derivative liabilities and the effects of purchase accounting adjustments in connection with acquisitions. At September 30, 2021, Boxlight had $6.2 million in cash and cash equivalents, $32 million in working capital, $31 million in inventory, $173.6 million in total assets, $23.9 million debt, $54.9 million in stockholders' equity, $61.1 million common shares issued and outstanding, and $3.1 million preferred shares issued and outstanding. And with that, we will open up the call for questions.

And the first question is from Brian Kinstlinger at Alliance Global Partners. Brian, your line is open. Please proceed.

Sorry, great quarter. Wanted to ask if the, an easy one, if the fourth quarter includes the two months that you expect from FrontRow or does it exclude FrontRow?

Yeah, the guidance we provided would include the additional two months of FrontRow. Yeah, the way we look at it now, I think, again, that's a baseline where we think we can beat that, but yeah, that would include the FrontRow revenue.

So I'm curious if you could break down the US growth versus the rest of the world in the third quarter. And I guess the way I'm thinking about it right now is there's a slowdown in the full fourth quarter. Maybe that is the shortage. Because if you add FrontRow into it, it just, it suggests that with the total growth. So if we can go through the breakdown of growth and maybe where we're maybe seeing temporary slowdown based on timing or component shortages.

Sure. So in terms of our kind of total revenues on a combined basis of us and the rest of the world for our kind of Sahara and Boxlight solutions. So in the US, in the quarter it was $27.7 million in the US and $33.3 million in the rest of the world. If you compare that to kind of last year's Q3 we had, obviously $9.5 million of total revenue of which $8.7 million was US-based revenues. It gives a kind of a 218% growth in the US as you would see from a combined basis. Sorry, say again, Brian and Sahara. But if I looked at the $33 million, what did Sahara do in the quarter for Q3 last year? So obviously you're on a combined basis. I haven't done it on a pro forma basis. Obviously, it was only right only consolidated at the end of Q4 last year.

So in the fourth quarter, is there a slowdown? And if so, no.

So I think it's important. No, there's no slowdown. It's actually seasonality actually, Brian. So the key things, obviously from the school districts and schools globally actually operate usually on Q2, Q3 being the busy period of the year. If you look at it on a combined basis that kind of represents about 60% of total revenues appear in those quarters and then Q1, Q4 the balance. So that's really where that comes from in terms of the totals. So as you can see from our guidance, we are kind of calling 40 million because it's not a slowdown, just usual seasonality that we would see in all markets for that time of year, Brian, by comparison, if you look at Q4 of last year, we did $32 million.

Well, so the acquisition, you have seasonality and acquisition as well. Right? So, if you look at kind of similar seasonality, cause it selling at the same market, you know, there will be, there will be some, there's gonna be definitely revenue that comes in from acquisition, but you can't take a straight line percentage.

Okay. And then just put on the guidance one more time. The margin, the 4Q margin is also EBITDA margin. Doesn't look like the second quarter when revenues are somewhat similar, maybe a little bit lower. So maybe talk, are we seeing additional pressures in the fourth quarter on top of what we're seeing in the third quarter to the margin?

We've seen some pricing increases in Q3, which obviously will carry on in terms of inventory and manufacturing costs, which will carry through in terms of Q4. We anticipate having additional pressures on margins in Q4.

Okay. And lastly, the recent press release on trucks becoming an exclusive reseller of CleverTouch. Talk about what that means.

Yeah, so, great question, Brian. So previously, we had an exclusive arrangement for Allstate bar Texas with TE. One of the key reasons that TRX acquired TE was because of the exclusive contracts that TE had with CleverTouch. It was a key reason why they wanted to buy them. Now, as you state, TRX does have a big relationship with NewLine. However, they are very, very interested in the exclusive arrangement that we've got with CleverTouch. It took us a long time to renegotiate that contract and it doesn't change overnight. We're working very closely with TRX, and we expect significant growth in that contract over the next 12 months. You don't lose anything because TRX continues to sell under the partnership as they're part of TRX, but from the TRX standpoint, you'll get incremental revenue as they sell your product instead of NewLine. So, you know, there's a significant opportunity for us.

Okay, great. Hi guys, grab some installed results in the gap profits pretty, pretty good to see that it's first time. I think I have seen that from you guys. Some congrats on that and in the supply chain environment, we're in a couple questions. I'll start with the question on the federal funding programs that are in effect, at least in the US. And how, I guess, a general progress update there from your guys' perspective on how you're working with districts to help them get those funds allocated to them and sort of what that represents for a what what's left untapped for remaining opportunity to help grow sales in the US.

Yes. So Jack, I appreciate the question. There, there's a tremendous amount of opportunity for federal funding, both in the US and internationally, but the funding in the US of course, is substantially larger than what we're seeing in other countries. The US you'll remember that the federal government made available just shy of $200 billion for education, termed as the ESSER funds, right? ESSER standing for elementary and secondary school emergency relief, and there's three tranches. Some of this may be redundant from previous calls, but there's three tranches of those ESSER funds. The first tranche was the smallest, and the second and third got progressively bigger. A lot of the first couple of tranches are being spent now. The first tranche was the CARES Act money, and a lot of that's been spent, the second tranche is being spent and the third, which is by far the largest, a lot of that hasn't been spent and is being accessed and applied for now. A lot of that's still available. So, in short, you know, of all of that money, and keep in mind, the third tranche was about $130 billion of the roughly $200 billion. So most of that is available, and we're still trying to work with school districts and administrators to help them access and identify how to spend those funds. As part of that process, we've done a lot of marketing around it. We've created guides in white papers on how to access the funds. We have a dedicated person, Dr. Reinhart, who is our director of strategic grants, and he helps work with schools to access the funds. So that's something we're definitely actively pursuing and of that nearly 200 billion, most of our solutions will qualify in one way or another for those funds. And so that is a major strategy of ours.

Okay, great. That's helpful. If I just follow up then from your comments around, obviously every company in any industry virtually is being impacted by the global supply chain issues just, you, you did mention that you to combat this, you have been raising prices. Can you just talk a little bit more detail there of like when you began raising prices on what products in what markets in, you know, what the general response has been from your end customers?

Yeah, I can say a couple things and then, and then, Mark, feel free to jump in. So, we've had several price increases both internationally throughout Europe, as well as in the US, we've had three or four price increases in Europe and then we've had two to three price increases or so in the US. We look at each of our solutions solution by solution, of course the largest price increases have been on our interactive flat panels. And that's because those are quite expensive to ship, and so they've been hit really hard on shipping costs and those are expensive components that go into those displays. Our margins are slimmer on the interactive flat panels and not as much on some of our other solutions, but we have increased prices across the board with higher increases on the panels and we've done pretty well of offsetting increase in the cost of the goods. We've done pretty well to us at most of that. Shipping is another story, and you've heard Pat talk about, and his talk track that we've given about four points of gross profit margin just on shipping. As that starts to normalize, you know, you save another four points to our gross profit margin in the future.

What I would add on top of that, Michael, is customers generally understand. So we've had little pushback. The other thing is where we do have fixed-term contracts, there have been some customers where we've had to hold the price as we agreed per the contract. So it is a mixed bag. But I think generally most of our customers have worked with us and those price increases have been passed on.

Okay, appreciate that. And then maybe just somewhat tied to maybe gross margin upside in the future would be, you know, I can imagine an increasing mix of software sales. So you did mention, you know, interactive panel displays continue and will continue to be a core in the bulk of your revenues. But right now I think software, you're on track for about $4.5 million, nearly $5 million of software revenue this year in 2021, just longer-term, looking at 2022 and then, beyond 2022, can you just share your view on how software is tied into your long-term revenue model and how that's kind of how strategically going about that, and is it all Samsung driven in the future? What are the other drivers qualitatively?

Yeah, that's a good question. Thanks. couple thoughts. First off, software is a major part of our strategy, both to differentiate our total solution and then also as a profit center. So first off our up on differentiation, most of our sales, 80% of our sales are coming from the interactive flat panels today. But to be successful in selling flat panels, you have to have the software because no school district or corporate customers are going to purchase panel without having the software experience. And so it definitely helps us on selling our hardware, but we are moving towards a focus on monetizing software in the future that hasn't been part of our strategy. Historically, this is something we started talking about a couple of years ago, and we've made a lot of headway the last several quarters. But we're focusing on SA strategies. That's true of our new MI Connect software platform. That's true of our Links Whiteboard software platform. That's true of even our app stores that we're making available, that there's ways to monetize those. As far as guidance, we haven't given specific guidance about what software should look like, but I will say the growth in software sales should be dramatically higher than our total sales. That's for certain. And then I would say, you know, longer-term, because we're selling this broader solution, we're expecting software, you know, could be as much as 10% of our total sales, something like that. And we'd be very happy with that. Now, keep in mind in education, we're focusing on the classroom. If you look at the amount of dollars spent in the classroom, there's a lot more dollars that are going to be spent on hardware. When you think of handheld devices for the students and interactive flat panel and cameras and other devices in the classroom, a lot more dollars go to hardware than to software, but we want to participate both in the hardware and software. And so I think a good long-term expectation would be something around, around 10% of our total sales.

Okay, great. And then maybe just one more from me in terms of the 2022 guidance of $230 million revenue as well as the 10% adjusted EBITDA or above the 10% adjusted EBITDA margins, just given all of this uncertainty in the world with the supply chain environment and then also, pandemic-related disruptions are always on the back of people's minds. Just how much, what level is your confidence to lay out that guidance in terms of like that's a big uptick in revenue which, you know, you have to sell a lot more products? You have to have a lot more components and inventory for the, so given the current state of the world what level of confidence do you have that those targets are achievable given how everything's playing out right now?

I'd say very confident. The demand is there. There's no question about that. We're seeing higher demand now than we've ever seen. And that's a testament to the solution we're providing. But those numbers take into account the potential struggles around sourcing; that that's baked into those numbers, and we feel very good about achieving those numbers. Keep in mind, we have five quarters in a row where we've beat the guidance we've provided. We have a pretty good track record at this point, and we're going to beat those numbers as well.

Great to hear. Well, I appreciate the time guys, I'll hop back in queue. Thanks.

Your next question is coming from Scott Buck at H.C. Wainwright. Your line live, please go ahead at Scott your line, ask the question.

Thank you. Good day, gentlemen. This is my first exposure to management. We purchased stock a few months ago and we're gratified by the continuing trend. I don't know why maybe you have an idea. The stock sold off immediately following the earnings release. And the last time I looked, it was down about 9% on the day. Do you have any thought as to anyone who was disappointed by the performance?

Well, first off, I want to say we appreciate you as an investor, so we're glad that you took a position, and it's definitely good to meet you. As far as insight into movement in the stock, the only thing that we could point to is analysts had us at 4 cents per share, and we came in at 1 cent per share. I think that's the only thing that we potentially could point to now that was not our guidance. Our guidance was that we would be net income positive and we would be positive EPS, which we hit both those numbers. We also gave guidance on revenue. We guided to $60 million; we beat that number. We guided to $7 million in EBITDA; we beat that number. Now for us as a company, we focus a lot less on net income and earnings per share because there's a lot that flows through the P&L that's non-cash, and we think not applicable to our business. We focus on that adjusted EBITDA number, which we think is the best number when you're evaluating the business. And like I said, very happy with our performance. We beat all the guidance we provided, but I think there was just a little bit of a disconnect on a couple of analysts that cover us on EPS versus where we ended up. I would say, by the way, that if anyone sold on this news, they are not long-term players and chances are they were cleaning out a losing position.

I have some questions on the gross margins in general. And I'd like to throw this analogy. You're familiar with CDW.

Yeah, absolutely.

Okay. Well, my thought is that in a way you're in a different specialty, but you are similar to CDW in that I see you as a wholesaler distributor of largely other people's products. And that what you do is you integrate and provide as much of a coordinated system as possible. Therefore, except of selling more software, you're not going to be a business that can easily go into the high twenties or even 30 in the next few years. Do you disagree with that?

Just to clarify, CDW is one of our largest reseller partners. So they sell our solutions and we're quite different than CDW, or, you know, TRC we talked about earlier or how these are some of the larger resellers in the US. We're different because we are the manufacturer. So we manufacture solutions under our CleverTouch brand, as well as our MI brand. We sell those through reseller partners or the channel globally in the US as well as internationally. We should be valued very differently because we own IP. We own the technology, and we're going to be able to prove much higher margins over time than these various reseller partners. So definitely should be evaluated differently.

What percentage of your sales come from self-manufactured products?

Yeah, 95% plus or 90% plus of our sales come from our own branded solutions.

So the question is how high can you go on your proprietary products as far as an achievable gross margin let's say in the next five years.

Yeah, so right now our gross profit is being hampered a little bit, as we talked about, by some of the challenges in the supply chain. If we took some of those challenges out, we would be a 30% or 30% plus gross operating margin company. Selling interactive flat panels, we've talked a lot about in the past that we expect to improve our product mix over time to where interactive flat panels are less of our total solution. We are selling a lot of other high margin solutions like software, which is 90% plus margin and various accessories which are 50% plus gross profit margin and our STEM solutions typically have a 50% plus margin. We expect to trend up from a 30% adjusted gross profit margin to something closer to 40% or even something higher than 40% within the foreseeable years to come. We're not guiding to time periods on that, but we believe our product mix will improve over time with higher gross profit margin solutions. You're going to start to see that, and I think you'll start to see it as soon as next year you'll see movement in the right direction. What else I would add on top of that is moving to the larger screen formats, which come with a greater margin, but also importantly, we now sell into the corporate sector and that's going to be a key growing part of the business going forward, which typically has much higher margins.

I'm reading in between the lines of what was said, we're talking about mitigating against the price increases that you had to absorb. I get the impression that with the price increases or cost increases that you've seen, you still are going to be behind where you'd like a gross margins to be because of this situation that your price increases have not carried enough with them to offset. Am I correct?

For the current year? Yes. We do expect the kind of, as with all businesses globally freighting to normalize at a point. Everyone is seeing significantly increased costs, ourselves included in terms of products, shipping, and freighting. That has had an impact of about 4% incremental margin. As we anticipate that starts to normalize shortly, we should see improvements.

So the gap will remain that you have in the third quarter, assuming we see more increases? Will the fourth quarter show an improvement in gross margin? Is that fair to say?

I think it would be pretty static. An earlier question touched on a comparison of Q2 versus Q4, which would have similar revenues; our guidance for slightly under Q2 revenues would be one of the reasons, as there are these increased costs we are currently bearing.

Let me ask a question on another subject, which is, I believe it was said that between the United States and overseas, you have 17 sales reps considering how much product you've added in the past year or so are 17 salespeople enough to cover the world?

No, I think the 17 relates to the acquired business that we're acquiring; FrontRow has 44 employees of which 17 are their current sales staff. No, we have a significant sales force across the operations we have. We've got over 25 already in the US and probably over 60 across EMEA. We've got a significant sales force.

Okay. I got that. Thank you. One other question regarding the integration of your acquisitions of the past year and the ones that are pending, is there still benefits to get from integration and the elimination of duplication?

Yeah, so as far as savings, there will be maybe some small amount of savings, but I think that the major focus of us is right revenue capture and future profitability from growing overall business. So I think again, minimum cost savings and more focus on combined growth of our business, which will drive more to the bottom line.

We have no further questions in queue at this time. I would like to pass the floor back to Michael Pope for closing remarks.

Thank you, everyone for your support and for joining us today on our third quarter 2021 conference call. We look forward to speaking to you again in March when we report our Q4 and full year 2021 results. Thank you.

Thank you, ladies and gentlemen, this does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.