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Creative Realities Announces Reflect Settlement Agreement

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Creative Realities (NASDAQ: CREX) has announced a settlement agreement with former Reflect Systems stockholders regarding contingent supplemental cash payments from their merger. The settlement includes:

  • A $3 million cash payment funded through First Merchants Bank credit
  • A $4 million, 30-month promissory note with 14% annual interest
  • A balloon payment of $2.3 million due September 14, 2027
  • Issuance of warrants to purchase company common stock

The agreement terminates and releases Creative Realities from its Guaranteed Consideration obligations to former Reflect stockholders. CEO Rick Mills stated this settlement provides financial flexibility while removing share overhang, allowing the company to focus on expansion and improved operating results for the remainder of fiscal 2025.

Creative Realities (NASDAQ: CREX) ha annunciato un accordo di transazione con i precedenti azionisti di Reflect Systems riguardo ai pagamenti supplementari in contante condizionati derivanti dalla loro fusione. L'accordo include:

  • Un pagamento in contante di 3 milioni di dollari finanziato tramite un credito della First Merchants Bank
  • Un cambiale di 4 milioni di dollari con una durata di 30 mesi e un interesse annuale del 14%
  • Un pagamento finale di 2,3 milioni di dollari in scadenza il 14 settembre 2027
  • Emissione di warrant per l'acquisto di azioni ordinarie della società

L'accordo termina e libera Creative Realities dai suoi obblighi di Considerazione Garantita nei confronti dei precedenti azionisti di Reflect. Il CEO Rick Mills ha dichiarato che questa transazione offre flessibilità finanziaria, rimuovendo l'eccesso di azioni, consentendo all'azienda di concentrarsi sull'espansione e sul miglioramento dei risultati operativi per il resto dell'anno fiscale 2025.

Creative Realities (NASDAQ: CREX) ha anunciado un acuerdo de conciliación con los antiguos accionistas de Reflect Systems sobre los pagos en efectivo suplementarios contingentes de su fusión. El acuerdo incluye:

  • Un pago en efectivo de 3 millones de dólares financiado a través de un crédito del First Merchants Bank
  • Una nota promisoria de 4 millones de dólares a 30 meses con un interés anual del 14%
  • Un pago global de 2,3 millones de dólares que vence el 14 de septiembre de 2027
  • Emisión de opciones para comprar acciones ordinarias de la empresa

El acuerdo termina y libera a Creative Realities de sus obligaciones de Consideración Garantizada hacia los antiguos accionistas de Reflect. El CEO Rick Mills declaró que esta conciliación proporciona flexibilidad financiera al eliminar el exceso de acciones, permitiendo a la empresa enfocarse en la expansión y en la mejora de los resultados operativos para el resto del ejercicio fiscal 2025.

Creative Realities (NASDAQ: CREX)는 이전 Reflect Systems 주주들과의 합병에서 발생한 조건부 추가 현금 지급에 대한 합의서를 발표했습니다. 합의 내용은 다음과 같습니다:

  • First Merchants Bank 신용을 통해 자금 조달된 300만 달러의 현금 지급
  • 14%의 연이자율이 적용되는 30개월 만기 400만 달러의 약속어음
  • 2027년 9월 14일에 만기가 도래하는 230만 달러의 일시불 지급
  • 회사의 보통주를 구매할 수 있는 워런트 발행

이 합의는 Creative Realities가 이전 Reflect 주주들에게 보장된 고려 사항 의무에서 면제됨을 의미합니다. CEO Rick Mills는 이번 합의가 재정적 유연성을 제공하고 주식 과잉을 제거하여 회사가 2025 회계연도 나머지 기간 동안 확장 및 운영 결과 개선에 집중할 수 있도록 한다고 밝혔습니다.

Creative Realities (NASDAQ: CREX) a annoncé un accord de règlement avec les anciens actionnaires de Reflect Systems concernant des paiements en espèces supplémentaires conditionnels résultant de leur fusion. Le règlement comprend :

  • Un paiement en espèces de 3 millions de dollars financé par un crédit de First Merchants Bank
  • Une note à ordre de 4 millions de dollars sur 30 mois avec un intérêt annuel de 14%
  • Un paiement final de 2,3 millions de dollars dû le 14 septembre 2027
  • Émission de bons de souscription pour acheter des actions ordinaires de la société

L'accord met fin et libère Creative Realities de ses obligations de Considération Garantie envers les anciens actionnaires de Reflect. Le PDG Rick Mills a déclaré que ce règlement offre une flexibilité financière tout en éliminant le surplus d'actions, permettant à l'entreprise de se concentrer sur l'expansion et l'amélioration des résultats opérationnels pour le reste de l'exercice fiscal 2025.

Creative Realities (NASDAQ: CREX) hat eine Vergleichsvereinbarung mit ehemaligen Aktionären von Reflect Systems bezüglich der bedingten zusätzlichen Barzahlungen aus ihrer Fusion angekündigt. Der Vergleich umfasst:

  • Eine Barzahlung von 3 Millionen Dollar, die über einen Kredit der First Merchants Bank finanziert wird
  • Ein 4 Millionen Dollar, 30-monatiger Schuldschein mit einem jährlichen Zinssatz von 14%
  • Eine Schlusszahlung von 2,3 Millionen Dollar, fällig am 14. September 2027
  • Ausgabe von Warrants zum Kauf von Stammaktien des Unternehmens

Die Vereinbarung beendet und entbindet Creative Realities von seinen Verpflichtungen zur garantierten Gegenleistung gegenüber ehemaligen Reflect-Aktionären. CEO Rick Mills erklärte, dass dieser Vergleich finanzielle Flexibilität bietet und die Aktienüberhang beseitigt, was es dem Unternehmen ermöglicht, sich auf Expansion und verbesserte Betriebsergebnisse für den Rest des Geschäftsjahres 2025 zu konzentrieren.

Positive
  • Settlement eliminates uncertainty and quantifies payment obligations
  • Extended payment terms provide financial flexibility with 30-month timeline
  • Removes significant share overhang
  • Structured payment plan allows focus on business growth
Negative
  • Takes on $7 million in total settlement obligations
  • High 14% interest rate on $4M promissory note
  • Large $2.3M balloon payment due in September 2027
  • Increases debt through $3M additional credit facility utilization

Insights

Creative Realities' settlement with former Reflect stockholders represents a significant financial restructuring for a company with an $18.4 million market cap. The total $7 million obligation (representing 38% of their market cap) has now been formalized with clear payment terms: a $3 million immediate cash payment using their existing credit facility, plus a $4 million promissory note carrying a 14% interest rate and requiring a $2.3 million balloon payment in September 2027.

The high interest rate signals potential creditor concerns about repayment risk and will create meaningful carrying costs over the 30-month term. While the settlement provides certainty by quantifying and extending payment obligations that might otherwise have been due immediately, it does create significant long-term financial commitments. The inclusion of stock warrants further indicates Creative Realities had leverage in negotiations and suggests future shareholder dilution.

The resolution eliminates a material contingent liability that likely constrained strategic flexibility and created investor uncertainty. This settlement transforms an ambiguous obligation into a defined payment schedule, improving financial transparency. However, servicing this debt will require strong operational performance given the company's modest size and the substantial balloon payment looming in 2.5 years.

This settlement represents a strategically negotiated compromise that restructures Creative Realities' contingent consideration obligations from the Reflect acquisition. By replacing potentially larger or immediate payment demands with a structured settlement, the company has effectively converted an uncertain legal liability into a defined financial obligation with predictable terms.

The three-component structure of the settlement (cash payment, promissory note, and equity warrants) demonstrates a carefully balanced approach that satisfies immediate cash demands while stretching significant obligations over time. The agreement's inclusion of mutual releases is particularly valuable, as it eliminates further legal challenges regarding the Guaranteed Consideration provisions from the merger agreement.

The unsecured nature of the $4 million promissory note is noteworthy, as it avoids encumbering company assets but explains the elevated 14% interest rate. This settlement transforms what was likely a contentious dispute into a negotiated business arrangement, allowing management to redirect focus from litigation to operations while providing former Reflect stockholders with defined payment terms and potential equity upside through warrants. The comprehensive resolution through this settlement eliminates a significant contingent liability that likely created uncertainty in financial reporting and strategic planning.

Quantifies Liability and Future Payment Plans

LOUISVILLE, Ky., March 17, 2025 (GLOBE NEWSWIRE) -- Creative Realities, Inc. (“Creative Realities,” “CRI,” or the “Company”) (NASDAQ: CREX), a leading provider of digital signage and AdTech solutions, today announced that it settled and resolved its dispute with former stockholders of Reflect Systems, Inc. (“Reflect”) related to the Company’s obligation to pay to former Reflect stockholders contingent supplemental cash payments under the terms of the Company’s merger with Reflect (the “Guaranteed Consideration”). The settlement terminates and releases the Company’s obligation to pay the Guaranteed Consideration in exchange for: (i) a cash payment of $3 million; (ii) a $4 million, 30-month promissory note (the “Note”); and (iii) the issuance of certain warrants to purchase common stock of the Company. The Note is an unsecured obligation of the Company that accrues interest at a rate of 14.0% per annum, and requires the Company to make a balloon payment of $2.3 million on the maturity date, September 14, 2027. A more detailed description of the settlement and settlement documents are included in a Current Report on Form 8-K of the Company being filed with the SEC.

“I’m very pleased to announce this settlement with the former Reflect stockholders, positioning us for a more certain future,” said Rick Mills, Chief Executive Officer. “We worked hard to resolve this liability in a way that is beneficial to the Company, our investors, and the former Reflect stockholders. We believe the settlement accomplishes this objective and provides a great deal of financial flexibility while removing a significant overhang on our shares. CRI will pay $3 million in cash utilizing our existing credit agreement with First Merchants Bank, and we entered into a $4 million, 30-month promissory note that includes a balloon payment in 2027. This long-term plan, along with warrants, provides us time to continue growing the Company and enhance shareholder value while giving former Reflect stockholders an additional return on their investment. I think this is a win-win for all involved that quantifies a payment schedule and eliminates uncertainty through a clear, simplified financing structure. We are very pleased with this development that allows us to focus on expansion and improved operating results for the remainder of fiscal 2025.”

About Creative Realities, Inc.
Creative Realities designs, develops and deploys digital signage-based experiences for enterprise-level networks utilizing its Clarity™, ReflectView™, and iShowroom™ Content Management System (CMS) platforms. The Company is actively providing recurring SaaS and support services across diverse vertical markets, including but not limited to retail, automotive, digital-out-of-home (DOOH) advertising networks, convenience stores, foodservice/QSR, gaming, theater, and stadium venues. In addition, the Company assists clients in utilizing place-based digital media to achieve business objectives such as increased revenue, enhanced customer experiences, and improved productivity. This includes the design, deployment, and day to day management of Retail Media Networks to monetize on-premise foot traffic utilizing its AdLogic™ and AdLogic CPM+™ programmatic advertising platforms.

Cautionary Note on Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, and includes, among other things, discussions of our business strategies, product releases, future operations and capital resources. Words such as "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance, conditions or results. They are based on the opinions, estimates and beliefs of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties, assumptions and other factors, many of which are outside of our control, that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Some of these risks are discussed in the “Risk Factors” section contained in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, and the Company’s subsequent filings with the U.S. Securities and Exchange Commission. Important factors, among others, that may affect actual results or outcomes include: our strategy for customer retention, growth, product development, market position, financial results and reserves, our ability to execute on our business plan, our ability to retain key personnel, our ability to remain listed on the Nasdaq Capital Market, our ability to realize the revenues included in our future guidance and backlog reports, our ability to satisfy our upcoming debt obligations and other liabilities, the ability of the Company to continue as a going concern, potential litigation, supply chain shortages, and general economic and market conditions impacting demand for our products and services. Readers should not place undue reliance upon any forward-looking statements. We assume no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts
Media:
Christina Davies
cdavies@ideagrove.com

Investor Relations:
Chris Witty
cwitty@darrowir.com
646-438-9385
ir@cri.com
https://investors.cri.com/


FAQ

What are the key terms of Creative Realities (CREX) settlement with Reflect Systems stockholders?

The settlement includes a $3M cash payment, a $4M promissory note over 30 months at 14% interest, a $2.3M balloon payment due September 2027, and stock purchase warrants.

How is Creative Realities (CREX) funding the $3 million cash payment in the Reflect settlement?

The $3 million cash payment will be funded through Creative Realities' existing credit agreement with First Merchants Bank.

What is the interest rate and maturity date for CREX's promissory note in the Reflect settlement?

The promissory note has a 14% annual interest rate and matures on September 14, 2027, with a $2.3M balloon payment due at maturity.

How does the Reflect settlement impact CREX's future operations?

The settlement removes share overhang and provides financial flexibility, allowing CREX to focus on expansion and improved operating results for fiscal 2025.
Creative Realities Inc

NASDAQ:CREX

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20.37M
7.49M
15.34%
36.64%
0.13%
Software - Application
Services-computer Integrated Systems Design
Link
United States
LOUISVILLE