# EDGAR Filing Document

**Accession Number:** 0001054721
**File Stem:** 0001437749-23-005664
**Filing Date:** 2023-3
**Character Count:** 19257
**Document Hash:** 91483c22c9cbebbc315531a061db460f
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-23-005664.hdr.sgml**: 20230307

**ACCESSION NUMBER**: 0001437749-23-005664

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230307

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230307

**DATE AS OF CHANGE**: 20230307

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BSQUARE CORP /WA
- **CENTRAL INDEX KEY:** 0001054721
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-BUSINESS SERVICES, NEC [7389]
- **IRS NUMBER:** 911650880
- **STATE OF INCORPORATION:** WA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-27687
- **FILM NUMBER:** 23712651

**BUSINESS ADDRESS:**
- **STREET 1:** 110    110TH AVENUE NE, SUITE 300
- **CITY:** BELLEVUE
- **STATE:** WA
- **ZIP:** 98004
- **BUSINESS PHONE:** 4255195900

**MAIL ADDRESS:**
- **STREET 1:** 110    110TH AVENUE NE, SUITE 300
- **CITY:** BELLEVUE
- **STATE:** WA
- **ZIP:** 98004

bsqr20221128_8k.htm

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**UNITED STATES** 

**SECURITIES AND EXCHANGE COMMISSION** 

**Washington, D.C. 20549** 

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**FORM 8-K**

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**CURRENT REPORT** 

**Pursuant to section 13 or 15(d)** 

**of the Securities Exchange Act of 1934** 

**Date of Report (Date of Earliest Event Reported): March 7, 2023**

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## BSQUARE CORPORATION
**(Exact name of Registrant as specified in its charter)** 

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| | | |
|:---|:---|:---|
| **Washington** | **000-27687** | **91-1650880** |
| **(State or Other Jurisdiction**<br> **of Incorporation)** | **(Commission**<br> **File Number)** | **(IRS Employer**<br> **Identification No.)** |

---

**1415 Western Avenue, Suite 700**

**Seattle, WA 98101**

**425-519-5900**

**(Address and Telephone Number of Registrant's Principal Executive Offices)** 

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| **Title of each class** | **Trading**<br> **Symbol(s)** | **Name of each exchange on which registered** |
| Common stock, no par value | BSQR | The NASDAQ Stock Market LLC |

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| | |
|:---|:---|
| **Item 2.02**  | **Results of Operations and Financial Condition.**  |

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On March 7, 2023, Bsquare Corporation (the "Company") announced its financial results for the quarter ended December 31, 2022. A copy of the Company's press release announcing these financial results and certain other information is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by this reference.

The information in this Item 2.02 shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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| | |
|:---|:---|
| **Item 9.01**  | **Financial Statements and Exhibits.**  |

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(d) The following exhibit is furnished with this Form 8-K pursuant to Item 2.02:

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| | |
|:---|:---|
| <u>**Exhibit No.**</u> | <u>**Description**</u> |
| 99.1 | [**Press release dated March 7, 2023**](ex_451086.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

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**SIGNATURES** 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **BSQUARE CORPORATION** | **BSQUARE CORPORATION** |
| Date: March 7, 2023 | By: | /s/ Cheryl A. Wynne |
|  |  | Cheryl A. Wynne |
|  |  | Chief Financial Officer |

---

## Exhibit 99.1

![logo.jpg](logo.jpg)

Exhibit 99.1

FOR IMMEDIATE RELEASE

Bsquare Announces Fourth Quarter 2022 Financial Results

***Strong cash reserves; Exploring strategic alternatives in 2023***

Seattle, WA **–** March 7, 2023 **–** Bsquare Corporation (NASDAQ: BSQR) today announced financial results for the fourth quarter of 2022. Revenue was $8.0 million, a decrease of $0.5 million or 5% from third quarter 2022. Fourth quarter operating expenses were $2.7 million, an increase of $0.5 million over the previous quarter. Loss from operations were $1.5 million which was $0.4 million larger than the previous quarter. Net loss was $1.2 million, which was slightly larger than the previous quarter. Year-end cash totaled $35.6 million, a decrease of $4.5 million from December 31, 2021.

"Q4 2022 was a was a mixed bag for us. Partner Solutions revenue was down and SquareOne revenue did not materialize as we hoped. On the plus side, improved margins and interest income from our investments helped to reduce our net loss. But those were offset by one-time restructuring charges associated with the workforce reduction we implemented in December 2022," said Ralph C. Derrickson, President and CEO of Bsquare.

Adds Derrickson: "We are entering 2023 with a plan and cost structure that aligns with reality. We are running the business as efficiently as possible, minimizing cash burn, seeking organic growth within our means, all while aggressively exploring alternatives to create shareholder value."

**Fourth Quarter 2022 Compared to Third Quarter 2022**

• Revenue for the quarter was $8.0 million, a decrease of $0.5 million or 5% from the third quarter of 2022, driven primarily by a decline in the Partner Solutions segment.

• Gross profit increased $0.1 million driven by gross margin rate improvement in both segments. The margin rate improvement in Partner Solutions was driven by increased rebate recognition and the rate improvement in Edge to Cloud was due to the increase in revenue combined with a slight decrease in cost of revenue.

• Total operating expenses for the quarter were $2.7 million, an increase of $0.5 million compared to the third quarter of 2022. The increase was driven by marketing expenses and a restructuring charge related to the fourth quarter reduction in force action.

• Loss from operations for the quarter was $1.5 million which was $0.4 million larger than the third quarter loss. Net loss for the quarter was $1.2 million, or $0.06 per diluted share, compared to a net loss of $1.1 million, or $0.05 per diluted share, in the third quarter of 2022.

• Cash, cash equivalents, restricted cash and short-term investments totaled $35.6 million on December 31, 2022, a decrease of $4.5 million from December 31, 2021. The decrease was driven primarily by cash used in operations.

• In the fourth quarter of 2022, the Company announced a plan to repurchase up to $5 million of its common stock. The plan is intended to return value to shareholders without compromising the Company's ability to pursue organic growth or strategic alternatives. During the quarter, we repurchased 178,857 shares for approximately $0.2 million.

The following table provides details regarding our financial results for the fourth quarter of 2022 (unaudited, in thousands except percentages and per share amounts):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
|  | **December 31, 2022** | **September 30, 2022** | **Quarter-over-Quarter Change** | **December 31, 2021** | **Year-over-Year Change** |
| Revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Partner Solutions | $7077 | $7557 | $(480) | $8123 | $(1046) |
| &nbsp;&nbsp;&nbsp; Edge to Cloud | 878 | 849 | 29 | 955 | (77) |
| Total revenue | 7955 | 8406 | (451) | 9078 | (1123) |
| Total gross profit | $1236 | $1135 | $101 | $1302 | $(66) |
| Gross margin: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Partner Solutions | 15% | 13% | 2 | 14% | 1 |
| &nbsp;&nbsp;&nbsp; Edge to Cloud | 22% | 18% | 4 | 14% | 8 |
| Total gross margin | 16% | 14% | 2 | 14% | 2 |
| Total operating expenses | $2748 | $2289 | $459 | $2157 | $591 |
| Net loss | (1220) | (1125) | (95) | (780) | (440) |
| Net loss per diluted share | (0.06) | (0.05) | (0.01) | (0.04) | (0.02) |
| Cash, cash equivalents and restricted cash | $35635 | $26386 | $9249 | $40086 | $(4451) |

---

**Notes:**

<sup>(1)</sup> Quarter-over-quarter and year-over-year changes represent percentage point change.

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![logo.jpg](logo.jpg)

**Fourth Quarter 2022 Compared to Fourth Quarter 2021**

• Total revenue decreased $1.1 million for the comparative period driven primarily by the Partner Solutions segment.

• Total gross profit decreased $0.1 million for the comparative period driven by lower revenue.

• Total operating expenses increased $0.6 million for the comparative period due to increases in marketing spend.

• Net loss for the current quarter was $1.2 million, or $0.06 per diluted share, compared to a net loss of $0.8 million or $0.04 per diluted share in the fourth quarter of 2021.

<u>**Conference Call**</u>

Management will host a conference call today, March 7, 2023, at 5 p.m. Eastern Time (2 p.m. Pacific Time). To access the call dial 1-877-407-0789 or 1-201-689-8562 for international callers, and reference "Bsquare Corporation Fourth Quarter 2022 Earnings Conference Call." A replay will be available for two weeks following the call by dialing 1-844-512-2921, or 1-412-317-6671 for international callers; reference access ID 13736621. A live and replay Webcast of the call will be available at www.bsquare.com in the investor relations section.

**About Bsquare Corporation** 

Bsquare helps companies build connected products that participate intelligently in their own security, deployment, operation, and management, allowing our customers to realize the full potential of a connected world. We have extensive experience designing with Windows, Linux, Android, and other embedded operating systems and now operate IoT networks ranging in size from 50,000 to more than 1 million devices for our customers. Our technology is powering devices that help people be productive, enhance quality of life, and preserve the resources of our planet. Bsquare serves a global customer base from offices in Seattle, WA, and the United Kingdom. For more information, visit <u>www.bsquare.com</u>.

**Cautionary Note Regarding Forward-Looking Statements**

This release contains "forward-looking statements" within the meaning of the safe-harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: "expect," "continue," "believe," "plan," "strategy," "future," "may," "should," "will," and similar references to future periods. Examples of forward-looking statements include, among others, express or implied statements we make regarding the stability of our business, expected improvements to our IoT and software offerings, expected operating results in future periods, such as anticipated revenue, gross margins, profitability, cash and investments, and regarding strategies for customer retention, growth, new product and service developments, and market position. Forward-looking statements are neither historical facts nor assurances about future performance. Instead, they are based on current beliefs, expectations and assumptions about the future of our business and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others: our ability to execute our development initiatives and sales and marketing strategies; the extent to which we are successful in gaining new long-term customers and retaining existing ones; whether we are able to maintain our favorable relationship with Microsoft as a systems integrator and distributor; our success in leveraging strategic partnering initiatives with companies such as Microsoft, AWS and Intel; the ongoing impact of COVID-19 on our business and on our customers and vendors; and such other risk factors as discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. Except as required by law, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

---

| |
|:---|
| **Bsquare and Investor Contact:** |
| Cheryl Wynne, Chief Financial Officer |
| Bsquare Corporation |
| +1 425.519.5900 |
| <u>investorrelations@bsquare.com</u> |

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*Bsquare and the Bsquare Logo are trademarks of Bsquare Corporation in the U.S. and other countries. Other names and brands herein may be trademarks of others.*

1415 Western Avenue, Suite 700, Seattle, Washington 98101 **Toll Free:** 888.820.4500 **Main:** +1 425.519.5900 **Fax:** +1 425.519.5999

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![logo.jpg](logo.jpg)

**BSQUARE CORPORATION** 

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

**(In thousands, except share amounts)**

**(unaudited)**

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp; Cash and cash equivalents | $35414 | $39529 |
| &nbsp;&nbsp;&nbsp; Restricted cash | 221 | 557 |
| &nbsp;&nbsp;&nbsp; Short-term investments | 7 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable, net of allowance for doubtful accounts of $50 at December 31, 2022 and December 31, 2021 | 3985 | 4914 |
| &nbsp;&nbsp;&nbsp; Prepaid expenses and other current assets | 410 | 364 |
| &nbsp;&nbsp;&nbsp; Contract assets |  | 46 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets | 40037 | 45410 |
| Property and equipment, net of accumulated depreciation | 813 | 726 |
| Deferred tax assets |  |  |
| Right-of-use lease assets, net | 1297 | 1598 |
| Other non-current assets | 24 | 24 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets | $42171 | $47758 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp; Third-party software fees payable | $4073 | $4628 |
| &nbsp;&nbsp;&nbsp; Accounts payable | 414 | 426 |
| &nbsp;&nbsp;&nbsp; Accrued compensation | 430 | 502 |
| &nbsp;&nbsp;&nbsp; Other accrued expenses | 232 | 219 |
| &nbsp;&nbsp;&nbsp; Deferred revenue, current portion | 201 | 944 |
| &nbsp;&nbsp;&nbsp; Operating leases | 362 | 357 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities | 5712 | 7076 |
| Deferred revenue | 9 | 194 |
| Operating leases, long-term | 1051 | 1363 |
| Shareholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp; Preferred stock, no par: 10,000,000 shares authorized; no shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, no par value: 37,500,000 shares authorized; 20,337,906 and 20,374,406 issued and outstanding on December 31, 2022 and December 31, 2021, respectively | 172558 | 172397 |
| &nbsp;&nbsp;&nbsp; Accumulated other comprehensive loss | (1053) | (1024) |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (136106) | (132248) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total shareholders' equity | 35399 | 39125 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and shareholders' equity | $42171 | $47758 |

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1415 Western Avenue, Suite 700, Seattle, Washington 98101 **Toll Free:** 888.820.4500 **Main:** +1 425.519.5900 **Fax:** +1 425.519.5999

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![logo.jpg](logo.jpg)

**BSQUARE CORPORATION** 

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS** 

**(In thousands, except per share amounts)** 

**(unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Partner Solutions | $7077 | $8123 | $33119 | $36516 |
| &nbsp;&nbsp;&nbsp; Edge to Cloud | 878 | 955 | 3368 | 3851 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total revenue | 7955 | 9078 | 36487 | 40367 |
| Cost of revenue: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Partner Solutions | 6031 | 6950 | 28263 | 31478 |
| &nbsp;&nbsp;&nbsp; Edge to Cloud | 688 | 826 | 2771 | 3474 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total cost of revenue | 6719 | 7776 | 31034 | 34952 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gross profit | 1236 | 1302 | 5453 | 5415 |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Selling, general and administrative | 2277 | 1794 | 8472 | 8003 |
| &nbsp;&nbsp;&nbsp; Research and development | 266 | 363 | 1042 | 1304 |
| &nbsp;&nbsp;&nbsp; Restructuring | 205 |  | 205 |  |
| Total operating expenses | 2748 | 2157 | 9719 | 9307 |
| Loss from operations | (1512) | (855) | (4266) | (3892) |
| Other income, net | 292 | 75 | 408 | 1650 |
| Loss before income taxes | (1220) | (780) | (3858) | (2242) |
| Income taxes |  |  |  |  |
| Net loss | $(1220) | $(780) | $(3858) | $(2242) |
| Basic and diluted net loss per share | $(0.06) | $(0.04) | $(0.19) | $(0.13) |
| Shares used in per share calculations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Basic and diluted | 20474 | 19607 | 20449 | 16640 |

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1415 Western Avenue, Suite 700, Seattle, Washington 98101 **Toll Free:** 888.820.4500 **Main:** +1 425.519.5900 **Fax:** +1 425.519.5999