CREATIVE REALITIES, INC. 10-Q

Item 1A. Risk Factors There have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors of our Form 10-K for the fiscal year ended December 31, 2024, except for the following risk factor for which our investors should be aware: Changes in U.S. and foreign government policy, including the imposition of or increases in tariffs and changes to existing trade agreements, could have a material adverse effect on global economic conditions, our ability to raise capital on the capital markets, and our business, results of operations, prospects and financial condition. The current Presidential Administration has proposed changes to U.S. and foreign government policy, including, but not limited to, changes to existing trade agreements, imposing significant increases in tariffs on goods imported into the U.S., particularly those manufactured in China, and greater restrictions on free trade generally. This has led to, among other things, adverse responses by foreign governments to U.S. trade policies. The implementation of tariffs is evolving. More tariffs may be increased or added in the future, which may significantly reduce global trade and trade between the impacted nations and the United States. As of the date of this Quarterly Report on Form 10-Q, discussions remain ongoing in respect of certain trade restrictions and tariffs on imports from numerous countries, including China, as well as retaliatory tariffs enacted in response to such actions. In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties, and tariffs. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets. Any of these factors could have an adverse effect on our ability to raise capital on the capital markets in the future on terms acceptable to us, if at all. Certain hardware that we procure and resell to our customers is supplied from vendors internationally, including certain media players from Taiwan and digital displays and mounts from Mexico and Vietnam. While we are currently unable to determine the aggregate impact of these tariffs, they could have an adverse impact on our business, results of operations, prospects and financial condition, and if we are unable to pass through the tariff costs via price increases to our customers, it would likely increase our cost of sales and, as a result, decrease our gross margins, operating income and net income. 29 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable.