What the changes say
- Creative Realities expanded its risk profile around the CDM acquisition, financing constraints, and Canadian regulatory compliance.
- The company faces ongoing going concern doubts with increased negative working capital and net losses.
- Convertible preferred stock issuance heavily concentrates voting power in North Run Capital.
What changed since the prior 10-K
New
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
Adequate funds for our operations may not be available, requiring us to raise additional financing or else curtail our activities significantly
We refinanced via an Amended Credit Agreement for a $36,000 term loan and $22,500 revolver, and sold $30,000 in preferred stock to fund the CDM acquisition, restricting our asset pledging and additional debt issuance.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
We may not realize the growth opportunities that are anticipated from our acquisition of CDM
We may fail to realize anticipated growth opportunities and cost savings from our acquisition of CDM due to integration difficulties or unexpected expenses.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
The CDM acquisition may fail to achieve beneficial synergies
The CDM acquisition may fail to achieve beneficial synergies and could cause customer deferrals, product rejections, or management distraction.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
developing and maintaining uniform standards, controls, procedures and policies
Developing and maintaining uniform standards, controls, procedures, and policies across the combined companies may fail to yield anticipated synergies.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
The assumption of unknown liabilities in the CDM acquisition may harm our financial condition and results of operations
We assumed unknown and contingent liabilities from DDC Group International, the parent of CDM, which could exceed our indemnification remedies.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
We have incurred and will continue to incur significant transaction and integration costs in connection with our acquisition of CDM
We incurred significant transaction and integration costs for the CDM acquisition that may not be offset by long-term efficiencies.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
If we are unable to compete effectively in our various markets, or if competitive pressures place downward pressure on the prices at which we offer our products and services, our business, financial condition and results of operations may suffer
Our Canadian operations through CDM expose us to stringent Canadian regulations including PIPEDA data privacy rules and Quebec's Bill 96 French-language requirements.
- NewRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar could adversely affect our financial results
Fluctuations in the USD/CAD exchange rate could negatively impact our reported financial results since we do not maintain a hedging program.
- NewRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
Because we will not declare cash dividends on our common stock in the foreseeable future, stockholders must rely on appreciation of the value of our common stock for any return on their investment
We will not declare cash dividends on our common stock in the foreseeable future, so returns depend entirely on stock price appreciation.
- NewRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
We have issued shares of convertible preferred stock with terms that could dilute the voting power or reduce the value of our common stock
We issued 30,000 shares of Series A Convertible Preferred Stock with a 5.25% annual dividend that could dilute common stock value and voting power.
- NewRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
Geopolitical conflicts, including the current conflicts involving Iran, Israel and the United States, as well as terrorism and other global security threats, could adversely affect our business, financial condition and results of operations
Geopolitical conflicts involving Ukraine, Israel, Hamas, and recent U.S. and Israeli military actions against Iran could adversely affect our business.
- NewRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
High inflation and unfavorable economic conditions could negatively affect our business, financial condition and results of operations
High inflation and unfavorable economic conditions could reduce consumer disposable income and discretionary spending on our services.
- NewRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
Changes in trade policy, tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operations
Dropped
- DroppedRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
Anticipated changes in the U.S. political environment, including those resulting from the change in Presidential Administration and control of Congress, and to regulatory agencies, may result in significant changes to regulatory framework and enforcements
- DroppedRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
devote greater resources to the marketing and sales of their products, technology, platform, and services
- DroppedRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
We have never paid dividends on our capital stock and we do not anticipate paying dividends in the foreseeable future
- DroppedRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition
- DroppedRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
Inflation and price volatility in the global economy could hurt our business and results of operations
Reworded
- 99% rewrittenRISKS RELATED TO OUR SECURITIES AND OUR COMPANY
Our preferred shareholders possess significant voting power, which will limit your influence on our management and affairs, and may discourage parties from initiating potential merger, takeover or other change-of-control transactions
Updated ownership concentration from Slipstream's 26% to North Run's convertible preferred stock representing 48.7% of outstanding common stock.
Was: Our largest shareholder possesses significant voting power with respect to our common stock, which will limit your influence on our management and affairs, and may discourage parties from initiating potential merger, takeover, or other change-of-control transactions
- 51% rewrittenRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
Our success and longevity depend on our ability to generate profits from future operations and obtain sufficient capital through financing transactions to satisfy our debt obligations and meet our other business obligations
Updated going concern disclosures, reporting a 2025 net loss of $8,276, negative operating cash flows of $7,750, and accumulated deficit of $65,130.
Was: Our success and longevity depend on our ability to generate profits from future operations and obtain sufficient capital through financing transactions to refinance our debt obligations, pay any contingent consideration owed to former Reflect stockholders, and meet our other business obligations
- 51% rewrittenRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
Our continued growth and financial performance could be adversely affected by the loss of several key customers
Updated customer concentration figures, noting one customer accounted for 10% of 2025 revenue and 12% of accounts receivable.
- 50% rewrittenRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
Our financial condition and potential for continued net losses may negatively impact our relationships with customers, prospective customers and third-party suppliers
Added that third-party supplier refusal or unfavorable terms could cause our margins to decrease in addition to increasing expenses.
- 31% rewrittenRISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
We use developed and licensed software technology, and we could face claims of infringement by others in the industry. Such claims are costly and add uncertainty to our operational results
Added a specific ongoing intellectual property infringement example involving Alpha Modus, Corp. starting in September 2025.
All 49 risk factors
Headings as the filing states them, in filing order.
RISKS RELATED TO OUR BUSINESS AND OUR INDUSTRY
- 01We have generally incurred losses, and may never become or remain profitable
- 02We have incurred historical net losses, and we have had negative cash flows from operations. We incurred net losses in 2024 and 2025 and it is uncertain whether we will be able to obtain or increase our profitability in successive periods
- 03Our digital marketing business is evolving in a rapidly changing market, and we cannot ensure the long-term successful operation of our business or the execution of our business plan
- 04Our success and longevity depend on our ability to generate profits from future operations and obtain sufficient capital through financing transactions to satisfy our debt obligations and meet our other business obligations51% rewritten
- 05Adequate funds for our operations may not be available, requiring us to raise additional financing or else curtail our activities significantlyNew
- 06We do not have sufficient capital to engage in material research and development, which may harm our long-term growth
- 07The variable sales cycle of some of our products make it difficult to predict operating results
- 08There has been, and we expect that there will continue to be, significant consolidation in our industry. Inability to either lead or remain active participants in that consolidation may have a severe adverse impact on our access to financing, customers, technology, and human resources
- 09We may not realize the growth opportunities that are anticipated from our acquisition of CDMNew
- 10The CDM acquisition may fail to achieve beneficial synergiesNew
- 11developing and maintaining uniform standards, controls, procedures and policiesNew
- 12The assumption of unknown liabilities in the CDM acquisition may harm our financial condition and results of operationsNew
- 13We have incurred and will continue to incur significant transaction and integration costs in connection with our acquisition of CDMNew
- 14Unpredictability in financing markets could impair our ability to grow our business through acquisitions
- 15Our success depends on our interactive marketing technologies achieving and maintaining widespread acceptance in our targeted markets
- 16the reliability of our interactive marketing technologies
- 17Our financial condition and potential for continued net losses may negatively impact our relationships with customers, prospective customers and third-party suppliers50% rewritten
- 18Because we do not have long-term purchase commitments from our customers, the failure to obtain anticipated orders or the deferral or cancellation of commitments could have adverse effects on our business
- 19Our continued growth and financial performance could be adversely affected by the loss of several key customers51% rewritten
- 20Most of our contracts are terminable by our customers with limited notice and without penalty payments, and terminations could have a material adverse effect on our business, financial condition, and results of operations
- 21Our industry is characterized by frequent technological change. If we are unable to adapt our products and services and develop new products and services to keep up with these rapid changes, we will not be able to obtain, or maintain, market share
- 22We operate in an intensely competitive industry, and our competitors are developing products and solutions that incorporate AI and ML. We may not be as successful as our competitors in incorporating AI and ML into our products and solutions
- 23Issues relating to the use of new and evolving technologies in our offerings, such as AI and ML, may result in increased regulation and costs to comply with such regulations
- 24We use developed and licensed software technology, and we could face claims of infringement by others in the industry. Such claims are costly and add uncertainty to our operational results31% rewritten
- 25Our proprietary platform architectures and data tracking technology underlying certain of our services are complex and may contain unknown errors in design or implementation that could result in system performance failures or inability to scale
- 26Our business may be adversely affected by malicious applications that interfere with, or exploit security flaws in, our products and services
- 27We compete with other companies that have more resources, which puts us at a competitive disadvantage
- 28Our future success depends on retaining key personnel and our ability to attract and retain additional personnel
- 29Our reliance on information management and transaction systems to operate our business exposes us to cyber incidents and hacking of our sensitive information if our outsourced service provider experiences a security breach
- 30Because our technology, products, platform, and services are complex and are deployed in and across complex environments, they may have errors or defects that could seriously harm our business
- 31We may have insufficient network or server capacity, which could result in interruptions in our services and loss of revenues
- 32Our business operations are susceptible to interruptions caused by events beyond our control
- 33increased volatility and uncertainty in the financial projections we use as the basis for estimate used in our financial statements
- 34Corporate social responsibility, specifically related to ESG, may impose additional costs and expose us to new risks
- 35Our competitors are constantly evolving, and we may be unable to compete successfully against existing or future competitors to our business
- 36If we are unable to compete effectively in our various markets, or if competitive pressures place downward pressure on the prices at which we offer our products and services, our business, financial condition and results of operations may sufferNew
- 37Fluctuations in the exchange rate between the U.S. dollar and the Canadian dollar could adversely affect our financial resultsNew
RISKS RELATED TO OUR SECURITIES AND OUR COMPANY
- 38Our Articles of Incorporation grant our Board of Directors the power to issue additional shares of common and preferred stock and to designate other classes of preferred stock, all without shareholder approval
- 39Because we will not declare cash dividends on our common stock in the foreseeable future, stockholders must rely on appreciation of the value of our common stock for any return on their investmentNew
- 40We do not have significant tangible assets that could be sold upon liquidation
- 41We can provide no assurance that our securities will continue to meet Nasdaq listing requirements. If we fail to comply with the continuing listing standards of the Nasdaq, our securities could be delisted
- 42Sales of a substantial number of shares of our common stock in the public market by certain of our shareholders could cause our stock price to fall
- 43There may not be an active market for shares of our common stock
- 44We have issued shares of convertible preferred stock with terms that could dilute the voting power or reduce the value of our common stockNew
- 45Our preferred shareholders possess significant voting power, which will limit your influence on our management and affairs, and may discourage parties from initiating potential merger, takeover or other change-of-control transactions99% rewritten
- 46Because of our limited internal resources, we may not have in place various processes and protections common to more mature companies and may be more susceptible to adverse events
- 47Geopolitical conflicts, including the current conflicts involving Iran, Israel and the United States, as well as terrorism and other global security threats, could adversely affect our business, financial condition and results of operations New
- 48High inflation and unfavorable economic conditions could negatively affect our business, financial condition and results of operationsNew
- 49Changes in trade policy, tariff and import/export regulations may have a material adverse effect on our business, financial condition and results of operationsNew
Other Creative Realities 10-Ks
- FY2024 10-K risk factors41 risks
Creative Realities faces going concern doubts and negative cash flows, relying heavily on a few major customers and key personnel like CEO Rick Mills.
Filed Mar 14, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.