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Item 9A. Controls and Procedures

2026-04-15 compared with 2025-03-14 · 1132 added, 561 removed, 807 unchanged (68% of the section changed)

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Based on our assessment and those criteria, management believes that we maintained effective internal control over financial reporting as of December 31, 2025.

Exclusion of Acquired Business

As permitted by the guidance issued by the Securities and Exchange Commission, management has excluded from its assessment of the effectiveness of internal control over financial reporting as of December 31, 2025, the internal control over financial reporting of CDM, which was acquired on November 7, 2025.

CDM represented approximately 60% of total assets and 22% of total revenues included in the Company’s consolidated financial statements as of and for the year ended December 31, 2025.

We are in the process of integrating CDM into our overall internal controls over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than the ongoing integration of CDM.

ITEM 9B OTHER INFORMATION

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During the quarter ended December 31, 2025, none of the officers (as defined in Exchange Act Rule 16a - 1 (f)) or directors of the Company adopted or terminated a “Rule 10b5 - 1 trading arrangement,” (as defined in Item 408 (a) of Regulation S-K) intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5 - 1 (c) or any non-Rule 10b5 - 1 trading arrangement.

Earnings Release

On March 14, 2025, the Company issued a press release announcing its financial condition and results of operations for the three months and year ended December 31, 2024.

A copy of the press release is furnished as Exhibit 99.1 and is incorporated by reference into this Item 9B in lieu of separately furnishing such press release under Item 2.02 of Form 8 -K.

This disclosure, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our Board of Directors consists of Richard Mills (Chairman and CEO), David Bell, Donald Harris, and Stephen Nesbit.

Our Board of Directors consists of Richard Mills (Chairman and CEO), David Bell, Thomas B.

Ellis, Donald A.

Harris, Daniel McGrath, and Stephen Nesbit.

The following table sets forth the name, age and position of each of our current directors and executive officers.

Michael Bosco

Daniel McGrath

Richard Mills

Chief Executive Officer and Director

Chief Executive Officer and Director (Chairman)

Stephen Nesbit

David Ryan Mudd

Interim Chief Financial Officer

Tamra Koshewa

Chief Financial Officer

The biographies of the above-identified individuals are set forth below:

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from June 2014 to January 2018.

Bosco was appointed to our Board of Directors on December 30, 2025.

Bosco serves as a Partner at North Run Capital, LP, a public security investment firm, a position he has held since 2005.

Previously, Mr.

Bosco served as Vice President of Resurgence Asset Management from 2002 until 2004, Senior Associate at Hampshire Equity Partners from 1997 until 2000, and as Corporate Finance Analyst at Alex.

Brown & Sons, Inc.

from 1995 until 1997.

Bosco received a B.S.

degree from Boston College and an M.B.A.

from The Wharton School, University of Pennsylvania.

Ellis was appointed to our Board of Directors on November 6, 2025.

Ellis has served as a Co-Managing Member at North Run Capital, LP, a public security investment firm, since December 2002.

Prior to co-founding North Run in 2002, Mr.

Ellis, was a Principal at Berkshire Partners, LLC, a private equity firm, an Analyst at MHR Fund Management, a hedge fund and distressed debt fund, and an Associate in the Investment Banking Division of Goldman, Sachs & Co.

Ellis received an A.B.

degree from Princeton University and a J.D.

degree from Harvard Law School.

Ellis has served on the board of directors of LENSAR, Inc.

LNSR) since May 2023, on the board of directors of Guerilla RF, Inc.

(OTCQX:GUER) since August 2024, and on the board of directors of LightPath Technologies, Inc.

LPTH) since February 2025.

Harris was appointed to our Board of Directors in August 2014 in connection with our acquisition of Broadcast International, Inc.

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Harris’s experience in the telecommunications industry and his association with private equity funding is valuable to the Company.

Daniel McGrath was appointed to our Board of Directors on November 6, 2025.

McGrath joined Cineplex Odeon Corporation in 1987 and held various financial and operational roles from 1987 to 2000.

Upon joining Galaxy in 2000, he held the position of Executive Vice President and held that position with the corporation until 2011 when he was named Chief Operating Officer.

In his current role as Chief Operating Officer of Cineplex Inc., Mr.

McGrath oversees theatre operations and food service, location-based entertainment (The Rec Room, Playdium, Junxion), design and construction, real estate, strategic planning, as well as the company’s media businesses, which included Cineplex Digital Media prior to the Company’s acquisition of such business in 2025.

He is a member of the Board of Directors of Scene+, the Movie Theatre Association of Canada (where he is also Treasurer), Canada’s Walk of Fame, and he is a member of the Finance Committee for Covenant House.

McGrath graduated from Brock University with a BAdmin (Honours) and holds the accounting designations of Chartered Professional Accountant (CPA) and Chartered Accountant (CA).

Richard Mills is currently our Chief Executive Officer, a member of our Board of Directors and Chairman of the Board.

Mills has served as our Chief Executive Officer and a member of our Board of Directors since 2015, and has served as Chairman of the Board since November 2023.

Mills served as interim Chief Financial Officer from October 10, 2025 to December 1, 2025, and has served as our Chief Executive Officer and as a member of our Board of Directors since 2015, and as Chairman of the Board since November 2023.

Mills possesses over 32 years of industry experience.

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Nesbit holds an undergraduate degree from the University of Notre Dame and earned an MBA from the Indiana University Kelly Graduate School of Business.

David Ryan Mudd has served as the Interim Chief Financial Officer of the Company since February 1, 2025.

Mudd joined the Company as Controller in November 2022.

From January 2012 until November 2022, Mr.

Mudd was employed by Ernst & Young in the assurance services group where he primarily worked with large publicly traded clients.

Mudd brings over ten years of experience in SEC reporting, technical accounting matters and Sarbanes-Oxley compliance expertise as well as expertise in initial public offerings, acquisitions and integration.

He has a B.S.

degree and a Masters in Accountancy from University of Kentucky and is a Certified Public Accountant.

Tamra Koshewa has served as the Chief Financial Officer of the Company since December 1, 2025.

Koshewa possesses over 30 years of financial leadership experience with multiple companies across diverse industries including manufacturing, technology, and services.

Most recently she was CFO for private equity owned entities including Manna Beverages, LLFlex and HMI.

Previously she held senior finance positions at Equipment Depot, AAF International, Time Warner Cable, American Commercial Lines and General Electric, where, over the course of a decade, she graduated from GE’s Experienced Financial Leadership Program and was certified as a Six Sigma Master Black Belt.

Early in her career she was a certified public accountant (inactive) with KPMG.

Koshewa has a bachelor's degree in accounting from Bellarmine University and an MBA from Vanderbilt’s Owen Graduate School of Management.

In addition, Ms.

Koshewa has been a member of the board of directors of Maryhurst, a Kentucky-based nonprofit health care organization for children, since 2012.

Under our corporate bylaws, all of our directors serve for annual terms expiring upon the next annual meeting of our shareholders.

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With regard to Mr.

Bosco, the Board of Directors considered his substantial accounting, banking and corporate finance experience.

With regard to Mr.

Mills, the Board of Directors considered his extensive background and experience in the industry.

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Harris, the Board of Directors considered his extensive experience in the telecommunications industry and association with private equity investors.

Finally, with regard to Mr.

With regard to Mr.

Nesbit, the Board of Directors considered his extensive experience in the digital signage industry, having run several companies in the industry and acted as a consultant broadly for digital signage companies over the past twenty years.

The Board of Directors has determined that there are presently three “independent” directors, as such term is defined in Section 5605(a)(2) of the Nasdaq listing rules, each of whom also meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934.

With regard to Mr.

Ellis, the Board of Directors considered his background in finance and his extensive experience investing in and working with companies.

With regard to Mr.

McGrath, the Board of Directors considered his significant experience in management of digital media operations, including the business of Cineplex Digital Media that was recently acquired by the Company.

The Board of Directors has determined that there are presently five “independent” directors, as such term is defined in Section 5605(a)(2) of the Nasdaq listing rules, each of whom also meets the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934.

The directors whom the board has determined to be independent are Messrs.

Bell, Harris, and Nesbit.

Bell, Bosco, Ellis, Harris and Nesbit.

Pursuant to the Securities Purchase Agreement dated October 15, 2025 among the Company, North Run Strategic Opportunities Fund I, LP (the “Lead Investor”) and NR-SOF I (Co-Invest I), LP (the “Securities Purchase Agreement”), we agreed to increase the size of the Board of Directors from four to seven directors, and to appoint two designees of the Lead Investor to the Board of Directors.

In accordance with this covenant, Thomas B.

Ellis and Michael P.

Bosco were appointed to the Board, effective as of November 6, 2025 and December 30, 2025, respectively.

We also agreed to provide the Lead Investor with continuing director designation rights based on the Lead Investor’s and its affiliates’ beneficial ownership of Common Stock on an as-converted basis.

The director designation right will be limited to one Board designee at such time as the Lead Investor and its affiliates cease to beneficially own at least 15% of the Company’s outstanding shares of Common Stock on an as-converted basis, and the designation right will cease to exist if such beneficial ownership threshold falls below 5%.

Pursuant to the Securities Purchase Agreement, if any of the Lead Investor’s board designees is not re-elected to the Board at any meeting of the Company’s shareholders at which directors are elected, our Board is obligated to promptly increase the size of the Board by one member, if necessary, and appoint the applicable board designee to fill the resulting vacancy.

Board Leadership Structure and Role in Risk Oversight

Richard Mills serves as the Chairman of the Board of Directors and the Company’s Chief Executive Officer.

The role of the Chief Executive Officer is to manage business operations and development.

The role of the Chair of the Board is to oversee, among other things, communications and relations between our Board of Directors and senior management, consideration by our Board of Directors of the Company’s strategies and policies, and the evaluation of our principal executive officers by our Board of Directors.

We believe that by having the Chairman and CEO held by the same person, information flows more easily between the management team and the Board of Directors.

The Board of Directors believes that the Board of Directors and Company are best served at this stage of the Company’s growth and operations for Mr.

Mills, as the Company’s CEO, to also serve as the Chairman.

The Board maintains a majority of independence, with five out of seven current directors being independent to provide appropriate oversight of the CEO’s performance and functioning.

Mills is not a member of the Company’s Audit Committee or Compensation Committee.

During the fiscal year ended December 31, 2025, the Board held five videoconference meetings.

During that year, all directors attended at least 80% of the aggregate of the meetings of the Board and of each of the Board committees on which he served at the time.

We encourage, but do not require, the Board to attend annual shareholder meetings.

Mills and Harris attended the 2025 annual meeting of the shareholders.

Although risk management is a core responsibility of the Company’s management, the Board of Directors recognizes that it plays a critical role in oversight of risk.

The Board, in order to more specifically carry out this responsibility, has assigned the audit committee the primary duty to periodically review the Company’s policies and practices with respect to risk assessment and risk management, including discussing with management the Company’s major risk exposures and the steps that have been taken to monitor and control those exposures.

Those risks include Company risks, such as cyber security incidents, and industry and general economic risks, such as risks related to the impact of trade policies on our supply chain, all as further identified in our annual report.

The compensation committee has been assigned the duty to assess the impact of the Company’s compensation programs on risk and recommend to the Board of Directors the adoption of any policies deemed necessary or advisable in order to mitigate compensation- and human capital management-related risks.

Board Committee Membership

Our Board of Directors has created a standing Compensation Committee and Audit Committee, which are described below.

The Company’s committees have separately adopted charters that are available on the Company’s website at https://investors.cri.com.

Harris, and Mr.

Nesbit qualify as “independent” members of the board as described above.

The Company’s committees have a separately adopted charter that is available on the Company’s website at https://investors.cri.com.

Bell, Bosco, Ellis, Harris, and Nesbit qualify as “independent” members of the board as described above.

The Board of Directors has not created a separate committee for nomination or corporate governance.

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Nesbit serves as chair of the committee.

Each of the members of the Compensation Committee is independent under the applicable Nasdaq listing standards.

The Compensation Committee did not meet during the fiscal year ended December 31, 2024.

Each member of the Compensation Committee is independent under the applicable Nasdaq listing standards.

The Compensation Committee met twice and took action by written consent three times during the fiscal year ended December 31, 2025.

The Compensation Committee has a written charter.

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reviewing and reassessing on an annual basis the adequacy of the charter and recommending to the Board any proposed changes to the charter.

Report of the Audit Committee

The Audit Committee reviewed and discussed the financial statements for the fiscal year ended December 31, 2025, with management.

The Audit Committee also discussed with the Company’s independent auditors the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.

The Audit Committee has received the written disclosures and the letter from the Company’s independent accountant required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the Company’s independent accountant its independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements of the Company included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 be included in such report.

This report has been furnished by the Audit Committee of the Board of Directors.

The Audit Committee:

David Bell (Chair)

Donald Harris

Stephen Nesbit

Communications with Board Members

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Insider Trading Policy

We have adopted an insider trading policy applicable to members of the Board of Directors, executive officers of the Company, and all employees of the Company (“Insiders”).

We have adopted an insider trading policy applicable to members of the Board of Directors, executive officers of the Company, and all employees of the Company or household and immediate family members of such individuals and entities that such individuals influence or control (collectively, “Insiders”).

The Company may also determine that other persons should be subject to the policy, such as contractors or consultants who have access to material non-public information.

The policy prohibits any Insider, as well as any family member of any Insider or any entities over which an Insider has influence or control, from engaging in transactions involving the purchase or sale of the Company’s securities while such person has access to material nonpublic information, as well as from trading in the securities of other companies in breach of a fiduciary duty or other relationship of trust and confidence while in possession of material nonpublic information about such company or its securities.

The policy prohibits any Insider from engaging in transactions involving the purchase or sale of the Company’s securities while such person has access to material nonpublic information, as well as from trading in the securities of other companies in breach of a fiduciary duty or other relationship of trust and confidence while in possession of material nonpublic information about such company or its securities.

Hedging and Pledging Policies

Our Insider Trading Policy provides that no Insider may trade in options, warrants, puts, calls or similar hedging instruments designed to hedge or offset any decrease in market value of our securities, may not sell our securities “short,” and may not hold our securities in margin accounts or pledge our securities except in cases where the individual seeks to pledge our securities as collateral for a loan (not including margin debt) if they can clearly demonstrate the financial capacity to repay the loan without resort to the pledged securities.

These prohibitions apply to avoid any appearance that an Insider is trading based on material non-public information and focus his or her attention on short-term performance at the expense of the Company’s long-term objectives.

ITEM 11 EXECUTIVE COMPENSATION

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Richard Mills

Chief Executive Officer and Director

Chief Financial Officer

Chief Executive Officer

Ryan David Mudd

Interim Chief Financial

Mills joined the Company effective October 15, 2015.

Logan joined the Company effective November 6, 2017 and resigned as Chief Financial Officer on January 31, 2025.

On November 13, 2024, the Company awarded Mr.

Logan, a $50,000 bonus for his services rendered in 2023.

The material terms of employment agreements of Richard Mills, Chief Executive Officer of the Company, and Will Logan, Chief Financial Officer of the Company, and payments to be made upon a change in control are discussed below.

Mudd served as the Interim Chief Financial Officer of the Company from February 1, 2025 until October 10, 2025.

Represents 450,000 Restricted Stock Units ("RSUs") granted to Mr.

Mills pursuant to a Restricted Stock Unit Agreement in accordance with Issuer's 2023 Stock Incentive Plan, as amended (the "Plan"), with RSUs vesting in three equal installments as follows:

150,000 vest on December 31, 2025, 150,000 vest on July 3, 2027 and 150,000 vest on July 3, 2028.

Accelerated vesting shall occur upon the earliest of Reporting Person's death or disability, termination of employment without "cause" by Issuer, or a "Sale Transaction" occurring under the Plan.

Represents 206,000 options issued pursuant to an Option Agreement in accordance with the Plan, with options vesting and exercisable in three installments as follows:

68,667 options vest on June 2, 2026, 68,667 options vest on June 2, 2027, and 68,666 options vest on June 2, 2028.

Represents 50,000 RSUs granted to Mr.

Mudd pursuant to a Restricted Stock Unit Agreement in accordance with the Plan, with RSUs vesting in three equal installments as follows:

16,666 vest on July 3, 2026, 16,666 vest on July 3, 2027 and 16,667 vest on July 3, 2028.

Accelerated vesting shall occur upon the earliest of Mr.

Mudd’s death or disability, or a "Sale Transaction" occurring under the Plan.

Represents 69,000 options issued pursuant to an Option Agreement in accordance with the Plan, with options vesting and exercisable in three installments as follows:

23,000 options vest on June 2, 2026, 23,000 options vest on June 2, 2027, and 23,000 options vest on June 2, 2028.

The material terms of employment agreements of Richard Mills, Chief Executive Officer of the Company, and David Ryan Mudd, former Interim Chief Financial Officer of the Company, and payments to be made upon a change in control are discussed below.

Our named executive officers are eligible for retirement benefits on the same terms as non-executives under the Company’s defined contribution 401(k) retirement plan.

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In accordance with the agreement, Mr.

Mills’ annual base salary was adjusted automatically on February 17, 2022 upon the closing of the Merger to $450,000, subject to annual increases but not generally subject to decreases.

Mills’ annual base salary was adjusted automatically on February 17, 2022 to $450,000, subject to annual increases but not generally subject to decreases.

Under the agreement, Mr.

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Mills’ compensation as further described below.

Will Logan Employment Agreement

The Company employed Will Logan as its Chief Financial Officer until his resignation effective January 31, 2025.

Logan and the Company entered into an employment agreement on November 12, 2021.

The employment agreement was effective for a one-year term, which automatically renewed for additional one-year periods through Mr.

Logan’s resignation.

The agreement provided for an initial annual base salary of $249,000 subject to annual increases but generally not subject to decreases.

In accordance with the employment agreement, Mr.

Logan’s annual base salary was automatically adjusted upon the closing of the Merger to $350,000, subject to annual increases but not generally subject to decreases, and Mr.

Logan received a $75,000 cash bonus upon the closing of the Merger.

Under the agreement, Mr.

Logan was eligible to participate in performance-based cash bonus or equity award plans for Company senior executives.

Logan participated in Company employee benefit plans, policies, programs, perquisites, and arrangements to the extent he met applicable eligibility requirements.

In the event of a termination of employment for good reason, as defined, without cause, as defined, or within 12 months following a change in control, as defined, other than for reason of death, disability or for cause, Mr.

Logan would have been entitled to receive aggregate severance payments equal to six months of his base salary.

David Ryan Mudd Employment Agreement

The Company and Mr.

Mudd entered into an employment agreement in which the Company paid Mr.

Mudd an annual base salary of $235,000 through January 31, 2026, at which point his annual base salary would have increased to $260,000 until his resignation on October 10, 2025.

Mudd’s employment was terminated for good reason, as defined, without cause, as defined, or within 12 months following a change in control, as defined, other than for cause, Mr.

Mudd would have been entitled to receive aggregate severance payments equal to the annual base salary that would have been payable until January 31, 2027, or six months, whichever is larger.

The agreement provided that any severance payments would be paid in installments over the course of the severance.

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The agreement also contains other customary restrictive and other covenants relating to the confidentiality of information, the ownership of inventions and other matters.

On June 15, 2022, the Board approved an amendment to certain aspects of Mr.

Logan’s compensation as described below.

Mudd ceased serving as the Interim Chief Financial Officer of the Company on October 10, 2025.

Tamra Koshewa Employment Agreement

In connection with Ms.

Koshewa’s appointment as Chief Financial Officer on December 1, 2025, the Company and Ms.

Koshewa entered into an employment agreement.

The employment agreement provides that the Company will employ Ms.

Koshewa on an “at will” basis, and pay Ms.

Koshewa an annual base salary of $350,000, and a minimum bonus for 2025 of no less than $50,000.

Koshewa’s employment is terminated by the Company without cause, as defined, or within 12 months following a change in control, as defined, for any reason other than for death, disability or cause, Ms.

Koshewa will be entitled to receive aggregate severance payments equal to six months of Ms.

Koshewa’s annual base salary.

The agreement provides that any severance payments would be paid in installments over the course of the severance.

The agreement contains certain non-solicitation provisions that continue after employment for a period of one year.

The agreement also contains other customary restrictive and other covenants relating to the confidentiality of information, the ownership of inventions and other matters.

Outstanding Equity Awards at Fiscal Year-End

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Richard Mills

David Ryan Mudd

These stock options vested in three equal installments on June 1 annually, beginning in 2021 and ending in 2023.

These stock options (the “Performance Options”) become vested in increments of 16.67 percent of the total shares purchasable under this issuance subject to satisfying Company revenue target and earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for the applicable year.

Represents 450,000 Restricted Stock Units ("RSUs") granted to Mr.

Mills pursuant to a Restricted Stock Unit Agreement in accordance with Issuer's 2023 Stock Incentive Plan, as amended (the "Plan"), with RSUs vesting in three equal installments as follows:

150,000 vest on December 31, 2025, 150,000 vest on July 3, 2027 and 150,000 vest on July 3, 2028.

Accelerated vesting shall occur upon the earliest of Reporting Person's death or disability, termination of employment without "cause" by Issuer, or a "Sale Transaction" occurring under the Plan.

These stock options (the “Performance Options”) became vested in increments of 16.67 percent of the total shares purchasable under this issuance subject to satisfying Company revenue target and earnings before interest, taxes, depreciation and amortization (“EBITDA”) target for the applicable year.

In each of calendar years 2020, 2021 and 2022, one-third of the total shares may vest (if the revenue and EBITDA targets are met), and the shares that are subject to vesting each year are allocated equally to each of the revenue and EBITDA targets for such year, with each target and vesting being independently achieved without regard for the other.

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Calendar Year

Revenue Target (millions)

EBITDA Target (millions)

Revenue Target

EBITDA Target

The executives met the foregoing EBITDA target for calendar year 2021.

Mills and 53,334 for Mr.

Logan) (including the unvested portions of shares based on the satisfaction of the revenue targets for 2020 and 2021 by virtue of the catch-up provisions in the Performance Options) will fully vest upon the achievement of the updated EBITDA target for calendar year 2022 of $3.6 million.

On June 15, 2022, the Board approved of an amendment to the Performance Options to provide that the revenue target for the calendar year 2022 set forth therein ($38 million) is eliminated, and the remaining shares that are available for vesting under the Performance Options (106,667 unvested) (including the unvested portions of shares based on the satisfaction of the revenue targets for 2020 and 2021 by virtue of the catch-up provisions in the Performance Options) will fully vest upon the achievement of the updated EBITDA target for calendar year 2022 of $3.6 million.

The Performance Options state that the calculation of EBITDA set forth in the Performance Options shall be calculated in a form consistent with the Company’s 2022 approved budget, which:

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The unvested portion of the Performance Options as of December 31, 2022 vested in full effective as of March 30, 2023 upon confirmation by the Board of Directors of achievement of the performance metrics for the year ended December 31, 2022.

Mills and Logan received ten-year options to purchase 333,334 and 200,000 shares of common stock, respectively (the “New Options”).

The New Options are eligible to vest at any time on or prior to the date on which the “Guaranteed Price” is agreed upon by the Company and RSI Exit Corporation, or finally determined in accordance with the terms of the Merger Agreement, if the trailing 10-trading day VWAP of the Company’s common stock, as reported on the Nasdaq Capital Market, exceeds the share price targets below, subject to such executive serving the Company as a director, officer, employee or consultant at such time:

Mills received ten-year options to purchase 333,334 shares of common stock (the “New Options”).

The New Options were eligible to vest at any time on or prior to the date on which the “Guaranteed Price” is agreed upon by the Company and RSI Exit Corporation, or finally determined in accordance with the terms of the Merger Agreement, if the trailing 10-trading day VWAP of the Company’s common stock, as reported on the Nasdaq Capital Market, exceeded certain share price targets.

The New Options were fully vested in connection with a settlement of certain claims related to the Guaranteed Price.

Share Price Targets

Mills Shares Vested

Logan’s Shares Vested

Logan Shares Vested

Percentage of Shares Vested

These stock options become exercisable in increments of 25 percent of the total shares purchasable under this issuance on November 6 annually, beginning in 2018 and ending in 2021.

These stock options become exercisable in increments of 25 percent of the total shares purchasable under this issuance on September 20 annually, beginning in 2019 and ending in 2022.

These options vest in three installments as follows:

68,667 options vest on June 2, 2026, 68,667 options vest on June 2, 2027, and 68,666 options vest on June 2, 2028.

Represents 69,000 options issued pursuant to an Option Agreement in accordance with the Plan, with options vesting and exercisable in three installments as follows:

23,000 options vest on June 2, 2026, 23,000 options vest on June 2, 2027, and 23,000 options vest on June 2, 2028.

Mudd resigned as Interim Chief Financial Officer effective October 10, 2025, and such option terminated 90 days after such resignation.

Represents 50,000 RSUs granted to Mr.

Mudd pursuant to a Restricted Stock Unit Agreement in accordance with the Plan, with RSUs vesting in three equal installments as follows:

16,666 vest on July 3, 2026, 16,666 vest on July 3, 2027 and 16,667 vest on July 3, 2028.

Accelerated vesting shall occur upon the earliest of Mr.

Mudd’s death or disability, or a "Sale Transaction" occurring under the Plan.

Mudd resigned as Interim Chief Financial Officer effective October 10, 2025, and such RSUs have terminated.

Director Compensation

The Company’s Board of Directors had a director compensation plan to compensate non-officer directors as follows:

Annual grant of shares of unrestricted common stock of the Company, issuable on November 17, 2021, 2022 and 2023, having an annual value of $24,000, with the per-share price to be determined based upon the closing price of the Company’s common stock as reported on Nasdaq on such issuance date.

No shares were issued on November 17, 2023 as the Company’s ability to issue shares under the 2014 Stock Incentive Plan expired.

An option issuable to each non-executive director to purchase 60,000 shares of Company common stock (or in the case of Dennis McGill, prior Chairman of the Company Board, 75,000 shares), which vested in three equal installments on November 17, 2021, 2022 and 2023, subject to continuing service as a director as of such vesting date.

The exercise price of such options is $2.21, the closing price of the Company’s common stock as reported on Nasdaq on the date of adoption of such plan.

The Company’s Board of Directors had a director compensation plan to compensate non-officer directors for services provided to the Board and its standing committees.

For calendar years 2025 and thereafter, the Compensation Committee approves an annual grant under the Creative Realities, Inc.

2023 Stock Incentive Plan, as amended (the “Plan”), to each non-employee director of the Company as of December 31 of each calendar year, commencing December 31, 2025, of shares of the Company’s common stock (the “Shares”) having an aggregate value of $36,000 (pro-rated for partial years of service), with such Shares to be valued at the closing price of the Company’s common stock on December 31 of the applicable year (or if such date is not a trading day, as of the trading day immediately prior thereto).

The table below sets forth the compensation paid to Company non-employee directors during 2025:

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Option awards

Daniel McGrath

Stephen Nesbit

The Company is evaluating the terms by which its directors may be compensated for their services in 2024 and for subsequent years.

As of the date of this Report, the Company has not adopted any plan for director compensation.

Pay Versus Performance

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The dollar amounts reported in column (d) represent the amounts reported for the NEO (excluding our PEO) in the “Total” column of the Summary Compensation Table in each applicable year.

The NEO (excluding our PEO) included for purposes of calculating the amounts in each applicable year was Will Logan, our Chief Financial Officer as of the applicable time periods.

The NEO (excluding our PEO) included for purposes of calculating the amounts in 2023 and 2024 was Will Logan, our Chief Financial Officer as of the applicable time periods, and in 2025 was David Ryan Mudd, our Interim Chief Financial Officer as of the applicable time period.

The dollar amounts reported in column (e) represent the amounts of “compensation actually paid” to the NEO (excluding our PEO), as computed in accordance with Item 402(v) of Regulation S-K.

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Compensation Actually Paid and Cumulative TSR

The following graph sets forth the relationship between Compensation Actually Paid to our PEO, the Compensation Actually Paid to our Non-PEO NEO, and the Company’s cumulative TSR over the three most recently completed fiscal years.

The following graph sets forth the relationship between Compensation Actually Paid to our PEO, Compensation Actually Paid to our Non-PEO NEO, and the Company’s cumulative TSR over the three most recently completed fiscal years.

Compensation Actually Paid and Net Income

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ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The table below sets forth certain information with respect to beneficial ownership of our common stock as of March 14, 2025, on which date there were 10,446,659 shares of issued and outstanding common stock.

The following table sets forth the number of common shares, and percentage of outstanding common shares, beneficially owned by:

The table below sets forth certain information with respect to beneficial ownership of our Common Stock and Series A Preferred Stock as of April 10, 2026, on which date there were 10,567,268 shares of issued and outstanding Common Stock and 30,000 shares of issued and outstanding Series A Preferred Stock.

The following table sets forth the number of shares of Common Stock and Series A Preferred Stock, and percentage of such shares, beneficially owned by:

each director of the Company;

each named executive officer;

all current directors and officers of the Company as a group;

each person or entity known by the Company to beneficially own more than 5% of our common stock.

Unless otherwise indicated in the table or its footnotes, the address of each of the following persons or entities is 13100 Magisterial Drive, Suite 100, Louisville, KY 40223, and each such person has sole voting and investment power with respect to the shares set forth opposite his, her or its name.

Percentage of

Name and Address

Slipstream Funding, LLC (2)

c/o Pegasus Capital Advisors, L.P.

750 E Main St., Suite 600

Stamford, CT 06902

Slipstream Communications, LLC (3)

c/o Pegasus Capital Advisors, L.P.

750 E Main St., Suite 600

Stamford, CT 0690

Stephen Nesbit (4)

David Bell (6)

Richard Mills (7)

Will Logan (8)

David Ryan Mudd (9)

All current executive officers and directors as a group (5 persons) (10)

all current directors and executive officers of the Company as a group;

each person, or group of affiliated persons, known by us to own beneficially more than 5% of our outstanding shares of Common Stock and Series A Preferred Stock.

Beneficial ownership is determined in accordance with the rules of the SEC and includes general voting power and/or investment power with respect to securities.

Shares of common stock issuable upon exercise of options or warrants that are currently exercisable or exercisable within 60 days of March 14, 2025, and shares of common stock issuable upon conversion of other securities currently convertible or convertible within 60 days, are deemed outstanding for computing the beneficial ownership percentage of the person holding such securities but are not deemed outstanding for computing the beneficial ownership percentage of any other person.

Under applicable SEC rules, each person’s beneficial ownership is calculated by dividing the total number of shares with respect to which they possess beneficial ownership by 10,466,659, the total number of outstanding shares of the Company as of March 14, 2025.

Shares of common stock issuable upon exercise of options or warrants that are currently exercisable or exercisable within 60 days of April 10, 2026, and shares of common stock issuable upon conversion of other securities currently convertible or convertible within 60 days, are deemed outstanding for computing the beneficial ownership percentage of the person holding such securities but are not deemed outstanding for computing the beneficial ownership percentage of any other person.

Under applicable SEC rules, each person’s beneficial ownership is calculated by dividing the total number of shares with respect to which they possess beneficial ownership by the total number of outstanding shares of the Company.

In any case where an individual has beneficial ownership over securities that are not outstanding but are issuable upon the exercise of options or warrants or similar rights within the next 60 days, that same number of shares is added to the denominator in the calculation described above.

Because the calculation of each person’s beneficial ownership set forth in the “Percentage of Common Shares” column of the table may include shares that are not presently outstanding, the sum total of the percentages set forth in such column may exceed 100%.

Investment and voting power over shares held by Slipstream Funding, LLC is held by Slipstream Communications, LLC, its sole member, and may deemed to be directly or indirectly controlled by Craig Cogut, Chairman and Chief Executive Officer of Pegasus Capital Advisors, LLC.

See table footnote 3 for further information regarding Slipstream Communications, LLC.

Investment and voting power over shares held by Slipstream Communications, LLC may be deemed to be directly or indirectly controlled by Craig Cogut, Chairman and Chief Executive Officer of Pegasus Capital Advisors, LLC.

Slipstream Communications, LLC (“Slipstream Communications”) is the sole member of Slipstream Funding, LLC (“Slipstream Funding”).

BCOM Holdings, LP (“BCOM Holdings”) is the managing member of Slipstream Communications.

BCOM GP LLC (“BCOM GP”) is the general partner of BCOM Holdings.

Business Services Holdings, LLC (“Business Services Holdings”) is the sole member of BCOM GP.

PP IV BSH, LLC (“PP IV BSH”), Pegasus Investors IV, L.P.

(“Pegasus Investors”) and Pegasus Partners IV (AIV), L.P.

(“Pegasus Partners (AIV)”) are the members of Business Services Holdings.

Pegasus Partners IV, L.P.

(“Pegasus Partners”) is the sole member of PP IV BSH.

Pegasus Investors IV, L.P.

(“Pegasus Investors”) is the general partner of each of Pegasus Partners (AIV) and Pegasus Partners and Pegasus Investors IV GP, L.L.C.

(“Pegasus Investors GP”) is the general partner of Pegasus Investors.

Pegasus Investors GP is wholly owned by Pegasus Capital, LLC (“Pegasus Capital”).

Pegasus Capital may be deemed to be directly or indirectly controlled by Craig Cogut.

The share figure includes the 317,455 shares of common stock issued to and held by Slipstream Funding, LLC in connection with the merger transaction with Creative Realities, LLC.

Share figure also includes 1,731,499 common shares purchasable upon exercise of outstanding warrants issued to and held by Slipstream Communications, LLC.

Nesbit is a director of the Company.

Share figure includes 20,000 shares purchasable upon the exercise of outstanding options.

Harris is a director of the Company.

Share figure includes 20,000 shares purchasable upon the exercise of outstanding options.

Bell is a director of the Company.

Share figure includes 20,000 shares purchasable upon the exercise of outstanding options.

Mills is a director of the Company, Chairman of the Board and Chief Executive Officer.

Share figure includes 320,000 shares purchasable upon the exercise of outstanding options and 333,334 shares purchasable upon the exercise of outstanding performance-restricted options upon which vesting requires achievement of certain targeted share trading prices.

Logan served as the Chief Financial Officer of the Company until January 31, 2025.

Share figure includes 171,945 shares purchasable upon the exercise of outstanding options and 200,000 shares purchasable upon the exercise of outstanding performance-restricted options upon which vesting requires achievement of certain targeted share trading prices.

Mudd became the Interim Chief Financial Officer of the Company on February 1, 2025.

Includes Messrs.

Mills, Bell, Harris, Nesbit and Mudd.

Unless otherwise indicated in the table or its footnotes, the address of each of the following persons or entities is 13100 Magisterial Drive, Suite 201, Louisville, KY 40223, and each such person has sole voting and investment power with respect to the shares set forth opposite his, her or its name.

Shares Beneficially Owned

Title or Class of Securities

Series A Convertible

Preferred Stock (1)

Name of Beneficial Owner

Directors and executive officers:

Richard Mills

Michael Bosco

Tamra Koshewa (6)

Daniel McGrath

Stephen Nesbit

All directors and executive officers as a group (8 persons)

Other named executive officers:

David Ryan Mudd (8)

Other 5% stockholders:

Mink Brook Partners LP

North Run Strategic Opportunities Fund I, LP (10)

NR-SOF I (Co-Invest I), LP (12)

Less than one percent

The holders of Series A Preferred Stock generally are entitled to vote on an as-converted basis with holders of the Common Stock, subject to the Beneficial Ownership Limitation and the Exchange Cap limitation, on all matters on which holders of Common Stock are entitled to vote, voting together with the Common Stock as a single class.

Each share of Series A Preferred Stock is convertible into the number of shares common stock at the Conversion Rate calculated by dividing (i) the Stated Value of $1,000 plus an amount per share equal to dividends accrued and unpaid on such share through the date of determination, by (ii) by the Conversion Price of $3.00, subject to conversion limitations resulting from the Beneficial Ownership Limitation and the Exchange Cap limitation set forth in the Certificate of Designations and described elsewhere in this Report.

Includes (i) 302,601 shares held by Mr.

Mills individually, (ii) 653,334 shares issuable upon the exercise of outstanding stock options, (iii) 150,000 shares issuable upon the vesting of outstanding restricted stock units, and (iv) 29,325 shares held by RFK Communications, LLC (“RFK”).

Mills serves as the sole manager of RFK and has sole voting and investment power over shares of the Company held by RFK.

Includes 20,000 shares issuable upon the exercise of outstanding stock options.

Consists of (i) shares issuable upon conversion of Series A Preferred Stock directly held by North Run Strategic Opportunities Fund I, LP (“NR-SOF”) and NR-SOF I (Co-Invest I), LP (“NR Co-Invest”), taking into account the Beneficial Ownership Limitation and the Exchange Cap limitation.

Such shares may be deemed to be indirectly beneficially owned by North Run Strategic Opportunities Fund I GP, LLC (“NR GP”) as the general partner of NR-SOF and NR Co-Invest.

Ellis, as a member of NR GP, may also be deemed to indirectly beneficially own the Series A Preferred Stock held by NR-SOF and NR Co-Invest.

Ellis disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein.

Consists of 25,000 shares of Series A Preferred Stock directly held by NR-SOF and 5,000 shares of Series A Preferred Stock directly held by NR Co-Invest.

Such shares may be deemed to be indirectly beneficially owned by NR GP as the general partner of NR-SOF and NR Co-Invest.

Ellis, as a member of NR GP, may also be deemed to indirectly beneficially own the Series A Preferred Stock held by NR-SOF and NR Co-Invest.

Ellis disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein.

Tamra Koshewa was appointed as the Chief Financial Officer of the Company effective December 1, 2025.

Includes a total of 863,334 shares issuable upon the exercise of outstanding stock options and, without duplication, 2,102,733 shares currently issuable upon conversion of Series A Preferred Stock.

Mudd served as the Chief Financial Officer of the Company until October 10, 2025.

Based on information reported on Amendment No.

1 to Schedule 13G filed on April 6, 2026 by (i) Mink Brook Asset Management LLC, (ii) Mink Brook Partners LP, (iii) Mink Brook Capital GP LLC, and (iv) William Mueller.

As the general partner to Mink Brook Partners LP, Mink Brook Capital GP LLC may be deemed to have shared power to vote or to direct the vote and to dispose of or to direct the disposition of the shares held by Mink Brook Partners LP.

As the managing member of Mink Brook Capital GP LLC and Mink Brook Asset Management LLC, William Mueller may be deemed to have shared power to vote or to direct the vote and to dispose or to direct the disposition of the shares held by Mink Brook Partners LP.

Such beneficial ownership is expressly disclaimed, except to the extent of their respective pecuniary interests therein.

Based on information reported on Schedule 13D filed on November 14, 2025 by (i) NR-SOF, (ii) NR Co-Invest, (iii) NR GP, (iv) Todd B.

Hammer, and (v) Thomas B.

Ellis, as well as information known to us.

Securities held by NR-SOF may be deemed to be indirectly beneficially owned by NR GP as the general partner of NR-SOF.

Hammer and Ellis, as members of NR GP, may also be deemed to indirectly beneficially own the Series A Preferred Stock held by NR-SOF.

NR GP and Messrs.

Hammer and Ellis disclaim beneficial ownership of the reported securities except to the extent of their respective pecuniary interest therein.

Includes shares initially issuable upon conversion of shares of Series A Preferred Stock.

The reported beneficial ownership excludes an additional 6,581,055 shares of Common Stock initially issuable upon conversion of the Series A Preferred Stock that are not presently issuable due to the Beneficial Ownership Limitation and the Exchange Cap limitation set forth in the Certificate of Designations and described elsewhere in this Report.

Based on information reported on Schedule 13D filed on November 14, 2025 by (i) NR-SOF, (ii) NR Co-Invest, (iii) NR GP, (iv) Todd B.

Hammer, and (v) Thomas B.

Ellis, as well as information known to us.

Securities held by NR Co-Invest may be deemed to be indirectly beneficially owned by NR GP as the general partner of NR Co-Invest.

Hammer and Ellis, as members of NR GP, may also be deemed to indirectly beneficially own the Series A Preferred Stock held by NR Co-Invest.

NR GP and Messrs.

Hammer and Ellis disclaim beneficial ownership of the reported securities except to the extent of their respective pecuniary interest therein.

Includes shares initially issuable upon conversion of shares of Series A Preferred Stock.

The reported beneficial ownership excludes an additional 1,316,211 shares of Common Stock initially issuable upon conversion of the Series A Preferred Stock that are not presently issuable due to the Beneficial Ownership Limitation and the Exchange Cap limitation set forth in the Certificate of Designations and described elsewhere in this Report.

Securities Authorized for Issuance Under Equity Compensation Plans

The table below sets forth certain information, as of the close of business on December 31, 2025, regarding equity compensation plans (including individual compensation arrangements) under which our securities were then authorized for issuance.

Number of Securities to be

Number of Securities

Available for Issuance

Weighted-Average

Number of Securities Remaining

Issued Upon Exercise of

Exercise Price of

Available for Issuance Under Equity

Compensation Plans

Outstanding Options,

Compensation Plans (excluding

(excluding securities

Warrants and Rights

securities reflected in column (a))

reflected in column (a))

Equity compensation plans approved by stockholders

Equity compensation plans not approved by stockholders

Shares reflected are issuable upon exercise of outstanding stock options issued under the 2014 Stock Incentive Plan.

Shares reflected are issuable upon exercise of outstanding stock options and restricted stock units issued under the 2014 Stock Incentive Plan and the Company’s 2023 Stock Incentive Plan, as amended.

The Company’s ability to issue new awards under its 2014 Stock Incentive Plan expired in 2023.

On October 18, 2024, the Company’s shareholders approved the Company’s 2023 Stock Incentive Plan, which authorizes the issuance of up to 2,500,000 shares.

No awards have been issued under the Plan as of December 31, 2024.

For information regarding the material features of each of the above plans see Note 15 , Stock-based Compensation, in our Consolidated Financial Statements included in this Report.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

(All currency in this Item 13 is rounded to the nearest thousand, except share and per share amounts.)

Merger Agreement

On February 17, 2025 and February 23, 2025, the parties to the Merger Agreement entered into the fourth and fifth amendments to the Merger Agreement, respectively, pursuant to which the commencement date of the 30-day period for which Reflect stockholders may seek payment of the Guaranteed Consideration was delayed from February 17, 2025 to February 24, 2025 and thereafter March 17, 2025.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

(All currency in this Item 13 is in thousands, except share and per share amounts.)

North Run Securities Purchase Agreement

On October 15, 2025, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with North Run Strategic Opportunities Fund I, LP (the “Lead Investor”) and NR-SOF I (Co-Invest I), LP (together with the Lead Investor, the “Buyers”), each an affiliate of North Run Capital, LP (“North Run”), pursuant to which we agreed to sell in a private placement (the “Offering”), for an aggregate gross purchase price of $30,000, an aggregate of 30,000 shares of a newly established series of preferred stock, par value $0.01 per share, to be designated as Series A Convertible Preferred Stock (the “Preferred Shares”).

On November 5, 2025, in anticipation of the closing of the Offering, we filed the Certificate of Designations with the Secretary of State of the State of Minnesota, which established the designations, preferences, powers and rights of the Preferred Shares.

The closing of the purchase and sale of the Preferred Shares occurred on November 6, 2025.

We used net proceeds from the Offering to pay a portion of the purchase price for our acquisition of the business of Cineplex Digital Media Inc.

and its affiliates.

See Note 9, Series A Redeemable Convertible Preferred Stock , for a description of the terms of the Securities Purchase Agreement.

Ellis, a director of the Company, is affiliated with North Run Capital, LP.

CDM Acquisition

Daniel McGrath is the Chief Operating Officer of Cineplex Inc., the parent company of and Cineplex Entertainment Limited Partnership, a Manitoba limited partnership (“Cineplex”).

McGrath’s appointment to the Board of Directors, on October 15, 2025, the Company entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with its wholly owned subsidiary, 1001372953 Ontario Inc., an Ontario corporation and Cineplex to acquire DDC Group International, Inc., an Ontario corporation and wholly owned subsidiary of Cineplex (“DDC”).

DDC is the parent company of its wholly owned subsidiary, Cineplex Digital Media Inc., an Ontario corporation (“CDMI”), and CDMI’s wholly owned subsidiary, Cineplex Digital Media US Inc., a Delaware corporation (“CDMUS”).

In this Report, DDC, CDMI and CDMUS are collectively referred to as “CDM”, and such acquisition is referred to as the “CDM Acquisition.”

On November 7, 2025, the parties consummated the transactions contemplated by the Share Purchase Agreement.

Upon the terms and conditions of the Share Purchase Agreement, at the closing of the CDM Acquisition, the Company (indirectly through 1001372953 Ontario Inc.) acquired ownership of all of the issued and outstanding capital shares of DDC for a total purchase price of approximately CAD $70,000, subject to customary purchase price adjustments.

The final purchase price after adjustments was approximately CAD $60,263 (or approximately USD $42,761).

See Note 5, Business Combinations , for a description of the terms of the Share Purchase Agreement.

The foregoing transactions were approved by our Board of Directors after full disclosure of any conflicts of interest.

No directors had any conflicting interest in the transactions.

No directors at the time of the approval of the Board of Directors had any conflicting interest in the transactions.

The Board of Directors has not created a separate committee for nomination or corporate governance.

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ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents fees (in thousands) for audit and other services provided by our principal accountant for 2023, Deloitte & Touche LLP (“Deloitte”), and by our principal accountant for 2024, Grant Thornton LLP (“Grant Thornton”).

The following table presents fees (in thousands) for audit and other services provided by our principal accountant for 2024 and 2025, Grant Thornton LLP (“Grant Thornton”):

Audit fees (a)

Audit related fees

Audit related fees (b)

All other fees

Audit fees for 2025 and 2024 relate to professional services provided in connection with the audit of our consolidated financial statements, the reviews of our quarterly condensed consolidated financial statements, and audit services provided in connection with other regulatory filings.

Audit related fees for 2025 related to financial due diligence in connection with CDM Acquisition.

Our Board of Directors pre-approved the audit services rendered by our principal accountant during 2025 and 2024 and concluded that such services were compatible with maintaining the auditor’s independence.

Pre-Approval Policies and Procedures of Audit Committee

All services provided by our current independent registered public accounting firm, Grant Thornton, are subject to pre-approval by our Audit Committee.

All services provided by our independent registered public accounting firm, Grant Thornton, are subject to pre-approval by our Audit Committee.

The Audit Committee has authorized each of its members to approve services by our independent registered public accounting firm in the event there is a need for such approval prior to the next full Audit Committee meeting.

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Before granting any approval, the Audit Committee (or a committee member if applicable) gives due consideration to whether approval of the proposed service will have a detrimental impact on the independence of our independent registered public accounting firm.

The Audit Committee pre-approved all services provided by Deloitte during 2023, and provided by Grant Thornton during 2024.

The Audit Committee pre-approved all services provided by Grant Thornton during 2025.

ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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and RSI Exit Corporation (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed February 15, 2023)

Third Amendment to Merger Agreement (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed February 18, 2025)

Fourth Amendment to Merger Agreement (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed February, 24, 2025)

Settlement Agreement and Fifth Amendment to Merger Agreement dated March 14, 2025 among Creative Realities, Inc., Reflect Systems, Inc.

and RSI Exit Corporation (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed March 17, 2025)

Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 21, 2024)

Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Amended and Restated Bylaws (incorporated by reference to the registrant’s Current Report on Form 8-K filed on November 2, 2011)

1 unchanged sentence

Description of Securities (incorporated by reference to Exhibit 4.2 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 21, 2024)

Warrant dated January 16, 2018, issued in favor of Slipstream Communications, LLC (incorporated by reference to the registrant’s Form S-1 filed with the SEC on June 25, 2018)

Warrant to Purchase Common Stock issued to Slipstream Communications, LLC on April 27, 2018 (incorporated by reference to Exhibit 10.31 of the registrant’s Form S-1 filed with the SEC on June 25, 2018).

Investor Warrant dated June 30, 2022 (incorporated by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K filed July 7, 2022)

Lender Warrant dated June 30, 2022 (incorporated by reference to Exhibit 10.1 of the registrant ’ s Current Report on Form 8-K filed July 7, 2022)

Investor Warrant dated June 30, 2022 (incorporated by reference to Exhibit 10.3 of the registrant’s Current Report on Form 8-K filed July 7, 2022)

Lender Warrant dated October 17, 2024 (incorporated by reference to the registrant’s Registration Statement on Form S-3 filed with the SEC on October 17, 2024)

Employment Agreement dated as of November 12, 2021 by and between the registrant and Rick Mills (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed November 15, 2021).

Employment Agreement dated as of November 12, 2021 by and between the registrant and Will Logan (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed November 15, 2021)

Second Amended and Restated Loan and Security Agreement by and among the registrant, its subsidiaries and Slipstream Communications, LLC (incorporated by reference to Exhibit 10.1 of the registrant’s Current Report on Form 8-K filed February 18, 2022)

First Amendment to Second Amended and Restated Loan and Security Agreement (incorporated by reference to Exhibit 10.4 to the registrant ’ s Quarterly Report on Form 10-Q filed with the SEC on November 14, 2022)

$10,000,000 Acquisition Term Note (incorporated by reference to Exhibit 10.2 of the registrant’s Current Report on Form 8-K filed February 18, 2022)

$7,185,319.06 Consolidation Term Note (incorporated by reference to Exhibit 10.3 of the registrant’s Current Report on Form 8-K filed February 18, 2022)

Note and Security Agreement (incorporated by reference to Exhibit 10.4 of the registrant’s Current Report on Form 8-K filed February 18, 2022)

First Amendment to Note and Security Agreement (incorporated by reference to Exhibit 10.2 of the registrant ’ s Current Report on Form 8-K filed February 15, 2023)

2014 Stock Incentive Plan, as amended (incorporated by reference to Exhibit A to the registrant’s definitive proxy statement on Schedule 14A filed with the SEC on June 12, 2020)

2023 Stock Incentive Plan, as amended

2023 Stock Incentive Plan, as amended (incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on August 27, 2024)

Amendment to Stock Option Agreement dated June 15, 2022 between the Company and Rick Mills (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2022)

Amendment to Stock Option Agreement dated June 15, 2022 between the Company and Will Logan (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2022)

Stock Option Agreement dated June 15, 2022 between the Company and Rick Mills (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2022)

Stock Option Agreement dated June 15, 2022 between the Company and Will Logan (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed with the SEC on June 17, 2022)

Credit Agreement dated May 23, 2024 by and among Creative Realities, Inc., First Merchants Bank and other parties thereto (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on May 28, 2024)

$22,100,000 Revolving Credit Note dated May 23, 2024 (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on May 28, 2024)

Security Agreement dated May 23, 2024 by and among Creative Realities, Inc., First Merchants Bank and other parties thereto (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on May 28, 2024)

Guaranty dated May 23, 2024 by Creative Realities Canada, Inc.

in favor of First Merchants Bank (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed with the SEC on May 28, 2024)

Security Agreement dated May 23, 2024 granted by Creative Realities Canada, Inc.

in favor of First Merchants Bank (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K filed with the SEC on May 28, 2024)

Form of Indemnification Agreement (incorporated by reference to Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 14, 2024)

Amendment to Option Agreement dated February 17, 2025 between the Company and Richard Mills (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed February 21, 2025)

$4,000,000 Promissory Note dated March 14, 2025 payable to the order of RSI Exit Corporation (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed March 17, 2025)

Subordination Agreement dated March 14, 2025 by and among Creative Realities, Inc., Reflect Systems, Inc., First Merchants Bank and RSI Exit Corporation (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed March 17, 2025)

Consent Agreement dated March 14, 2025 by and among First Merchants Bank, Allure Global Solutions, Inc., Creative Realities, Inc.

and Reflect Systems, Inc.

(incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed March 17, 2025)

Second Amendment to Stock Option Agreement between the Company and Richard Mills (incorporated by reference to Exhibit 10.1 to the registrant ’ s Current Report on Form 8-K filed June 4, 2025)

Form of Stock Option Agreement (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed June 4, 2025)

Restricted Stock Unit Agreement dated July 3, 2025 by and between Creative Realities, Inc.

and Richard Mills (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed July 3, 2025)

Restricted Stock Unit Agreement dated July 3, 2025 by and between Creative Realities, Inc.

and David Ryan Mudd (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed July 3, 2025)

Share Purchase Agreement, by and among the registrant, 1001372953 Ontario Inc., and Cineplex Entertainment Limited Partnership, dated as of October 15, 2025 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 16, 2025)

Securities Purchase Agreement, by and between the registrant and the Buyers listed therein, dated as of October 15, 2025 (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on October 16, 2025)

Registration Rights Agreement, dated November 6, 2025, by and among the registrant, North Run Strategic Opportunities Fund I, LP and NR-SOF I (Co-Invest I), LP (incorporated by reference to Exhibit 10.8 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Amended and Restated Credit Agreement dated as of November 6, 2025 by and among the registrant, Allure Global Solutions, Inc., Reflect Systems, Inc., Cineplex Digital Media US Inc., 1001372953 Ontario Inc., Cineplex Digital Media, Inc., the other Loan Parties signatory thereto, as Loan Parties, the financial institutions or other entities from time to time parties hereto, each as a Lender, and First Merchants Bank, an Indiana bank, as Agent for the Lenders (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Form of Term Loan Promissory Note (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Form of Revolving Credit Promissory Note (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Amended and Restated Security Agreement dated as of November 6, 2025 by and among the registrant, Allure Global Solutions, Reflect Systems, Cineplex Digital Media US Inc., and First Merchants Bank, as agent for and on behalf of the Lenders (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Amended and Restated Security Agreement dated as of November 6, 2025 by and among Creative Realities Canada, Inc., 1001372953 Ontario Inc., DDC Group International Inc., Cineplex Digital Media Inc.

and First Merchants Bank, as agent for and on behalf of the Lenders (incorporated by reference to Exhibit 10.5 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Amended and Restated Canadian Guarantee dated as of November 6, 2025 by Creative Realities Canada, Inc.

in favor of First Merchants Bank, as agent for and on behalf of the Lenders (incorporated by reference to Exhibit 10.6 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Form of Voting Agreement by and between the registrant and each of the executive officers and directors of the registrant (incorporated by reference to Exhibit 10.7 to the registrant’s Current Report on Form 8-K filed with the SEC on November 12, 2025)

Employment Agreement, dated as of December 1, 2025, by and between the registrant and Tamra Koshewa

Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018)

2 unchanged sentences

Consent of Grant Thornton LLP

Consent of Deloitte & Touche LLP

Chief Executive Officer Certification pursuant to Exchange Act Rule 13a-14(a)

1 unchanged sentence

Chief Executive Officer Certification pursuant to 18 U.S.C.

Section 1350.

Chief Financial Officer Certification pursuant to 18 U.S.C.

Section 1350.

Clawback Policy.

Press Release dated March 14, 2025

Clawback Policy (incorporated by reference to Exhibit 97.1 of the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 14, 2025)

Inline XBRL Instance Document.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

March 14, 2025.

April 15, 2026.

Creative Realities, Inc.

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Chief Executive Officer

/s/ David Ryan Mudd

David Ryan Mudd

Interim Chief Financial Officer

/s/ Tamra Koshewa

Tamra Koshewa

Chief Financial Officer

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

1 unchanged sentence

Chief Executive Officer (Principal Executive Officer)

March 14, 2025

April 15, 2026

Richard Mills

and Chairman of the Board of Directors

/s/ David Ryan Mudd

Interim Chief Financial Officer (Principal Financial and

March 14, 2025

David Ryan Mudd

/s/ Tamra Koshewa

Chief Financial Officer (Principal Financial and

April 15, 2026

Tamra Koshewa

Principal Accounting Officer)

/s/ David Bell

March 14, 2025

/s/ Donald Harris

March 14, 2025

Donald Harris

/s/ Steve Nesbit

March 14, 2025

April 15, 2026

/s/ Michael Bosco

April 15, 2026

Michael Bosco

/s/ Thomas B.

April 15, 2026

/s/ Donald A.

April 15, 2026

/s/ Daniel McGrath

April 15, 2026

Daniel McGrath

/s/ Stephen Nesbit

April 15, 2026

Stephen Nesbit

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Financial Statements

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Shareholders’ Equity

5 unchanged sentences

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Creative Realities, Inc.

(a Minnesota corporation) and subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statements of operations, shareholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Creative Realities, Inc.

(a Minnesota corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, changes in shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Going concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company is experiencing difficulty in generating sufficient cash flow to service its contingent consideration obligations, which raises substantial doubt about its ability to continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company is experiencing difficulty due to the accumulated deficit, negative working capital, recurring losses and use of cash in operations, which raises substantial doubt about its ability to continue as a going concern.

These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

We have served as the Company’s auditor since 2024.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Business Acquisition - CDM - valuation of developed technology and customer relationships intangible assets

As described further in Note 5 to the consolidated financial statements, the Company acquired CDM on November 7th, 2025 for a total purchase price of approximately $42.8 million.

The acquisition was accounted for as a business combination and the assets acquired and liabilities assumed were valued at fair value on the date of acquisition.

Specifically, the Company identified developed technology and customer relationships of approximately $6.7 million and $14.3 million, respectively.

We identified the valuation of developed technology and customer relationships intangible assets acquired in the CDM acquisition as a critical audit matter.

The principal considerations for our determination that the valuation of developed technology and customer relationships intangible assets acquired in the CDM acquisition is a critical audit matter are the high degree of auditor judgment and subjectivity in performing procedures and evaluating management’s significant assumptions relating to the projected forecasted information including the revenue growth rate and discount rate.

Our audit procedures related to the valuation of developed technology and customer relationships intangible assets acquired in the CDM acquisition included the following, among others:

We tested the design and implementation of relevant controls over the development and review of significant assumptions used in the determination of the fair value of the developed technology and customer relationships intangible assets.

We tested the projected financial information including the revenue growth rate by assessing the reasonableness of management's forecasts compared to historical results and forecasted industry trends.

With the assistance of our valuation specialists, we evaluated the appropriateness of the valuation methodology used to determine the fair value of the developed technology and customer relationships intangible assets and the reasonableness of the discount rate used by management.

We developed an independent estimate of the discount rate using comparable companies and compared that rate to the rate selected by management.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2024.

Cincinnati, Ohio

March 14, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Creative Realities, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Creative Realities, Inc.

and subsidiaries (the "Company") as of December 31, 2023, the related consolidated statements of operations, shareholders' equity, and cash flows, for the year ended December 31, 2023, and the related notes to the financial statements (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The 2023 financial statements of the Company were prepared assuming that the Company would continue as a going concern.

As of the date of issuance of the Company's 2023 financial statements, the Company was experiencing difficulty in generating sufficient cash flow to service its debt and contingent consideration obligations, which raised substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters were also described in the 2023 financial statements.

The 2023 financial statements did not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Louisville, Kentucky

March 21, 2024

We began serving as the Company’s auditor in 2020.

In 2024 we became the predecessor auditor.

April 15, 2026

CREATIVE REALITIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

(in thousands, except per share amounts)

Current Assets:

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35,906 22,841

Finance lease right-of-use assets

Operating lease right-of-use assets

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$ 151,040 $ 65,210

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES, TEMPORARY EQUITY, AND SHAREHOLDERS ’ EQUITY

Current Liabilities:

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Current maturities of operating leases

Short-term portion of related party term debt

Current maturities of finance leases

Short-term debt

Short-term contingent consideration, at fair value

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Revolving credit facility

Long-term related party term debt

Long-term obligations under operating leases

Long-term contingent consideration, at fair value

Other non-current liabilities

Term debt, net of deferred financing costs

Non-current operating lease liabilities

Non-current finance lease liabilities

Deferred tax liabilities

Total Liabilities

101,854 39,750

Commitments and contingencies (Note 12)

Series A Redeemable Convertible Preferred stock, $ 1,000 stated value, 50,000 shares authorized;

30 and 0 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Liquidation preference of $ 30,232 and $ 0 as of December 31, 2025 and 2024, respectively

Shareholders' Equity:

Common stock, $ 0.01 par value, 66,666 shares authorized;

10,447 and 10,409 shares issued and outstanding, respectively

10,519 and 10,447 shares issued and outstanding as of December 31, 2025 and 2024, respectively

Additional paid-in capital

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( 65,130 ) ( 56,854 )

Accumulated other comprehensive income

Total Shareholders ’ Equity

21,498 25,460

Total Liabilities and Shareholders' Equity

Total Liabilities, Temporary Equity, and Shareholders' Equity

$ 151,040 $ 65,210

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Services and other

16,226 13,322

Total cost of sales

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Operating expenses:

Sales and marketing

General and administrative

Sales and marketing expenses

General and administrative expenses

23,065 17,058

Loss on impairment of software asset

Total operating expenses

34,580 23,073

Operating income

Other expense (income):

Operating (loss) income

( 8,866 ) 938

Other (income) expenses:

Interest expense, including amortization of debt discount

Loss on change in fair value of contingent consideration

Gain on settlement of contingent consideration

Loss on debt extinguishment

Other expenses (income), net

Loss on debt modification

Other expense (income), net

Total other (income) expenses, net

( 1,756 ) 4,340

Total other expense (income)

Net loss before income taxes

Loss before income taxes

( 7,110 ) ( 3,402 )

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( 8,276 ) ( 3,508 )

Net loss per common share - basic

Series A Redeemable Convertible Preferred Stock dividends

Net loss applicable to common stockholders

$ ( 8,508 ) $ ( 3,508 )

Net loss per common share - diluted

Basic and diluted loss per common share

$ ( 0.81 ) $ ( 0.34 )

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

Weighted average shares outstanding - basic and diluted

10,495 10,440

See accompanying Notes to Consolidated Financial Statements.

CREATIVE REALITIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

For the Years Ended

$ ( 8,276 ) $ ( 3,508 )

Other comprehensive income:

Foreign currency translation adjustments

Total comprehensive loss

$ ( 7,053 ) $ ( 3,508 )

See accompanying Notes to Consolidated Financial Statements.

CREATIVE REALITIES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY

For the years ended December 31, 2025 and 2024

(in thousands, except shares)

Year ended December 31, 2024

Balance as of December 31, 2023

(in thousands, except share amounts)

Additional Paid-in

Accumulated Other Comprehensive

Capital Income Deficit Total

Balance at January 1, 2024

10,409,027 $ 104 $ 82,073 $ - $ ( 53,346 ) $ 28,831

Stock-based compensation

Shares issued to employees pursuant to the Retention Bonus Plan

- - 13 - - 13

Shares issued to employees pursuant to the Retention Bonus Plan

37,632 - 124 - - 124

Balance as of December 31, 2024

- - - - ( 3,508 ) ( 3,508 )

Year ended December 31, 2023

Balance as of December 31, 2022

Balance at December 31, 2024

10,446,659 104 82,210 - ( 56,854 ) 25,460

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72,273 1 2,282 - - 2,283

Shares issued to directors as compensation

51,616 1 95 - 96

Shares issued to vendors as compensation

Series A Redeemable Convertible Preferred Stock dividends

- - ( 232 ) - - ( 232 )

Shares issued to employees pursuant to the Retention Bonus Plan

Issuance of warrants in connection with settlement of contingent consideration

- - 1,040 - - 1,040

Issuance of common stock, net

Other comprehensive income

- - - 1,223 - 1,223

- - - - ( 8,276 ) ( 8,276 )

Balance as of December 31, 2023

Balance at December 31, 2025

10,518,932 $ 105 $ 85,300 $ 1,223 $ ( 65,130 ) $ 21,498

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(in thousands)

For the Years Ended

For the Years Ended December 31,

Operating Activities:

$ ( 8,276 ) $ ( 3,508 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities

Depreciation and amortization

Non-cash lease expense

Amortization of debt discount

Amortization of stock-based compensation

Stock-based compensation

Amortization of deferred financing costs

Loss on extinguishment of debt

Bad debt expense

Loss on modification of revolver

Provision for credit losses

Impairment of software asset

Provision for inventory reserves

Loss on change in fair value of contingent consideration

Gain on settlement of contingent consideration

Deferred income taxes

Changes to operating assets and liabilities:

Changes to operating assets and liabilities, net of acquisitions:

Accounts receivable

( 6,056 ) 1,850

( 3,846 ) 615

Prepaid expenses and other current assets

1,699 ( 194 )

Accounts payable

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( 358 ) ( 1,052 )

Net cash provided by operating activities

Lease liabilities

( 633 ) ( 233 )

Other non-current liabilities

Net cash (used in) provided by operating activities

( 7,750 ) 3,381

Investing Activities:

Cash paid for acquisition of Cineplex Digital Media (net of cash acquired)

Purchases of property and equipment

( 306 ) ( 11 )

Capitalization of labor for software development

Capitalization of costs for software development

( 2,188 ) ( 2,790 )

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Financing Activities:

Proceeds from sale of common stock, net of offering expenses

Proceeds from sale of Series A Redeemable Convertible Preferred Stock

Payment of issuance costs related to Series A Redeemable Convertible Preferred Stock

Proceeds from term debt

Repayment of term debts

( 490 ) ( 15,147 )

Proceeds from borrowings under revolving credit facility

41,712 31,459

Repayment of borrowings under revolving credit facility

Payment of deferred financings costs

Repayment of term debt

( 49,817 ) ( 18,415 )

Principal payments on finance leases

Payment of contingent consideration

Payment of deferred financing costs

( 850 ) ( 306 )

Net cash (used in) provided by financing activities

Repayment of finance lease obligations

( 2,272 ) ( 44 )

Increase (decrease) in Cash and Cash Equivalents

Net cash provided by (used in) financing activities

48,739 ( 2,453 )

Effect of exchange rate on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

522 ( 1,873 )

Cash and cash equivalents, beginning of year

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The Company has expertise in a broad range of existing and emerging digital marketing technologies, as well as the related media management and distribution software platforms and networks, device management, product management, customized software service layers, systems, experiences, workflows, and integrated solutions.

Our technology and solutions include:

digital merchandising systems and omni-channel customer engagement systems, interactive digital shopping assistants, advisors and kiosks, and other interactive marketing technologies such as mobile, social media, point-of-sale transactions, beaconing and web-based media that enable our customers to transform how they engage with consumers.

Our technology and solutions include digital merchandising systems and omni-channel customer engagement systems, interactive digital shopping assistants, advisors and kiosks, and other interactive marketing technologies such as mobile, social media, point-of-sale transactions, beaconing and web-based media that enable our customers to transform how they engage with consumers.

We have expertise in a broad range of existing and emerging digital marketing technologies, as well as the following related aspects of our business:

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and proprietary processes and automation tools.

Our main operations are conducted directly through Creative Realities, Inc., and under our wholly owned subsidiaries Allure Global Solutions, Inc., a Georgia corporation (“Allure”), Creative Realities Canada, Inc., a Canadian corporation (“CRI Canada”), and Reflect Systems, Inc., a Delaware corporation (“Reflect”).

Public Offering

On August 17, 2023, the Company conducted a public offering for the sale by the Company of an aggregate of 3,000,000 shares of common stock, par value $ 0.01 per share at a public offering price of $ 2.00 per share and received approximately $ 5,454 in net proceeds, after deducting underwriting fees of $ 478 and offering costs of $ 68 .

Reverse stock split

On March 27, 2023, the Company effected a 1 -for- 3 stock split of the shares of the Company’s common stock, par value $ 0.01 per share.

As a result of the reverse stock split, effective 12:01 am on March 27, 2023, every three shares of common stock then-issued and outstanding automatically combined into one share of common stock, with no change in par value per share.

All fractional shares resulting from the reverse split were rounded up to the nearest whole share of common stock.

In connection with the reverse stock split, the total number of shares of common stock authorized for issuance was reduced from 200,000,000 shares to 66,666,666 shares in proportion to the outstanding shares of common stock.

Effective as of the same time as the reverse stock split, the number of shares of common stock available for issuance under the Company’s equity compensation plans were reduced in proportion to the reverse stock split.

The reverse stock split also resulted in the number of shares of shares of common stock issuable upon exercise of outstanding warrants, or the exercise or vesting of equity awards, in proportion to the reverse stock split and caused a proportionate increase in exercise price or share-based performance criteria, where applicable.

Our main operations are conducted directly through Creative Realities, Inc., and under our wholly owned subsidiaries, Cineplex Digital Media Inc., a Canadian corporation (“CDMI”) and Cineplex Digital Media U.S.

Inc., a Delaware corporation (“CDMUS”).

Liquidity and Financial Condition;

Going Concern

In accordance with Accounting Standards Update (“ASU”) No.

2014 - 15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205 - 40 ) (“ASU 205 - 40” ), the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Consolidated Financial Statements are issued.

At December 31, 2024, the Company has an accumulated deficit of $ 56,854 , and negative working capital of $ 11,667 .

For the year ended December 31, 2024, the Company generated operating income of $ 938 and generated positive net cash flows from operations of $ 3,381 .

The Company’s contingent consideration obligation was dependent upon the market value of the Company’s share price at February 17, 2025, and contractually must be settled in cash.

The estimated liability for financial statement accounting purposes is $ 12,815 as of December 31, 2024 .

While the Company is currently generating cash from operations and refinanced its debt in 2024, the Credit Agreement (as defined in Note 7 Debt below) limits, via specific reserve, utilization of the Company’s line of credit to no more than $ 4,000 (or such lesser amount determined by the lender in its sole and absolute discretion) for payments to satisfy the contingent consideration obligation.

Should the contingent consideration require a cash payment in excess of the specific reserve, the Company may not have sufficient liquidity to settle this obligation without (i) receipt of a waiver under the Credit Agreement, (ii) an amendment to the Credit Agreement to permit additional funds from the line of credit to be used for payment of the contingent consideration obligation, (iii) raising additional capital on the capital markets, the proceeds of which would be used, in whole or in part, to satisfy the contingent consideration obligation, or (iv) a reduction in the amount of the contingent consideration obligation.

The conditions and events raise substantial doubt about the Company's ability to continue as a going concern under the technical framework within ASU 205 - 40 .

In response to these conditions, the Company continues to evaluate its available options for amending its debt facilities or accessing the capital markets via equity financing.

However, these plans have not been finalized, are subject to market conditions, in some respects are not within the Company’s control, and therefore cannot be deemed probable.

As a result, the Company has concluded that management's plans do not alleviate substantial doubt about the Company's ability to continue as a going concern.

The Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Subsequent events

The Company has evaluated subsequent events occurring after the balance sheet date through the date the Consolidated Financial Statements were issued and has determined that there were no such events that would require recognition or disclosure in the financial statements.

On November 6, 2025, the Company completed a refinancing of its senior debt facilities, and on November 7, 2025, the Company completed the acquisition of DDC Group International, Inc.

(see Note 5, Business Combinations) , and related financing arrangements.

Management believes these actions are likely to significantly improve the Company’s liquidity, scale, and overall financial condition.

Its ability to generate positive net income and cash flows from operations is reliant on the successful integration and operation of this newly acquired business and therefore the financial impacts of this acquisition were not fully known at the time of the Company's going concern assessment.

Management believes the completion of these transactions and the planned integration and operating plan for the newly acquired business with expected realization of synergies present the opportunity to prospectively eliminate the conditions giving rise to substantial doubt regarding the Company’s ability to continue as a going concern in future periods.

However, there can be no assurance that these efforts will be successful.

As of December 31, 2025, the Company has an accumulated deficit of $ 65,130 and negative working capital of $ 5,728 .

For the year ended December 31, 2025, the Company generated a net loss of $ 8,276 and used net cash in operations of $ 7,750 .

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for at least twelve months after the issuance date of these consolidated financial statements.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business.

The carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent realizable or settlement values.

The accompanying consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10 -K and Article 8 of Regulation S- X and include all of the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for annual financial reporting.

The accompanying consolidated financial statements have been prepared in accordance with the instructions to Form 10 -K and Article 8 of Regulation S- X and include all of the information and disclosures required by GAAP for annual financial reporting.

The consolidated financial statements include the accounts of Creative Realities, Inc.

and our wholly owned subsidiaries Allure, CRI Canada, and Reflect.

All intercompany balances and transactions have been eliminated in consolidation, as applicable.

Certain amounts have been reclassified to conform to current period presentation.

and our wholly owned subsidiaries CDMI and CDMUS.

The CDM entities (CDMI and CDMUS), acquired through the Company's acquisition of DDC Group International, Inc.

on November 7, 2025, have been consolidated from the acquisition date forward.

All intercompany balances and transactions have been eliminated in consolidation.

Recently Issued and Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023 - 07, Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023 - 07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023 - 07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted the new standard for the fiscal year ending December 31, 2024.

See Note 12 Segment Reporting for new required disclosures.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

1 unchanged sentence

ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2023 - 09.

Cash and cash equivalents

Cash and cash equivalents consist of cash on deposit in financial institutions, in both the United States and Canada.

The Company does not hold any investments that qualify as cash equivalents as of December 31, 2024.

As of December 31, 2024, the Company had approximately $ 981 in cash that was held in a Canadian financial institution.

The Company does not believe the balance presents a material concentration of credit risk, as the cash is held with a reputable financial institution.

The Company adopted ASU 2023 - 09 effective January 1, 2025 on a retrospective basis.

The adoption of ASU 2023 - 09 did not have a material impact on the Company’s consolidated financial condition, results of operations or cash flows since the guidance pertains to disclosure only.

See Note 11, Income Taxes for further information.

In March 2024, the FASB issued ASU 2024 - 01, Compensation — Stock Compensation (Topic 718 ):

Scope Application of Profits Interest and Similar Awards .

ASU 2024 - 01 clarifies how an entity should evaluate whether a profits interest or similar award issued as compensation is within the scope of ASC 718 by adding four illustrative examples to ASC 718 - 10 - 55.

The ASU is effective for public business entities for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years, with early adoption permitted.

The Company adopted ASU 2024 - 01 effective January 1, 2025.

The adoption of ASU 2024 - 01 did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In March 2024, the FASB issued ASU 2024 - 02, Codification Improvements — Amendments to Remove References to the Concepts Statements .

ASU 2024 - 02 removes various references to the FASB's Concepts Statements from the FASB Accounting Standards Codification, as those references are non-authoritative and their inclusion could imply otherwise.

The amendments are effective for public business entities for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU 2024 - 02 effective January 1, 2025.

The adoption of ASU 2024 - 02 did not have a material impact on the Company's consolidated financial condition, results of operations or cash flows.

In October 2024, the FASB issued ASU 2024 - 04, Debt — Debt with Conversion and Other Options (Subtopic 470 - 20 ):

Induced Conversions of Convertible Debt Instruments .

ASU 2024 - 04 clarifies the requirements for determining whether a settlement of a convertible debt instrument (or convertible preferred stock classified as a liability) should be accounted for as an induced conversion under ASC 470 - 20.

Specifically, the ASU clarifies that an issuer must assess whether a settlement offer provides the holder with consideration in excess of the original conversion terms — and if so, the transaction must be accounted for as an induced conversion, with any excess consideration recognized as an expense.

The amendments in this ASU are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted for any date on or after the issuance of the ASU.

The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures .

ASU 2024 - 03 is intended to improve disclosures about a public business entity’s expenses and provide more detailed information to investors about the types of expenses in commonly presented expense captions.

This ASU will be applied retrospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

In January 2025, the FASB issued ASU 2025 - 01 , Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Clarifying the Effective Date, which clarified that public business entities should initially adopt the disclosure requirements of ASU 2024 - 03 in an annual reporting period, not an interim period.

As clarified by ASU 2025 - 01, ASU 2024 - 03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of implementing this guidance.

In July 2025, the FASB issued ASU 2025 - 05, Financial Instruments—Credit Losses (Topic 326 ):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The amendments introduce a practical expedient that permits entities to assume current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets within the scope of ASC 606 when developing reasonable and supportable forecasts of expected credit losses, thereby removing the requirement to incorporate macroeconomic forecasts for those assets.

The ASU also provides an accounting policy election to consider post-balance-sheet collection activity in estimating expected credit losses;

this election is available only to entities other than public business entities and is therefore not available to the Company.

The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods, with early adoption permitted.

The Company is currently evaluating whether to elect the practical expedient and the impact, if any, on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025 - 11, Interim Reporting (Topic 270 ):

Narrow-Scope Improvements.

The amendments clarify the scope of ASC 270, specifying its applicability to all entities that provide interim financial statements and notes in accordance with U.S.

GAAP, consolidate required interim disclosures into a centralized list within Topic 270, and introduce a disclosure principle requiring disclosure of events and changes occurring after the last annual reporting period that have a material effect on the entity.

The amendments are effective for public business entities for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted.

The Company does not expect the adoption to have a material impact on its consolidated financial statements, as the amendments primarily clarify existing interim reporting requirements.

Cash Concentrations

Cash consists of cash on deposit in financial institutions in both the United States and Canada.

The Company does not hold any investments that qualify as cash equivalents as of December 31, 2025 and 2024.

Balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) limit of $250 USD in the United States and may exceed the Canada Deposit Insurance Corporation (“CDIC”) limit of $100 CAD in Canada.

As of December 31, 2025 and 2024, the Company did not have USD cash in excess of FDIC insurance limits.

As of December 31, 2025 and 2024, the Company had CAD cash in excess of CDIC insurance limits of $ 1,037 and $ 912 , respectively.

The Company does not believe the balances present a material credit risk, as the cash is held with reputable financial institutions and the Company has never experienced any losses related to these balances although no assurance can be provided that it will not experience any losses in the future.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers , applying the five -step model.

If an arrangement involves multiple performance obligations, the obligations are analyzed to determine the separate units of accounting, whether the obligations have value on a standalone basis and whether there is objective and reliable evidence of their standalone selling price.

The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations.

We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers , applying the five -step model.

The Company evaluates each customer contract to identify the distinct performance obligations promised therein.

A performance obligation is considered distinct if the customer can benefit from the good or service on its own or together with other resources that are readily available, and if the Company's promise to transfer the good or service is separately identifiable from other promises in the contract.

If an individual promised good or service is not distinct from another promised good or service, the Company combines those promised goods or services into a single combined performance obligation.

The total contract transaction price is allocated to the identified distinct performance obligations based upon the relative standalone selling prices of the performance obligations.

The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost plus margin approach.

For contracts when one or more performance obligations have observable standalone selling prices, the residual approach is applied to determine the allocation for highly variable components, including SaaS and support pricing, which both vary based on engagement size.

The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities.

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The Company receives variable consideration in very few instances.

The Company generally does not accept returns or provide refunds related to its customer contracts.

Revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services.

The Company has very few contracts with material extended payment terms as payment is typically due at or shortly after the time of the sale, typically ranging between thirty and ninety days.

In those instances where the Company has material extended payment terms (most commonly in multi-year arrangements where the Company acts as an agent to a transaction on behalf of its customers), the Company evaluates and applies constraints to arrive at the revenue recognized in the period in which a contract is entered.

In those instances where the Company offers material extended payment terms (most commonly in multi-year arrangements), the Company determines whether a significant financing component exists.

Where the Company acts as an agent to a transaction on behalf of its customers (primarily for the sale of extended warranties that are performed by the equipment manufacturer), the Company recognizes revenue on a net basis.

Observable prices are used to determine the standalone selling price of separate performance obligations or a cost plus margin approach when one is not available.

Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue.

The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the customers.

A contract liability is recognized as deferred revenue when the Company invoices customers in advance of performing the related services under the terms of a contract.

Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation.

Deferred revenue is recognized as revenue when or as the Company satisfies the related performance obligation.

The Company uses the practical expedient for recording an immediate expense for incremental costs of obtaining contracts, including certain design/engineering services, commissions, incentives and payroll taxes, as these incremental and recoverable costs have terms that do not exceed one year.

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The allowance for credit losses is included in accounts receivable, net in the accompanying consolidated balance sheets.

The Company had the following activity for its allowance for credit losses from December 31, 2022 to December 31, 2024:

Balance as of December 31, 2022

The opening accounts receivable balance as of January 1, 2024 was $ 12,468 , net of the allowance for credit losses.

The Company had the following activity for its allowance for credit losses from January 1, 2024 to December 31, 2025:

Balance as of January 1, 2024

Provision for credit losses

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$ 7,420 $ 1,995

The reserve for obsolete inventory at December 31, 2024 and 2023 was $ 112 and $ 160 , respectively.

Impairment of Long-Lived Assets

We review the carrying value of all long-lived assets, including property and equipment, for impairment in accordance with ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets .

Under ASC 360, impairment losses are recorded whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

If the impairment tests indicate that the carrying value of the asset is greater than the expected undiscounted cash flows to be generated by such asset, an impairment loss would be recognized.

The impairment loss is determined as the amount by which the carrying value of such asset exceeds its fair value.

Under ASC 360, impairment tests are performed for property and equipment whenever events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable.

Impairment testing on other long-lived assets, including intangible assets, is described in Note 2, item ( 11 ) below.

Impairment testing on goodwill is described in Note 2, item ( 10 ) below.

If the impairment tests indicate that the carrying value of the asset or asset group is greater than the expected undiscounted cash flows to be generated by such asset, an impairment loss would be recognized in the amount by which the carrying value of such asset or asset group exceeds its fair value.

We generally measure fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such assets using an appropriate discount rate.

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Basic and Diluted Loss per Common Share

Basic and diluted loss income per common share for all periods presented is computed using the weighted average number of common shares outstanding.

Basic weighted average shares outstanding includes only outstanding common shares.

Diluted weighted average shares outstanding includes outstanding common shares and potential dilutive common shares outstanding in accordance with the treasury stock method.

Shares reserved for outstanding stock options, including stock options with performance restricted vesting, and warrants totaling approximately 6,152,233 and 6,223,134 at December 31, 2024 and 2023 , respectively were excluded from the computation of loss per share as the strike price on the options and warrants were higher than the Company's market price and therefore anti-dilutive.

Deferred income taxes are recognized in the financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates.

Temporary differences arise from a number of matters including, but not limited to, net operating losses, differences in basis of intangibles, stock-based compensation, reserves for uncollectible accounts receivable and inventory, differences in depreciation methods, and accrued expenses.

Basic loss per common share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period.

Net loss applicable to common shareholders is calculated as net loss less preferred stock dividends, whether declared or accruing.

The Company's Series A Redeemable Convertible Preferred Stock accrues dividends at 5.25 % annually on the stated value of $ 1,000 per share;

such accruing dividends reduce the numerator in the basic net loss per share calculation regardless of whether they have been declared by the Board of Directors.

Diluted loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock.

When the Company is in a net loss position, all potentially dilutive securities, including stock options, warrants, and shares issuable upon conversion of the Series A Preferred Stock, are excluded from diluted loss per share as their inclusion would be anti-dilutive.

Shares reserved for outstanding stock options totaling 2,539,564 , warrants totaling 5,364,802 , and 30,000 shares of the Series A Preferred Stock, convertible into 10,000,000 shares of common stock as of December 31, 2025 were excluded from the computation of loss per share for the year ended December 31, 2025, as the Company was in a net loss position and their inclusion would have been anti-dilutive.

Shares reserved for outstanding stock options totaling 1,565,231 and warrants totaling 4,587,002 as of December 31, 2024, were excluded from the computation of loss per share for the year ended December 31, 2024, as the Company was in a net loss position and their inclusion would have been anti-dilutive.

Deferred income taxes are recognized in the consolidated financial statements for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates.

Temporary differences arise from a number of matters including, but not limited to, net operating losses, differences in basis of intangibles, stock-based compensation, allowance for credit losses, write-downs of inventory for book purposes, differences in depreciation methods, and accrued expenses.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

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We had no uncertain tax positions as of December 31, 2025 and 2024.

Goodwill and Definite-Lived Intangible Assets

We follow the provisions of ASC 350, Goodwill and Other Intangible Assets.

Pursuant to ASC 350, goodwill acquired in a purchase business combination is not amortized, but instead tested for impairment at least annually.

The Company uses an annual measurement date of September 30 to assess impairment of goodwill and indefinite-lived intangible assets, or as indicators are identified.

Definite-lived intangible assets are amortized straight-line in accordance with their identified useful lives.

Goodwill is the excess of consideration paid for an acquired entity over the fair value of the amounts assigned to assets acquired, including other identifiable intangible assets, and liabilities assumed in a business combination.

To determine the amount of goodwill resulting from a business combination, the Company performs an assessment to determine the acquisition date fair value of the acquired company’s tangible and identifiable intangible assets and liabilities.

Goodwill is required to be evaluated for impairment on an annual basis and whenever events or changes in circumstances indicate the asset may be impaired.

An entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

These qualitative factors include macroeconomic and industry conditions, cost factors, overall financial performance, and other relevant entity-specific events.

If the entity determines that this threshold is met, then the Company may apply a one -step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit.

The Company determines fair value through multiple valuation techniques and weighs the results accordingly.

The Company is required to make certain subjective and complex judgments in assessing whether an event of impairment of goodwill has occurred, including assumptions and estimates used to determine the fair value of its reporting units.

The Company has elected to perform its annual goodwill impairment test on September 30 of each year utilizing a qualitative assessment to determine if it was more likely than not that the fair value of each of its reporting units was less than their respective carrying values.

Intangible Assets

Identifiable intangible assets primarily include developed technology, trade names, customer relationships and non-compete agreements.

Amortizable intangible assets are amortized on a straight-line basis over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the assets may be impaired.

If an indicator of impairment exists, the Company will compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset.

If the undiscounted cash flows exceed the carrying value, no impairment is indicated.

If the undiscounted cash flows do not exceed the carrying value, then impairment, if any, is measured as the difference between fair value and carrying value, with fair value typically based on a discounted cash flow model.

Use of Estimates

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Our significant estimates include:

contingent purchase consideration valuation, allowance for credit losses, valuation allowances related to deferred taxes, and assumptions and estimates used to evaluate the recoverability of goodwill and other intangible assets and the related amortization methods and periods.

the fair value of assets acquired and liabilities assumed in business combinations, including identifiable intangible assets;

allowance for credit losses;

valuation allowances related to deferred tax assets, including the realizability of acquired Canadian deferred tax assets;

assumptions and estimates used to evaluate the recoverability of goodwill and other intangible assets and the related amortization methods and periods;

the incremental borrowing rate used to measure right-of-use assets and lease liabilities;

the fair value of stock-based compensation awards;

and the assessment of the Company's ability to continue as a going concern, including projected cash flows and available liquidity.

Actual results could differ from those estimates.

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Property and equipment are carried at cost, less accumulated depreciation and amortization.

Depreciation is provided for in amounts sufficient to relate the cost of depreciable assets to operations over the estimated service lives, principally using straight-line methods.

Depreciation is recorded using a straight-line method.

Leasehold improvements are amortized over the shorter of the life of the improvement or the lease term, using the straight-line method.

Property and equipment consist of the following at December 31, 2024 and 2023 :

Property and equipment consisted of the following:

$ 2,894 $ 241

Leasehold improvements

Furniture and fixtures

Other depreciable assets

Total property and equipment

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Net property and equipment

$ 2,937 $ 207

The estimated useful lives used to compute depreciation and amortization are as follows:

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Depreciation expense was $ 346 and $ 201 for the years ended December 31, 2025 and 2024, respectively.

The Company disposed of certain fully depreciated fixed assets with an acquisition value of $ 310 and $ 150 for the years ended December 31, 2024 and 2023 , respectively.

Reclassifications

Certain prior year amounts in the consolidated financial statements and accompanying notes have been reclassified to conform to the current year presentation.

These reclassifications had no effect on previously reported net loss, total assets, total liabilities, shareholders’ equity, or cash flows from operations.

Management has evaluated these reclassifications and determined that they are not material, individually or in the aggregate, to the consolidated financial statements taken as a whole.

Contingent Consideration

On November 12, 2021, the Company, Reflect, CRI Acquisition Corporation, a direct wholly owned subsidiary of the Company (“CRI Acquisition”), and RSI Exit Corporation, representative of the former Reflect stockholders (“RSI”), entered into an Agreement and Plan of Merger (as amended, the “Merger Agreement”), pursuant to which CRI Acquisition merged with and into Reflect, with Reflect surviving the merger and becoming our wholly owned subsidiary (the “Merger”).

At the effective time of the Merger, which occurred on February 17, 2022, all shares of Reflect’s capital were converted into the right to receive cash and a total of 2,333,334 shares of Creative Realities common stock (the “Merger Shares”).

The Merger Agreement also requires the Company to pay to the former Reflect stockholders additional contingent cash payments (the “Guaranteed Consideration”), if any, payable on or after February 17, 2025 ( subject to the Extension Option described below, the “Guarantee Date”), in an amount by which the value of the Merger Shares on the Guarantee Date is less than $ 6.40 per share (such applicable amount, the “Guaranteed Price”), multiplied by the number of Merger Shares held by the Reflect stockholders on the Guarantee Date.

On March 23, 2023, after the closing of the Merger, the Company completed a 1 -for- 3 reverse stock split (the “Reverse Split”) primarily intended to bring the Company into compliance with the minimum bid price requirements to maintain the listing of its common stock on the Nasdaq Capital Market.

As a result of the Reverse Split, the number of Merger Shares decreased from 2,333,334 to 777,778 .

The Company and RSI have engaged in discussions regarding the impact that the Reverse Split had on the calculation of the Guaranteed Consideration, given that the Merger Agreement provides for a Guaranteed Price of $6.40 per share and does not provide for any adjustment to the Guaranteed Price as a result of the Reverse Stock Split or other similar transaction with respect to the Company’s common stock.

To date, the Company and RSI have not reached any agreement regarding the methodology for calculating Guaranteed Consideration under the plain terms of the Merger Agreement, and commencing March 17, 2025, former Reflect stockholders seeking payment of Guaranteed Consideration may submit written demands to the Company for a 30 -day period.

The contingent liability associated with the Guaranteed Consideration is recorded in the Company’s Consolidated Balance Sheets at fair value and is remeasured at each reporting period in accordance with ASC 805 - 30 - 35 - 1 using a Monte Carlo simulation model.

For financial statement purposes, consistent with prior reporting periods since the Reverse Split, the Company has and continues to book a contingent liability as of December 31, 2024 related to the Guaranteed Consideration as though the Reverse Split increased the Guaranteed Price from $6.40 per share to $ 19.20 per share, thereby recording an estimated potential liability for contingent consideration, at fair value of $ 12,815 .

The contingent liability, at fair value, as of December 31, 2024 related to the Guaranteed Consideration that would be calculated using a Guaranteed Price of $6.40 per share would result in an estimated liability of $ 3,017 .

The Company engaged an outside independent valuation firm to calculate the fair value of the Guaranteed Consideration at both the $6.40 and $19.20 Guaranteed Prices.

While we believe that the Merger Agreement provides no adjustment to the Guaranteed Price as a result of the Reverse Split, resulting in a lower amount of Guaranteed Consideration than the contingent liability reflected in our financial statements, no assurance can be provided that our interpretation of the Merger Agreement will ultimately be accepted by RSI and the former Reflect stockholders, or by any arbitrator or court that ultimately adjudicates the matter.

The Company may exercise an extension option (the “Extension Option”) to extend the Guarantee Date by six ( 6 ) months, from February 17, 2025 to August 17, 2025, if (i) the Extension Threshold Price is greater than or equal to 70 % of the Guaranteed Price described above, and (ii) the Company provides written notice of its election to exercise the Extension Option no later than February 7, 2025.

The “Extension Threshold Price” means the average closing price per share of Creative Realities common stock as reported on the Nasdaq Capital Market (or NYSE) in the fifteen ( 15 ) consecutive trading day period ending February 2, 2025.

The Merger Agreement provides that if the Extension Threshold Price is less than 80 % of the Guaranteed Price, then the Guaranteed Price will be increased by $ 1.00 per share (which amount has not been adjusted as a result of the Reverse Split).

The Company had contingent consideration arrangements related to certain acquisitions to potentially pay additional cash amounts in future periods based on the lack of achievement of certain share price performance goals of our common stock.

Such contingent consideration arrangements are recorded at fair value and are classified as liabilities on the acquisition date and are remeasured at each reporting period in accordance with ASC 805 - 30 - 35 - 1 using a Monte Carlo simulation model.

On March 14, 2025, the Company entered into a settlement agreement which resolved all amounts due related to the contingent consideration arrangements (see Note 5, Business Combinations , for additional information).

Foreign Currency Translation

The functional currency of the Company's Canadian subsidiaries is the Canadian dollar.

The financial statements of these subsidiaries are translated into U.S.

dollars in accordance with ASC 830, Foreign Currency Matters .

Assets and liabilities denominated in foreign currencies are translated into U.S.

dollars at the exchange rates in effect at the balance sheet date.

Revenue and expense accounts are translated at the average exchange rates during the period.

The resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss) within shareholders' equity.

Gains and losses arising from foreign currency transactions are included in other expense (income), net in the consolidated statements of operations.

The Company's reporting currency is the U.S.

Because the Company acquired its Canadian subsidiaries on November 7, 2025, the consolidated financial statements for the year ended December 31, 2025 include the results of the Canadian subsidiaries from the acquisition date through December 31, 2025 only.

There were no foreign currency translation adjustments for the year ended December 31, 2024.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting, under which the purchase price of an acquisition is allocated to the assets acquired and liabilities assumed based on their fair values, as determined by management at the acquisition date.

Examples of significant estimates in valuing certain of the intangible assets acquired include, but are not limited to, future expected cash inflows and outflows, expected useful life, discount rates and income tax rates.

Acquisition-related costs incurred in connection with a business combination are expensed as incurred and are included in general and administrative expenses in the consolidated statements of operations.

The Company accounts for leases in accordance with ASC 842, Leases .

At the inception of a contract, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration.

Leases are classified as either operating or finance leases at the commencement date.

Right-of-use ("ROU") assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, discounted using the rate implicit in the lease or, if not readily determinable, the Company's incremental borrowing rate.

The Company does not include renewal options in the lease term unless reasonably certain to be exercised.

For operating leases, lease expense is recognized on a straight-line basis over the lease term.

For finance leases, amortization of the ROU asset is recognized on a straight-line basis over the lease term and interest expense on the lease liability is recognized using the effective interest method.

The Company has elected not to combine lease and non-lease components for any asset class.

Variable lease payments that do not depend on an index or rate, including certain payments under the Company's digital media advertising display arrangements that are based on the greater of a percentage of advertising sales or a minimum annual guarantee, are excluded from the measurement of the lease liability and recognized as expense in the period incurred.

The minimum annual guarantees are not excluded from the measurement of the lease liability, rather only variable amounts above the minimum annual guarantees are excluded from the measurement of the lease liability and expensed when incurred.

In connection with the acquisition of CDM on November 7, 2025, the Company reassessed certain contracts acquired from CDM under ASC 842's dual-model framework, treating the acquisition date as the lease commencement date in accordance with ASC 805.

The resulting ROU assets and lease liabilities were measured using an incremental borrowing rate of 8.0 %.

See Note 17, Leases , for additional information.

Stock Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award.

The fair value of the award is measured on the grant date and is recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period.

The Company computes the fair value of equity-classified stock options and warrants using the Black-Scholes option pricing model and the fair value of awards with market-based vesting conditions using a Monte Carlo simulation model.

The fair value of restricted stock units is based on the closing price of the Company's common stock on the date of grant.

Forfeitures are recognized as they occur.

Stock-based compensation expense is included in general and administrative expenses in the consolidated statements of operations.

See Note 15, Stock-Based Compensation , for additional information.

Internally Developed Software

The Company capitalizes costs associated with internally developed software in accordance with ASC 350 - 40, Internal-Use Software .

Costs incurred during the preliminary project stage and post-implementation stage are expensed as incurred.

Costs incurred during the application development stage, including internal labor and direct third -party costs, are capitalized and amortized on a straight-line basis over the software's estimated useful life, generally three to seven years.

The Company evaluates capitalized software for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable.

When indicators of impairment exist, the Company compares the estimated undiscounted future cash flows associated with the asset to its carrying value.

If the carrying value exceeds the undiscounted cash flows, impairment is measured as the excess of the carrying amount over the asset's estimated fair value.

See Note 8, Intangible Assets and Goodwill , for additional information.

FAIR VALUE MEASUREMENT

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The Company previously recorded warrant liabilities that were measured at fair value on a recurring basis using a binomial option pricing model.

The calculation of the fair value of the contingent consideration contains inputs which are unobservable and involve management judgment and are considered Level 3 estimates.

Additionally, the separately identifiable intangible assets rely on a discounted cash flow model which utilizes inputs including the calculation of the weighted average cost of capital and management’s forecast of future financial performance which are unobservable and involve management judgment and are considered Level 3 estimates.

The calculation of the fair value of the contingent consideration contained inputs which were unobservable and involved management judgment and were considered Level 3 estimates.

Additionally, the separately identifiable intangible assets and goodwill rely on a discounted cash flow model which utilizes inputs including the calculation of the weighted average cost of capital and management’s forecast of future financial performance which are unobservable and involve management judgment and are considered Level 3 estimates.

The calculation of the weighted average cost of capital and management’s forecast of future financial performance utilized within our discounted cash flow model for the impairment of goodwill contains inputs which are unobservable and involve management judgment and are considered Level 3 estimates.

REVENUE RECOGNITION

The Company applies ASC 606 for revenue recognition.

The following table disaggregates the Company’s revenue by major source for the years ended December 31, 2024 and 2023 :

$ 18,259 $ 20,303

The Company applies ASC 606, Revenue from Contracts with Customers, for revenue recognition.

The table below disaggregates the Company’s revenue by major source as follows:

For the Years Ended

Recognition Policy:

$ 21,232 $ 18,259 Point in time

Managed Services

19,547 15,916

17,896 19,547 Over time

Digital Media Advertising

9,549 - Over time

Installation Services

Other Services

5,617 8,968 Point in time

2,938 4,080 Point in time

Total Services

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$ 57,232 $ 50,854

System hardware revenue is recognized generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer in instances in which the sale of hardware is the sole performance obligation.

System hardware revenue is recognized at a point in time generally upon shipment of the product or customer acceptance depending upon contractual arrangements with the customer in instances in which the sale of hardware is the sole performance obligation.

Shipping charges billed to customers are included in hardware sales and the related shipping costs are included in hardware cost of sales.

The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer.

The Company sells extended warranties to its customers in connection with its hardware sales.

The equipment manufacturer performs the warranty services, and therefore manufacturer is considered the principal and the Company is an agent for extended warranty sales.

Accordingly, extended warranty sales are presented on a net basis (gross revenue less cost) within hardware revenue and are recognized at the time of the hardware sale.

Managed Services

Software as a service license sales

Software as a service includes revenue from software licensing and delivery in which software is licensed on a subscription basis and is centrally hosted by the Company.

Software as a service

Software as a service (“SaaS”) includes revenue from software licensing and delivery in which software is licensed on a subscription basis and is centrally hosted by the Company.

These services often include software updates which provide customers with rights to unspecified software product upgrades and maintenance releases and patches released during the term of the support period.

Contracts for these services are generally 12 - 36 months in length and typically have perpetual autorenewal terms.

We account for revenue from these services in accordance with ASC 985 - 20 - 15 - 5 and recognize revenue ratably over the performance period.

We recognize SaaS revenue ratably over the performance period.

Maintenance and support services

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Revenue is recognized over the term of the agreement in proportion to the costs incurred in fulfilling performance obligations under the contract.

Maintenance and support fees are based on the level of service provided to end customers, which can range from monitoring the health of a customer’s network, supporting a sophisticated web-portal, or managing the end-to-end hardware and software of a digital marketing system.

Maintenance services are based on the level of service provided to end customers, which can range from monitoring the health of a customer’s network, supporting a sophisticated web-portal, or managing the end-to-end hardware and software of a digital marketing system.

These agreements are renewable by the customer.

Rates for maintenance and support, including subsequent renewal rates, are typically established based upon a fee per location, per device, or a specified percentage of net software license fees as set forth in the arrangement.

Rates for maintenance, including subsequent renewal rates, are typically established based upon a fee per location, per device, or a specified percentage of net SaaS fees as set forth in the arrangement.

These contracts are generally 12 - 36 months in length.

Revenue is recognized ratably and evenly over the service period.

In arrangements where the SaaS and maintenance are highly interrelated, they are combined as one performance obligation.

The Company also performs time and materials-based maintenance and repair work for customers.

Revenue is recognized at a point in time when the performance obligation has been fully satisfied.

Digital Media Advertising

Digital media advertising revenues are derived from selling digital out-of-home, or DOOH, advertising on infrastructure assets owned or operated by the Company and located at retail malls, shopping centers, office buildings, and other commercial properties.

The Company sells advertising placement opportunities to brands and advertising agencies through an exclusive sales agent, which solicits and engages in media sales agreements with end-customer advertisers on the Company's behalf.

The Company has concluded that it acts as the principal in these arrangements under ASC 606, as it controls the specified advertising service before transfer to the customer.

Accordingly, the Company reports digital media advertising revenues on a gross basis, with the full amount charged to advertisers recorded as revenue and the agent's commission, which ranges from ten percent ( 10 %) to fourteen percent ( 14 %) of annual gross revenue, presented as a component of cost of sales in the consolidated statements of operations.

Digital media advertising revenue is recognized over time in accordance with ASC 606 - 10 - 25 - 27 (a), as the advertiser simultaneously receives and consumes the benefit of the advertising display service throughout each campaign period.

The Company's performance obligation to each advertiser constitutes a single combined performance obligation encompassing the operation of advertising infrastructure and the presentation of advertising content over the contracted campaign period.

Revenue is recognized ratably over each campaign period as content is displayed and commissions paid to the agent computed on a stated percentage of gross advertising revenue included in the consolidated statements of operations within cost of sales.

Installation Services

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Installation services also include engineering and configuration services required to be performed to design and deploy a digital signage system that subsequently becomes an installation project.

When system hardware sales include installation services to be performed by the Company, the goods and services in the contract are, in certain instances, not distinct as the customer contract contemplates an installed solution, inclusive of system hardware.

In those instances, the arrangement is accounted for as a single performance obligation.

In those instances, the arrangement is accounted for as a single combined performance obligation.

Our customers may control the work-in-process and can make changes to the design specifications over the contract term.

In these circumstances, revenues are recognized over time as the installation services are completed based on the relative portion of labor hours completed as a percentage of the budgeted hours for the installation.

Typically, in large scale deployments that include installation services, the contract terms segregate performance obligations related to hardware sales and installation services by providing for different legal transfer of title and risk of loss.

Alternatively, in certain large scale deployments that include installation services, the contract terms segregate performance obligations related to hardware sales and installation services by providing for different legal transfer of title and risk of loss and the two activities are not highly interrelated.

In those circumstances, installation services are deemed to be a separate performance obligation.

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We sell advertising or sponsorship opportunities on behalf of our media network owner customers to brands and advertisers.

We generally do not own the devices that display the sold digital advertising.

The Company has concluded that it acts as an agent and reports media revenues on a net basis, with the Company recording its commission, which typically is between thirty percent ( 30 %) and forty percent ( 40 %) of the total media sales contract, as revenue in the consolidated financial statements.

This revenue stream is separate from the digital media advertising revenue stream described above.

For digital media advertising, we own or control the digital displays and accordingly, we are the principal.

For media sales described here, we do not own the devices that display the sold digital advertising.

The Company has concluded that it acts as an agent for these arrangements and reports media revenues on a net basis, with the Company recording its commission, which typically is between thirty percent ( 30 %) and forty percent ( 40 %) of the total media sales contract, as revenue in the consolidated financial statements.

The media sales contracts we facilitate on behalf of our customers range from a single day to eight years.

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The Company applies time-based constraints in accordance with ASC 606 to evaluate the earned portion of the contract to record at execution.

For revenues generated through the use of a subcontracted advertising agency, commissions are calculated based on a stated percentage of gross advertising revenue and reported in the Consolidated Statements of Operations within Sales and Marketing Expenses.

For revenues generated through the use of a subcontracted advertising agency, commissions are calculated based on a stated percentage of gross advertising revenue and reported in the consolidated statements of operations within cost of sales.

The following table presents the activities in deferred revenue for the year ended December 31, 2025:

Balance, January 1

Amounts assumed in CDM business combination

Amounts billed and deferred during the year

Revenue recognized that was included in the beginning balance

Revenue recognized from amounts deferred during the year

Foreign currency translation adjustment on Canadian deferred revenue

Balance, December 31,

There were no significant revenues recognized in 2025 or 2024 from performance obligations that were satisfied (or partially satisfied) in prior periods as a result of contract price changes, changes in estimates or variable consideration true-ups.

As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations (i.e., unsatisfied or partially unsatisfied performance obligations) was $ 10,564 .

The following table presents the expected timing of recognition of that amount:

Recognition Period

Within 1 year

Between 1 and 2 years

Between 2 and 3 years

The remaining performance obligations in the table above primarily consist of non-cancellable multi-year SaaS and maintenance agreements, under which the Company recognizes SaaS and maintenance revenue ratably over the contract term.

The Company has elected the optional exemption under ASC 606 - 10 - 50 - 14 and does not disclose information about remaining performance obligations for contracts with an original expected duration of one year or less, which primarily consist of short-term digital media advertising contracts, month-to-month support agreements, media revenue, and transactional arrangements (e.g., hardware and installation, software design and development, content creation).

BUSINESS COMBINATIONS

Cineplex Digital Media

On October 15, 2025, the Company entered into a Share Purchase Agreement (the "Share Purchase Agreement") with its wholly-owned subsidiary, 1001372953 Ontario Inc., an Ontario corporation ("Buyer"), and Cineplex Entertainment Limited Partnership ("Cineplex") to acquire 100 % of the issued and outstanding common shares of DDC Group International, Inc.

("DDC"), an Ontario corporation and wholly owned subsidiary of Cineplex.

DDC is the parent company of Cineplex Digital Media Inc.

("CDMI"), a digital solutions provider offering end-to-end digital signage and place-based media network services, and Cineplex Digital Media U.S.

DDC, CDMI and CDMUS are collectively referred to herein as "CDM".

The Company pursued the acquisition to expand its digital signage capabilities and geographic presence into Canada, gain access to CDM's proprietary SaaS technology platform and diversified recurring-revenue customer base, and realize cross-selling synergies across the combined business.

The Share Purchase Agreement provided for a base purchase price of approximately CAD $ 70,000 in exchange for all of the issued and outstanding common shares of DDC, subject to customary purchase price adjustments based on net working capital, closing cash, transaction expenses, CDM closing indebtedness and planned capital expenditures (the "Purchase Price").

The Share Purchase Agreement also included customary closing conditions, including the Company obtaining debt and equity financing sufficient to fund the Purchase Price and receipt of regulatory approval pursuant to Canada's Competition Act , which was obtained prior to closing.

No contingent consideration arrangements were entered into in connection with the acquisition.

The final purchase price after adjustments was approximately CAD $ 60,263 (or approximately USD $ 42,761 ).

On November 7, 2025 ( the "Acquisition Date"), the Company consummated the transactions contemplated by the Share Purchase Agreement and acquired all of the issued and outstanding common shares of DDC in exchange for cash consideration.

The Company translated the purchase price and the fair values of assets acquired and liabilities assumed from Canadian dollars to U.S.

dollars using the Bank of Canada closing exchange rate on November 7, 2025 of approximately 0.7096 USD per 1.00 CAD.

The acquisition was accounted for as a business combination in accordance with ASC 805, Business Combinations .

The Company engaged a third -party independent valuation specialist to assist in the determination of preliminary fair values of tangible and intangible assets acquired and liabilities assumed for CDM.

The final determination of the fair value of assets and liabilities will be completed within the one -year measurement period as required by ASC 805.

The acquisition will necessitate the use of this measurement period to adequately analyze and assess the factors used in establishing the asset and liability fair values as of the relevant acquisition date, including intangible assets, working capital adjustments and evaluation of deferred tax assets and liabilities arising from the Acquisition.

The Company will recognize any measurement period adjustments in the reporting period in which the adjustments are determined.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date:

Purchase Consideration:

Cash (net of cash acquired of $ 4,778 )

Technology platform

Customer relationships

Non-compete covenant

Unfavorable lease

Operating lease right-of-use assets

Finance lease right-of-use assets

Operating lease liabilities

Finance lease liabilities

Property and equipment

Deferred tax liability

Debt-free net working capital deficit

Fair Value of Identified Net Assets

Remaining Goodwill Value

The components of the debt-free net working capital deficit are as follows:

Current assets:

Accounts receivable

Prepaid expenses and other current assets

Total current assets

Less current liabilities:

Accounts payable

Accrued expenses and current liabilities

Current portion of deferred revenue

Total current liabilities

Net working capital deficit

The following describes the methods used to determine the fair value of each identifiable intangible asset acquired and the respective useful lives:

The fair value of the technology platform of $ 6,656 was estimated using the relief from royalty method under the income approach.

The developed technology consists of patented and unpatented technology, know-how and processes related to CDM's SaaS platform and integrated digital hardware for end-to-end digital signage experiences and place-based media networks.

Key assumptions included a royalty rate of 4.0 %, a discount rate of 13.25 %, a tax rate of 25.0 %, and a technology obsolescence period of 10 years.

The estimated useful life of the developed technology is 10 years.

The fair value of customer relationships of $ 14,324 was estimated using the multi-period excess earnings method under the income approach.

CDM has developed a broad and diversified customer base with recurring revenues operating across verticals including quick service restaurants, financial services, retail, and malls/real estate.

Key assumptions included a customer attrition rate of 2.5 % per annum, a projected customer revenue growth averaging approximately 5 % annually over the forecast period, a discount rate of 13.5 %, and a tax rate of 25.0 %.

The estimated useful life of customer relationships is 10 years.

The fair value of the non-compete covenant of $ 21 was estimated using the "with or without" method under the income approach.

The non-compete agreement was entered into with Cineplex.

Key assumptions included a potential loss of sales of 2.5 %, a probability of competing of 10.0 %, a discount rate of 13.0 %, and a tax rate of 25.0 %.

The estimated useful life of the non-compete covenant is 5 years.

The Company identified an unfavorable leasehold interest of ($ 41 ) related to office space at 137 Northfield Drive West, Waterloo, Ontario, where the contract rent of CAD $ 19.50 per square foot exceeds the estimated market rent of CAD $ 16.00 per square foot.

The fair value was estimated using a discounted cash flow analysis under the income approach at a discount rate of 10.50 %.

The unfavorable lease intangible has been reflected as a reduction to the acquired operating lease right-of-use asset in the preliminary purchase price allocation and is being amortized over the remaining lease term through January 2027.

The Company acquired the lease agreement for office space in Waterloo, Ontario, as well as certain media mall agreements that contained embedded leases.

The Company established a new right-of-use asset and lease liability for these leases in purchase accounting.

See Note 17 for further details.

Contract liabilities assumed in the acquisition consist primarily of deferred revenue related to digital media and digital signage service arrangements with CDM Business customers.

In accordance with ASU 2021 - 08, Business Combinations (Topic 805 ):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, the Company measured the assumed contract liabilities at the amount that would have been recorded under ASC 606 as if the Company had originated the underlying contracts.

The fair value of working capital accounts was determined to approximate their carrying values due to the short-term nature of the assets and liabilities.

Goodwill was recorded based on the amount by which the purchase price exceeded the fair value of the net assets acquired.

The goodwill is primarily attributable to expected synergies from combining operations, the assembled workforce, cross-selling opportunities across the combined customer base, and other intangible benefits that do not qualify for separate recognition under ASC 805.

The goodwill has been assigned to the Company’s sole reporting unit.

The goodwill recognized is not expected to be deductible for income tax purposes.

The consolidated financial statements of the Company include the results of operations of CDM from November 7, 2025 to December 31, 2025 and do not include results of operations for periods prior to November 7, 2025.

The results of operations of CDM from November 7, 2025 to December 31, 2025 included revenues of $ 13,613 and net income of $ 4,661 .

The following table presents the unaudited pro forma consolidated results of operations for the year ended December 31, 2025 and 2024 as if the acquisition of CDM occurred at the beginning of fiscal year 2024.

The pro forma results are not necessarily indicative of the results of operations that would have occurred had the operations of this acquisition actually been acquired at the beginning of fiscal year 2024 or future results of operations.

For the Year Ended

$ 88,778 $ 91,524

$ ( 10,842 ) $ ( 4,818 )

As of the acquisition date, the Company expected to collect all contractual cash flows related to receivables acquired in the acquisition.

Acquisition-related costs of $ 1,955 were expensed as incurred and are recorded within general and administrative expenses on the consolidated statements of operations.

Merger-related Contingent Consideration Settlement

On November 12, 2021, the Company entered into an Agreement and Plan of Merger with Reflect and RSI Exit Corporation, as representative of the former stockholders of Reflect (the “Stockholders’ Representative”), which was amended on February 8, 2022, February 11, 2023, February 17, 2025, and February 23, 2025 ( as amended, the “Merger Agreement”).

Pursuant to the Merger Agreement, the Company’s direct, wholly owned subsidiary, CRI Acquisition Corporation, merged with and into Reflect, with Reflect continuing as the surviving entity and becoming a wholly owned subsidiary of the Company (the “Merger”).

The Merger was closed on February 17, 2022.

The Merger Agreement required the Company to pay to the former Reflect stockholders on or after February 17, 2025 ( the “Guaranteed Date”) additional contingent supplemental cash payments (the “Guaranteed Consideration”) if the average closing price of the Company’s common stock in the fifteen ( 15 ) trading day period prior to the Guaranteed Date was below $ 6.40 per share (such applicable amount, the “Guaranteed Price”).

On March 14, 2025, the Company and Reflect entered into a Settlement Agreement and Fifth Amendment to Merger Agreement with the Stockholders’ Representative (the “Settlement Agreement”), pursuant to which the Company settled and resolved a dispute regarding the amount and enforceability of the Guaranteed Consideration.

Pursuant to the Settlement Agreement, the Company’s obligation to pay the Guaranteed Consideration to the former Reflect stockholders was terminated and released.

In consideration for such termination and release, (i) the Company deposited an aggregate of $ 3,000 in cash with an exchange agent for the ratable benefit of, and for distribution to, the former Reflect stockholders, (ii) the Company and Reflect (as co-obligors) delivered a subordinated promissory note in the principal amount of $ 4,000 payable to the order of the Stockholders’ Representative, as nominee for, and for the ratable benefit of, the former Reflect stockholders (the “Promissory Note”), and (iii) the Company agreed to issue to the former Reflect stockholders warrants to purchase their pro rata share of an aggregate of 777,800 shares of the Company’s common stock (the “Settlement Warrants”).

As a result of the Settlement Agreement, the Company derecognized the previously recorded contingent consideration liability related to the Merger of $ 12,815 and recorded the fair value of the settlement consideration of $ 8,040 , which included $ 3,000 in cash, the $ 4,000 Promissory Note, and Settlement Warrants with a fair value of $ 1,040 .

The Company recognized a gain on settlement of contingent consideration of $ 4,775 during the year ended December 31, 2025 in the consolidated statement of operations.

In conjunction with entering into the Settlement Agreement and related documents, the Company entered into a Consent Agreement dated March 14, 2025 with First Merchants Bank, among others (the “Consent Agreement”), pursuant to which (among other things) First Merchants Bank, the senior secured lender under the Company’s credit facility, agreed to waive certain negative covenants under the Company’s credit facility that may have otherwise been implicated by the transactions contemplated by the Settlement Agreement.

See Note 11, Debt, and Note 14, Warrants, for additional accounting considerations as a result of the issuance of the Promissory Note and Settlement Warrants.

SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION

For the Years Ended

Supplemental non-cash investing and financing activities:

Capitalized software labor in accounts payable

Capitalized software in accounts payable

Series A Redeemable Convertible Preferred Stock dividends

Right-of-use assets obtained in exchange for new operating lease liabilities

Issuance of notes payable as partial settlement of contingent consideration

Issuance of warrants as partial settlement of contingent consideration

Supplemental disclosure information for cash flow

1 unchanged sentence

$ 1,849 $ 1,195

Operating leases

PREPAID EXPENSES AND OTHER CURRENT ASSETS

As of December 31, 2025 and 2024, prepaid expenses and other current assets consisted of the following:

Vendor, project and hardware prepayments

Severance receivable

MAG reimbursement receivable

Other receivables

Prepaid subscriptions

Prepaid marketing

Prepaid other

Tax receivables

Prepaid insurance

$ 5,347 $ 859

INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets consisted of the following at December 31, 2024 and 2023:

Intangible assets consisted of the following as of December 31, 2025 and 2024:

Technology platform

2 unchanged sentences

8,815 5,921 13,780 5,006

In-Process internally developed software platform

Customer relationships

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Accumulated amortization

(16,713 ) (13,249 )

Net book value of amortizable intangible assets

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For the year ended December 31, 2024, the Company wrote-off a $ 30 fully amortized noncompete asset and the related accumulated amortization.

For the year ended December 31, 2023, the Company wrote-off a $ 340 fully amortized trade name asset, a $ 1,090 fully amortized customer list asset, a $ 2,864 fully amortized technology asset , a $ 758 fully amortized capitalized software and the related accumulated amortization.

There was no impact on the Company’s Consolidated Balance Sheet or Consolidated Statement of Operations as a result of these write-offs during the period.

There was no impact on the Company’s consolidated balance sheet or consolidated statement of operations as a result of this write-off during the period.

During the year ended December 31, 2025, the Company recognized an impairment charge of $ 5,712 related to a proprietary software platform capitalized as an intangible asset under ASC 350 - 40.

The impairment was recorded after management determined that expected future cash flows associated with the platform were not sufficient to recover its carrying amount, primarily due to uncertainty regarding the renewal of an existing software license agreement.

The uncertainty arose in September 2025 when the customer communicated that it was unable to renew its license agreement with the Company due to budget constraints, representing a triggering event under ASC 350 - 40.

The impairment charge was measured as the excess of the asset’s carrying amount over its estimated fair value, which was determined using an income approach based on expected discounted cash flows and Level 3 inputs in accordance with ASC 820.

The impairment charge is presented within operating expenses in the consolidated statements of operations.

Estimated amortization is as follows:

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Customer relationships

Goodwill represents the excess of the purchase price over the fair value of net assets acquired.

Goodwill is subject to an impairment review at a reporting unit level, on an annual basis at September 30th each fiscal year, when an event occurs, or circumstances change that would indicate potential impairment.

The Company has only one reporting unit, and therefore the entire goodwill is allocated to that reporting unit.

Using the quantitative approach, fair value of the reporting unit is estimated using both ( 1 ) a market approach, leveraging recent industry merger and acquisition activity as well as comparable public company information, and ( 2 ) a discounted cash flow analyses consisting of various assumptions, including expectations of future cash flows based on projections or forecasts derived from analysis of business prospects and economic or market trends that may occur.

Specifically, the Company gives significant consideration to actual historic financial results, including revenue growth rates in the current and preceding three years, further informed by known backlog and customer acquisitions.

Using the qualitative approach, the Company reviews macroeconomic conditions, industry and market conditions and entity specific factors, including strategies and financial performance for potential indicators of impairment.

The Company performed its annual impairment of goodwill qualitatively in 2024, and quantitatively in 2023 to determine whether it is more likely than not that the fair value of our reporting unit is below its carrying amount.

Based on the Company’s assessment, we determined that the fair value of our reporting unit exceeded its carrying value, and accordingly, the goodwill associated with the reporting unit was not considered to be impaired at September 30, 2024 and 2023.

No indicators of potential impairment were identified as of December 31, 2024.

We believe our implied fair value continues to exceed our total carrying value as of December 31, 2024.

The Company recognizes that any changes in our projected 2025 results could potentially have a material impact on our assessment of goodwill impairment.

The Company will continue to monitor the actual performance of its operations against expectations and assess indicators of possible impairment.

The valuation of goodwill and intangible assets is subject to a high degree of judgment, uncertainty and complexity.

Should any indicators of impairment occur in subsequent periods, the Company will be required to perform an analysis in order to determine whether goodwill is impaired.

Debt of the Company consists of the following:

Interest Rate

Debt Instrument

Revolving Credit Facility

$ 13,044 $ - None

Acquisition Term Loan

$ - $ 10,000 833,334 8 %

Consolidation Term Loan

As of December 31, 2025, the Company's goodwill balance includes $ 26,013 , recognized in connection with the acquisition of CDM on November 7, 2025 ( see Note 5 ).

The Company has one reporting unit and all goodwill has been assigned to that reporting unit.

On September 30, 2025, the Company performed a qualitative assessment and concluded that it was not more likely than not that the fair value of its reporting unit was less than its carrying amount.

Accordingly, no quantitative test was required and no impairment was recognized during the year ended December 31, 2025.

On September 30, 2024, the Company performed a qualitative assessment and concluded that it was not more likely than not that the fair value of its reporting unit was less than its carrying amount.

Accordingly, no quantitative test was required and no impairment was recognized during the year ended December 31, 2024.

The Company recognizes that changes in projected operating results, market conditions, or other assumptions could have a material impact on its assessment of goodwill impairment in future periods.

Should indicators of impairment arise in subsequent periods, the Company will perform the analysis required to determine whether goodwill is impaired.

Changes in goodwill for the years ended December 31, 2025 and 2024 were as follows:

Gross Carrying Amount

Balance as of January 1, 2024

Impairment expense

Balance as of December 31, 2024

Foreign currency translation adjustments

Balance as of December 31, 2025

Accumulated Impairment

Balance as of January 1, 2024

Impairment expense

Balance as of December 31, 2024

Impairment expense

Balance as of December 31, 2025

Goodwill, net of accumulated impairment

The carrying values of goodwill and intangible assets attributable to the Company's Canadian operations are denominated in Canadian dollars and are translated into U.S.

dollars at the exchange rate in effect as of the balance sheet date.

As a result, the reported balances of goodwill and intangible assets are subject to fluctuation due to changes in foreign currency exchange rates, with translation adjustments recorded in accumulated other comprehensive income.

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK

On October 15, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors pursuant to which it agreed to issue 30,000 shares of Series A Convertible Preferred Stock (the “Series A Preferred”) at a purchase price of $ 1,000 per share for aggregate gross proceeds of $ 30,000 .

The transaction closed on November 6, 2025.

In connection with the issuance of the Series A Preferred, the Company incurred direct and incremental offering expenses of approximately $ 2,544 , which were recorded as a reduction to the carrying amount of the Series A Preferred.

Proceeds from the transaction were used to fund the acquisition of CDM (see Note 5 ).

Dividend Rights

The Series A Preferred ranks senior to the Company’s common stock with respect to dividend rights and rights upon liquidation.

Each share has a liquidation preference equal to $ 1,000 per share plus accrued and unpaid dividends.

The liquidation preference of the Series A Preferred totaled $ 30,232 as of December 31, 2025.

The Series A Preferred bears cumulative dividends at a rate of 5.25 % per annum on the stated value.

Dividends accrue daily and compound quarterly beginning on November 6, 2025, and accrue for a five -year period (the “Guaranteed Term”).

Dividends are not payable in cash during the Guaranteed Term, except at the Company’s option.

Upon certain events occurring during the Guaranteed Term, including a liquidation, fundamental transaction (see below) or mandatory conversion, holders are entitled to a make-whole amount representing dividends that would have accrued through the end of the Guaranteed Term.

Dividends are recorded as an increase to the carrying value of the Series A Preferred and as an adjustment to net income (loss) attributable to common shareholders in the calculation of earnings per share.

The Company recorded $ 232 in preferred dividends during the year ended December 31, 2025.

Conversion Features

The Series A Preferred is convertible at the option of the holders at any time into shares of common stock at a conversion price of $ 3.00 per share, subject to customary anti-dilution adjustments.

The number of shares issuable upon conversion is determined by dividing the applicable liquidation preference by the conversion price.

The Series A Preferred is initially convertible into an aggregate of 10,000,000 shares of common stock, subject to beneficial ownership limitations and available authorized shares.

On or after the third anniversary of the issuance date, the Company may elect to require conversion of all outstanding shares if specified financial and market price conditions are satisfied.

The Company evaluated the embedded conversion features under ASC 815, Derivatives and Hedging, and concluded that bifurcation was not required as the conversion feature is clearly and closely related to the equity-like host instrument and qualifies for the conventional convertible scope exception.

Redemption Rights

A fundamental transaction includes, among other events, a merger, consolidation, sale of substantially all assets, tender offer resulting in a change of control, recapitalization or similar transaction (a “Fundamental Transaction”).

Upon the occurrence of a Fundamental Transaction, holders are entitled to receive the greater of (i) the liquidation preference, including accrued dividends, or (ii) the amount they would have received on an as-converted basis.

Since the redemption of the Series A Preferred is contingently or optionally redeemable and therefore not certain to occur, the Series A Preferred is not required to be classified as a liability under ASC 480, Distinguishing Liabilities from Equity .

As the Series A Preferred is redeemable in certain circumstances at the option of the holder and is redeemable in certain circumstances upon the occurrence of an event that is not solely within the Company’s control, the Company has classified the Series A Preferred in temporary equity in the consolidated balance sheets.

Because redemption is contingent and not currently probable, the Company has not accreted the carrying value to the redemption amount as of December 31, 2025.

Registration Rights

In connection with the issuance, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) requiring the Company to file and maintain an effective registration statement covering the resale of the shares of common stock issuable upon conversion.

The Registration Rights Agreement provides for liquidated damages of up to 6 % of the aggregate purchase price in the event of certain registration failures.

As of December 31, 2025, no liability has been recorded related to these provisions.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

As of December 31, 2025 and 2024, accrued expenses and other current liabilities consisted of the following:

Accrued compensation

Sales and use taxes payable

Accrued interest

Accrued purchases

Other accrued expenses

$ 3,837 $ 3,164

Total debt, gross

Debt consisted of the following:

Prior Credit Agreement:

Revolving Credit Facility

$ - $ 13,044 See below

Amended and Restated Credit Agreement:

New Revolving Credit Facility

4,940 - See below

Term Loan Facility

35,700 - See below

Promissory Note

44,450 13,044

Deferred financing costs

debt issuance costs

Total debt, net

43,953 13,044

Current portion

Total long-term debt, net

current portion of debt, net

Total non-current portion of debt, net

$ 39,523 $ 13,044

Secured Promissory Note

On February 17, 2022, in connection with the Closing, the Company issued to RSI Exit Corporation (“Stockholders’ Representative”), the representative of Reflect stockholders, a $ 2,500 Note and Security Agreement (the “Secured Promissory Note”).

The Secured Promissory Note accrued interest at 0.59 % per annum (the applicable federal rate on the date of issuance of the Secured Promissory Note) and required the Company and Reflect to collectively pay equal monthly principal installments of $ 104 on the fifteenth ( 15th ) day of each month, commencing on March 15, 2022.

Any remaining or unpaid principal was due and payable on February 17, 2023.

All payments under the Secured Promissory Note were paid to the escrow agent in the Merger Agreement to be placed into the escrow account to secure the Reflect stockholders’ indemnification obligations until released on February 17, 2023 ( the one -year anniversary of the closing of the Merger), at which time any remaining proceeds not subject to a pending indemnification claim would be paid to the exchange agent for payment to the Reflect stockholders pursuant to the Merger Agreement.

The Secured Promissory Note is secured by a first -lien security interest in certain contracts of Reflect, including obligations arising out of those certain contracts.

The Company has the right to offset amounts payable under the Secured Promissory Note upon a final, non-appealable decision of a court that entitles the Company or its affiliates to any damages for indemnification under the Merger Agreement, or the Stockholders’ Representative’s agreement in writing to such damages.

On February 11, 2023, the Company, Reflect and the Stockholders’ Representative, executed a Second Amendment to the Merger Agreement.

The Second Amendment to the Merger Agreement provided that, among other things, the cash merger consideration payable in the Merger should be reduced by $ 242 , or the “Claim Amount,” subject to a reduction in the Claim Amount to the extent that Reflect or Creative Realities receive payments of certain accounts receivable of Reflect, up to $ 27 .

An employer retention credit of $ 242 (the “ERC”) based on the operations of Reflect pre-Merger remains outstanding and will be paid to the Stockholders’ Representative for the benefit of former Reflect stockholders upon receipt, subject to the offset rights of Creative Realities.

In addition, the Company and the Stockholders’ Representative executed an amendment (the “Note Amendment”) to the Secured Promissory Note on February 11, 2023.

The Note Amendment eliminated the balloon payment, extended the maturity date for a one -year period, to February 17, 2024.

During the extended period, the Company continued to make monthly principal payments of $ 104 , and the annual interest rate on the outstanding principal increased from 0.59 % to 4.60 %, which accrued and is payable in full on the new maturity date.

On December 15, 2023, the Company paid $ 110 as final settlement of the Secured Promissory Note, including accrued interest through the settlement date.

All rights to payment of the ERC were retained by the Reflect stockholders as part of this settlement.

Second Amended and Restated Loan and Security Agreement

On February 17, 2022, the Company and its subsidiaries (collectively, the “Borrowers”) refinanced their debt facilities with Slipstream, pursuant to a Second Amended and Restated Credit and Security Agreement (the “Credit Agreement”).

The Borrowers include Reflect, which became a wholly owned subsidiary of the Company as a result of the Closing on February 17, 2022.

The debt facilities continue to be fully secured by all assets of the Borrowers.

The Credit Agreement also provides that the Company’s outstanding loans from Slipstream at December 31, 2021, consisting of its pre-existing $ 4,767 senior secured term loan and $ 2,418 secured convertible loan, with an aggregate of $ 7,185 in outstanding principal and accrued and unpaid interest under such loans, were consolidated into a term loan (the “Consolidation Term Loan”).

The Consolidation Term Loan has an interest rate of 10.0 %, with 75.0 % warrant coverage (or 898,165 warrants).

On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers will make interest-only payments on the Consolidation Term Loan.

Commencing on September 1, 2023, and on the first day of each month thereafter until the Maturity Date, the Borrowers will make a payment on the Consolidation Term Loan, in an equal monthly installment of principal sufficient to fully amortize the Consolidation Term Loan in eighteen equal installments.

In addition to refinancing the existing debt with Slipstream, the Company issued to Slipstream a $ 10,000 , 36 -month senior secured term loan (the “Acquisition Term Loan”) resulting in $ 10,000 in gross proceeds, or $ 9,950 in net proceeds.

The Acquisition Term Loan matured on February 17, 2025 ( the “Maturity Date”) and had an interest rate of 8.0 %, with 50.0 % warrant coverage (or 833,334 warrants).

On the first day of each month, commencing March 1, 2022 through February 1, 2025, the Borrowers were required to make interest-only payments on the Acquisition Term Loan.

No principal payments on the Acquisition Term Loan were payable until the Maturity Date.

In connection with the Acquisition Term Loan and Consolidation Term Loan warrant coverage, the Company issued to Slipstream a warrant to purchase an aggregate of 1,731,499 shares of Company common stock (the “Lender Warrant”).

The Lender Warrant has a five -year term, an initial exercise price of $ 6.00 per share, subject to adjustments in the Lender Warrant, and was not exercisable until August 17, 2022.

The warrants were assessed in accordance with ASC 470 and ASC 815 Derivatives and were deemed to represent bifurcated derivative instruments that should be recorded as liabilities in the Consolidated Balance Sheets.

The Company performed a Black-Scholes valuation of the warrants as of the issuance date, resulting in a fair value of $ 2.4387 per warrant.

In recording the warrant liability, the Company recorded a debt discount associated with each of the Acquisition and Consolidation Term Loans in an amount of $ 2,032 and $ 2,190 , respectively.

These amounts are amortized straight-line through interest expense over the life of the loans.

In certain circumstances, upon a fundamental transaction of the Company (e.g., a disposal or sale of all or the greater part of the assets or undertaking of the Company, an amalgamation or merger with another company, or implementation of a scheme of arrangement), the holder of the Lender Warrant will have the right to require the Company to repurchase the Lender Warrant at its fair value using a Black Scholes option pricing formula;

provided that such holder may not require the Company or its successor entity to repurchase the Lender Warrant for the Black Scholes value in connection with a fundamental transaction that is not approved by the Company’s Board of Directors, and therefore not within the Company’s control.

Effective June 30, 2022, the Company amended the terms of the Lender Warrant to remove the holder’s option to exercise such warrant on a cashless basis utilizing the VWAP of the Company’s common stock on the trading day immediately preceding the date of a notice of cashless exercise in certain circumstances, and remove the condition to exercising such warrant that the Company’s shareholders approve the exercise thereof (which had already been obtained).

The amendments to the Lender Warrant also extend the term of such warrants for an additional one year, such that the Lender Warrant will expire on February 17, 2028.

The foregoing amendments to the Lender Warrant caused such warrants to be accounted for as equity instruments in the Company’s Consolidated Financial Statements.

On October 31, 2022, the Borrowers and Slipstream amended the Credit Agreement to provide the Borrowers with a $ 2,000 term loan ("Term Loan ( 2022 )"), the net proceeds of which were used by the Company to accelerate an active software development project with potential to expand SaaS revenues associated with an existing customer.

The Term Loan ( 2022 ) had an annual interest rate of 12.5 % and matured on September 1, 2023.

Commencing on February 1, 2023, the Company made monthly installment payments of approximately $ 270 until the maturity date, consisting of principal and interest sufficient to fully amortize the Term Loan ( 2022 ) through the maturity date.

As of December 31, 2023, the Term Loan 2022 has been repaid in full to Slipstream.

Revolving credit facility

On May 23, 2024, the Company entered into a Credit Agreement (the "Credit Agreement") with First Merchants Bank (the "Bank").

The Credit Agreement provides the Company with a $ 22,100 secured revolving credit facility, with an uncommitted accordion feature that provides for additional borrowing capacity of up to $ 5,000 , subject to the Bank's approval and other customary terms and conditions set forth in the Credit Agreement.

The revolving credit facility matures on May 23, 2027, subject to any earlier default under the Credit Agreement.

The Credit Agreement requires the Company to pay the entire unpaid principal balance of the revolving credit facility on the maturity date, subject to any earlier default under the Credit Agreement.

The Credit Agreement includes, among other things, the occurrence of any event which could reasonably be anticipated to cause or result in a “Material Adverse Effect” (as defined in the Credit Agreement) as an event of default under which the outstanding balance could become due and payable to the Bank.

The Company has determined that the risk of such event is not probable and therefore has classified the outstanding balance in long-term liabilities in the Consolidated Balance Sheets based on the maturity date.

Obligations under the Credit Agreement are secured by all assets of the Company.

On May 23, 2024, the Company borrowed $ 13,667 under the revolving credit facility to repay all obligations owing to its prior lender, Slipstream Communications, LLC, including the outstanding principal balance of $ 10,000 on the Acquisition Term Loan, the outstanding principal balance of $ 3,593 on the Consolidation Term Loan and accrued interest expense incurred through the payoff date of $ 74 .

The Company recognized a $ 1,059 loss on extinguishment of debt equal to the unamortized portion of debt discount at May 23, 2024 associated with the Acquisition Term Loan and Consolidation Term Loan.

The revolving credit facility accrues interest at a floating rate equal to the 1 -month SOFR, plus 0.11 %, plus a floating margin ranging from 2.00 % to 3.50 % that adjusts quarterly, depending upon the Company's Senior Funded Debt to EBITDA Ratio.

The floating margin is determined as follows:

Senior Funded Debt to EBITDA Ratio

Floating Margin

≥ 1.00 to 1.00 but < 2.00 to 1.00

≥ 2.00 to 1.00 but < 3.00 to 1.00

≥ 3.00 to 1.00

The effective interest rate at December 31, 2024 was 7.16 %.

The Company pays accrued interest monthly on the first day of each successive calendar month.

The Company incurred $ 306 of deferred financing costs that were capitalized and recorded as other non-current assets within the Consolidated Balance Sheets.

Deferred financing costs are being amortized as interest expense over the respective debt instrument period, 36 months.

The Company had $ 13,044 in outstanding borrowings under the revolving credit facility as of December 31, 2024.

Total availability under the revolving facility was $ 5,056 , after accounting for $ 4,000 reserved under the Credit Agreement until resolution of the Contingent Consideration.

As of December 31, 2024, the Company was in compliance with all applicable debt covenants.

Deferred financing costs related to the New Revolving Credit Facility and Revolving Credit Facility of $ 435 and $ 243 as of December 31, 2025 and 2024, respectively, are included in other non-current assets on the consolidated balance sheets.

Prior Credit Agreement

On May 23, 2024, the Company entered into a secured credit agreement (the “Prior Credit Agreement”) with First Merchants Bank (“FMB”) which provided the Company with a three -year secured revolving credit facility of up to $ 22,100 (the “Revolving Credit Facility”), with an uncommitted accordion feature that provided for additional borrowing capacity of up to $ 5,000 , subject to FMB’s approval and other customary terms and conditions set forth in the Prior Credit Agreement.

The Revolving Credit Facility has a maturity date of May 23, 2027, and the Company is required to pay the entire unpaid principal balance of the Revolving Credit Facility on the maturity date, subject to any earlier default under the Prior Credit Agreement.

The facility bore a floating interest rate tied to the secured overnight financing rate (“Term SOFR”) as administered by the New York Federal Reserve Board (“NYFRB”) plus applicable margins.

The Prior Credit Agreement was secured by substantially all assets of the Company;

subject to a borrowing base formula based on eligible accounts and inventory;

and contained certain financial covenants including an accelerated repayment of all unpaid principal and interest due on demand upon an event of default.

The Company incurred $ 306 of deferred financing costs in connection with the Revolving Credit Facility that were capitalized and recorded as other non-current assets within the Company’s consolidated balance sheet as of December 31, 2024.

Deferred financing costs were amortized as interest expense on a straight-line basis over the term of the Revolving Credit Facility.

On May 12, 2025, the Company entered into an amendment to the Prior Credit Agreement to modify the financial covenant related to the Senior Funded Debt to EBITDA ratio, effective March 31, 2025.

Pursuant to the amendment, the Company was required to maintain a Senior Funded Debt to EBITDA ratio of less than 4 -to- 1 through June 30, 2025, and less than 3.75 -to- 1 beginning in the quarter ending September 30, 2025 and thereafter.

On July 24, 2025, the Company entered into a second amendment to the Prior Credit Agreement to amend the borrowing base used to determine the availability of the Company’s revolving line of credit under the Prior Credit Agreement, effective June 30, 2025.

The borrowing base (“Borrowing Base Margin”) was a percentage based on the difference between (a) the sum of the net orderly liquidation value of certain contracts of the Company eligible for inclusion;

and (b) reserves required by FMB, in each case as determined in accordance with the Prior Credit Agreement.

The amendment provided that the Borrowing Base Margin equal (i) 95 % from June 30, 2025 through September 29, 2025, ( ii) 90 % from September 30, 2025 through October 30, 2025, and (iii) 85 % on and after October 31, 2025.

During the years ended December 31, 2025 and 2024, the Company recorded amortization of deferred financing costs on the Revolving Credit Facility of $ 61 and $ 63 , respectively, in the Company’s consolidated statements of operations.

Amended and Restated Credit Agreement

On November 6, 2025 ( the “Refinancing Date”), the Company and certain of its subsidiaries entered into the Amended and Restated Credit Agreement (the “Amended Credit Agreement”), with FMB acting as agent (“Agent”), and a new syndicate of lenders (“Lenders”) which included FMB and two additional creditors, Northwest Bank (“NWB”) and Axos Bank (“Axos”;

together with NWB, the “New Lenders”).

In the ordinary course of its business, Agent has performed and may continue to perform commercial banking and financial services for the Company for which it has received and will continue to receive customary fees and expenses.

The Amended Credit Agreement provides the Company, CDMI and CDMUS (collectively, “Borrowers”) with two debt facilities, including a three -year term loan of $ 36,000 (the “Term Loan”) and a three -year revolving debt arrangement of up to $ 22,500 (the “New Revolving Credit Facility”).

The Term Loan and New Revolving Credit Facility in the Amended Credit Agreement both have maturity dates of November 6, 2028 ( the “Maturity Date”) and are secured by all the assets of the Borrowers.

The Borrowers are required to pay monthly principal payment installments on the Term Loan equal to $ 300 on the first day of each successive calendar month following the Refinancing Date, which commenced on December 1, 2025 to the Agent;

provided, however, that the last installment shall be due and payable on the Maturity Date (if not paid earlier) and shall be in an amount sufficient to pay in full the entire unpaid principal amount of the Term Loan (the “Final Term Loan Payment”).

In accordance with the Amended Credit Agreement, any voluntary pre-payments of the Term Loan will be applied to the Final Term Loan Payment.

Additionally, monthly interest payments for both facilities of the Amended Credit Agreement are due and payable on the first day of each successive calendar month following the Refinancing Date, which commenced on December 1, 2025, at a rate equal to the sums of (a) the one -month Term SOFR, (b) base rate of 0.11%;

and (c) a floating margin ranging between (i) 2.75 % to 3.25 % for the New Revolving Credit Facility, or (ii) 3.00 % to 3.50 % for the Term Loan, in each case adjusted quarterly based upon the Company’s Senior Funded Debt to EBITDA Ratio (as defined in the Amended Credit Agreement).

The floating margin is computed as follows:

The Amended Credit Agreement also includes a letter of credit sub-facility under which the Lenders may issue commercial or standby letters of credit that reduce the availability under the New Revolving Credit Facility and for which the Borrowers pay a fee equal to the applicable margin on the stated amount of each letter of credit, and a swing line sub-facility that permits short-term advances by FMB, as swing line lender, which are subsequently settled among the loan syndicate as revolving credit advances.

All outstanding amounts under the letter of credit sub-facility and swing-line facility are due and payable in full on the Maturity Date or earlier upon an event of default or voluntary termination of commitments.

Further, the Amended Credit Agreement requires Borrowers to comply with certain financial covenants on a quarterly basis related to the Fixed Charge Coverage Ratio and Senior Funded Debt to EBITDA Ratio (each as defined in the Amended Credit Agreement).

The Amended Credit Agreement also includes certain restrictive covenants and, among other things and subject to certain exceptions and qualifications, limits the Borrowers and any of their subsidiaries’ abilities to:

(i) make certain restricted payments, (ii) enter into agreements that create liens other than liens securing the Amended Credit Facility and related documents, and certain other permitted liens, (iii) incur or guarantee additional indebtedness, (iv) engage in liquidations, mergers or amalgamations, (v) dispose of certain assets, and (vi) engage in certain transactions with affiliates.

The Amended Credit Agreement also contains certain customary representations and warranties, affirmative covenants and events of default.

Upon any events of default which include, among others, failure to make payments of principal, interest or fees when due, the Agent, among other remedies, may ( or upon the written request of the Required Lenders (as defined in the Amended Credit Agreement) shall) suspend or terminate the revolving loan commitments, accelerate all outstanding obligations under both the Term Loan and New Revolving Credit Facility, increase the applicable interest rate by 2.0 % per annum to the default rate, and/or require cash collateralization of the Company’s assets and letters of credit.

As of December 31, 2025, the Borrowers remained compliant with the terms of the Amended Credit Agreement.

In accordance with ASC 470, Debt , the syndicated loan facilities embedded in the Amended Credit Agreement were accounted for as (i) new indebtedness comprised of the Term Loan, (ii) new indebtedness comprised of the New Revolving Credit Facility with the New Lenders, and (iii) a modification of the Revolving Credit Facility under the Prior Credit Agreement with FMB as an existing Lender.

The Company accounted for the modification by performing the borrowing capacity test to determine that the borrowing capacity with FMB as an existing Lender decreased by approximately 15.6 %.

The Company then recorded a loss on the modification of $ 24 which was equal to 16 % of existing deferred financing costs immediately prior to the modification.

The remaining portion of deferred financing costs of $ 132 was carried forward to the New Revolving Credit Facility.

The Company also incurred additional financing costs in aggregate of $ 850 which was allocated on a pro-rata basis to (a) the Term Loan facility of $ 523 , which is amortized as interest expense over the term using the effective interest method and included within Term Debt on the Company’s consolidated balance sheets;

and (b) the New Revolving Credit Facility of $ 327 , which is amortized as interest expense over the term using the straight-line method and included within other non-current assets on the Company’s consolidated balance sheets.

During the year ended December 31, 2025, the Company recorded amortization of debt discount on the Term Loan of $ 27 and amortization of deferred financing costs on the New Revolving Credit Facility of $ 50 in the Company’s consolidated statements of operations.

As of December 31, 2025, the Company had remaining unamortized debt discount on the Term Loan of $ 497 and deferred financing costs on the New Revolving Credit Facility of $ 435 .

Promissory Note

The Promissory Note was issued on March 14, 2025 as part of the Settlement Agreement to resolve the contingent consideration liability.

It is an unsecured obligation of the Company.

The Promissory Note bears interest at a fixed annual rate of 14.0 % (the “Interest Rate”).

In the event of a default (as defined in the Promissory Note), or during any period of non-payment caused by restrictions under the Subordination Agreement (as defined below), the interest rate increases to 17.0 % per annum (the “Default Rate”).

The Promissory Note requires monthly payments of interest only commencing April 14, 2025 and continuing through September 14, 2025.

Commencing October 14, 2025, the Company is required to pay principal and interest in accordance with an amortization schedule that requires equal monthly payments of $ 109 on the 14th day of each calendar month through maturity on September 14, 2027.

On the maturity date, the Company is required to make a final balloon payment of $ 2,277 , representing the remaining principal and accrued but unpaid interest outstanding at maturity.

As of December 31, 2025, the Company is in compliance with the monthly required payments and there have been no events of default.

The principal balance of the Promissory Note (together with accrued but unpaid interest on such amounts) may be prepaid in whole or in part at any time prior to maturity, subject to the Company’s payment of a make-whole payment with such prepayment.

The make-whole payment is equal to the aggregate monthly payments of interest on the prepayment amount that would be due after the prepayment date and through the maturity date, using the percentage, if any, by which the Interest Rate exceeds a prescribed “yield maintenance treasury rate.”

The Stockholders’ Representative’s rights under the Promissory Note are subject to a Subordination Agreement dated of March 14, 2025, by, and among, the Company, Reflect, First Merchants Bank and the Stockholders’ Representative (the “Subordination Agreement”).

Under the terms of the Subordination Agreement, during any period in which an event of default existed under the Prior Credit Agreement, the Company was prohibited from making any payments on the Promissory Note unless FMB provided prior written consent, and the Stockholders’ Representative was prohibited from accepting or enforcing any payments during the subordination period.

COMMITMENTS AND CONTINGENCIES

The Company is not party to any material legal proceedings, other than ordinary routine litigation incidental to the business, and there were no other such proceedings pending during the period covered by this Report.

The composition of (loss) income before income tax expense for the years ended December 31, 2025 and 2024 was as follows:

For the Years Ended

$ ( 10,490 ) $ ( 2,757 )

3,380 ( 645 )

(Loss) income before income taxes

$ ( 7,110 ) $ ( 3,402 )

Income tax expense consisted of the following:

Year ended December 31,

For the Years Ended

Tax provision summary:

State income tax

Deferred tax expense – federal

Deferred tax expense – state

State income tax expense (benefit)

Deferred tax expense (benefit) – federal

Deferred tax expense (benefit) – state

Deferred tax expense (benefit) – foreign

$ 1,166 $ 106

The income tax expense includes federal and state income taxes currently payable and those deferred or prepaid because of temporary differences between financial statement and tax bases of assets and liabilities.

1 unchanged sentence

Under this method, deferred income taxes are recognized for the estimated future tax effects of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws.

A reconciliation of the statutory income tax rate to the effective income tax rates as a percentage of income before income taxes is as follows:

Federal statutory rate

A reconciliation (reflective of the provisions of ASU 2023 - 09 ) of the statutory income tax rate to the effective income tax rates as a percentage of income before income taxes is as follows:

For the Years Ended

US Federal Statutory Tax Rate

$ ( 1,493 ) 21.0 % $ ( 732 ) 21.0 %

State taxes, net of federal benefit

Foreign rate differential

Fair value of Contingent Consideration

State and local income taxes, net of federal benefit*

12 - 0.2 % 51 - 1.5 %

Provision-to-return adjustments ( 5.6 )% 0.5 %

Net operating loss expirations ( 24.5 )% ( 2.5 )%

Deferred tax true-ups ( 0.2 )% ( 1.0 )%

State rate changes

Foreign Tax Effects

Statutory tax rate difference

186 - 2.6 % ( 35 ) 1.0 %

Other permanent ( 1.6 )% ( 1.2 )%

Changes in valuation allowance

299 - 4.2 % 454 - 13.0 %

Effective tax rate

Prior year return-to-provision adjustments

- 0.0 % ( 285 ) 8.2 %

The net deferred tax assets and liabilities recognized in the accompanying Consolidated Balance Sheets, determined using the income tax rate applicable to each period, consist of the following:

Deferred tax assets (liabilities):

( 5 ) 0.1 % - 0.0 %

Changes in valuation allowance

1,182 - 16.6 % ( 967 ) 27.8 %

Effect of Cross-Border Tax Laws:

Global Intangible Low-Taxed Income

487 - 6.9 % - 0.0 %

Nontaxable or nondeductible items

Gain on contingent consideration

( 1,003 ) 14.1 % - 0.0 %

Fair value of contingent consideration

- 0.0 % 338 - 9.7 %

Original issue discount

- 0.0 % 45 - 1.3 %

11 - 0.1 % 11 - 0.3 %

Expiration of net operating loss carryforwards

1,470 - 20.7 % 851 - 24.4 %

Federal return-to-provision adjustments

20 - 0.3 % 375 - 10.8 %

$ 1,166 - 16.4 % $ 106 - 3.0 %

*State taxes in Texas in 2024 and 2025 made up the majority (greater than 50% ) of the tax effect in this category.

Cash paid for income taxes, net of refunds received, consisted of the following:

For the Years Ended

US Federal Taxes

Foreign Taxes

State and Local Taxes:

The net deferred tax assets and liabilities recognized in the accompanying consolidated balance sheets, determined using the income tax rate applicable to each period, consisted of the following:

Deferred tax assets:

Property and equipment

Accrued expenses

Right-of-use Asset

( 207 ) ( 254 )

Right-of-use Liability

IRC 163(j) Interest Carryforward

Debt issuance costs

Non-qualified stock options

IRC Section 174

Net foreign carryforwards

Research and development credits 2,312 2,312

US net operating loss and contribution carryforwards

38,086 37,437

( 5,244 ) ( 3,818 )

Total deferred tax liabilities, net

Foreign credits

Section 163(j) interest expense carryforward

Research and development credits

Right-of-use liability

Acquisition costs

Total deferred tax assets

61,006 48,972

1 unchanged sentence

( 48,851 ) ( 43,654 )

Net deferred tax liabilities

Total deferred tax assets, net

Deferred tax liabilities:

Right-of-use asset

( 6,517 ) ( 207 )

Intangible assets

( 9,179 ) ( 5,244 )

Total deferred tax liabilities

( 15,696 ) ( 5,451 )

Deferred tax liabilities, net

$ ( 3,541 ) $ ( 133 )

The Company’s income tax provision for the year ended December 31, 2025 was significantly impacted by the acquisition of CDM on November 7, 2025.

The acquisition resulted in the recognition of deferred tax assets and liabilities related to the fair value adjustments of acquired assets and assumed liabilities, including identifiable intangible assets.

The Company recorded net deferred tax liabilities of $ 2,215 related to the acquisition, primarily attributable to book-tax basis differences in acquired intangible assets, partially offset by deferred tax assets related to net operating loss carryforwards.

In connection with the acquisition, the Company recognized a $ 3,550 increase in valuation allowance against certain acquired deferred tax assets, primarily related to foreign net operating losses for which realization is not considered more likely than not.

As of December 31, 2025, the Company had no reserves recorded as a liability for unrecognized tax benefits for U.S.

2 unchanged sentences

It is the Company’s policy to accrue interest and penalties related to liabilities for income tax contingencies in the provision for income taxes.

As of December 31, 2024 , the Company had no accrued interest or penalties related to uncertain tax positions.

Our deferred tax assets are primarily related to net federal and state operating loss carryforwards (NOLs).

As of December 31, 2024 , the Company has federal net operating loss carryforwards of $ 36,433 , federal contribution carryforwards of $ 13 , and state net operating loss carryforwards of $ 991 expiring between 2025 and 2044, $ 2,631 of which have an indefinite carryforward period but are subject to limitation on usage such that they cannot be utilized to offset more than 80% of taxable income in a given tax year.

The acquisition of CDM did not result in the recognition of any uncertain tax positions and, as of December 31, 2025, the Company had no accrued interest or penalties related to uncertain tax positions.

The Company’s deferred tax assets are primarily related to net federal, state, and foreign operating loss carryforwards (“NOLs”).

As of December 31, 2025, the Company has federal net operating loss carryforwards of $ 36,923 , of which, $ 13,817 have an indefinite carryforward period but are subject to limitation on usage such that they cannot be utilized to offset more than 80% of taxable income in a given tax year.

The Company has foreign net operating loss carryforwards of $ 10,097 which have a twenty -year carryforward period, federal contribution carryforwards of $ 13 which have a five -year carryforward period, and state net operating loss carryforwards of $ 1,150 expiring between 2026 and 2045.

The federal statute of limitations remains open for tax years 2022 through 2024 and state tax jurisdictions generally have statutes of limitations open for tax years 2021 through 2024.

1 unchanged sentence

IRC Section 382 generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership within a statutory testing period.

As a result of the acquisition, the Company acquired foreign net operating loss carryforwards which are subject to limitation under the Canadian tax regime.

A valuation allowance has been recorded against a portion of these acquired foreign losses due to uncertainty regarding realizability.

We have performed a preliminary analysis of the annual NOL carryforwards and limitations that are available to be used against taxable income.

Based on the history of losses of the Company, there continues to be a full valuation allowance against the net deferred tax assets of the Company.

A summary of outstanding warrants accounted for as equity instruments in the Company's Consolidated Financial Statements for the years ended December 31, 2024 and 2023 is included below:

Based on the history of losses of the Company, there continues to be a partial valuation allowance against the net deferred tax assets of the Company.

On March 14, 2025, as part of the contingent consideration settlement described in Note 5, the Company issued to the former Reflect stockholders, in their capacities as selling stockholders and not as outside investors, the Settlement Warrants to purchase their pro rata share of an aggregate of 777,800 shares of the Company’s common stock at an exercise price equal to $ 3.25 per share, subject to adjustment for stock dividends, distributions, subdivisions, combinations, or reclassifications.

The Settlement Warrants are exercisable immediately and expire six years from the date of issuance.

They may be exercised for cash or, at the holder’s election, on a cashless (net settlement) basis.

The Company evaluated the Settlement Warrants under ASC 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Equity, and concluded that the Settlement Warrants meet the criteria for equity classification.

As such, the Settlement Warrants are not subject to remeasurement.

Accordingly, the fair value of the Settlement Warrants at issuance was recorded as a component of additional paid-in capital within shareholders’ equity.

The fair value of the Settlement Warrants was estimated at $ 1.34 per share as of the issuance date, using the Black-Scholes option pricing model.

Key assumptions included:

expected volatility of 94 %, expected term of 6 years (matching the exercise term), risk-free interest rate of 4.15 %, dividend yield of 0 %, and the Company’s stock price of $ 1.88 as of the valuation date.

The following is a summary of warrants accounted for as equity instruments in the Company's consolidated financial statements for the year ended December 31, 2025:

Average Exercise

Contractual Life

Balance December 31, 2022

5,824,027 $ 6.56 4.21

Warrants expired

Balance January 1, 2025

4,587,002 $ 4.90 -

Balance December 31, 2023

Warrants issued

777,800 3.25 -

Warrants expired

Balance December 31, 2025

5,364,802 $ 4.66 2.55

All outstanding warrants were fully vested as of December 31, 2025.

STOCK-BASED COMPENSATION

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Performance Vesting Options

Number Contractual Exercise Options Exercise

240,000 4.42 $ 7.59 240,000 $ 7.59

Market Vesting Options

Number Contractual Exercise Options Exercise

733,334 6.46 $ 3.00 733,334 $ 3.00

3 unchanged sentences

Date/Activity

Balance, December 31, 2023

Balance, January 1, 2025

733,334 3.00 591,897 $ 9.57 240,000 $ 7.59

- - 1,170,500 2.46 - -

Forfeited or expired

3 unchanged sentences

The weighted average remaining contractual life for options exercisable is 5.48 years as of December 31, 2025.

Shares authorized for issuance under the Company's 2014 Stock Incentive Plan is 2,000,000 .

There are 1,565,231 options outstanding under the 2014 Stock Incentive Plan.

The Company’s ability to issue new awards under its 2014 Stock Incentive Plan expired in 2023.

On October 18, 2024, the Company’s shareholders approved the Company’s 2023 Stock Incentive Plan, which authorizes the issuance of up to 2,500,000 shares.

No awards have been issued under the Plan as of December 31, 2024.

No options were exercised during 2025.

The aggregate intrinsic value of stock options outstanding and exercisable as of December 31, 2025 was approximately $ 252,000 and zero, respectively.

There are 2,000,000 shares authorized for issuance under the Company's 2014 Stock Incentive Plan (the “2014 Plan”).

There are 1,475,564 options outstanding under the 2014 Plan as of December 31, 2025.

The Company’s ability to issue new awards under its 2014 Plan expired in 2023.

On October 18, 2024, the Company’s shareholders approved the Company’s 2023 Stock Incentive Plan (the “2023 Plan”), which authorizes the issuance of up to 2,500,000 shares.

There are 1,064,000 options outstanding under the 2023 Plan as of December 31, 2025.

Employee Awards

Stock-based compensation expense recognized for the issuance of stock options to employees for the years ended December 31, 2024 and 2023 of $ 13 and $ 383 , respectively, was included in general and administrative expense in the Consolidated Financial Statements.

At December 31, 2024 , there was $ 2 of total unrecognized compensation expense related to unvested share-based awards with market vesting criteria for employees.

Compensation expense related to market vesting options will be recognized over the next 1.5 months and will be adjusted for any future forfeitures as they occur.

The fair value of options on the grant date varied between $ 0.63 and $ 1.11 per award as determined using the Monte Carlo model.

Non-Employee Awards

Compensation expense recognized for the issuance of stock options, including those options awarded to our Board of Directors, for the years ended December 31, 2024 and 2023 of $ 0 and $ 150 , respectively, was included in general and administrative expense in the Consolidated Financial Statements.

At December 31, 2024 , there was no unrecognized compensation expense related to share-based awards to non-employees.

On April 1, 2025, the Company granted stock options to purchase an aggregate of 567,500 shares of common stock to employees pursuant to the Company’s 2023 Plan, which was previously approved by shareholders.

The options have an exercise price of $ 1.95 per share, equal to the closing market price of the Company’s common stock on the grant date.

The options vest in equal annual installments over a three -year period, subject to continued service through each vesting date, and expire ten years from the date of grant.

The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 96 %, expected term of 6.5 years, risk-free interest rate of 4.00 %, dividend yield of 0 %, and the Company’s stock price of $ 1.95 as of the valuation date.

The awards will be recognized as stock-based compensation expense on a straight-line basis over the requisite service period in accordance with ASC 718 Compensation - Stock Compensation (ASC 718 ), based on the grant-date fair value of the options.

On June 2, 2025, the Company granted stock options to purchase an aggregate of 378,000 shares of common stock to employees under the 2023 Plan.

The options have an exercise price of $ 3.05 per share, equal to the closing market price of the Company’s common stock on the grant date.

The options vest in equal annual installments over a three -year period, subject to continued service through each vesting date, and expire ten years from the date of grant.

The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94 %, expected term of 6.5 years, risk-free interest rate of 4.17 %, dividend yield of 0 %, and the Company’s stock price of $ 3.05 as of the valuation date.

The awards will be recognized as stock-based compensation expense on a straight-line basis over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

On June 2, 2025, the Company accelerated the vesting of the market-vesting options to purchase 733,334 shares of common stock.

Prior to such acceleration, the vesting of these options depended on the Company’s share price meeting various price targets.

One such share price target was an amount equal to the “Guaranteed Price,” as such term is defined in the Merger Agreement by and among the Company, Reflect, CRI Acquisition Corporation, a Delaware corporation, and RSI Exit Corporation, a Texas corporation and representative of the former stockholders of Reflect (“RSI”).

On March 14, 2025, the Company and RSI settled and resolved a dispute related to the Guaranteed Consideration.

On June 2, 2025, in consideration of the efforts in resolving and settling such dispute, the Compensation Committee of the Company fully vested the 733,334 options.

As a result of the amendment and corresponding vesting, the Company recognized stock compensation expense of $ 1,149 during the year ended December 31, 2025.

On July 3, 2025, the Company granted 575,000 restricted stock units to employees under the 2023 Plan.

The restricted stock units vest in three equal installments over a period of three years, subject to continued service through the applicable vesting dates.

The grant date fair value of the restricted stock units was estimated at $ 3.30 per share based on the closing price of the Company’s common stock on the grant date.

During the year ended December 31, 2025, 50,000 of these restricted stock awards were forfeited.

The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

On September 15, 2025, the Company granted stock options to purchase an aggregate of 15,000 shares of common stock to employees under the 2023 Plan.

The options have an exercise price of $ 2.31 per share, equal to the closing market price of the Company’s common stock on the grant date.

The options vest in equal annual installments over a three -year period, subject to continued service through each vesting date, and expire ten years from the date of grant.

The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94 %, expected term of 6.5 years, risk-free interest rate of 3.75 %, dividend yield of 0 %, and the Company’s stock price of $ 2.31 as of the valuation date.

The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

On November 20, 2025, the Company granted stock options to purchase an aggregate of 110,000 shares of common stock to employees under the 2023 Plan.

The options have an exercise price of $ 2.73 per share, equal to the closing market price of the Company’s common stock on the grant date.

The options vest in equal annual installments over a three -year period, subject to continued service through each vesting date, and expire ten years from the date of grant.

The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94 %, expected term of 6.5 years, risk-free interest rate of 3.75 %, dividend yield of 0 %, and the Company’s stock price of $ 2.73 as of the valuation date.

The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

On December 1, 2025, the Company granted stock options to purchase an aggregate of 100,000 shares of common stock to employees under the 2023 Plan.

The options have an exercise price of $ 2.89 per share, equal to the closing market price of the Company’s common stock on the grant date.

The options vest in equal annual installments over a three -year period, subject to continued service through each vesting date, and expire ten years from the date of grant.

The Company determined the grant-date fair value using the Black-Scholes option pricing model with key assumptions including expected volatility of 94 %, expected term of 6.5 years, risk-free interest rate of 3.75 %, dividend yield of 0 %, and the Company’s stock price of $ 2.89 as of the valuation date.

The awards will be recognized as stock-based compensation expense over the requisite service period in accordance with ASC 718 based on the grant-date fair value of the options.

The weighted average grant date fair value of employee stock options granted during 2025 was $ 2.05 .

Stock-based compensation expense recognized related to stock options and restricted stock units to employees (including the expense described above related to the market-vesting options) for the years ended December 31, 2025 and 2024 was $ 2,118 and $ 13 , respectively, and is included in general and administrative expenses in the consolidated financial statements.

As of December 31, 2025, there was $ 2,950 of total unrecognized compensation expense related to unvested share-based awards, which is expected to be recognized over a weighted average period of approximately 2.5 years.

Director Awards

Compensation expense recognized for the issuance of stock options awarded to our Board of Directors for the years ended December 31, 2025 and 2024 was $ 165 and $ 0 , respectively, and was included in general and administrative expenses in the consolidated financial statements.

As of December 31, 2025, there was $ 0 unrecognized compensation expense related to share-based awards to directors.

SEGMENT REPORTING

Segment Information

We currently operate in one reportable segment, marketing technology solutions.

The marketing technology solutions segment generates revenue through three primary sources which includes ( 1 ) hardware sales from reselling digital signage hardware from original equipment manufacturers, ( 2 ) services from helping customers design, deploy, and manage their digital signage and ad-based networks, and ( 3 ) recurring subscription licensing and support revenue from our digital signage and ad-tech software platforms, which are generally sold via a SaaS model.

The marketing technology solutions segment generates revenue through four primary sources which includes ( 1 ) hardware sales from reselling digital signage hardware from original equipment manufacturers, ( 2 ) services from helping customers design, deploy, and manage their digital signage and ad-based networks, ( 3 ) recurring subscription licensing and support revenue from our digital signage and ad-tech software platforms, which are generally sold via a SaaS model, and ( 4 ) selling digital out-of-home (DOOH) advertising on infrastructure it owns or operates at retail malls, shopping centers, office buildings, and other commercial properties.

Our Chief Executive Officer is our chief operating decision maker (the “CODM”).

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Significant Customers

We had three customers that accounted for 15 %, 13 % and 10 % of revenue for the year ended December 31, 2024.

No customer accounted for more than 10% of revenue for the year ended December 31, 2023.

We had one customer that accounted for 16 % of accounts receivable at December 31, 2024 and two customers that accounted for 26 % and 23 % of accounts receivable at December 31, 2023.

We had one customer that accounted for 10 % of revenue for the year ended December 31, 2025.

Three customers accounted for 15 %, 13 % and 10 % of revenue for the year ended December 31, 2024.

We had one customer that accounted for 12 % of accounts receivable as of December 31, 2025 and one customer that accounted for 16 % of accounts receivable as of December 31, 2024.

Revenues by Geographical Area

The following table summarizes our revenue recognized in the consolidated statements of operations by geographical area:

For the Years Ended

Revenues by Geographical Area:

United States

$ 45,304 $ 50,854

Total Revenues

$ 57,232 $ 50,854

Significant Vendors

We had two vendors that accounted for 27 % and 10 % of outstanding accounts payable at December 31, 2024, and one vendor that accounted for 38 % of outstanding accounts payable at December 31, 2023.

The Company's lease portfolio is primarily comprised of operating leases for office space and finance leases for computer equipment.

We had three vendors that accounted for 30 %, 18 % and 10 % of outstanding accounts payable as of December 31, 2025 and two vendors that accounted for 27 % and 10 % of outstanding accounts payable as of December 31, 2024.

Long Lived Assets by Geographical Region

The following table sets forth our long-lived assets by geographic area, which consists of property and equipment, net and operating and finance lease right-of-use assets:

United States

$ 1,950 $ 1,108

$ 27,712 $ 1,108

The Company's lease portfolio is primarily comprised of operating leases for office space and finance leases for computer equipment and DOOH media assets from the acquisition of CDM.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration.

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The Company determines the discount rate used to measure lease liabilities based on the rate implicit in the lease, if readily determinable.

If the implicit rate is not available, the Company an incremental borrowing rate, which is determined based on the rate at which the Company could borrow on a collateralized basis over a similar term and in a similar economic environment to the lease.

The following table summarizes the classification of operating and finance lease assets and obligations in the Company's Consolidated Balance Sheet as of December 31, 2024 and 2023:

Operating lease assets

Operating lease right-of-use assets

$ 787 $ 1,041

If the implicit rate is not available, the Company uses its incremental borrowing rate, which is determined based on the rate at which the Company could borrow on a collateralized basis over a similar term and in a similar economic environment to the lease.

Leases Acquired from the Acquisition of CDM

The Waterloo Office

The Company acquired an operating lease for approximately 14,917 square feet of office space in a commercial building located in Waterloo, Ontario (the “Waterloo Office”), which is used for CDM’s operating activities.

The lease was originally effective on November 15, 2013 and has been renewed until January 14, 2029.

In accordance with ASC 805 and ASC 842, the Company remeasured the lease as of the acquisition date and recognized a ROU asset and corresponding lease liability of approximately $ 571 , discounted using the Company’s IBR of 8.0 %.

The lease does not meet any of the five classification criteria for a finance lease under ASC 842 - 10 - 25 - 2.

Accordingly, the lease is classified as an operating lease.

Cadillac Fairview

The Company acquired an embedded finance lease within a media mall agreement (the “Cadillac MSA”) entered into on December 15, 2023, with Cadillac Fairview (“CF Fairview”).

Under the Cadillac MSA, the Company was granted the exclusive right to install, operate, and manage a digital media sales network (“DMSN”) consisting of media advertising display assets (“Media Advertising Displays”) across seventeen CF Fairview-owned or managed shopping centers throughout Canada.

The Cadillac MSA expires on December 31, 2028, and includes minimum annual guarantee (“MAG”) payments escalating from approximately $ 5,837 (CAD $ 8,000 ) in Year 1 to $ 8,390 (CAD $ 11,500 ) in Year 5, totaling approximately $ 37,210 (CAD $ 51,000 ) over the term.

Additional variable consideration, consisting of a percentage fee of 75 % of net revenue and a bonus fee of 5 % of net revenue, capped at approximately $ 547 (CAD $ 750 ) per year, is excluded from the lease liability measurement as it does not meet the definition of fixed or in-substance fixed lease payments under ASC 842.

The Company analyzed the Cadillac MSA on a portfolio basis, treating the seventeen locations as a single lease, as the agreement applies jointly and severally to all properties.

The lease term represents substantially all of the remaining economic life of the underlying Media Advertising Display assets, thereby satisfying the classification criterion under ASC 842 - 10 - 25 - 2 (c).

Accordingly, the lease is classified as a finance lease.

The Company recognized a ROU asset and corresponding lease liability of approximately $ 22,142 as of the acquisition date, discounted using the Company’s IBR of 8.0 %.

The ROU asset is amortized on a straight-line basis over the remaining term of approximately 3.0 years, with amortization recorded as a component of cost of sales, as the lease payments are directly associated with the fulfillment of the Company’s digital media advertising revenue contracts.

Interest expense is recognized using the effective interest method over the lease term.

Cominar Real Estate Investment Trust

The Company acquired an embedded finance lease within a media mall agreement (the “Cominar MSA”) entered into on December 22, 2023, with Cominar Real Estate Investment Trust (“Cominar”).

Under the Cominar MSA, the Company was granted the exclusive right to install, operate, and manage a DMSN consisting of Media Advertising Displays across five shopping mall complexes in the Province of Québec.

The Cominar MSA expires on April 1, 2029.

The Cominar MSA includes MAG provisions with minimum fixed payments of approximately $ 438 (CAD $ 600 ) per year.

Variable consideration above the minimum fixed payments is excluded from the lease liability measurement as such amounts are contingent on future traffic volumes and do not constitute fixed or in-substance fixed lease payments under ASC 842.

The Company analyzed the Cominar MSA on a portfolio basis, treating the five locations as a single lease, as the agreement applies jointly and severally to all properties.

Consistent with the Cadillac MSA, the lease term represents substantially all of the remaining economic life of the underlying Media Advertising Display assets, satisfying the classification criterion under ASC 842 - 10 - 25 - 2 (c), and the lease is accordingly classified as a finance lease.

The Company recognized a ROU asset and corresponding lease liability of approximately $ 1,167 as of the acquisition date, discounted using the Company’s IBR of 8.0 %.

The ROU asset is amortized on a straight-line basis over the remaining term of approximately 3.3 years, with amortization recorded as a component of cost of sales, as the lease payments are directly associated with the fulfillment of the Company’s digital media advertising revenue contracts.

Interest expense is recognized using the effective interest method over the lease term.

The following table summarizes the classification of operating and finance lease assets and liabilities in the Company's consolidated balance sheet as follows:

Finance lease assets

Property and equipment, net

Total leased assets

$ 22,658 $ 114

Operating lease obligation

Current maturities of operating leases

Finance lease obligation

Accrued expenses and other current liabilities

Operating lease obligation

Long-term obligations under operating leases

Finance lease obligation

Other non-current liabilities

Total lease obligations

Operating lease assets

Total lease assets

$ 24,775 $ 901

The following table summarizes the classification of lease expense in the Company's Consolidated Statements of Operations for the years ended December 31, 2024 and 2023:

Operating lease expense:

Operating lease liabilities:

Current portion of operating lease liabilities

Non-current portion of operating lease liabilities

Finance lease liabilities:

Current portion of finance lease liabilities

Non-current portion of finance lease liabilities

Total lease liabilities

$ 23,912 $ 922

The following table summarizes the operating and financing lease expenses in the Company's consolidated statements of operations as follows:

For the Years Ended

Operating lease expense

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Amortization of right-of-use assets

Interest on lease obligations

Interest on lease liabilities

Total lease expense

The following table provides lease term and discount rate information related to operating leases as of December 31, 2024:

Year Ended Year Ended

December 31, December 31,

$ 2,253 $ 636

The following table provides lease term and discount rate information related to operating and finance leases as follows:

For the Years Ended

Weighted average remaining lease term (years):

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Finance leases

The following table sets forth the scheduled maturities of lease obligations as of December 31, 2024:

Leases Leases Leases

The following sets forth future minimum lease payments as follows:

Future minimum payments:

$ 751 $ 7,916 $ 8,667

684 8,243 8,927

541 9,249 9,790

Total undiscounted cash flows

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$ 2,269 $ 21,643 $ 23,912

The following table provides supplemental information related to the Company's Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023:

Supplemental cash flow information and non-cash activity related to leases include the following:

For the Years Ended

Cash paid for amounts included in the measurement of lease liabilities:

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Financing cash flows paid for finance leases

Right-of-use assets obtained in exchange for new finance lease liabilities

Non-cash amounts included in the measurement of lease liabilities:

Right-of-use assets obtained in exchange for new operating lease liabilities

In connection with the acquisition of CDM, the Company obtained right-of-use assets totaling $ 23,880 and assumed finance and operating lease liabilities of approximately $ 23,309 and $ 571 , respectively, during the year ended December 31, 2025.

PROFIT-SHARING PLAN

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The Company contributed $ 341 and $ 288 to employee retirement plans for the year-ended December 31, 2025 and 2024, respectively.

SUBSEQUENT EVENTS

The Company has evaluated subsequent events occurring after the balance sheet date through the date the consolidated financial statements were issued and has determined that there were no such events that would require recognition or disclosure in the financial statements.

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 9A. Controls and Procedures