CREATIVE REALITIES, INC. 10-K

ITEM 9A CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of December 31, 2025, and designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management ’ s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. 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, 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 Rule 10b5 - 1 Trading Plans 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. ITEM 9C DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 29 Table of Contents PART III ITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 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. Name Age Positions David Bell 81 Director Michael Bosco 52 Director Thomas B. Ellis 56 Director Donald A. Harris 72 Director Daniel McGrath 63 Director Richard Mills 70 Chief Executive Officer and Director (Chairman) Stephen Nesbit 74 Director Tamra Koshewa 58 Chief Financial Officer The biographies of the above-identified individuals are set forth below: David Bell joined our Board of Directors in August 2014 in connection with our acquisition of Creative Realities, LLC. Mr. Bell brings over 40 years of advertising and marketing industry experience to the Board, including serving as CEO of three of the largest companies in the industry - Bozell Worldwide, True North Communications and The Interpublic Group of Companies, Inc. Mr. Bell has previously led Slipstream Communications, LLC which is an international company providing strategic branding, digital marketing, and public relations services and served as a Senior Advisor to Google Inc. from 2006 to 2009. Mr. Bell previously served as an Operating Advisor at Pegasus Capital Advisors. He was a Senior Advisor to AOL from 2008 to 2016 and has also served on the boards of multiple publicly traded companies, including Lighting Science Group Corporation and Point Blank Solutions, Inc., and Primedia, Inc., and served as President and CEO of The Interpublic Group of Companies Inc. from 2003 to 2005. Mr. Bell served as an independent director on the Board of Directors of Time, Inc. from June 2014 to January 2018. Michael P. Bosco was appointed to our Board of Directors on December 30, 2025. Mr. 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. Mr. Bosco received a B.S. degree from Boston College and an M.B.A. from The Wharton School, University of Pennsylvania. Thomas B. Ellis was appointed to our Board of Directors on November 6, 2025. Mr. 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. Mr. Ellis received an A.B. degree from Princeton University and a J.D. degree from Harvard Law School. Mr. Ellis has served on the board of directors of LENSAR, Inc. (Nasdaq: 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. (Nasdaq: LPTH) since February 2025. Donald A. Harris was appointed to our Board of Directors in August 2014 in connection with our acquisition of Broadcast International, Inc. He has been President of 1162 Management, and the General Partner of 5 Star Partnership, a private equity firm, since June 2006. Mr. Harris has been President and Chief Executive Officer of UbiquiTel Inc., a telecommunications company organized by Mr. Harris and other investors, since its inception in September 1999 and also its Chairman since May 2000. Mr. Harris served as the President of Comcast Cellular Communications Inc. from March 1992 to March 1997. Mr. Harris received a Bachelor of Science degree from the United States Military Academy and an MBA from Columbia University. Mr. 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. Mr. 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. Mr. McGrath graduated from Brock University with a BAdmin (Honours) and holds the accounting designations of Chartered Professional Accountant (CPA) and Chartered Accountant (CA). 30 Table of Contents Richard Mills is currently our Chief Executive Officer, a member of our Board of Directors and Chairman of the Board. Mr. 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. Mr. Mills possesses over 32 years of industry experience. He was previously Chief Executive Officer of ConeXus World Global, a leading digital media services company, which he founded in 2010, and which was acquired by the Company. Prior to founding ConeXus, Mr. Mills was President and Director at Beacon Enterprise Solutions Group, Inc., a public telecom and technology infrastructure services provider. Previous to that, he joined publicly traded Pomeroy Computer Resources, Inc. in 1993 and served as Chief Operating Officer and a member of the Board of Directors from 1995 until 1999. Mr. Mills helped grow sales at Pomeroy during his time there from $100 million to $700 million. Mr. Mills was also a founder of Strategic Communications LLC. Stephen Nesbit was appointed to our Board of Directors in 2019. Mr. Nesbit has been in the digital signage and digital advertising industry for over 20 years. He is currently the Managing Director of Prestonwood Trail Holdings LLC and has provided advisory services for companies in the Digital Signage and Digital Media Industry for the past 10 years. He has directed and advised projects in North America, Europe, Asia proper, Southeast Asia, the Middle East, Australia and Africa. Prior to founding Prestonwood Trail, Mr. Nesbit was the President/COO at Reflect Systems, a prominent software and services company in the Digital Signage business. He joined Reflect after serving as President/COO of MarketForward, the Global Digital Media Division owned by the Publicis Groupe S.A. in Paris France. Mr. Nesbit began his career in Digital Signage as the EVP Global Operations & GM International Business for Next Generation Network. NGN was one of the first Digital Place Based Advertising companies in the industry before its sale to Anschutz Investments where the company changed its name to National Cinemedia (NASDAQ: NCMI). He began his career at IBM in the Data Processing Division holding various field and HQ management positions. Mr. Nesbit also held management and executive positions at Wang Labs and BBN Communications Inc., the communications company that was the original architect of the Internet. Mr. Nesbit holds an undergraduate degree from the University of Notre Dame and earned an MBA from the Indiana University Kelly Graduate School of Business. Tamra Koshewa has served as the Chief Financial Officer of the Company since December 1, 2025. Ms. 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. Ms. 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. When considering whether directors and nominees have the experience, qualifications, attributes and skills to enable the Board of Directors to satisfy its oversight responsibilities effectively in light of our business and structure, the Board of Directors focuses primarily on the industry and transactional experience, in addition to any unique skills or attributes associated with a director. With regard to Mr. Bell, the Board considered his deep experience within the advertising and marketing industries and his prior management of large enterprises. 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. With regard to Mr. Harris, the Board of Directors considered his extensive experience in the telecommunications industry and association with private equity investors. 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. 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, Bosco, Ellis, Harris and Nesbit. 31 Table of Contents 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. Mr. 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. Messrs. 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 a separately adopted charter that is available on the Company’s website at https://investors.cri.com. Messrs. 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. Instead, the entire Board of Directors shares the responsibility of identifying potential director-nominees to serve on the Board of Directors. Nevertheless, nominees to serve as directors on our Board of Directors are selected by those directors on our board who are independent. Compensation Committee Information . Our Compensation Committee consists of Stephen Nesbit, Donald Harris, and David Bell. Mr. Nesbit serves as chair of the committee. 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. The Compensation Committee’s duties, which are specified in the Compensation Committee charter, include, but are not limited to: • reviewing and approving on an annual basis the corporate goals and objectives relevant to the Company’s Chief Executive Officer’s compensation, evaluating the Company’s Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of the Company’s Chief Executive Officer based on such evaluation; • reviewing and approving the compensation of all of our other executive officers; • reviewing our executive compensation policies and plans; • implementing and administering our incentive compensation equity-based remuneration plans; • assisting management in complying with our proxy statement and annual report disclosure requirements, and reviewing specific disclosures in the proxy statement and reports; • if required, producing a report on executive compensation to be included in our annual proxy statement; 32 Table of Contents • reviewing, evaluating, and recommending changes, if appropriate, to the remuneration for directors; and • reviewing and reassessing, on an annual basis, the adequacy of the charter and recommending to the Board any proposed changes to the charter. Audit Committee Information . Our Audit Committee consists of David Bell, Stephen Nesbit, and Donald Harris. Mr. Bell serves as chair of the committee. The Board of Directors has determined that at least one member of the Audit Committee, Mr. Bell, is an “audit committee financial expert” as that term is defined in Regulation S-K promulgated under the Securities Exchange Act of 1934. Mr. Bell’s relevant experience in this regard is detailed above in his biography. The Board of Directors has determined that each director serving on the Audit Committee is able to read and understand fundamental financial statements. The audit committee met four times during the fiscal year ended December 31, 2025. Pursuant to our audit committee charter, responsibilities of the Audit Committee include: • reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the board whether the audited financial statements should be included in our required disclosures; • reviewing and discussing interim financial statements prior to the filing of quarterly reports and earnings releases; • approving the committee report, as required by the SEC rules, to be included in the Company’s annual proxy statement or annual report; • discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements; • discussing with management major risk assessment and risk management policies; • monitoring the independence of our independent auditor; • verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law; • inquiring and discussing with management our compliance with applicable laws and regulations; • pre-approving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed; • appointing or replacing the independent auditor; • determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work; • establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and • 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 33 Table of Contents Communications with Board Members Our Board of Directors has provided the following process for shareholders and interested parties to send communications to our Board and/or individual directors. All communications should be addressed to Creative Realities, Inc., 13100 Magisterial Drive, Ste. 201, Louisville, KY 40223, Attention: Corporate Secretary. Communications to individual directors may also be made to such director at our Company’s address. All communications sent to any individual director will be received directly by such individuals and will not be screened or reviewed by any Company personnel. Any communications sent to the Board in the care of the Corporate Secretary will be reviewed by the Corporate Secretary to ensure that such communications relate to the business of the Company before being reviewed by the Board. Code of Ethics We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers (including our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions) and directors. Our Code of Business Conduct and Ethics is designed to help ensure our business is conducted in accordance with the highest standards of ethical behavior and satisfies the requirements of Item 406(b) of Regulation S-K. Our Code of Business Conduct and Ethics is available, free of charge, on the Company’s website at https://investors.cri.com, or upon written request to our Corporate Secretary at 13100 Magisterial Drive, Ste. 201, Louisville, KY 40223. 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 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 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 Executive Compensation Summary Compensation Table The following table sets forth information concerning the compensation of our named executive officers for 2025 and 2024 (table and footnotes in whole dollars) : Non-Equity Stock Option Incentive Plan All Other Salary Bonus Awards Awards Compensation Compensation Total Name and Principal Position(a) Years ($) ($) ($) ($) ($) ($) ($) Richard Mills 2025 450,000 270,000 1,485,000 (b) 502,249 (c) - - 2,707,249 Chief Executive Officer and Director 2024 450,000 - - - - - 450,000 Ryan David Mudd 2025 197,336 - 165,000 (d) 168,229 (e) - - 530,565 Interim Chief Financial Officer 2024 207,692 22,500 - - - - 230,192 (a) Mr. Mills joined the Company effective October 15, 2015. Mr. Mudd served as the Interim Chief Financial Officer of the Company from February 1, 2025 until October 10, 2025. (b) 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. 34 Table of Contents (c) 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. (d) 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. (e) 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. Employees may contribute pretax or after-tax compensation to the plan in accordance with current maximum contribution levels proscribed by the Internal Revenue Service. The Company contributes an employer contribution match of 50% of employee wages up to 6%, for an effective match of 3%. Richard Mills Employment Agreement The Company employs Richard Mills as its Chief Executive Officer. Mr. Mills and the Company entered into an employment agreement on November 12, 2021. The employment agreement is effective for a one-year term, which automatically renews for additional one-year periods unless either the Company or Mr. Mills elects not to extend the term. The agreement provided for an initial annual base salary of $330,000 subject to annual increases but generally not subject to decreases. In accordance with the agreement, Mr. 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. Mills is eligible to participate in performance-based cash bonus or equity award plans for Company senior executives. Mr. Mills will participate in Company employee benefit plans, policies, programs, perquisites and arrangements to the extent he meets 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. Mills will be entitled to receive aggregate severance payments equal to twelve months of his 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 and non-competition 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. On June 15, 2022, the Board approved an amendment to certain aspects of Mr. Mills’ compensation as further described below. 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. If Mr. 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. The agreement contains certain non-solicitation and non-competition 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. Mr. 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 $50,000. If Ms. Koshewa’s employment is terminated by the Company without cause, as defined, or within 12 months following a change in control, as defined, for any reason other than for death, disability or cause, Ms. Koshewa will be entitled to receive aggregate severance payments equal to six months of Ms. Koshewa’s annual base salary. The agreement provides that any severance payments would be paid in installments over the course of the severance. The agreement contains certain non-solicitation provisions that continue after employment for a period of one year. The agreement also contains other customary restrictive and other covenants relating to the confidentiality of information, the ownership of inventions and other matters. 35 Table of Contents Outstanding Equity Awards at Fiscal Year-End The following table sets forth certain information concerning outstanding stock options and restricted stock awards held by our named executive officers as of December 31, 2025: Option Awards(a) Stock Awards Market Number value Number of Number of of shares of shares Securities Securities or units of or units of Underlying Underlying Option stock stock Unexercised Unexercised Exercise Option that has that have Options (#) Options (#) Price Expiration not vested not vested Name Exercisable Non-Exercisable ($) Date (#) ($) Richard Mills 160,000(a) -(a) 7.59 6/1/2030 300,000(b) 783,000 160,000(c) -(c) 7.59 6/1/2030 - - 333,334(d) -(d) 3.00 2/17/2025 - - -(e) 206,000(e) 3.05 6/2/2035 - - David Ryan Mudd -(f) 69,000(f) 3.05 1/8/2026(f) 50,000(g) 130,500 (a) These stock options vested in three equal installments on June 1 annually, beginning in 2021 and ending in 2023. (b) 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. (c) 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. These Performance Options include a catch-up provision, where any options that did not vest during a prior year due to the Company’s failure to meet a prior revenue or EBITDA target may vest in a subsequent vesting year if the revenue or EBITDA target, as applicable, is met in the future year. The revenue and EBITDA targets for the subject years are as follows: Calendar Year Revenue Target (millions) EBITDA Target (millions) 2022 $ 35 $ 3.1 2023 $ 38 $ 3.5 The executives met the foregoing EBITDA target for calendar year 2021. 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: (i) excludes any impact on EBITDA of: (a) the accounting treatment (including any “mark-to-market accounting”) of the Company’s warrants or the “Guaranteed Consideration” (as defined in the Merger Agreement), 36 Table of Contents (b) non-recurring transaction expenses associated with the Merger and the capital raising financing activities of the Company to effectuate the Merger, and (c) any write-down or write-off of any Company inventory of Safe Space Solutions products. (ii) includes deductions related to any cash or stock bonuses paid or payable to any employees of the Company for services provided in calendar year 2022 (even if such bonuses are actually paid after calendar year 2022), including bonuses paid pursuant to the terms of the 2022 Cash Bonus Plan (as described above) (collectively, the “EBITDA Calculations”). 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. (d) Mr. 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 Guaranteed Total Executive $ 6.00 $ 9.00 $ 12.00 $ 15.00 $ 18.00 Price Shares Mills Shares Vested 16,667 33,334 50,000 66,667 83,333 83,333 333,334 Logan Shares Vested 10,000 20,000 30,000 40,000 50,000 50,000 200,000 Percentage of Shares Vested 5 % 10 % 15 % 20 % 25 % 25 % (e) 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. (f) 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. Mr. Mudd resigned as Interim Chief Financial Officer effective October 10, 2025, and such option terminated 90 days after such resignation. (g) 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. Mr. 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 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 $36,000 (pro-rated for partial years of service), with such Shares to be valued at the closing price of the Company’s common stock on December 31 of the applicable year (or if such date is not a trading day, as of the trading day immediately prior thereto). 37 Table of Contents The table below sets forth the compensation paid to Company non-employee directors during 2025: Director Compensation (table and footnotes in whole dollars) Fees Nonqualified earned Non-equity deferred or paid Stock incentive plan compensation All other in cash awards Option awards compensation earnings compensation Total Name ($)(a) ($)(b) ($) ($) ($) ($) ($) David Bell - 36,000 - - - - 36,000 Michael Bell - 5,523 - - - - 5,523 Thomas B. Ellis - 5,523 - - - - 5,523 Donald A. Harris - 36,000 - - - - 36,000 Daniel McGrath - 5,523 - - - - 5,523 Stephen Nesbit - 36,000 - - - - 36,000 Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid to our Principal Executive Officer (“PEO”) and our Principal Financial Officer (“PFO”) and certain financial performance of the Company. Pay Versus Performance Summary Summary Compensation Compensation Compensation Compensation Value of Initial Fixed $100 Table Total for Actually Table Total for Actually Paid to Investment Based On: Net Income(6) PEO(1) Paid to PEO(2) Non-PEO NEO(3) Non-PEO NEO(4) Total Shareholder Return(5) (in thousands) Year ($) ($) ($) ($) ($) ($) (a) (b) (c) (d) (e) (f) (g) 2025 2,707,249 3,066,367 512,291 345,013 150 (8,276 ) 2024 450,000 438,154 400,000 392,893 141 (3,508 ) 2023 450,000 498,678 350,000 373,292 61 (2,937 ) (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Richard Mills (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table." (2) The dollar amounts reported in column (c) represent the amounts of “compensation actually paid” to Mr. Mills, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Mills during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Mills’ total compensation for each year to determine the compensation actually paid: Reported Summary Compensation Reported Equity Compensation Table Total Value of Equity Awards Actually Paid to for PEO Awards(a) Adjustments(b) PEO Year ($) ($) ($) ($) 2025 2,707,249 (1,987,249 ) 2,346,367 3,066,367 2024 450,000 - (11,846 ) 438,154 2023 450,000 - 48,678 498,678 (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. 38 Table of Contents The amounts deducted or added in calculating the equity award adjustments are as follows: Fair Value of Year over Fair Value Dividends or other Year over Year Change in at the End Earnings Paid on Year Change in Fair Value as of Fair Value of of the Prior Year Stock or Option Fair Value of Vesting Date of Equity Awards of Equity Awards Awards not Year End Outstanding Equity Awards Granted in that Failed to Otherwise Reflected Total Fair Value and Unvested Granted Prior Years Meet Vesting in Fair Value Equity of Equity Equity and Vested that Vested Conditions or Total Award Awards Awards in the Year in the Year in the Year Compensation Adjustments Year ($) ($) ($) ($) ($) ($) ($) 2025 1,278,447 - 391,500 676,420 - - 2,346,367 2024 - (11,846 ) - - - - (11,846 ) 2023 - (10,465 ) - 59,143 - - 48,678 (3) 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 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. (4) 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. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEO (excluding our PEO) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEO (excluding our PEO) for each year to determine the compensation actually paid, using the same methodology described above in Note (2): Reported Summary Compensation Compensation Table Total Reported Equity Actually Paid for Non-PEO Value of Awards to Non-PEO NEO Equity Awards(a) Adjustments(b) NEO Year ($) ($) ($) ($) 2025 512,291 (333,229 ) 165,951 345,013 2024 400,000 - (7,107 ) 392,893 2023 350,000 - 23,292 373,292 (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. 39 Table of Contents The amounts deducted or added in calculating the equity award adjustments are as follows: Fair Value of Year Over Value as of Year over Year Fair Value Dividends or other Year Vesting Date Change in at the End of the Earnings Paid on Change in of Equity Fair Value of Prior Year of Stock or Option Year End Fair Value of Awards Equity Awards Equity Awards that Awards not Total Fair Value Outstanding and Granted Granted in Prior Failed to Meet Otherwise Reflected Equity of Equity Unvested and Vested Years that Vested Vesting Conditions in Fair Value or Award Awards Equity Awards in the Year in the Year in the Year Total Compensation Adjustments Year ($) ($) ($) ($) ($) ($) ($) 2025 165,951 - - - - - 165,951 2024 - (7,107 ) - - - - (7,107 ) 2023 - (6,279 ) - 29,571 - - 23,292 (5) Cumulative total shareholder return (Cumulative TSR) is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. (6) The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. Analysis of the Information Presented in the Pay versus Performance Table In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between information presented in the Pay Versus Performance table above. Compensation Actually Paid and Cumulative TSR 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. 40 Table of Contents Compensation Actually Paid and Net Income 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 net income over the three most recently completed fiscal years. 41 Table of Contents Policies and Practices for Granting Certain Equity Awards While the granting of options and other equity awards to officers, directors and other employees is not expressly addressed in our Insider Trading Policy, we generally follow the same principles set forth in the Insider Trading Policy when granting equity awards, including options, to our officers, directors and other employees with access to material nonpublic information. Generally, our Board of Directors or Compensation Committee does not approve grants of such awards during a blackout period and does not take material nonpublic information into account when determining the timing and terms of such an award. Further, we do not have a policy or practice of timing the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. 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 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 executive officers of the Company as a group; and • 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 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%. 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 Common Stock Series A Convertible Preferred Stock (1) Name of Beneficial Owner Number of Shares Beneficially Owned Percentage Beneficially Owned Number of Shares Beneficially Owned Percentage Beneficially Owned Combined Voting Power Directors and executive officers: Richard Mills 1,135,260 (2) 9.98 % — — 9.98 % David Bell 83,735 (3) * — — * Michael Bosco 2,117 * — * Thomas B. Ellis 2,104,851 (4) 16.61 % 30,000 (5) 100.00 % 16.61 % Donald A. Harris 207,761 (3) 1.96 % — — 1.96 % Tamra Koshewa (6) — — — — — Daniel McGrath 2,117 * — * Stephen Nesbit 121,389 (3) 1.15 % — — 1.15 % All directors and executive officers as a group (8 persons) 3,657,229 (7) 32.0 % 30,000 100.00 % 30.54 % Other named executive officers: David Ryan Mudd (8) — — — — — Other 5% stockholders: Mink Brook Partners LP 763,379 (9) 5.81 % 5.81 % North Run Strategic Opportunities Fund I, LP (10) 1,752,279 (11) 14.28 % 25,000 83.3 % 14.22 % NR-SOF I (Co-Invest I), LP (12) 350,456 (13) 3.22 % 5,000 16.7 % 3.22 % * Less than one percent (1) 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. 42 Table of Contents (2) 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”). Mr. Mills serves as the sole manager of RFK and has sole voting and investment power over shares of the Company held by RFK. (3) Includes 20,000 shares issuable upon the exercise of outstanding stock options. (4) 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. Mr. 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. Mr. Ellis disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. (5) 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. Mr. 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. Mr. Ellis disclaims beneficial ownership of the reported securities except to the extent of his pecuniary interest therein. (6) Tamra Koshewa was appointed as the Chief Financial Officer of the Company effective December 1, 2025. (7) 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. (8) Mr. Mudd served as the Chief Financial Officer of the Company until October 10, 2025. (9) 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. (10) 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. Messrs. 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. 43 Table of Contents (11) 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. (12) 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. Messrs. 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. (13) 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 Number of Securities Remaining to be Available for Issuance Issued Upon Weighted-Average Under Equity Exercise of Exercise Price of Compensation Plans Outstanding Options, Outstanding Options, (excluding securities Warrants and Rights Warrants and Rights reflected in column (a)) Equity compensation plans approved by stockholders 3,064,564 (1) 4.20 911,000 (2) Equity compensation plans not approved by stockholders None N/A None (1) 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. (2) 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. 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 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. Thomas B. Ellis, a director of the Company, is affiliated with North Run Capital, LP. 44 Table of Contents 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”). Prior to Mr. 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 at the time of the approval of the Board of Directors had any conflicting interest in the transactions. Independence The Board of Directors has not created a separate committee for nomination or corporate governance. Instead, the entire Board of Directors shares the responsibility of identifying potential director-nominees to serve on the Board of Directors. Nevertheless, nominees to serve as directors on our Board of Directors are selected by those directors on our board who are independent. 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. The directors whom the board has determined to be independent are Messrs. Bell, Harris, and Nesbit. 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 2024 and 2025, Grant Thornton LLP (“Grant Thornton”): 2025 2024 Audit fees (a) $ 821 $ 431 Audit related fees (b) 200 - Tax fees - - All other fees - - $ 1,021 $ 431 (a) 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. (b) 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 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. Any interim approval given by an Audit Committee member must be reported to the Audit Committee no later than its next scheduled meeting. 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 Grant Thornton during 2025. PART IV ITEM 15 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) See “Index to Consolidated Financial Statements” on page F-1 . (b) See “Exhibit Index” on page 45 . (c) Not applicable. 45 Table of Contents EXHIBIT INDEX Exhibit No. Description 2.1 Agreement and Plan of Merger, dated as of November 12, 2021, by and between the registrant, CRI Acquisition Corporation, Reflect Systems, Inc., and RSI Exit Corporation (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed on November 15, 2021) 2.2 Amendment to Agreement and Plan of Merger, dated as of February 8, 2022, by and among the registrant, CRI Acquisition Corporation, Reflect Systems, Inc., and RSI Exit Corporation (incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed February 9, 2022) 2.3 Second Amendment to Agreement and Plan of Merger dated as of February 11, 2023 by and among the registrant, 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 February 15, 2023) 2.4 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) 2.5 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) 2.6 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) 3.1 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) 3.2 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) 3.3 Amended and Restated Bylaws (incorporated by reference to the registrant’s Current Report on Form 8-K filed on November 2, 2011) 4.1 Specimen certificate evidencing shares of Common Stock (incorporated by reference to Exhibit 4.2 of the registrant’s Registration Statement on Form SB-2 (File No. 333-136972)) 4.2 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) 4.3 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) 4.4 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) 10.1+ 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). 46 Table of Contents Exhibit No. Description 10.2+ 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) 10.3+ 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) 10.4+ 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) 10.5+ 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) 10.6+ 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) 10.7 $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) 10.8 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) 10.9 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) 10.10+ 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) 10.11+ 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) 10.12+ 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) 10.13+ 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) 10.14 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) 10.15 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) 10.16 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) 10.17 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) 10.18 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) 10.19 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) 10.20 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) 10.21 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) 10.22 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) 47 Table of Contents Exhibit No. Description 10.23 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) 10.24*+ Employment Agreement, dated as of December 1, 2025, by and between the registrant and Tamra Koshewa 14.1 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) 19.1 Insider Trading Policy (incorporated by reference to Exhibit 19.1 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) 21.1* List of Subsidiaries 23.1* Consent of Grant Thornton LLP 31.1* Chief Executive Officer Certification pursuant to Exchange Act Rule 13a-14(a) 31.2* Chief Financial Officer Certification pursuant to Exchange Act Rule 13a-14(a) 32.1* Chief Executive Officer Certification pursuant to 18 U.S.C. Section 1350 32.2* Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 97.1 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) 101.INS* Inline XBRL Instance Document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith. + Compensatory Plan or arrangement required to be filed pursuant to Item 15(b) of Form 10-K. ITEM 16. FORM 10-K SUMMARY . None. 48 Table of Contents SIGNATURES 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. April 15, 2026. Creative Realities, Inc. By /s/ Richard Mills Richard Mills Chief Executive Officer By /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. Signature Title Date /s/ Richard Mills Chief Executive Officer (Principal Executive Officer) April 15, 2026 Richard Mills and Chairman of the Board of Directors /s/ Tamra Koshewa Chief Financial Officer (Principal Financial and April 15, 2026 Tamra Koshewa Principal Accounting Officer) /s/ David Bell Director April 15, 2026 David Bell /s/ Michael Bosco Director April 15, 2026 Michael Bosco /s/ Thomas B. Ellis Director April 15, 2026 Thomas B. Ellis /s/ Donald A. Harris Director April 15, 2026 Donald A. Harris /s/ Daniel McGrath Director April 15, 2026 Daniel McGrath /s/ Stephen Nesbit Director April 15, 2026 Stephen Nesbit 49 Table of Contents INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID No. 248 ) F-2 Consolidated Financial Statements Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Comprehensive Loss F-6 Consolidated Statements of Shareholders’ Equity F-7 Consolidated Statements of Cash Flows F-8 Notes to Consolidated Financial Statements F-9 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Shareholders Creative Realities, Inc. Opinion on the financial statements 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 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. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for opinion 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 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 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 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 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 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 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. F-2 Table of Contents 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 April 15, 2026 F-3 Table of Contents CREATIVE REALITIES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) December 31, 2025 2024 ASSETS Current Assets: Cash and cash equivalents $ 1,559 $ 1,037 Accounts receivable, net 19,219 10,605 Inventories, net 7,420 1,995 Prepaid expenses and other current assets 5,347 859 Total current assets 33,545 14,496 Property and equipment, net 2,937 207 Goodwill 53,266 26,453 Other intangible assets, net 35,906 22,841 Finance lease right-of-use assets 22,658 114 Operating lease right-of-use assets 2,117 787 Other non-current assets 611 312 Total Assets $ 151,040 $ 65,210 LIABILITIES, TEMPORARY EQUITY, AND SHAREHOLDERS ’ EQUITY Current Liabilities: Accounts payable $ 16,673 $ 6,354 Accrued expenses and other current liabilities 3,837 3,164 Deferred revenues 8,115 1,137 Customer deposits 1,823 2,181 Current maturities of operating leases 596 466 Current maturities of finance leases 3,799 46 Short-term debt 4,430 - Short-term contingent consideration, at fair value - 12,815 Total Current Liabilities 39,273 26,163 Revolving credit facility 4,940 13,044 Term debt, net of deferred financing costs 34,583 - Non-current operating lease liabilities 1,673 342 Non-current finance lease liabilities 17,844 68 Deferred tax liabilities 3,541 133 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 27,688 - Shareholders' Equity: Common stock, $ 0.01 par value, 66,666 shares authorized; 10,519 and 10,447 shares issued and outstanding as of December 31, 2025 and 2024, respectively 105 104 Additional paid-in capital 85,300 82,210 Accumulated deficit ( 65,130 ) ( 56,854 ) Accumulated other comprehensive income 1,223 - Total Shareholders ’ Equity 21,498 25,460 Total Liabilities, Temporary Equity, and Shareholders' Equity $ 151,040 $ 65,210 See accompanying Notes to Consolidated Financial Statements. F-4 Table of Contents CREATIVE REALITIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) For the Years Ended December 31, 2025 2024 Sales: Hardware $ 21,232 $ 18,259 Services and other 36,000 32,595 Total sales 57,232 50,854 Cost of sales: Hardware 15,292 13,521 Services and other 16,226 13,322 Total cost of sales 31,518 26,843 Gross profit 25,714 24,011 Operating expenses: Sales and marketing expenses 5,803 6,015 General and administrative expenses 23,065 17,058 Loss on impairment of software asset 5,712 - Total operating expenses 34,580 23,073 Operating (loss) income ( 8,866 ) 938 Other (income) expenses: Interest expense, including amortization of debt discount 2,479 1,775 Loss on change in fair value of contingent consideration - 1,608 Gain on settlement of contingent consideration ( 4,775 ) - Loss on debt extinguishment - 1,059 Loss on debt modification 24 - Other expense (income), net 516 ( 102 ) Total other (income) expenses, net ( 1,756 ) 4,340 Loss before income taxes ( 7,110 ) ( 3,402 ) Income tax expense ( 1,166 ) ( 106 ) Net loss ( 8,276 ) ( 3,508 ) Series A Redeemable Convertible Preferred Stock dividends ( 232 ) - Net loss applicable to common stockholders $ ( 8,508 ) $ ( 3,508 ) Basic and diluted loss per common share $ ( 0.81 ) $ ( 0.34 ) Weighted average shares outstanding - basic and diluted 10,495 10,440 See accompanying Notes to Consolidated Financial Statements. F-5 Table of Contents CREATIVE REALITIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) For the Years Ended December 31, 2025 2024 Net loss $ ( 8,276 ) $ ( 3,508 ) Other comprehensive income: Foreign currency translation adjustments 1,223 - Total comprehensive loss $ ( 7,053 ) $ ( 3,508 ) See accompanying Notes to Consolidated Financial Statements. F-6 Table of Contents CREATIVE REALITIES, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY For the years ended December 31, 2025 and 2024 (in thousands, except share amounts) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Shares Amount Capital Income Deficit Total Balance at January 1, 2024 10,409,027 $ 104 $ 82,073 $ - $ ( 53,346 ) $ 28,831 Stock-based compensation - - 13 - - 13 Shares issued to employees pursuant to the Retention Bonus Plan 37,632 - 124 - - 124 Net loss - - - - ( 3,508 ) ( 3,508 ) Balance at December 31, 2024 10,446,659 104 82,210 - ( 56,854 ) 25,460 Stock-based compensation 72,273 1 2,282 - - 2,283 Series A Redeemable Convertible Preferred Stock dividends - - ( 232 ) - - ( 232 ) Issuance of warrants in connection with settlement of contingent consideration - - 1,040 - - 1,040 Other comprehensive income - - - 1,223 - 1,223 Net loss - - - - ( 8,276 ) ( 8,276 ) Balance at December 31, 2025 10,518,932 $ 105 $ 85,300 $ 1,223 $ ( 65,130 ) $ 21,498 See accompanying Notes to Consolidated Financial Statements. F-7 Table of Contents CREATIVE REALITIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the Years Ended December 31, 2025 2024 Operating Activities: Net loss $ ( 8,276 ) $ ( 3,508 ) Adjustments to reconcile net loss to net cash (used in) provided by operating activities Depreciation and amortization 6,491 4,078 Non-cash lease expense 621 254 Amortization of debt discount 27 569 Stock-based compensation 2,283 13 Amortization of deferred financing costs 110 63 Loss on extinguishment of debt - 1,059 Loss on modification of revolver 24 - Provision for credit losses 229 13 Impairment of software asset 5,712 - Provision for inventory reserves 160 ( 43 ) Loss on change in fair value of contingent consideration - 1,608 Gain on settlement of contingent consideration ( 4,775 ) - Deferred income taxes 1,139 61 Changes to operating assets and liabilities, net of acquisitions: Accounts receivable ( 6,056 ) 1,850 Inventories ( 3,846 ) 615 Prepaid expenses and other current assets 1,699 ( 194 ) Accounts payable 4,357 ( 1,388 ) Accrued expenses and other current liabilities ( 6,003 ) ( 395 ) Deferred revenue ( 549 ) 5 Customer deposits ( 358 ) ( 1,052 ) Other assets ( 106 ) 43 Lease liabilities ( 633 ) ( 233 ) Other non-current liabilities - ( 37 ) 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) ( 37,983 ) - Purchases of property and equipment ( 306 ) ( 11 ) Capitalization of costs for software development ( 2,188 ) ( 2,790 ) Net cash used in investing activities ( 40,477 ) ( 2,801 ) Financing Activities: Proceeds from sale of Series A Redeemable Convertible Preferred Stock 30,000 - Payment of issuance costs related to Series A Redeemable Convertible Preferred Stock ( 2,544 ) - Proceeds from term debt 36,000 - 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 ( 49,817 ) ( 18,415 ) Payment of contingent consideration ( 3,000 ) - Payment of deferred financing costs ( 850 ) ( 306 ) Repayment of finance lease obligations ( 2,272 ) ( 44 ) Net cash provided by (used in) financing activities 48,739 ( 2,453 ) Effect of exchange rate on cash and cash equivalents 10 - Net increase (decrease) in cash and cash equivalents 522 ( 1,873 ) Cash and cash equivalents, beginning of year 1,037 2,910 Cash and cash equivalents, end of year $ 1,559 $ 1,037 See accompanying Notes to Consolidated Financial Statements. F-8 Table of Contents CREATIVE REALITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share amounts) NOTE 1: NATURE OF ORGANIZATION AND OPERATIONS Unless the context otherwise indicates, references in these Notes to the accompanying consolidated financial statements to “ we, ” “ us, ” “ our ” and “ the Company ” refer to Creative Realities, Inc. and its subsidiaries. Nature of the Company ’ s Business Creative Realities, Inc. is a Minnesota corporation that provides innovative digital marketing technology and solutions to retail companies, individual retail brands, enterprises and organizations throughout the United States and in certain international markets. 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. We have expertise in a broad range of existing and emerging digital marketing technologies, as well as the following related aspects of our business: content, network management, and connected device software and firmware platforms; customized software service layers; hardware platforms; digital media workflows; and proprietary processes and automation tools. 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. 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. F- 9 Table of Contents NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows: 1. 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 GAAP for annual financial reporting. The consolidated financial statements include the accounts of Creative Realities, Inc. 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. 2. Recently Issued and Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. 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. F- 10 Table of Contents 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. 3. 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. 4. Revenue Recognition 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. The Company only includes some or a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the customer and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. 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 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. 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 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. F- 11 Table of Contents 5. Allowance for Credit Losses The allowance for credit losses is the Company's best estimate of the amount of expected lifetime credit losses in the Company's accounts receivable. The Company regularly reviews the adequacy of its allowance for credit losses. The Company estimates losses over the contractual life using assumptions to capture the risk of loss, even if remote, based principally on how long a receivable has been outstanding. Account balances are charged off against the allowance for credit losses after all reasonable means of collection have been exhausted and the potential for recovery is considered remote. Other factors considered include historical write-off experience, current economic conditions, customer credit, and past transaction history with the customer. The allowance for credit losses is included in accounts receivable, net in the accompanying consolidated balance sheets. 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 $ 701 Provision for credit losses 13 Recoveries 47 Write-offs charged against the allowance ( 53 ) Balance as of December 31, 2024 $ 708 Provision for credit losses 229 Write-offs charged against the allowance ( 685 ) Balance as of December 31, 2025 $ 252 6. Inventories Inventories are stated at the lower of cost or net realizable value, determined by the first -in, first -out (FIFO) method, and consist of the following: December 31, 2025 2024 Raw materials $ 4,822 $ 1,465 Work-in-process 2,598 530 Total inventories $ 7,420 $ 1,995 7. 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 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. Assets to be disposed of are carried at the lower of their carrying value or fair value less costs to sell. Considerable management judgment is necessary to estimate the fair value of assets, and accordingly, actual results could vary significantly from such estimates. 8. Basic and Diluted Loss per Common Share 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. F- 12 Table of Contents 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. 9. Income Taxes 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. The Company accounts for uncertain tax positions utilizing an established recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We had no uncertain tax positions as of December 31, 2025 and 2024. 10. Goodwill 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. 11. 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. 12. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Our significant estimates include: 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. F- 13 Table of Contents 13. Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. 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 consisted of the following: December 31, 2025 2024 Equipment $ 2,894 $ 241 Leasehold improvements 425 141 Furniture and fixtures 266 189 Total property and equipment 3,585 571 Less: accumulated depreciation and amortization ( 648 ) ( 364 ) Net property and equipment $ 2,937 $ 207 The estimated useful lives used to compute depreciation and amortization are as follows: Asset class Useful life assigned (in years) Equipment 3 - 5 Furniture and fixtures 3 - 5 Leasehold improvements Shorter of 5 years or term of lease Depreciation expense was $ 346 and $ 201 for the years ended December 31, 2025 and 2024, respectively. 14. 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. F- 14 Table of Contents 15. Contingent Consideration 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). 16. 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. dollar. 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. 17. 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. 18. Leases 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. 19. 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. F- 15 Table of Contents 20. 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. NOTE 3: FAIR VALUE MEASUREMENT We measure certain financial assets, including cash equivalents, at fair value on a recurring basis. In accordance with ASC 820 - 10 - 30, fair value is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 - 10 - 35 establishes a three -level hierarchy that prioritizes the inputs used in measuring fair value. The three hierarchy levels are defined as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets. Level 2 — Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. Level 3 — Valuations based on inputs that are unobservable and involve management judgment and the reporting entity’s own assumptions about market participants and pricing. 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 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. F- 16 Table of Contents NOTE 4: REVENUE RECOGNITION 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 December 31, 2025 2024 Recognition Policy: Hardware $ 21,232 $ 18,259 Point in time Services: Managed Services 17,896 19,547 Over time Digital Media Advertising 9,549 - Over time Installation Services 5,617 8,968 Point in time Other 2,938 4,080 Point in time Total Services 36,000 32,595 Total Hardware and Services $ 57,232 $ 50,854 Hardware 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 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 recognize SaaS revenue ratably over the performance period. Maintenance and support services The Company sells support services that include access to technical support personnel for software and hardware troubleshooting. The Company offers a hosting service through our network operations center, or NOC, allowing the ability to monitor and support our customers’ networks 7 days a week, 24 hours a day. These contracts are generally 12 - 36 months in length and typically have autorenewal terms. Revenue is recognized over the term of the agreement in proportion to the costs incurred in fulfilling performance obligations under the contract. 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, 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. F- 17 Table of Contents 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 The Company performs installation services associated with system hardware sales to customers and recognizes revenue upon completion of the installations. 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, and the two activities are highly interrelated. 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. 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. In each instance, installation services are recognized at the time of completion. Other Services Software design and development services Software design and custom development sales represent fixed fee orders for work on a time and materials basis and are recognized as revenue when the application, feature, or custom software code has been received and delivery has occurred to the customer. Revenue is recognized generally upon customer acceptance (point-in-time) of the software product and verification that it meets the required specifications. Software is delivered to customers electronically. Media sales Media revenues are derived from selling (i) promotion and sponsorship packages to monetize customer infrastructure assets, including mobile takeover or physical presence, or (ii) digital advertising inventory to advertisers on digital displays or other outdoor structures, owned or controlled by our customers, each within physical venues. We sell advertising or sponsorship opportunities on behalf of our media network owner customers to brands and advertisers. 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. The Company invoices advertisers on behalf of our customers and remits the net cash to our customer after the advertiser has paid the Company the fees owed for such advertising. Media revenue services are recognized when the Company has completed its performance obligations under the contract with our customers, which typically has concluded upon facilitating execution of contracts between our customer and a brand/advertiser. 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 cost of sales. F- 18 Table of Contents The following table presents the activities in deferred revenue for the year ended December 31, 2025: 2025 Balance, January 1 1,137 Amounts assumed in CDM business combination 7,368 Amounts billed and deferred during the year 10,066 Revenue recognized that was included in the beginning balance ( 1,137 ) Revenue recognized from amounts deferred during the year ( 9,345 ) Foreign currency translation adjustment on Canadian deferred revenue 26 Balance, December 31, $ 8,115 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 Amount Within 1 year $ 6,846 Between 1 and 2 years 3,404 Between 2 and 3 years 314 Thereafter - $ 10,564 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). NOTE 5: 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. Inc. ("CDMUS"). 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. F- 19 Table of Contents 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 ) $ 37,983 Less: Technology platform 6,656 Customer relationships 14,324 Non-compete covenant 21 Unfavorable lease ( 41 ) Operating lease right-of-use assets 571 Finance lease right-of-use assets 23,309 Operating lease liabilities ( 571 ) Finance lease liabilities ( 23,309 ) Property and equipment 2,711 Deferred tax liability ( 2,215 ) Debt-free net working capital deficit ( 9,486 ) Fair Value of Identified Net Assets $ 11,970 Remaining Goodwill Value $ 26,013 The components of the debt-free net working capital deficit are as follows: Current assets: Accounts receivable $ 2,596 Inventory 1,699 Prepaid expenses and other current assets 5,979 Total current assets $ 10,274 Less current liabilities: Accounts payable $ 5,790 Accrued expenses and current liabilities 6,600 Current portion of deferred revenue 7,370 Total current liabilities 19,760 Net working capital deficit $ ( 9,486 ) 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. F- 20 Table of Contents 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 December 31, 2025 2024 (Unaudited) (Unaudited) Revenues $ 88,778 $ 91,524 Net loss $ ( 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”). F- 21 Table of Contents 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. NOTE 6: SUPPLEMENTAL CASH FLOW STATEMENT INFORMATION For the Years Ended December 31, 2025 2024 Supplemental non-cash investing and financing activities: Capitalized software in accounts payable $ 30 $ 67 Series A Redeemable Convertible Preferred Stock dividends $ 232 $ - Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,509 $ - Issuance of notes payable as partial settlement of contingent consideration $ 4,000 $ - Issuance of warrants as partial settlement of contingent consideration $ 1,040 $ - Supplemental disclosure information for cash flow Cash paid during the period for: Interest $ 1,849 $ 1,195 Operating leases $ 520 $ - Income taxes $ 56 $ 52 NOTE 7: PREPAID EXPENSES AND OTHER CURRENT ASSETS As of December 31, 2025 and 2024, prepaid expenses and other current assets consisted of the following: December 31, 2025 2024 Vendor, project and hardware prepayments $ 1,431 $ - Severance receivable 1,728 - MAG reimbursement receivable 820 - Other receivables 412 196 Prepaid subscriptions 346 344 Prepaid marketing 236 24 Prepaid other 145 209 Tax receivables 148 - Prepaid insurance 81 86 $ 5,347 $ 859 F- 22 Table of Contents NOTE 8: INTANGIBLE ASSETS AND GOODWILL Intangible Assets Intangible assets consisted of the following as of December 31, 2025 and 2024: December 31, 2025 2024 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Amount Amortization Technology platform $ 13,961 3,858 $ 7,140 3,041 Purchased and developed software 8,815 5,921 13,780 5,006 Customer relationships 28,561 5,889 13,910 4,350 Trademarks and trade names 1,260 1,044 1,260 852 Noncompete 22 1 - - Total amortizable intangible assets 52,619 16,713 36,090 13,249 Less: Accumulated amortization (16,713 ) (13,249 ) Net book value of amortizable intangible assets $ 35,906 $ 22,841 For the years ended December 31, 2025 and 2024, amortization of intangible assets charged to operations was $ 4,822 and $ 3,877 , respectively. For the year ended December 31, 2024, the Company wrote-off a $ 30 fully amortized noncompete asset 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 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: Estimated Future Year ending December 31, Amortization 2026 $ 5,876 2027 4,854 2028 4,351 2029 4,021 2030 4,020 Thereafter 12,784 Total $ 35,906 Intangible assets include the following and are being amortized over their estimated useful lives as follows: Amortization Period: Acquired Intangible Asset: (years) Technology platform and patents 3 - 10 Purchased and developed software 3 - 7 Trade names 5 Customer relationships 10 - 15 Goodwill 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. F- 23 Table of Contents Changes in goodwill for the years ended December 31, 2025 and 2024 were as follows: Gross Carrying Amount Balance as of January 1, 2024 $ 37,099 Additions - Impairment expense - Balance as of December 31, 2024 37,099 Additions 26,013 Foreign currency translation adjustments 800 Balance as of December 31, 2025 $ 63,912 Accumulated Impairment Balance as of January 1, 2024 $ ( 10,646 ) Impairment expense - Balance as of December 31, 2024 ( 10,646 ) Impairment expense - Balance as of December 31, 2025 $ ( 10,646 ) Goodwill, net of accumulated impairment $ 53,266 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. NOTE 9: 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. F- 24 Table of Contents 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. NOTE 10: ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of December 31, 2025 and 2024, accrued expenses and other current liabilities consisted of the following: December 31, 2025 2024 Accrued compensation 1,753 823 Sales and use taxes payable 1,591 1,389 Accrued interest 288 96 Accrued purchases 77 72 Other accrued expenses 128 784 $ 3,837 $ 3,164 NOTE 11: DEBT Debt consisted of the following: Issuance Maturity December 31, December 31, Interest Date Date 2025 2024 Rate Prior Credit Agreement: Revolving Credit Facility 5/23/2024 5/23/2027 $ - $ 13,044 See below Amended and Restated Credit Agreement: New Revolving Credit Facility 11/6/2025 11/6/2028 4,940 - See below Term Loan Facility 11/6/2025 11/6/2028 35,700 - See below Promissory Note 3/14/2025 9/14/2027 3,810 - 14% Total debt 44,450 13,044 Less: debt issuance costs 497 - Total debt, net 43,953 13,044 Less: current portion of debt, net 4,430 - Total non-current portion of debt, net $ 39,523 $ 13,044 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. F- 25 Table of Contents 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: Margin Senior Applicable Debt to to Margin Pricing Adjusted Revolving Applicable Grid EBITDA Credit to the Level Ratio Advances Term Loan I < 2.50x 2.75% 3.00% II > 2.50x 3.25% 3.50% 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. F- 26 Table of Contents 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. NOTE 12: 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. F- 27 Table of Contents NOTE 13: INCOME TAXES 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 December 31, 2025 2024 Federal $ ( 10,490 ) $ ( 2,757 ) Foreign 3,380 ( 645 ) (Loss) income before income taxes $ ( 7,110 ) $ ( 3,402 ) Income tax expense consisted of the following: For the Years Ended December 31, 2025 2024 Tax provision summary: State income tax expense (benefit) $ 27 $ 46 Deferred tax expense (benefit) – federal ( 39 ) 41 Deferred tax expense (benefit) – state ( 12 ) 19 Deferred tax expense (benefit) – foreign 1,190 - Tax expense $ 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. The Company records income taxes under the liability method. 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 (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 December 31, 2025 2024 Amount Percent Amount Percent US Federal Statutory Tax Rate $ ( 1,493 ) 21.0 % $ ( 732 ) 21.0 % State and local income taxes, net of federal benefit* 12 - 0.2 % 51 - 1.5 % Foreign Tax Effects Canada: Statutory tax rate difference 186 - 2.6 % ( 35 ) 1.0 % Changes in valuation allowance 299 - 4.2 % 454 - 13.0 % Prior year return-to-provision adjustments - 0.0 % ( 285 ) 8.2 % Other ( 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 % Other 11 - 0.1 % 11 - 0.3 % Other: Expiration of net operating loss carryforwards 1,470 - 20.7 % 851 - 24.4 % Federal return-to-provision adjustments 20 - 0.3 % 375 - 10.8 % Total $ 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. F- 28 Table of Contents Cash paid for income taxes, net of refunds received, consisted of the following: For the Years Ended December 31, 2025 2024 US Federal Taxes $ - $ - Foreign Taxes - - State and Local Taxes: Minnesota - 4 New Jersey 4 - New York 16 10 Texas 32 28 Other States 4 10 $ 56 $ 52 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: December 31, 2025 2024 Deferred tax assets: Reserves $ 129 $ 239 Property and equipment 18 41 Accrued expenses 150 325 Non-qualified stock options 2,088 1,645 Net foreign carryforwards 10,097 4,148 US net operating loss and contribution carryforwards 38,086 37,437 Foreign credits 328 - Section 163(j) interest expense carryforward 1,052 651 Research and development credits 2,312 2,312 Right-of-use liability 6,285 212 Acquisition costs 461 - Section 174 - 1,962 Total deferred tax assets 61,006 48,972 Valuation allowance ( 48,851 ) ( 43,654 ) Total deferred tax assets, net 12,155 5,318 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. federal and state tax jurisdictions. There were no unrecognized tax benefits as of December 31, 2025 that, if recognized, would affect the tax rate. It is the Company’s policy to accrue interest and penalties related to liabilities for income tax contingencies in the provision for income taxes. F- 29 Table of Contents 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. We have substantial NOLs that are limited in usage by IRC Section 382. 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 partial valuation allowance against the net deferred tax assets of the Company. NOTE 14: WARRANTS 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: Warrants Weighted Weighted Average Average Exercise Remaining Amount Price Contractual Life Balance January 1, 2025 4,587,002 $ 4.90 - Warrants issued 777,800 3.25 - Balance December 31, 2025 5,364,802 $ 4.66 2.55 All outstanding warrants were fully vested as of December 31, 2025. F- 30 Table of Contents NOTE 15: STOCK-BASED COMPENSATION A summary of outstanding options as of December 31, 2025 is included below: Time Vesting Options Weighted Average Weighted Weighted Remaining Average Average Range of Exercise Number Contractual Exercise Options Exercise Prices between Outstanding Life Price Exercisable Price $0.01 - $ 4.00 1,064,000 9.44 $ 2.44 - $ - $4.01 - $ 8.00 480,005 4.67 7.39 480,005 7.39 8.01+ 22,225 2.00 22.33 22,225 22.33 1,566,230 7.87 $ 4.24 502,230 $ 8.05 Performance Vesting Options Weighted Average Weighted Weighted Remaining Average Average Number Contractual Exercise Options Exercise Outstanding Life Price Exercisable Price 240,000 4.42 $ 7.59 240,000 $ 7.59 Market Vesting Options Weighted Average Weighted Weighted Remaining Average Average Number Contractual Exercise Options Exercise Outstanding Life Price Exercisable Price 733,334 6.46 $ 3.00 733,334 $ 3.00 Market Vesting Options Time Vesting Options Performance Vesting Options Weighted Weighted Weighted Average Average Average Options Exercise Options Exercise Options Exercise Date/Activity Outstanding Price Outstanding Price Outstanding Price Balance, January 1, 2025 733,334 3.00 591,897 $ 9.57 240,000 $ 7.59 Granted - - 1,170,500 2.46 - - Forfeited or expired - - ( 196,167 ) 9.72 - - Balance, December 31, 2025 733,334 3.00 1,566,230 $ 4.24 240,000 $ 7.59 The weighted average remaining contractual life for options exercisable is 5.48 years as of December 31, 2025. 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 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. F- 31 Table of Contents 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. F- 32 Table of Contents 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. NOTE 16: SEGMENT REPORTING We currently operate in one reportable segment, marketing technology solutions. 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”). Our CODM evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis, accompanied by information about revenue disaggregated by service. Our CODM uses the segment information primarily to evaluate the profitability and strategic growth potential of the segment. The reported measures of profit or loss are benchmarked against historical performance and market expectations. Based on this analysis, the CODM determines whether or not to invest in new technology or reallocate operating expenses - namely personnel. In addition, the CODM reviews supplementary metrics such as disaggregated revenue as disclosed in Note 4, Revenue Recognition, and customer growth to ensure that our strategic decisions are aligned with long-term performance goals. The measure used by our CODM to assess performance and make operating decisions is net loss as reported on our consolidated statements of operations. Significant segment expenses are reported as total expenses on the consolidated statements of operations. Segment assets are disclosed in the consolidated balance sheets. Significant Customers 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 December 31, 2025 2024 Revenues by Geographical Area: United States $ 45,304 $ 50,854 Canada 11,928 - Total Revenues $ 57,232 $ 50,854 Significant Vendors 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: December 31, 2025 2024 United States $ 1,950 $ 1,108 Canada 25,762 - Total $ 27,712 $ 1,108 F- 33 Table of Contents NOTE 17: LEASES 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. Leases are classified as operating or finance leases at the commencement date of the lease. Leases may include one or more options to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. 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 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. F- 34 Table of Contents 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: December 31, 2025 2024 Assets : Finance lease assets $ 22,658 $ 114 Operating lease assets 2,117 787 Total lease assets $ 24,775 $ 901 Liabilities: Operating lease liabilities: Current portion of operating lease liabilities $ 596 $ 466 Non-current portion of operating lease liabilities 1,673 342 Finance lease liabilities: Current portion of finance lease liabilities 3,799 46 Non-current portion of finance lease liabilities 17,844 68 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 December 31, 2025 2024 Operating lease expense $ 621 $ 584 Finance lease expense: Amortization of right-of-use assets 1,301 44 Interest on lease liabilities 331 8 Total lease expense $ 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 December 31, 2025 2024 Weighted average remaining lease term (years): Operating leases 4.0 2.1 Finance leases 3.0 2.3 Weighted average discount rate: Operating leases 8.2 % 9.6 % Finance leases 8.0 % 5.5 % F- 35 Table of Contents The following sets forth future minimum lease payments as follows: Operating Finance Total Future minimum payments: Leases Leases Leases 2026 $ 751 $ 7,916 $ 8,667 2027 684 8,243 8,927 2028 541 9,249 9,790 2029 337 61 398 2030 331 - 331 Total undiscounted cash flows 2,644 25,469 28,113 Less imputed interest ( 375 ) ( 3,826 ) ( 4,201 ) Present value of lease liabilities $ 2,269 $ 21,643 $ 23,912 Supplemental cash flow information and non-cash activity related to leases include the following: For the Years Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows paid for operating leases $ 520 $ 575 Operating cash flows paid for finance leases $ 331 $ 7 Financing cash flows paid for finance leases $ 1,776 $ 44 Non-cash amounts included in the measurement of lease liabilities: Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,509 $ - 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. NOTE 18: PROFIT-SHARING PLAN We have a defined contribution 401 (k) retirement plans for eligible associates in the United States. Associates may contribute up to 15 % of their pretax compensation to the plan subject to IRS limitations. The Company contributes an employer contribution match of 50 % of employee wages up to 6 %, for an effective match of 3 %. We have a Registered Retirement Savings Plan for eligible associates in Canada. Associates may contribute up to 18 % of earned income reported on their tax return in the previous year, subject to legal contribution limits. The Company contributes an employer contribution match of 50 % of employee wages up to 6 %, for an effective match of 3 %. The Company contributed $ 341 and $ 288 to employee retirement plans for the year-ended December 31, 2025 and 2024, respectively. NOTE 19: 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. F-36