What changed in this filing

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Item 1A. Risk Factors

2022-03-22 compared with 2021-03-10 · 592 added, 613 removed, 26 unchanged (98% of the section changed)

Our business involves a high degree of

In evaluating our business, you should carefully consider the specific risks described below, and any risks described in

our other filings with the Securities and Exchange Commission, pursuant to Sections 13(a), 13(c), 14, or 15(d) of the Securities

Exchange Act of 1934.

Any of the risks we describe below could cause our business, financial condition, results of operations or

future prospects to be materially adversely affected.

In addition, some of the following statements are forward-looking statements.

For more information about forward-looking statements, please see the “Forward-Looking Statements”

section included

in Item 7 of this Annual Report.

Amounts within the “Risk Factors”

section are stated in thousands with the exception

of share information.

RISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY

COVID-19 pandemic has had, and may in the future have, a significant adverse impact on our advertising revenue and also exposes

ITEM 1 A RISK FACTORS

business involves a high degree of risk.

In evaluating our business, you should carefully consider the specific risks described below,

and any risks described in our other filings with the Securities and Exchange Commission, pursuant to Sections 13(a), 13(c), 14, or 15(d)

of the Securities Exchange Act of 1934.

Any of the risks we describe below could cause our business, financial condition, results of

operations or future prospects to be materially adversely affected.

In addition, some of the following statements are forward-looking

RELATED TO OUR BUSINESS AND OUR INDUSTRY

ongoing COVID-19 pandemic has had, and may in the future have, a significant adverse impact on our advertising revenue and also exposes

our business to other risks.

The ongoing COVID-19 pandemic has resulted

in authorities implementing numerous preventative measures to contain or mitigate the outbreak of the virus, such as travel bans

and restrictions, limitations on business activity, quarantines, and shelter-in-place orders.

These measures have caused, and are

continuing to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide, which have significantly

impacted our business and results of operations.

For example, for the year ended December

31, 2020, our revenue declined by $14,141, or 45%, versus the year ended December 31, 2019, as compared to a four-year average

revenue growth rate of 29.1% from 2015 to 2019, and represented the first revenue reduction for the Company since its merger with

ConeXus World Global, LLC in October 2015.

This reduction was driven by a combination of factors, including, but not limited to,

a decrease in revenues generated from (1) installation services of $4,962 following a significant increase in suspended, delayed,

and cancelled customer projects, initiatives, and capital expenditures as a direct result of the COVID-19 pandemic, (2) management

services of $1,186 related to contracts with customers which were partially or permanently closed during the year, and (3) reductions

in new customer acquisition, each of which were directly attributable, either in whole or in part, to the COVID-19 pandemic.

While we have seen improved revenue generation

and customer activity in the second half of 2020 and first quarter of 2021, there can be no assurance that it will not decrease

again as a result of the effects of the pandemic.

In addition, we believe that the pandemic has contributed to an acceleration

in the shift of commerce from offline to online, potentially altering customer demand for our products and services as our customers

evaluate the most effective approach to capture consumer demand.

The demand for and pricing of our services

may be materially and adversely impacted by the pandemic for the foreseeable future, and we are unable to predict the duration

or degree of such impact with any certainty.

In addition to the impact on our installation and managed services business, the pandemic

exposes our business, operations, and workforce to a variety of other risks, including:

● delays in product development or releases,

or reductions in manufacturing production and sales of hardware, as a result of inventory shortages, supply chain or labor shortages,

or diversion of our efforts and resources to projects related to COVID-19;

● our inability to recognize revenue, collect

payment, or generate future revenue from customers, including from those that have been or may be forced to close their businesses

or are otherwise impacted by the economic downturn;

● significant volatility and disruption

of global financial markets, which could negatively impact our ability to access capital in the future;

● negative impact on our workforce productivity,

product development, and research and development due to difficulties resulting from our personnel working remotely;

● illnesses to key employees, or a significant

portion of our workforce, which may result in inefficiencies, delays, and disruptions in our business;

● increased volatility and uncertainty in

the financial projections we use as the basis for estimates used in our financial statements.

Any of these developments may adversely

affect our business, harm our reputation, or result in legal or regulatory actions against us.

The persistence of COVID-19, and

the preventative measures implemented to help limit the spread of the illness, have impacted, and will continue to impact, our

ability to operate our business and may materially and adversely impact our business, financial condition, and results of operations.

The launch of our new Safe Space Solutions products may

not be successful.

On April 28, 2020, we announced the joint

launch of an AI-integrated non-contact temperature inspection kiosk known as the Thermal Mirror with our partner, InReality, for

use by businesses as COVID-19 related workplace restrictions are reduced or eliminated.

Although we have experience in providing

customers digital integration solutions, our launch of the Thermal Mirror involves the development, marketing and sale of a new

product to new customers involving a joint effort with InReality.

The product also uses hardware and technologies that have not

been used with our other customers.

To date, the Company and InReality continued to develop incremental use cases and subsequently

launched a suite of Safe Space Solutions products addressing this market, each of which operate consistently with our primary business

model in that they represent a sale of hardware and a SaaS-based subscription license services contract.

While we believe this product and our launch

will be successful, there are a number of risks involved in such a launch.

First, we are investing significant time and resources

that take away the attention of management that would otherwise be available for ongoing development of our existing business or

to respond to new opportunities.

We also have limited cash and we are spending significant costs in the launch, which may ultimately

not be successful.

This cash could have been used to support our other proven business lines.

We face significant competition from

other COVID-19 related workplace safety solutions, and our competitors have more capital resources than we do.

The failure to successfully

manage these risks in the development and marketing of Safe Space Solutions could have a material, adverse effect on the Company’s

business, financial condition, and results of operations.

We have generally incurred losses, and may never become

or remain profitable.

Except for the second, third and fourth

quarters of 2019, we have incurred historical net losses.

As of and for the year-ended December 31, 2020, we had a working capital

deficit and negative cash flows from operations.

We incurred a net loss for the years ended December 31, 2020 and December 31,

While we have been able to achieve profitability in certain recent periods, it is uncertain whether we will be able to sustain

or increase our profitability in successive periods.

We have formulated our business plans and

strategies based on certain assumptions regarding the acceptance of our business model and the marketing of our products and services.

Nevertheless, our assessments regarding market size, market share, market acceptance of our products and services and a variety

of other factors may prove incorrect.

Our future success will depend upon many factors, including factors beyond our control and

those that cannot be predicted at this time.

The ongoing COVID-19 pandemic has also caused a significant increase in suspended,

delayed, and cancelled customer projects, initiatives, and capital expenditures, and it is not known when these opportunities will

be revived for the Company, if at all.

Our digital marketing business is

evolving in a rapidly changing market, and we cannot ensure the long-term successful operation of our business or the execution

of our business plan.

Our digital marketing technology and solutions

are an evolving business offering and the markets in which we compete are rapidly changing and the evolution has slowed as a result

of the COVID-19 pandemic.

As a result, our prospects must be considered in light of the risks, expenses and difficulties frequently

encountered by growing companies in new and rapidly evolving markets.

We may be unable to accomplish any of the following, which

would materially impact our ability to implement our business plan:

establishing and maintaining broad market acceptance of our technology, solutions, services, and platforms, and converting that acceptance into direct and indirect sources of revenue;

establishing and maintaining adoption of our technology, solutions, services, and platforms in and on a variety of environments, experiences, and device types;

timely and successfully developing new technology, solution, service, and platform features, and increasing the functionality and features of our existing technology, solution, service, and platform offerings;

developing technology, solutions, services, and platforms that result in a high degree of customer satisfaction and a high level of end-customer usage;

successfully responding to competition, including competition from emerging technologies and solutions;

developing and maintaining strategic relationships to enhance the distribution, features, content and utility of our technology, solutions, services, and platforms;

identifying, attracting and retaining talented engineering, network operations, program management, technical services, creative services, and other personnel at reasonable market compensation rates in the markets in which we employ such personnel;

integration of acquisitions.

Our business strategy may be unsuccessful

and we may be unable to address the risks we face in a cost-effective manner, if at all.

If we are unable to successfully accomplish

these tasks, our business will be harmed.

Adequate funds for our operations may not be available,

requiring us to raise additional financing or else curtail our activities significantly.

On February 18, 2021, the Company entered

into a securities purchase agreement with an institutional investor which provided for the issuance and sale by the Company of

800,000 shares of the Company’s common stock (the “Shares”), in a registered direct offering (the “Offering”)

at a purchase price of $2.50 per Share, for gross proceeds of $2,000.

The net proceeds from the Offering after paying estimated

offering expenses were approximately $1,835 which the Company intends to use for general corporate purposes.

The closing of the

Offering occurred on February 22, 2021.

We may nonetheless be required to raise

additional funding through public or private financings, including equity financings, through 2021.

We have an “at-the-market”

offering in place, pursuant to which we may direct Roth Capital Partners, our sale agent, to sell shares of our common stock to

investors in the market, subject to the terms and conditions of a sales agreement.

ongoing COVID-19 pandemic has resulted in authorities implementing numerous preventative measures to contain or mitigate the outbreak

of the virus, such as travel bans and restrictions, limitations on business activity, quarantines, and shelter-in-place orders.

measures have caused, and are continuing to cause, business slowdowns or shutdowns in certain affected areas, both regionally and worldwide,

which have significantly adversely impacted our business and results of operations.

For example, for the year ended December 31, 2021 and 2020, our revenue

was $18,437 and $17,457, representing a reduction of 42% and 45% as compared to the year ended December 31, 2019 revenue, respectively.

The Company’s four-year average revenue growth rate was 29.1% from 2015 to 2019, and 2020 represented the first revenue reduction

for the Company since the merger with ConeXus World Global, LLC in October 2015.

This reduction was driven by a combination of factors,

including, but not limited to, a decrease in revenues generated from (1) installation services following a significant increase in suspended,

delayed, and cancelled customer projects, initiatives, and capital expenditures as a direct result of the COVID-19 pandemic, (2) management

services related to contracts with customers which were partially or permanently closed during the year(s), and (3) reductions in new

customer acquisition, each of which were directly attributable, either in whole or in part, to the COVID-19 pandemic.

While we grew revenue

5.6% in 2021, this growth rate is below our historic average.

we have seen improved revenue generation and customer activity in the second half of 2020 and in 2021, there can be no assurance that

it will not decrease again as a result of the effects of the pandemic.

In addition, we believe that the pandemic has contributed to an

acceleration in the shift of commerce from offline to online, potentially altering customer demand for our products and services as our

customers evaluate the most effective approach to capture consumer demand.

demand for and pricing of our services may be materially and adversely impacted by the pandemic for the foreseeable future, and we are

unable to predict the duration or degree of such impact with any certainty.

In addition to the impact on our installation and managed

services business, the pandemic exposes our business, operations, and workforce to a variety of other risks, including:

in product development or releases, or reductions in manufacturing production and sales of consumer hardware, as a result of inventory

shortages, supply chain or labor shortages;

volatility and disruption of global financial markets, which could negatively impact our ability to access capital in the future;

inability to recognize revenue, collect payment, or generate future revenue from customers, including from those that have been or

may be forced to close their businesses or are otherwise impacted by the economic downturn;

impact on our workforce productivity, product development, and research and development due to difficulties resulting from our personnel

working remotely;

to key employees, or a significant portion of our workforce, which may result in inefficiencies, delays, and disruptions in our business;

volatility and uncertainty in the financial projections we use as the basis for estimates used in our financial statements.

of these developments may adversely affect our business, harm our reputation, or result in legal or regulatory actions against us.

persistence of the COVID-19 pandemic, and the preventative measures implemented to help limit the spread of the illness, have impacted,

and will continue to impact, our ability to operate our business and may materially and adversely impact our business, financial condition,

and results of operations.

have generally incurred losses, and may never become or remain profitable.

have incurred historical net losses, and we have had negative cash flows from operations.

While we have been able to achieve profitability

in 2021, it is uncertain whether we will be able to sustain or increase our profitability in successive periods.

have formulated our business plans and strategies based on certain assumptions regarding the acceptance of our business model and the

marketing of our products and services.

Nevertheless, our assessments regarding market size, market share, market acceptance of our products

and services and a variety of other factors may prove incorrect.

Our future success will depend upon many factors, including factors

beyond our control and those that cannot be predicted at this time.

The ongoing COVID-19 pandemic has also caused a significant increase

in suspended, delayed, and cancelled customer projects, initiatives, and capital expenditures, and it is not known when these opportunities

will be revived for the Company, if at all.

digital marketing business is evolving in a rapidly changing market, and we cannot ensure the long-term successful operation of our business

or the execution of our business plan.

digital marketing technology and solutions are an evolving business offering and the markets in which we compete are rapidly changing

and the evolution has slowed as a result of the COVID-19 pandemic.

As a result, our prospects must be considered in light of the risks,

expenses and difficulties frequently encountered by growing companies in new and rapidly evolving markets.

We may be unable to accomplish

any of the following, which would materially impact our ability to implement our business plan:

and maintaining broad market acceptance of our technology, solutions, services, and platforms, and converting that acceptance into

direct and indirect sources of revenue;

and maintaining adoption of our technology, solutions, services, and platforms in and on a variety of environments, experiences,

and device types;

and successfully developing new technology, solution, service, and platform features, and increasing the functionality and features

of our existing technology, solution, service, and platform offerings;

technology, solutions, services, and platforms that result in a high degree of customer satisfaction and a high level of end-customer

responding to competition, including competition from emerging technologies and solutions;

and maintaining strategic relationships to enhance the distribution, features, content and utility of our technology, solutions,

services, and platforms;

attracting and retaining talented engineering, network operations, program management, technical services, creative services, and

other personnel at reasonable market compensation rates in the markets in which we employ such personnel;

of acquisitions.

business strategy may be unsuccessful and we may be unable to address the risks we face in a cost-effective manner, if at all.

are unable to successfully accomplish these tasks, our business will be harmed.

funds for our operations may not be available, requiring us to raise additional financing or else curtail our activities significantly.

During February of 2022, the Company completed a Debt Financing and

Equity Financing (as further described in this Annual Report), which resulted in gross proceeds to the Company, prior to deducting placement

agent and other offering fees, of approximately $20,000.

The net proceeds from the forgoing financings were

used to pay the cash portion of the merger consideration payable to former stockholders of Reflect in connection with our acquisition

of Reflect in February 2022.

As a result, we may be required to raise additional funding through public or private financings, including

equity financings, through 2022 and beyond.

We have an “at-the-market” offering in place, pursuant to which we may direct

Roth Capital Partners, our sale agent, to sell shares of our common stock to investors in the market, subject to the terms and conditions

of a sales agreement.

These sales are dilutive to shareholders.

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.

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.

Adequate funds for

our operations, whether from financial markets, collaborative or other arrangements, may not be available when needed or on terms

attractive to us.

If adequate funds are not available, our plans to operate our business may be adversely affected and we could

be required to curtail our activities significantly and/or cease operating.

We do not have sufficient capital to engage in material

research and development, which may harm our long-term growth.

In light of our limited resources in general,

we have made no material investments in research and development over the past several years.

This conserves capital in the short

In the long term, as a result of our failure to invest in research and development, our technology and product offerings

may not keep pace with the market, and we may lose any current existing competitive advantage.

Over the long term, this may harm

our revenues growth and our ability to become profitable.

We are reliant on the continued support

of a related party for adequate financing of our operations.

As of March 8, 2021, our largest shareholder

and investor, Slipstream Communications LLC (“Slipstream”) is the holder of 83.5% of our outstanding debt instruments

including a term loan, secured revolving promissory note, and secured special promissory note and has beneficial ownership of approximately

36.2% 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) as of December 31, 2020.

has also provided us with a continued support letter through March 31, 2022.

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.

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.

Adequate funds for our operations, whether from financial markets, collaborative or other arrangements, may

not be available when needed or on terms attractive to us.

If adequate funds are not available, our plans to operate our business may

be adversely affected and we could be required to curtail our activities significantly and/or cease operating.

do not have sufficient capital to engage in material research and development, which may harm our long-term growth.

light of our limited resources in general, we have limited material investments in research and development over the past several years.

This conserves capital in the short term.

In the long term, as a result of our failure to invest in research and development, our technology

and product offerings may not keep pace with the market, and we may lose any current existing competitive advantage.

Over the long term,

this may harm our revenues growth and our ability to become profitable.

are reliant on the continued support of a related party for adequate financing of our operations.

As of March 22, 2022, our largest shareholder and investor, Slipstream

Communications LLC (“Slipstream”) is the holder of 87% of our outstanding debt instruments, including two term loans, and

has beneficial ownership of approximately 47.57% 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).

Slipstream has also provided us with a continued support letter through March 31, 2023.

If we are unable to extend the maturity or replace

1 unchanged sentence

to curtail our activities significantly and/or cease operating.

We expect that there will be significant consolidation

in our industry.

Our failure or inability to lead that consolidation would have a severe adverse impact on our access to financing,

customers, technology, and human resources.

Our industry is currently composed of a

large number of relatively small businesses, no single one of which is dominant or which provides integrated solutions and product

offerings incorporating much of the available technology.

Accordingly, we believe that substantial consolidation may occur in our

industry in the near future.

If we do not play a positive role in that consolidation, either as a leader or as a participant whose

capability is merged in a larger entity, we may be left out of this process, with product offerings of limited value compared with

those of our competitors.

Moreover, even if we lead the consolidation process, the market may not validate the decisions we make

in that process.

Our success depends on our interactive marketing technologies

achieving and maintaining widespread acceptance in our targeted markets.

Our success will depend to a large extent

on broad market acceptance of our interactive marketing technologies among our current and prospective customers.

Our prospective

customers may still not use our solutions for a number of other reasons, including preference for static advertising, lack of familiarity

with our technology, preference for competing technologies or perceived lack of reliability.

We believe that the acceptance of

our interactive marketing technologies by prospective customers will depend primarily on the following factors:

our ability to demonstrate the economic and other benefits attendant to our interactive marketing technologies;

our customers becoming comfortable with using our interactive marketing technologies;

the reliability of our interactive marketing technologies.

Our interactive technologies are complex

and must meet stringent user requirements.

Some undetected errors or defects may only become apparent as new functions are added

to our technologies and products.

The need to repair or replace products with design or manufacturing defects could temporarily

delay the sale of new products and adversely affect our reputation.

Delays, costs and damage to our reputation due to product defects

could harm our business.

Our financial condition and potential for continued net

losses may negatively impact our relationships with customers, prospective customers and third-party suppliers.

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

has been, and we expect that there will continue to be, significant consolidation in our industry.

Our failure or inability to lead that

consolidation would have a severe adverse impact on our access to financing, customers, technology, and human resources.

industry is currently composed of a large number of relatively small businesses, no single one of which is dominant or which provides

integrated solutions and product offerings incorporating much of the available technology.

Accordingly, we believe that substantial consolidation

may occur in our industry in the near future.

We believe that our prior acquisitions of Allure and Reflect illustrate acquisition opportunities

that exist in our industry.

If we do not play a positive role in that consolidation, either as a leader or as a participant whose capability

is merged in a larger entity, we may be left out of this process, with product offerings of limited value compared with those of our

Moreover, even if we lead the consolidation process, the market may not validate the decisions we make in that process.

success depends on our interactive marketing technologies achieving and maintaining widespread acceptance in our targeted markets.

success will depend to a large extent on broad market acceptance of our interactive marketing technologies among our current and prospective

Our prospective customers may still not use our solutions for a number of other reasons, including preference for static advertising,

lack of familiarity with our technology, preference for competing technologies or perceived lack of reliability.

We believe that the

acceptance of our interactive marketing technologies by prospective customers will depend primarily on the following factors:

ability to demonstrate the economic and other benefits attendant to our interactive marketing technologies;

customers becoming comfortable with using our interactive marketing technologies;

reliability of our interactive marketing technologies.

interactive technologies are complex and must meet stringent user requirements.

Some undetected errors or defects may only become apparent

as new functions are added to our technologies and products.

The need to repair or replace products with design or manufacturing defects

could temporarily delay the sale of new products and adversely affect our reputation.

Delays, costs and damage to our reputation due

to product defects could harm our business.

financial condition and potential for continued net losses may negatively impact our relationships with customers, prospective customers

and third-party suppliers.

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 do not have long-term purchase commitments from our customers, the failure to obtain anticipated orders or the deferral or cancellation

of commitments could have adverse effects on our business.

business is characterized by short-term purchase orders and contracts that do not require that purchases be made by our customers.

makes forecasting our sales difficult.

The failure to obtain anticipated orders and deferrals or cancellations of purchase commitments

because of changes in customer requirements, or otherwise, could have a material adverse effect on 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.

Because we do not have long-term purchase commitments

from our customers, the failure to obtain anticipated orders or the deferral or cancellation of commitments could have adverse

effects on our business.

Our business is characterized by short-term

purchase orders and contracts that do not require that purchases be made by our customers.

This makes forecasting our sales difficult.

The failure to obtain anticipated orders and deferrals or cancellations of purchase commitments because of changes in customer

requirements, or otherwise, could have a material adverse effect on our business, financial condition and results of operations.

We have experienced such challenges in the past and may experience such challenges in the future.

Our continued growth and financial

performance could be adversely affected by the loss of several key customers, including a significant related party customer.

Our largest customers account for a significant

portion of our total revenue on a consolidated basis.

We had two (2) and one (1) customer(s) that accounted for 27.8% and 18.5%

of revenue for the years ended December 31, 2020 and 2019, respectively.

For the years ended December 31, 2020 and

2019, we had sales of $1,058 (6.1% of consolidated sales) and $1,103 (3.5% of consolidated sales), respectively, with 33 Degrees

Convenience Connect, Inc., a related party that is approximately 17.5% owned by a member of our senior management (“33 Degrees”).

Decisions by one or more of these key customers

to not renew, terminate or substantially reduce their use of our products, technology, services, and platform could substantially

slow our revenue growth and lead to a decline in revenue.

Our business plan assumes continued growth in revenue, and it is unlikely

that we will become profitable without a continued increase in revenue.

Most of our contracts are terminable by our customers

with limited notice and without penalty payments, and early terminations could have a material adverse effect on our business,

operating results and financial condition.

Most of our contracts are terminable by

our customers following limited notice and without early termination payments or liquidated damages due from them.

each stage of a project often represents a separate contractual commitment, at the end of which the customers may elect to delay

or not to proceed to the next stage of the project.

We cannot assure you that one or more of our customers will not terminate a

material contract or materially reduce the scope of a large project.

The delay, cancellation or significant reduction in the scope

of a large project or a number of projects could have a material adverse effect on our business, operating results and financial

It is common for our current and prospective customers

to take a long time to evaluate our products, most especially during economic downturns that affect our customers’

including as a result of the COVID-19 pandemic.

The lengthy and variable sales cycle makes it difficult to predict our operating

It is difficult for us to forecast the timing

and recognition of revenue from sales of our products and services because our actual and prospective customers often take significant

time to evaluate our products before committing to a purchase.

Even after making their first purchases of our products and services,

existing customers may not make significant purchases of those products and services for a long period of time following their

initial purchases, if at all.

The period between initial customer contact and a purchase by a customer may be years with potentially

an even longer period separating initial purchases and any significant purchases thereafter.

During the evaluation period, prospective

customers may decide not to purchase or may scale down proposed orders of our products for various reasons, including:

reduced need to upgrade existing visual marketing systems;

introduction of products by our competitors;

lower prices offered by our competitors;

changes in budgets and purchasing priorities.

Our prospective customers routinely require

education regarding the use and benefit of our products.

This may also lead to delays in receiving customers’

Our industry is characterized by frequent technological

If we are unable to adapt our products and services and develop new products and services to keep up with these rapid changes,

we will not be able to obtain or maintain market share.

The market for our products and services

is characterized by rapidly changing technology, evolving industry standards, changes in customer needs, heavy competition and

frequent new product and service introductions.

If we fail to develop new products and services or modify or improve existing products

and services in response to these changes in technology, customer demands or industry standards, our products and services could

become less competitive or obsolete.

We must respond to changing technology and

industry standards in a timely and cost-effective manner.

We may not be successful in using new technologies, developing new products

and services or enhancing existing products and services in a timely and cost-effective manner.

Furthermore, even if we successfully

adapt our products and services, these new technologies or enhancements may not achieve market acceptance.

A portion of our business involves the use of software

technology that we have developed or licensed.

Industries involving the ownership and licensing of software-based intellectual

property are characterized by frequent intellectual-property litigation, and we could face claims of infringement by others in

the industry.

continued growth and financial performance could be adversely affected by the loss of several key customers.

had two (2) customers that accounted for 41.1% and 27.8% of revenue for the years ended December 31, 2021 and 2020, respectively.

by one or more of these key customers to not renew, terminate or substantially reduce their use of our products, technology, services,

and platform could substantially slow our revenue growth and lead to a decline in revenue.

Our business plan assumes continued growth

in revenue, and it is unlikely that we will become profitable without a continued increase in revenue.

of our contracts are terminable by our customers with limited notice and without penalty payments, and early terminations could have

a material adverse effect on our business, operating results and financial condition.

of our contracts are terminable by our customers following limited notice and without early termination payments or liquidated damages

due from them.

In addition, each stage of a project often represents a separate contractual commitment, at the end of which the customers

may elect to delay or not to proceed to the next stage of the project.

We cannot assure you that one or more of our customers will not

terminate a material contract or materially reduce the scope of a large project.

The delay, cancellation or significant reduction in

the scope of a large project or a number of projects could have a material adverse effect on our business, operating results and financial

is common for our current and prospective customers to take a long time to evaluate our products, most especially during economic downturns

that affect our customers’ businesses, including as a result of the COVID-19 pandemic.

The lengthy and variable sales cycle makes

it difficult to predict our operating results.

is difficult for us to forecast the timing and recognition of revenue from sales of our products and services because our actual and

prospective customers often take significant time to evaluate our products before committing to a purchase.

Even after making their first

purchases of our products and services, existing customers may not make significant purchases of those products and services for a long

period of time following their initial purchases, if at all.

The period between initial customer contact and a purchase by a customer

may be years with potentially an even longer period separating initial purchases and any significant purchases thereafter.

evaluation period, prospective customers may decide not to purchase or may scale down proposed orders of our products for various reasons,

need to upgrade existing visual marketing systems;

of products by our competitors;

prices offered by our competitors;

in budgets and purchasing priorities.

prospective customers routinely require education regarding the use and benefit of our products.

This may also lead to delays in receiving

customers’ orders.

industry is characterized by frequent technological change.

If we are unable to adapt our products and services and develop new products

and services to keep up with these rapid changes, we will not be able to obtain or maintain market share.

market for our products and services is characterized by rapidly changing technology, evolving industry standards, changes in customer

needs, heavy competition and frequent new product and service introductions.

If we fail to develop new products and services or modify

or improve existing products and services in response to these changes in technology, customer demands or industry standards, our products

and services could become less competitive or obsolete.

must respond to changing technology and industry standards in a timely and cost-effective manner.

We may not be successful in using new

technologies, developing new products and services or enhancing existing products and services in a timely and cost-effective manner.

Furthermore, even if we successfully adapt our products and services, these new technologies or enhancements may not achieve market acceptance.

portion of our business involves the use of software technology that we have developed or licensed.

Industries involving the ownership

and licensing of software-based intellectual property are characterized by frequent intellectual-property litigation, and we could face

claims of infringement by others in the industry.

Such claims are costly and add uncertainty to our operational results.

A portion of our business involves our ownership

and licensing of software.

This market space is characterized by frequent intellectual property claims and litigation.

be subject to claims of infringement of third-party intellectual-property rights resulting in significant expense and the potential

loss of our own intellectual property rights.

From time to time, third parties may assert copyright, trademark, patent or other

intellectual property rights to technologies that are important to our business.

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.

portion of our business involves our ownership and licensing of software.

This market space is characterized by frequent intellectual

property claims and litigation.

We could be subject to claims of infringement of third-party intellectual-property rights resulting in

significant expense and the potential loss of our own intellectual property rights.

From time to time, third parties may assert copyright,

trademark, patent or other intellectual property rights to technologies that are important to our business.

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

If any such litigation resulted in an adverse ruling, we could be required to:

pay substantial damages;

cease the development, use, licensing or sale of infringing products;

discontinue the use of certain technology;

obtain a license under the intellectual property rights of the third party claiming infringement, which license may not be available on reasonable terms or at all.

Our proprietary platform architectures

and data tracking technology underlying certain of our services are complex and may contain unknown errors in design or implementation

that could result in system performance failures or inability to scale.

The platform architecture, data tracking

technology and integration layers underlying our proprietary platforms, our contract administration, procurement, timekeeping,

content and network management, network services, device management, virtualized services, software automation and other tools,

and back-end services are complex and include specially developed software and code.

This software and code are developed internally,

licensed from third parties, or integrated by in-house personnel and third parties.

Any of the system architecture, system administration,

integration layers, software or code may contain errors, or may be implemented or interpreted incorrectly, particularly when they

are first introduced or when new versions or enhancements to our tools and services are released.

Consequently, our systems could

experience performance failure, or we may be unable to scale our systems, which may:

adversely impact our relationship with customers and others who experience system failure, possibly leading to a loss of affected and unaffected customers;

increase our costs related to product development or service delivery;

adversely affect our revenues and expenses.

Our business may be adversely affected by malicious applications

that interfere with, or exploit security flaws in, our products and services.

Our business may be adversely affected by

malicious applications that make changes to our customers’

computer systems and interfere with the operation and use of our

products or products that impact our business.

These applications may attempt to interfere with our ability to communicate with

our customers’

The interference may occur without disclosure to or consent from our customers, resulting in a negative

experience that our customers may associate with our products and services.

These applications may be difficult or impossible to

uninstall or disable, may reinstall themselves and may circumvent other applications’

efforts to block or remove them.

ability to provide customers with a superior interactive marketing technology experience is critical to our success.

If our efforts

to combat these malicious applications fail, or if our products and services have actual or perceived vulnerabilities, there may

be claims based on such failure or our reputation may be harmed, which would damage our business and financial condition.

We compete with other companies that have more resources,

which puts us at a competitive disadvantage.

The market for interactive marketing technologies

is generally highly competitive and we expect competition to increase in the future.

Some of our competitors or potential competitors

may have significantly greater financial, technical and marketing resources than us.

These competitors may be able to respond more

rapidly than we can to new or emerging technologies or changes in customer requirements.

They may also devote greater resources

to the development, promotion and sale of their products than us.

We expect competitors to continue to improve

the performance of their current products and to introduce new products, services and technologies.

Successful new product and

service introductions or enhancements by our competitors could reduce sales and the market acceptance of our products and services,

cause intense price competition or make our products and services obsolete.

To be competitive, we must continue to invest significant

resources in research and development, sales and marketing and customer support.

If we do not have sufficient resources to make

these investments or are unable to make the technological advances necessary to be competitive, our competitive position will suffer.

substantial damages;

the development, use, licensing or sale of infringing products;

the use of certain technology;

a license under the intellectual property rights of the third party claiming infringement, which license may not be available on

reasonable terms or at all.

proprietary platform architectures and data tracking technology underlying certain of our services are complex and may contain unknown

errors in design or implementation that could result in system performance failures or inability to scale.

platform architecture, data tracking technology and integration layers underlying our proprietary platforms, our contract administration,

procurement, timekeeping, content and network management, network services, device management, virtualized services, software automation

and other tools, and back-end services are complex and include specially developed software and code.

This software and code are developed

internally, licensed from third parties, or integrated by in-house personnel and third parties.

Any of the system architecture, system

administration, integration layers, software or code may contain errors, or may be implemented or interpreted incorrectly, particularly

when they are first introduced or when new versions or enhancements to our tools and services are released.

Consequently, our systems

could experience performance failure, or we may be unable to scale our systems, which may:

impact our relationship with customers and others who experience system failure, possibly leading to a loss of affected and unaffected

our costs related to product development or service delivery;

affect our revenues and expenses.

business may be adversely affected by malicious applications that interfere with, or exploit security flaws in, our products and services.

business may be adversely affected by malicious applications that make changes to our customers’ computer systems and interfere

with the operation and use of our products or products that impact our business.

These applications may attempt to interfere with our

ability to communicate with our customers’ devices.

The interference may occur without disclosure to or consent from our customers,

resulting in a negative experience that our customers may associate with our products and services.

These applications may be difficult

or impossible to uninstall or disable, may reinstall themselves and may circumvent other applications’ efforts to block or remove

The ability to provide customers with a superior interactive marketing technology experience is critical to our success.

efforts to combat these malicious applications fail, or if our products and services have actual or perceived vulnerabilities, there

may be claims based on such failure or our reputation may be harmed, which would damage our business and financial condition.

compete with other companies that have more resources, which puts us at a competitive disadvantage.

market for interactive marketing technologies is generally highly competitive and we expect competition to increase in the future.

of our competitors or potential competitors may have significantly greater financial, technical and marketing resources than us.

competitors may be able to respond more rapidly than we can to new or emerging technologies or changes in customer requirements.

may also devote greater resources to the development, promotion and sale of their products than us.

expect competitors to continue to improve the performance of their current products and to introduce new products, services and technologies.

Successful new product and service introductions or enhancements by our competitors could reduce sales and the market acceptance of our

products and services, cause intense price competition or make our products and services obsolete.

To be competitive, we must continue

to invest significant resources in research and development, sales and marketing and customer support.

If we do not have sufficient resources

to make these investments or are unable to make the technological advances necessary to be competitive, our competitive position will

Increased competition could result in price reductions, fewer customer orders, reduced margins and loss of market share.

to compete successfully against current or future competitors could adversely affect our business and financial condition.

Our future success depends on key personnel and our ability

to attract and retain additional personnel.

Our key personnel include our:

Rick Mills, our Chief Executive Officer;

Will Logan, our Chief Financial Officer;

Mike McKim, our Vice President of Operations

If we fail to retain our key personnel or

to attract, retain and motivate other qualified employees, our ability to maintain and develop our business may be adversely affected.

Our future success depends significantly on the continued service of our key technical, sales and senior management personnel and

their ability to execute our growth strategy.

The loss of the services of our key employees could harm our business.

unable to retain our employees or to attract, assimilate and retain other highly qualified employees who could migrate to other

employers who offer competitive or superior compensation packages, especially in light of the compensation reductions that we implemented

in connection with the COVID-19 pandemic.

We are subject to cyber security risks and interruptions

or failures in our information technology systems and will likely need to expend additional resources to enhance our protection

from such risks.

Notwithstanding our efforts, a cyber incident could occur and result in information theft, data corruption, operational

disruption and/or financial loss.

We depend on digital technologies to process

and record financial and operating data and rely on sophisticated information technology systems and infrastructure to support

our business, including process control technology.

At the same time, cyber incidents, including deliberate attacks, have increased.

government has issued public warnings that indicate that energy assets might be specific targets of cyber security threats.

Our technologies, systems and networks and those of our vendors, suppliers and other business partners may become the target of

cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse, loss

or destruction of proprietary and other information, or other disruption of business operations.

failure to compete successfully against current or future competitors could adversely affect our business and financial condition.

future success depends on key personnel and our ability to attract and retain additional personnel.

key personnel include:

Mills, our Chief Executive Officer;

Logan, our Chief Financial Officer;

Summers, our President of Media;

Sanders, our Chief Strategy Officer.

we fail to retain our key personnel or to attract, retain and motivate other qualified employees, our ability to maintain and develop

our business may be adversely affected.

Our future success depends significantly on the continued service of our key technical, sales

and senior management personnel and their ability to execute our growth strategy.

The loss of the services of our key employees could

harm our business.

We may be unable to retain our employees or to attract, assimilate and retain other highly qualified employees who

could migrate to other employers who offer competitive or superior compensation packages.

are subject to cyber security risks and interruptions or failures in our information technology systems and will likely need to expend

additional resources to enhance our protection from such risks.

Notwithstanding our efforts, a cyber incident could occur and result

in information theft, data corruption, operational disruption and/or financial loss.

depend on digital technologies to process and record financial and operating data and rely on sophisticated information technology systems

and infrastructure to support our business, including process control technology.

At the same time, cyber incidents, including deliberate

attacks, have increased.

government has issued public warnings that indicate that energy assets might be specific targets of

cyber security threats.

Our technologies, systems and networks and those of our vendors, suppliers and other business partners may become

the target of cyberattacks or information security breaches that could result in the unauthorized release, gathering, monitoring, misuse,

loss or destruction of proprietary and other information, or other disruption of business operations.

In addition, certain cyber incidents,

such as surveillance, may remain undetected for an extended period.

Our systems for protecting against cyber security risks may

not be sufficient.

As the sophistication of cyber incidents continues to evolve, we will likely be required to expend additional

resources to continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents.

Additionally, any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures,

usage errors by employees, computer viruses, cyber-attacks or other security breaches or similar events.

The failure of any of

our information technology systems may cause disruptions in our operations, which could adversely affect our revenues and profitability.

Our reliance on information management and transaction

systems to operate our business exposes us to cyber incidents and hacking of our sensitive information if our outsourced service

provider experiences a security breach.

Effective information security internal

controls are necessary for us to protect our sensitive information from illegal activities and unauthorized disclosure in addition

to denial of service attacks and corruption of our data.

In addition, we rely on the information security internal controls maintained

by our outsourced service provider.

Breaches of our information management system could also adversely affect our business reputation.

Finally, significant information system disruptions could adversely affect our ability to effectively manage operations or reliably

report results.

Because our technology, products,

platform, and services are complex and are deployed in and across complex environments, they may have errors or defects that could

seriously harm our business.

Our technology, proprietary platforms, products

and services are highly complex and are designed to operate in and across data centers, large and complex networks, and other elements

of the digital media workflow that we do not own or control.

On an ongoing basis, we need to perform proactive maintenance services

on our platform and related software services to correct errors and defects.

In the future, there may be additional errors and

defects in our software that may adversely affect our services.

We may not have in place adequate reporting, tracking, monitoring,

and quality assurance procedures to ensure that we detect errors in our software in a timely manner.

If we are unable to efficiently

and cost-effectively fix errors or other problems that may be identified, or if there are unidentified errors that allow persons

to improperly access our services, we could experience loss of revenues and market share, damage to our reputation, increased expenses

and legal actions by our customers.

We may have insufficient network or server capacity, which

could result in interruptions in our services and loss of revenues.

Our operations are dependent in part upon:

Our systems for protecting against cyber security risks may not be

As the sophistication of cyber incidents continues to evolve, we will likely be required to expend additional resources to

continue to modify or enhance our protective measures or to investigate and remediate any vulnerability to cyber incidents.

Additionally,

any of these systems may be susceptible to outages due to fire, floods, power loss, telecommunications failures, usage errors by employees,

computer viruses, cyber-attacks or other security breaches or similar events.

The failure of any of our information technology systems

may cause disruptions in our operations, which could adversely affect our revenues and profitability.

reliance on information management and transaction systems to operate our business exposes us to cyber incidents and hacking of our sensitive

information if our outsourced service provider experiences a security breach.

information security internal controls are necessary for us to protect our sensitive information from illegal activities and unauthorized

disclosure in addition to denial of service attacks and corruption of our data.

In addition, we rely on the information security internal

controls maintained by our outsourced service provider.

Breaches of our information management system could also adversely affect our

business reputation.

Finally, significant information system disruptions could adversely affect our ability to effectively manage operations

or reliably report results.

our technology, products, platform, and services are complex and are deployed in and across complex environments, they may have errors

or defects that could seriously harm our business.

technology, proprietary platforms, products and services are highly complex and are designed to operate in and across data centers, large

and complex networks, and other elements of the digital media workflow that we do not own or control.

On an ongoing basis, we need to

perform proactive maintenance services on our platform and related software services to correct errors and defects.

In the future, there

may be additional errors and defects in our software that may adversely affect our services.

We may not have in place adequate reporting,

tracking, monitoring, and quality assurance procedures to ensure that we detect errors in our software in a timely manner.

unable to efficiently and cost-effectively fix errors or other problems that may be identified, or if there are unidentified errors that

allow persons to improperly access our services, we could experience loss of revenues and market share, damage to our reputation, increased

expenses and legal actions by our customers.

may have insufficient network or server capacity, which could result in interruptions in our services and loss of revenues.

operations are dependent in part upon:

network capacity provided by third-party telecommunications networks;

data center services provider owned and leased infrastructure

and capacity;

our dedicated and virtualized server capacity located at its data center services provider partner and a geo-redundant

micro-data center location;

data center services provider

owned and leased infrastructure and capacity;

our dedicated and virtualized server capacity located at its data center services provider

partner and a geo-redundant micro-data center location;

and our own infrastructure and equipment.

Collectively, this infrastructure, equipment, and capacity

must be sufficiently robust to handle all of our customers’

web-traffic, particularly in the event of unexpected surges in

high-definition video traffic and network services incidents.

We (and our service providers) may not be adequately prepared for

unexpected increases in bandwidth and related infrastructure demands from our customers.

Collectively, this infrastructure,

equipment, and capacity must be sufficiently robust to handle all of our customers’ web-traffic, particularly in the event of unexpected

surges in high-definition video traffic and network services incidents.

We (and our service providers) may not be adequately prepared

for unexpected increases in bandwidth and related infrastructure demands from our customers.

In addition, the bandwidth we have contracted

to purchase may become unavailable for a variety of reasons, including payment disputes, outages, or such service providers going

out of business.

Any failure of these service providers or our own infrastructure to provide the capacity we require, due to financial

or other reasons, may result in a reduction in, or interruption of, service to our customers, leading to an immediate decline in

revenue and possible additional decline in revenue as a result of subsequent customer losses.

Our business operations are susceptible to interruptions

caused by events beyond our control.

Our business operations are susceptible

to interruptions caused by events beyond our control.

We are vulnerable to the following potential problems, among others:

our platform, technology, products, and services and underlying infrastructure, or that of our key suppliers, may be damaged or destroyed by events beyond our control, such as fires, earthquakes, floods, power outages or telecommunications failures;

we and our customers and/or partners may experience interruptions in service as a result of the accidental or malicious actions of Internet users, hackers or current or former employees;

we may face liability for transmitting viruses to third parties that damage or impair their access to computer networks, programs, data or information.

Eliminating computer viruses and alleviating other security problems may require interruptions, delays or cessation of service to our customers;

failure of our systems or those of our suppliers may disrupt service to our customers (and from our customers to their customers), which could materially impact our operations (and the operations of our customers), adversely affect our relationships with our customers and lead to lawsuits and contingent liability.

The occurrence of any of the foregoing could

result in claims for consequential and other damages, significant repair and recovery expenses and extensive customer losses and

otherwise have a material adverse effect on our business, financial condition and results of operations.

The markets in which we operate are rapidly emerging,

and we may be unable to compete successfully against existing or future competitors to our business.

The market in which we operate is becoming

increasingly competitive.

Our current competitors generally include general digital signage companies, specialized digital

signage operators targeting certain vertical markets (e.g., financial services), content management software companies, or integrators

and vertical solution providers who develop single implementations of content distribution, digital marketing technology, and related

These competitors, including future new competitors who may emerge, may be able to develop a comparable or superior solution

capabilities, software platform, technology stack, and/or series of services that provide a similar or more robust set of features

and functionality than the technology, products and services we offer.

If this occurs, we may be unable to grow as necessary to

make our business profitable.

Whether or not we have superior products,

many of these current and potential future competitors have a longer operating histories in their current respective business areas

and greater market presence, brand recognition, engineering and marketing capabilities, and financial, technological and personnel

resources than we do.

Existing and potential competitors with an extended operating history, even if not directly related to our

business, have an inherent marketing advantage because of the reluctance of many potential customers to entrust key operations

to purchase may become unavailable for a variety of reasons, including payment disputes, outages, or such service providers going out

Any failure of these service providers or our own infrastructure to provide the capacity we require, due to financial or

other reasons, may result in a reduction in, or interruption of, service to our customers, leading to an immediate decline in revenue

and possible additional decline in revenue as a result of subsequent customer losses.

business operations are susceptible to interruptions caused by events beyond our control.

We are vulnerable to the following potential

problems, among others:

platform, technology, products, and services and underlying infrastructure, or that of our key suppliers, may be damaged or destroyed

by events beyond our control, such as fires, earthquakes, floods, power outages or telecommunications failures;

and our customers and/or partners may experience interruptions in service as a result of the accidental or malicious actions of Internet

users, hackers or current or former employees;

may face liability for transmitting viruses to third parties that damage or impair their access to computer networks, programs, data

or information.

Eliminating computer viruses and alleviating other security problems may require interruptions, delays or cessation

of service to our customers;

of our systems or those of our suppliers may disrupt service to our customers (and from our customers to their customers), which

could materially impact our operations (and the operations of our customers), adversely affect our relationships with our customers

and lead to lawsuits and contingent liability.

occurrence of any of the foregoing could result in claims for consequential and other damages, significant repair and recovery expenses

and extensive customer losses and otherwise have a material adverse effect on our business, financial condition and results of operations.

markets in which we operate are rapidly emerging, and we may be unable to compete successfully against existing or future competitors

to our business.

market in which we operate is becoming increasingly competitive.

Our current competitors generally include general digital signage

companies, specialized digital signage operators targeting certain vertical markets (e.g., financial services), content management software

companies, or integrators and vertical solution providers who develop single implementations of content distribution, digital marketing

technology, and related services.

These competitors, including future new competitors who may emerge, may be able to develop a comparable

or superior solution capabilities, software platform, technology stack, and/or series of services that provide a similar or more robust

set of features and functionality than the technology, products and services we offer.

If this occurs, we may be unable to grow as necessary

to make our business profitable.

or not we have superior products, many of these current and potential future competitors have a longer operating histories in their current

respective business areas and greater market presence, brand recognition, engineering and marketing capabilities, and financial, technological

and personnel resources than we do.

Existing and potential competitors with an extended operating history, even if not directly related

to our business, have an inherent marketing advantage because of the reluctance of many potential customers to entrust key operations

to a company that may be perceived as new, inexperienced or unproven.

In addition, our existing and potential future competitors

may be able to use their extensive resources to:

develop and deploy new products and services more quickly and effectively than we can;

develop, improve and expand their platforms and related infrastructures more quickly than we can;

reduce costs, particularly hardware costs, because of discounts associated with large volume purchases and longer-term relationships and commitments;

offer less expensive products, technology, platform, and services as a result of a lower cost structure, greater capital reserves or otherwise;

adapt more swiftly and completely to new or emerging technologies and changes in customer requirements;

take advantage of acquisition and other opportunities more readily;

devote greater resources to the marketing and sales of their products, technology, platform, and services.

If we are unable to compete effectively

in our various markets, or if competitive pressures place downward pressure on the prices at which we offer our products and services,

our business, financial condition and results of operations may suffer.

Risks Related to Our Securities and Our Company

The variable sales cycle of some

of the combined company’s products will likely make it difficult to predict operating results.

Our revenues in any quarter depend substantially

upon contracts signed and the related shipment and installation or delivery of hardware and software products in that quarter.

It is therefore difficult for us to accurately predict revenues and this difficulty also will affect the Company.

It is difficult

to forecast the timing of large individual hardware and software sales with a high degree of certainty due to the extended length

of the sales cycle and the generally more complex contractual terms that may be associated with our products that could result

in the deferral of some or all of the revenue to future periods.

Accordingly, large individual sales have

sometimes occurred in quarters subsequent to when we anticipated or not at all.

If we receive any significant cancellation or deferral

of customer orders, or it is unable to conclude license negotiations by the end of a fiscal quarter, our operating results may

be lower than anticipated.

In addition, our existing and potential future competitors may

be able to use their extensive resources to:

and deploy new products and services more quickly and effectively than we can;

improve and expand their platforms and related infrastructures more quickly than we can;

costs, particularly hardware costs, because of discounts associated with large volume purchases and longer-term relationships and

less expensive products, technology, platform, and services as a result of a lower cost structure, greater capital reserves or otherwise;

more swiftly and completely to new or emerging technologies and changes in customer requirements;

advantage of acquisition and other opportunities more readily;

greater resources to the marketing and sales of their products, technology, platform, and services.

we are unable to compete effectively in our various markets, or if competitive pressures place downward pressure on the prices at which

we offer our products and services, our business, financial condition and results of operations may suffer.

Safe Space Solutions products may no longer be marketable.

April 28, 2020, we announced the joint launch of an AI-integrated non-contact temperature inspection kiosk known as the Thermal Mirror

with our partner, InReality, for use by businesses as COVID-19 related workplace restrictions are reduced or eliminated.

While the product

and its launch were successful and recouped our initial investment, we still maintain $1,750 of inventory as of December 31, 2021 that

is solely used in deploying our Safe Space Solutions which may not be saleable elsewhere should the market for these products reduce

or eliminate as a result of the development of the COVID-19 vaccine.

As of December 31, 2021, the Company has recorded a reserve of $426

for this inventory in the Consolidated Balance Sheet.

RELATED TO OUR ACQUISITION OF REFLECT SYSTEMS, INC.

loss of the services of certain key management personnel at Reflect could impair our ability to execute our business strategy and as

a result, reduce our sales and profitability.

depend on the continued services of certain key personnel from Reflect’s senior management team.

As we integrate and combine Reflect’s

with our business, the loss of key personnel at Reflect could have a material adverse effect on our ability to execute our business strategy

and on our financial condition and results of operations.

Reflect does not maintain key-person insurance for members of its senior management

team and we do not anticipate obtaining any such insurance.

may be unable to successfully integrate Reflect with our business, which could cause our business to suffer.

acquisition of Reflect is significant, and we may be unable to successfully integrate and combine the operations, personnel and technology

of Reflect with our operations.

If we fail to successfully manage the integration of Reflect, we may experience interruptions in our

business activities, a deterioration in our employee and customer relationships, increased costs of integration and harm to our reputation,

all of which could have a material adverse effect on our business, financial condition and results of operations.

The types of integration

issues we face may include difficulties in combining corporate cultures, maintaining employee morale and retaining key employees.

integration process is likely to impose substantial demands on our management.

Other challenges involved in integrating Reflect with

Creative Realities include, but are not limited to, the following:

existing customers and strategic partners for each company;

and integrating management and other key employees of the combined company;

research and development activities to enhance introduction of new products and technologies, especially in light of rapidly evolving

markets for those products and technologies;

managing the diversion of management’s attention from business matters to integration issues;

product offerings and incorporating acquired software, technology and rights into the product offerings of the combined company effectively

sales efforts so that customers can do business easily with the combined company;

transitioning

all facilities to a common information technology environment;

offering products and services of Creative Realities and Reflect to each other’s customers;

the market needs and achieving market acceptance of our products and services;

together the companies’ marketing efforts so that the industry receives useful information about the combination and customers

perceive value in the combined company’s products and services;

and maintaining uniform standards, controls, procedures and policies.

is no assurance that improved operating results will be achieved as a result of the Reflect acquisition or that we successfully integrate

the businesses of Reflect in a timely manner, if at all.

may not realize the growth opportunities that are anticipated from our acquisition of Reflect.

benefits we expect to achieve as a result of the Reflect acquisition 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 Reflect’s business and operations with our business and operations.

Even if we are able to integrate our business

with Reflect’s business 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.

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.

acquisition of Reflect may fail to achieve beneficial synergies.

consummated the acquisition of Reflect 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 our existing business with Reflect’s business.

Potential risks from an unsuccessful integration

potential disruption of the combined company’s ongoing business and distraction of management;

risk that the customers of Creative Realities or Reflect may defer purchasing decisions due to disagreements with the combined company

on its strategic direction and product initiatives;

risk that Reflect’s customers abandon or reject products offered by the combined company after the acquisition, including Reflect

products that are integrated into Creative Realities’ business, such as additional software products, hosting applications

or installation services;

risk that it may be more difficult to retain key management, marketing, and technical personnel after the acquisition;

risk that costs and expenditures for retaining personnel, eliminating unnecessary resources and integrating the businesses are greater

than anticipated;

risk that the combined company cannot increase sales of its product;

risk that integrating and changing the businesses will impair Creative Realities’ and Reflect’s relationships with their

customers and business partners.

offering products and services of Creative Realities and Reflect to each other’s customers;

the market needs and achieving market acceptance of our products and services;

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 maintaining uniform standards, controls, procedures and policies.

if the two companies are able to effectively integrate operations, there can be no assurance that the anticipated synergies will be achieved.

The failure to achieve such synergies could adversely affect the business, results of operations and financial condition of the combined

The assumption of unknown liabilities in

the acquisition of Reflect may harm our financial condition and results of operations.

we acquired all of the capital stock of Reflect, we obtained ownership of Reflect subject to all of its liabilities, including contingent

and unknown liabilities.

Although the definitive merger agreement includes representations and warranties and indemnity covenants from

the sellers of Reflect capital stock that may offer us some contractual remedies for breaches or certain other undisclosed or unknown

liabilities, there are limitations and conditions to our ability to recoup any liabilities, and there may be other unknown obligations

for which we have no contractual remedy.

In such a case, our business could be materially and adversely affected.

We may learn additional

information about Reflect’s business that adversely affects us, such as the existence of unknown liabilities, or issues that could

affect our ability to comply with applicable laws.

If Reflect’s liabilities are greater than expected, or if there are material

obligations of which we do not become aware until after the acquisition or we have no recourse against the Seller, our business could

be materially and adversely affected.

If we become responsible for substantial uninsured liabilities, such liabilities may have a material

adverse effect on our financial condition and results of operations.

have incurred and will continue to incur significant transaction and integration costs in connection with the acquisition of Reflect.

have incurred significant costs associated with completing the acquisition of Reflect, and expect to incur additional significant costs

integrating the operations of the two companies.

The substantial majority of these costs will be non-recurring expenses and will consist

of transaction costs (e.g., legal, accounting), facilities and systems consolidation costs and employment-related costs.

Additional unanticipated

costs may be incurred in the integration of our businesses.

Although we expect that the elimination of duplicative costs, as well as

the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and acquisition

costs over time, this net benefit may not be achieved in the near term, or at all.

RELATED TO OUR SECURITIES AND OUR COMPANY

variable sales cycle of our products will likely make it difficult to predict operating results.

revenues in any quarter depend substantially upon contracts signed and the related shipment and installation or delivery of hardware

and software products in that quarter.

It is therefore difficult for us to accurately predict revenues and this difficulty also will

affect the Company.

It is difficult to forecast the timing of large individual hardware and software sales with a high degree of certainty

due to the extended length of the sales cycle and the generally more complex contractual terms that may be associated with our products

that could result in the deferral of some or all of the revenue to future periods.

large individual sales have sometimes occurred in quarters subsequent to when we anticipated or not at all.

If we receive any significant

cancellation or deferral of customer orders, or it is unable to conclude license negotiations by the end of a fiscal quarter, our operating

results may be lower than anticipated.

In addition, any weakening or uncertainty in the economy may make it more difficult for the Company

to predict quarterly results in the future, and could negatively impact our business, operating results and financial condition

for an indefinite period of time.

Our largest shareholder possesses controlling voting power

with respect to our common stock, which will limit your influence on corporate matters.

Our largest shareholder, Slipstream Communications,

LLC, has beneficial ownership of 6,726,350 shares of common stock, including common shares that are beneficially owned by its affiliate

Slipstream Funding, LLC.

In addition, the Company may pay off certain of its outstanding principal and interest owed to Slipstream

Communications, LLC in shares of its common stock, which would increase the number of shares beneficially owned by Slipstream Communications.

These shares represent beneficial ownership of approximately 36.2% of our common stock (on an as-converted basis including conversion

of outstanding warrants) as of March 7, 2021.

As a result, Slipstream Communications, LLC has significant influence on our management

and affairs, including the election and removal of our Board of Directors and all other matters requiring shareholder approval,

including the future merger, consolidation or sale of all or substantially all of our assets.

This stockholder position could discourage

others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise be beneficial to

our shareholders.

Furthermore, this concentrated ownership will limit the practical effect of your participation in Company matters,

through shareholder votes and otherwise.

Our Articles of Incorporation grant our Board of Directors

the power to issue additional shares of common and preferred stock and to designate other classes of preferred stock, all without

shareholder approval.

Our authorized capital consists of 250 million

shares of capital stock, 50 million of which is undesignated preferred stock.

Pursuant to authority granted by our Articles of

Incorporation, our Board of Directors, without any action by our shareholders, may designate and issue shares in such classes or

series (including other classes or series of preferred stock) as it deems appropriate and establish the rights, preferences and

privileges of such shares, including dividends, liquidation and voting rights, provided it is consistent with Minnesota law.

rights of holders of other classes or series of stock that may be issued could be superior to the rights of holders of our common

The designation and issuance of shares of capital stock having preferential rights could adversely affect other rights

appurtenant to shares of our common stock.

to predict quarterly results in the future, and could negatively impact our business, operating results and financial condition for an

indefinite period of time.

largest shareholder possesses controlling voting power with respect to our common stock, which will limit your influence on corporate

As of the date of this Annual Report, our largest shareholder, Slipstream

Communications, LLC, has beneficial ownership of 11,658,469 shares of common stock, including common shares that are beneficially owned

by its affiliate Slipstream Funding, LLC, and including warrants not yet exercisable.

As a result, Slipstream Communications, LLC has

significant influence on our management and affairs, including the election and removal of our Board of Directors and all other matters

requiring shareholder approval, including the future merger, consolidation or sale of all or substantially all of our assets.

This stockholder

position could discourage others from initiating any potential merger, takeover or other change-of-control transaction that may otherwise

be beneficial to our shareholders.

Furthermore, this concentrated ownership will limit the practical effect of your participation in Company

matters, through shareholder votes and otherwise.

Articles of Incorporation grant our Board of Directors the power to issue additional shares of common and preferred stock and to designate

other classes of preferred stock, all without shareholder approval.

authorized capital consists of 250,000,000 shares of capital stock, 50,000,000 of which is undesignated preferred stock.

authority granted by our Articles of Incorporation, our Board of Directors, without any action by our shareholders, may designate and

issue shares in such classes or series (including other classes or series of preferred stock) as it deems appropriate and establish the

rights, preferences and privileges of such shares, including dividends, liquidation and voting rights, provided it is consistent with

Minnesota law.

The rights of holders of other classes or series of stock that may be issued could be superior to the rights of holders

of our common shares.

The designation and issuance of shares of capital stock having preferential rights could adversely affect other

rights appurtenant to shares of our common stock.

Furthermore, any issuances of additional stock (common or preferred) will dilute the

percentage of ownership interest of then-current holders of our capital stock and may dilute our book value per share.

We do not intend to pay dividends on our common stock

for the foreseeable future.

We do not plan to pay dividends on our common

stock for the foreseeable future.

Earnings of the business will be reinvested in future growth strategies or utilized to repay

outstanding debt.

We do not have significant tangible

assets that could be sold upon liquidation.

We have nominal tangible assets.

if we become insolvent or otherwise must dissolve, there will be no tangible assets to liquidate and no corresponding proceeds

to disburse to our shareholders.

If we become insolvent or otherwise must dissolve, shareholders will likely not receive any cash

proceeds on account of their shares.

We can provide no assurance that our securities will continue

to meet Nasdaq listing requirements.

If we fail to comply with the continuing listing standards of the Nasdaq, our securities could

do not intend to pay dividends on our common stock for the foreseeable future.

do not plan to pay dividends on our common stock for the foreseeable future.

Earnings of the business will be reinvested in future growth

strategies or utilized to repay outstanding debt.

do not have significant tangible assets that could be sold upon liquidation.

have nominal tangible assets.

As a result, if we become insolvent or otherwise must dissolve, there will be no tangible assets to liquidate

and no corresponding proceeds to disburse to our shareholders.

If we become insolvent or otherwise must dissolve, shareholders will likely

not receive any cash proceeds on account of their shares.

can provide no assurance that our securities will continue to meet Nasdaq listing requirements.

If we fail to comply with the continuing

listing standards of the Nasdaq, our securities could be delisted.

A failure to remain listed on Nasdaq could have a material adverse

effect on the liquidity and price of our common stock.

Our pending disputes arising out

of our Allure acquisition may harm our financial condition and results of operations.

We acquired the capital stock of Allure

in 2018 from Christie Digital Systems.

We are currently engaged in a dispute involving Allure and its legacy customer based upon

alleged deficient products and services provided by Allure prior to our acquisition.

The alleged claim seeks $3,200 from us in

damages that, if successful, would materially adversely affect our business.

We have also tendered an indemnity claim against Christie

Digital Systems for the claimed damages in such dispute, and have alleged additional damages related to the Allure acquisition.

In connection with our claims against Christie Digital, we asserted an offset right and have not paid to Christie Digital Systems

the $1,637 outstanding principal or accrued interest under a promissory note that matured on February 20, 2020.

Christie Digital

Systems disputes our ability to exercise such offset right.

At this time, there is no guarantee that we will prevail on any matter.

Our required payment of the foregoing amounts would have a material adverse effect on our cash flow and operations.

General Risk Factors

Unpredictability in financing markets could impair our

ability to grow our business through acquisitions.

We anticipate that opportunities to acquire

similar businesses will materially depend on, among other things, the availability of financing alternatives with acceptable terms.

As a result, poor credit and other market conditions or uncertainty in financial markets could materially limit our ability to

grow through acquisitions since such conditions and uncertainty make obtaining financing more difficult.

Because of our limited resources, we may not have in place

various processes and protections common to more mature companies and may be more susceptible to adverse events.

We have limited resources as a result of,

among other things, significant restructuring and integration costs incurred in connection with prior acquisition activities.

a result, we may not have in place systems, processes and protections that many of our competitors have or that may be essential

to protect against various risks.

For example, we have in place only limited resources and processes addressing human resources,

timekeeping, data protection, business continuity, personnel redundancy, and knowledge institutionalization concerns.

result, we are at risk that one or more adverse events in these and other areas may materially harm our business, balance sheet,

revenues, expenses or prospects.

General global market and economic conditions may have

an adverse impact on our operating performance and results of operations.

Our business has been and could continue

to be affected by general global economic and market conditions.

Any downturn in the United States and worldwide economy could

have a negative effect on our operating results, including a decrease in revenue and operating cash flow.

To the extent our customers

are unable to profitably leverage various forms of digital marketing technology and solutions, and/or the content we create, deliver

and publish on their behalf, they may reduce or eliminate their purchase of our products and services.

Such reductions in traffic

would lead to a reduction in our revenues.

Additionally, in a down-cycle economic environment, we may experience the negative effects

of increased competitive pricing pressure, customer loss, slowdown in commerce over the Internet and corresponding decrease in

traffic delivered over our network and failures by our customers to pay amounts owed to us on a timely basis or at all.

we fail to comply with the continuing listing standards of the Nasdaq, our securities could be delisted.

A failure to remain listed on

Nasdaq could have a material adverse effect on the liquidity and price of our common stock.

Unpredictability

in financing markets could impair our ability to grow our business through acquisitions.

anticipate that opportunities to acquire similar businesses will materially depend on, among other things, the availability of financing

alternatives with acceptable terms.

As a result, poor credit and other market conditions or uncertainty in financial markets could materially

limit our ability to grow through acquisitions since such conditions and uncertainty make obtaining financing more difficult.

Because of our limited internal resources, we may not have in

place various processes and protections common to more mature companies and may be more susceptible to adverse events.

have limited internal resources.

As a result, we may not have in place systems, processes and protections that many of our competitors

have or that may be essential to protect against various risks.

For example, we have in place only limited resources and processes addressing

human resources, timekeeping, data protection, business continuity, personnel redundancy, and knowledge institutionalization concerns.

a result, we are at risk that one or more adverse events in these and other areas may materially harm our business, financial condition,

and results from operations.

global market and economic conditions may have an adverse impact on our operating performance and results of operations.

business has been and could continue to be affected by general global economic and market conditions.

Any downturn in the United States

and worldwide economy could have a negative effect on our operating results, including a decrease in revenue and operating cash flow.

To the extent our customers are unable to profitably leverage various forms of digital marketing technology and solutions, and/or the

content we create, deliver and publish on their behalf, they may reduce or eliminate their purchase of our products and services.

reductions in traffic would lead to a reduction in our revenues.

Additionally, in a down-cycle economic environment, we may experience

the negative effects of increased competitive pricing pressure, customer loss, slowdown in commerce over the Internet and corresponding

decrease in traffic delivered over our network and failures by our customers to pay amounts owed to us on a timely basis or at all.

on which we rely for equipment, field services, servers, bandwidth, co-location and other services could also be negatively impacted

2 unchanged sentences

may harm our operating results and financial condition.

In addition, our business could be adversely

affected by the effects of a widespread outbreak of contagious disease, including the recent outbreak of the COVID-19 respiratory

A significant outbreak of contagious diseases in the human population could result in a widespread health crisis that

could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect

demand for our products, our ability to collect against existing trade receivables and our operating results.

Specifically, such

event may cause us, our customers or suppliers to temporarily suspend operations in the affected city or country, and customers

may suspend or terminate capital improvements including in-store digital deployments or refresh projects, all of which may have

a material adverse effect on our business.

Significant issuances of our common stock, or the perception

that significant issuances may occur in the future, could adversely affect the market price for our common stock.

Significant actual or perceived potential

future issuance of our common stock could adversely affect the market price of our common stock.

Generally, issuances of substantial

amounts of common stock in the public market, and the availability of shares for future sale, could adversely affect the prevailing

market price of our common stock and could cause the market price of our common stock to remain low for a substantial amount of

We cannot foresee the impact of potential

securities issuances of common shares on the market for our common stock, but it is possible that the market for our shares may

be adversely affected, perhaps significantly.

It is also unclear whether or not the market for our common stock could absorb a

large number of attempted sales in a short period of time, regardless of the price at which they might be offered.

There may not be an active market for shares of our common

In general, there has been minimal trading

volume in our common stock.

Small trading volumes would likely make it difficult for our shareholders to sell their shares as and

when they choose.

addition, our business could be adversely affected by the effects of a widespread outbreak of contagious disease, including the recent

outbreak of the COVID-19 respiratory illness.

A significant outbreak of contagious diseases in the human population could result in a

widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic

downturn that could affect demand for our products, our ability to collect against existing trade receivables and our operating results.

Specifically, such event may cause us, our customers or suppliers to temporarily suspend operations in the affected city or country,

and customers may suspend or terminate capital improvements including in-store digital deployments or refresh projects, all of which

may have a material adverse effect on our business.

issuances of our common stock, or the perception that significant issuances may occur in the future, could adversely affect the market

price for our common stock.

actual or perceived potential future issuance of our common stock could adversely affect the market price of our common stock.

issuances of substantial amounts of common stock in the public market, and the availability of shares for future sale, could adversely

affect the prevailing market price of our common stock and could cause the market price of our common stock to remain low for a substantial

amount of time.

cannot foresee the impact of potential securities issuances of common shares on the market for our common stock, but it is possible that

the market for our shares may be adversely affected, perhaps significantly.

It is also unclear whether or not the market for our common

stock could absorb a large number of attempted sales in a short period of time, regardless of the price at which they might be offered.

may not be an active market for shares of our common stock.

general, there has been minimal trading volume in our common stock.

Small trading volumes would likely make it difficult for our shareholders

to sell their shares as and when they choose.

Furthermore, small trading volumes are generally understood to depress market prices.

As a result, you may not

always be able to resell shares of our common stock publicly at the time and prices that you feel are fair or appropriate.

a result, you may not always be able to resell shares of our common stock publicly at the time and prices that you feel are fair or appropriate.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors