CREX

CREATIVE REALITIES, INC.

NASDAQ · TECHNOLOGY · SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN

2.18

−0.05 −2.24%

USD · close Oct 23

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MKT CAP $29.5MP/E —DIV YIELD —FCF YIELD -34.49%REV TTM —NET INCOME −$21.2MNET DEBT $35.9M52W 2.10 – 4.15SEC XBRL · TTM TO Invalid Date

How CREX rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

52%

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131

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sentences removed

Length

+2,075

words, now 10,568

New in FY2025

As of December 31, 2025, we had 238 employees.
On February 17, 2022, we acquired Reflect Systems, Inc (“Reflect”).
On November 7, 2025, we acquired DDC Group International, Inc., an Ontario corporation and wholly owned subsidiary of Cineplex (“DDC”).
DDC is the parent company of its wholly owned subsidiary, Cineplex Digital Media Inc., an Ontario corporation (“CDMI”), and CDMI’s wholly owned subsidiary, Cineplex Digital Media US Inc., a Delaware corporation (“CDMUS”).
On November 7, 2025, we effectuated two post-closing amalgamations which resulted in CDMI and CDMUS becoming wholly owned by us, which we refer to as “CDM”.
Our principal offices are located at 13100 Magisterial Drive, Suite 201, Louisville, Kentucky 40223, and our telephone number at that office is (502) 791-8800.
We have additional offices in the Atlanta, Georgia and Waterloo, Ontario (Canada) metropolitan areas.
ITEM 1A RISK FACTORS Our business involves a high degree of risk.
We incurred net losses in 2024 and 2025 and it is uncertain whether we will be able to obtain or increase our profitability in successive periods.
Our success and longevity depend on our ability to generate profits from future operations and obtain sufficient capital through financing transactions to satisfy our debt obligations and meet our other business obligations.
The report of our independent registered public accounting firm on our Consolidated Financial Statements for the fiscal year ended December 31, 2025 includes an explanatory paragraph indicating that there is substantial doubt as to our ability to continue as a going concern within one year after that date that the Consolidated Financial Statements are issued.
As of December 31, 2025, the Company has an accumulated deficit of $65,130 and negative working capital of $5,728.
For the year ended December 31, 2025, the Company generated a net loss of $8,276 and used net cash in operations of $7,750.
These conditions and events, together with the outstanding debt obligations of the Company, raise substantial doubt about the Company's ability to continue as a going concern under the technical framework within ASU 205 - 40.
Adequate funds for our operations may not be available, requiring us to raise additional financing or else curtail our activities significantly.
On November 6, 2025, the Company refinanced its credit facilities pursuant to the Amended Credit Agreement (as described in Note 11, Debt , below), which include a $36,000 term loan and a $22,500 revolving credit facility, and sold 30,000 shares of Preferred Stock for $30,000 (each as further described in this Report).
The net proceeds from these activities were used in part to pay the purchase price payable under the Share Purchase Agreement to acquire CDM.
Additionally, we have a $4,000 Promissory Note outstanding.
If we are unable to maintain our debt service obligations, or we require additional funds for other purposes, we would be required to raise additional funding through public or private financings, including debt or equity financings.
Generally, the Amended Credit Agreement prohibits the Company and its subsidiaries from granting any security interests in any of their assets, or from issuing additional debt without the approval of the lenders under the Amended Credit Agreement.
The terms of the documents executed in connection with the Offering also provide certain limitations on our ability to effectuate any debt or equity financing, as described in the foregoing risk factor.
Any equity financing will dilute the percentages of ownership interest of then-current holders of our capital stock and may dilute our book value per share.
Any additional equity financings may also be dilutive to shareholders and may be completed at a discount to the then-current market price of our securities.
Any new debt financing, if available, may involve restrictive covenants on our operations or pertaining to future financing arrangements.
Nevertheless, we may not successfully complete any future equity or debt financing even if desired.
Revenues from the Company’s AdTech and Media Networks are also subject to seasonal and economic cycles.
Inability to either lead or remain active participants in that consolidation may have a severe adverse impact on our access to financing, customers, technology, and human resources.
We believe that our prior acquisitions of Allure, Reflect and CDM illustrate acquisition opportunities that exist in our industry.
If we do not remain active participants in consolidation, either as a consolidator or as a target, we may be left out of this process, with product offerings of limited value compared with those of our consolidated competitors.
We may not realize the growth opportunities that are anticipated from our acquisition of CDM.
The benefits we expect to achieve as a result of the acquisition of CDM will depend, in part, on our ability to realize anticipated growth opportunities.
Our success in realizing these growth opportunities, and the timing of this realization, depends largely on the successful integration of the business and operations of CDM with our business and operations.
Even if we are able to integrate our business with CDM successfully, this integration may not result in the realization of the full benefits of the growth opportunities we currently expect from this integration within the anticipated time frame or at all.
While we anticipate that certain expenses will be incurred, such expenses are difficult to estimate accurately, and may exceed current estimates, and cost saving projections may not be realized fully or at all.
Accordingly, the benefits from the acquisition may be offset by costs incurred or delays in integrating the companies, which could cause our revenue assumptions to be inaccurate.
The CDM acquisition may fail to achieve beneficial synergies.
We acquired CDM with the expectation that the acquisition will result in beneficial synergies, such as cost reductions and improving the stability of the combined company’s revenues.
Achieving these anticipated synergies and benefits will depend largely on our success in integrating CDM with our business.
Potential risks from an unsuccessful integration include: ● the potential disruption of the combined company’s ongoing business and distraction of management; ● the customers of Creative Realities or CDM may defer purchasing decisions due to disagreements with the combined company on its strategic direction and product initiatives; ● the customers of CDM may abandon or reject products and services offered by the combined company after the acquisition, including products and services of CDM that are integrated into Creative Realities’ business, such as additional software products, hosting applications or installation services; ● it may be more difficult to retain key management, marketing, and technical personnel after the acquisition; ● costs and expenditures for retaining personnel, eliminating unnecessary resources and integrating the businesses are greater than anticipated; ● the combined company cannot increase sales of its products and services; ● integrating CDM will impair the legacy relationships that Creative Realities and CDM have developed with their respective customers and business partners; ● anticipating the market needs and achieving market acceptance of our products and services; ● bringing together the companies’ marketing efforts so that the industry receives useful information about the acquisition and customers perceive value in the combined company’s products and services; and ● developing and maintaining uniform standards, controls, procedures and policies.
Even if the two companies are able to effectively integrate operations, there can be no assurance that the anticipated synergies will be achieved.

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Gone since FY2024

As of December 31, 2024, we had 146 employees.
On February 17, 2022, we acquired Reflect.
Our principal offices are located at 13100 Magisterial Drive, Ste 100, Louisville, Kentucky 40223, and our telephone number at that office is (502) 791-8800.
We have additional offices in the Dallas, TX, Atlanta, GA, and Windsor, Ontario (Canada) metro areas.
ITEM 1 A RISK FACTORS Our business involves a high degree of risk.
While we were able to achieve net income in 2022, we incurred a net loss in 2023 and 2024 and it is uncertain whether we will be able to obtain or increase our profitability in successive periods.
Our success and longevity depend on our ability to generate profits from future operations and obtain sufficient capital through financing transactions to refinance our debt obligations, pay any contingent consideration owed to former Reflect stockholders, and meet our other business obligations .
The report of our independent registered public accounting firm on our Consolidated Financial Statements for the fiscal year ended December 31, 2024 includes an explanatory paragraph indicating that there is substantial doubt as to our ability to continue as a going concern within one year after that date that the Consolidated Financial Statements are issued.
At December 31, 2024, the Company has an accumulated deficit of $56,854, and negative working capital of $11,667.
For the year ended December 31, 2024, the Company generated operating income of $938 and generated positive net cash flows from operations of $3,381.
The Company’s contingent consideration obligation was dependent upon the market value of the Company’s share price at February 17, 2025, and contractually must be settled in cash.
The estimated liability for financial statement accounting purposes is $12,815 as of December 31, 2024 .
While the Company is currently generating cash from operations and refinanced its debt in 2024, the Credit Agreement (as defined in Note 7 Debt below) limits, via specific reserve, utilization of the Company’s line of credit to no more than $4,000 (or such lesser amount determined by the lender in its sole and absolute discretion) for payments to satisfy the contingent consideration obligation.
Should the contingent consideration require a cash payment at maturity in excess of the specific reserve, the Company may not have sufficient liquidity to settle this obligation without (i) receipt of a waiver under the Credit Agreement, (ii) an amendment to the Credit Agreement to permit additional funds from the line of credit to be used for payment of the contingent consideration obligation, (iii) raising additional capital on the capital markets, the proceeds of which would be used, in whole or in part, to satisfy the contingent consideration obligation, or (iv) a reduction in the amount of the contingent consideration obligation.
The conditions and events raise substantial doubt about the Company's ability to continue as a going concern under the technical framework within ASU 205 - 40.
Our failure or inability to either lead or participate in that consolidation may have a severe adverse impact on our access to financing, customers, technology, and human resources.
We believe that our prior acquisitions of Allure and Reflect illustrate acquisition opportunities that exist in our industry.
If we are not active participants in consolidation, either as a consolidator or as a target, we may be left out of this process, with product offerings of limited value compared with those of our consolidated competitors.
Our financial condition and potential for continued net losses may cause current and prospective customers to defer placing orders with us, to require terms that are less favorable to us, or to place their orders with our competitors, which could adversely affect our business, financial condition, and results of operations.
On the same basis, third-party suppliers may refuse to do business with us, or may do so only on terms that are unfavorable to us, which also could cause our expenses to increase.
We had three customers that accounted for 15%, 13% and 10% of revenue for the year ended December 31, 2024.
No customer accounted for more than 10% of revenue for the year ended December 31, 2023.
We had one customer that accounted for 16% of accounts receivable at December 31, 2024 and two customers that accounted for 26% and 23% of accounts receivable at December 31, 2023.
Changes to the products and services we offer related to AI and ML may affect customer expectations, requirements, or tastes in ways that the Company cannot adequately anticipate or adapt to, causing its business to lose revenues.
We are exploring manners to integrate AI and ML into many of our offerings.
Any litigation to determine the validity of these claims, including claims arising through our contractual indemnification of our business partners, regardless of their merit or resolution, would likely be costly and time consuming and divert the efforts and attention of our management and technical personnel.
C orporate social responsibility, specifically related to ESG, may impose additional costs and expose us to new risks .
Anticipated changes in the U.S. political environment, including those resulting from the change in Presidential Administration and control of Congress, and to regulatory agencies, may result in significant changes to regulatory framework and enforcements .
As a result of the 2024 presidential election, changes in the Presidency and both chambers of Congress may result in significant changes in, and have resulted in uncertainty with respect to, legislation, regulation, implementation or repeal of laws and rules that could affect our business.
The new Presidential Administration has imposed and threatened tariffs against numerous countries and products, rescinded various prior executive orders and has issued new executive orders and taken other related executive actions.
Many of these policy changes will require further rulemaking actions or other formal steps before they would become law.
In addition, the new Administration has taken actions to reduce the number of federal employees and to eliminate certain federal agencies or reduce their authority.
As a result, there is significant uncertainty regarding whether or how regulations and the agencies that administer and enforce these regulations may change as a result of the actions taken to date and possible future actions by the new Administration.
Additionally, there may be litigation over such regulatory changes, and if public enforcement decreases as a result of such changes, private litigation over these matters may increase.
We continually monitor these developments in order to respond to the changing regulatory environment impacting our business.
While it is not possible to predict whether and when any such changes will occur, such changes could harm our business, operating results and financial condition.
If we are slow or unable to adapt to any such changes, our business, operating results and financial condition could be adversely affected.
Our current competitors generally include general digital signage companies, specialized digital signage operators targeting certain vertical markets (e.g., financial services, retail, or food services), content management software companies, and integrators and vertical solution providers who develop single implementations of content distribution, digital marketing technology, and related services.
RISKS RELATED TO OUR SECURITIES AND OUR COMPANY Our largest shareholder possesses significant voting power with respect to our common stock, which will limit your influence on our management and affairs, and may discourage parties from initiating potential merger, takeover, or other change-of-control transactions.
As of March 14, 2025, our largest shareholder, Slipstream, has beneficial ownership of approximately 26% of our common stock (on an as-converted, fully diluted basis including conversion of outstanding warrants, and assuming no other convertible securities, options and warrants are converted or exercised by other parties).

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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