UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Minnesota 41-1967918 State or Other Jurisdiction of Incorporation or Organization I.R.S. Employer Identification No. Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 per share CREX The Nasdaq Stock Market LLC Warrants to purchase Common Stock CREXW The Nasdaq Stock Market LLC FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT ...

Financial Data and Key Metrics Changes - The company reported record revenue of $10.9 million for Q2 2022, an increase of $7.6 million or 233% year-over-year, bringing year-to-date revenue to $21.7 million, a 162% increase year-over-year [8][40]. - EBITDA for Q2 2022 was $2.8 million, with adjusted EBITDA at $933,000, improving the adjusted EBITDA margin from 5.9% in Q1 to 8.5% in Q2 [10][67]. - The gross profit margin decreased to 42.7% from 57.2% year-over-year, primarily due to a shift in revenue mix towards hardware sales [45][46]. Business Line Data and Key Metrics Changes - Hardware revenues reached $5.7 million in Q2 2022, a 337% increase compared to the prior year, driven by the merger with Reflect and growth in large-scale LED deployments [42]. - Services and other revenues were $5.3 million, a 165% increase, with SaaS revenue contributing $3.8 million, up from $1.4 million in the same period last year, reflecting a 175% growth [43]. Market Data and Key Metrics Changes - The company has grown its annual recurring revenue (ARR) run rate to over $14.5 million, achieving 83% of its target growth for the year through the first half [12]. - The company anticipates significant revenue from a new partnership with the Bowling Proprietors Association of America, targeting over 3,000 member bowling alleys [20][21]. Company Strategy and Development Direction - The management's strategic initiative focuses on growing ARR, primarily through SaaS subscriptions, with a goal to increase the ARR run rate by 25% from approximately $12 million at the end of 2021 to $15 million by the end of 2022 [11][12]. - The company aims to enhance its market share in the fragmented digital signage industry by offering integrated solutions beyond basic digital signage, including media sales and ad monetization [75][76]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving at least $43 million in revenue for 2022, with expectations to exceed $52 million in 2023 [65][66]. - The company anticipates ongoing margin expansion and expects adjusted EBITDA margins to exceed 15% in 2023 and 20% in 2024 as it scales its operations [69]. Other Important Information - The company has a cash position of approximately $3 million as of June 30, 2022, which, combined with accounts receivable, provides sufficient runway to service its debt [61]. - The company is actively pursuing strategic partnerships and acquisitions to enhance growth opportunities [78]. Q&A Session Summary Question: Can you provide details around the announced bowling contract? - The contract is expected to be executed soon, with over 650 bowling centers signed up to participate, and minor revenue expected in Q4 2022, with significant revenue anticipated in 2023 [90][91]. Question: Has there been any changes to expected delivery rates in the theme park market? - There has not been a slowdown in demand for digital conversion, with an acceleration in ad monetization capabilities observed among theme park customers [93][94]. Question: What is the company's ability to source products to meet demand? - There are no issues with display capability, but media players are currently running about 90 days out, and the company is placing orders ahead of schedule [96]. Question: How have global shipping costs impacted the hardware business? - The company experienced significant gross margin erosion due to increased shipping costs during the pandemic, but costs are moderating now [99]. Question: What is the runway for media offerings with the existing customer base? - The media sales apparatus is in the early stages, with significant interest from existing customers in monetization opportunities [102][103].

PART 1. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Creative Realities, Inc. as of June 30, 2022, with detailed notes on accounting policies and the Reflect acquisition [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) - Total assets increased significantly to **$68.5 million** as of June 30, 2022, from **$22.9 million** at December 31, 2021, primarily due to the acquisition of Reflect, which added substantial goodwill and intangible assets[6](index=6&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $17,193 | $9,772 | | **Goodwill** | $26,094 | $7,525 | | **Intangibles, net** | $23,227 | $4,850 | | **TOTAL ASSETS** | **$68,517** | **$22,881** | | **Total Current Liabilities** | $16,544 | $6,859 | | **TOTAL LIABILITIES** | **$42,080** | **$14,152** | | **Total Shareholders' Equity** | **$26,437** | **$8,729** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) - The company reported significant revenue growth for both the three and six months ended June 30, 2022, largely driven by the Reflect acquisition. Net income also increased, benefiting from a large non-cash gain on the change in fair value of warrant liability[9](index=9&type=chunk) Statement of Operations Summary (in thousands) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Sales** | $10,923 | $3,277 | $21,680 | $8,281 | | **Gross Profit** | $4,662 | $1,875 | $8,554 | $4,109 | | **Operating Income/(Loss)** | $30 | $(411) | $(984) | $(624) | | **Net Income** | $1,262 | $1,025 | $3,764 | $2,297 | | **Diluted EPS** | $0.06 | $0.09 | $0.21 | $0.20 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) - For the six months ended June 30, 2022, cash used in investing activities surged to **$19.5 million** due to the acquisition of Reflect. This was funded by **$19.6 million** in cash provided by financing activities from new debt and equity issuances. Operating cash flow was a small use of **$63 thousand**[12](index=12&type=chunk) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(63) | $(363) | | **Net cash used in investing activities** | $(19,546) | $(204) | | **Net cash provided by financing activities** | $19,566 | $1,745 | | **Increase/(decrease) in Cash** | $(43) | $1,178 | | **Cash and Cash Equivalents, end of period** | $2,840 | $3,004 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Note 1: Nature of Organization and Operations](index=7&type=section&id=NOTE%201:%20NATURE%20OF%20ORGANIZATION%20AND%20OPERATIONS) - On February 17, 2022, the Company completed its merger with Reflect Systems, Inc., a provider of digital signage solutions. The transaction was financed through a combination of equity and debt[20](index=20&type=chunk) - To fund the Reflect merger, the company raised approximately **$11.0 million** in gross proceeds from an Equity Financing (private placement) and **$10.0 million** in gross proceeds from a new Debt Financing agreement with Slipstream Communications, LLC[29](index=29&type=chunk)[31](index=31&type=chunk) - Management believes the company can continue as a going concern through at least August 15, 2023, based on debt refinancing, operational forecasts, and a continued support letter from its lender, Slipstream[36](index=36&type=chunk) [Note 4: Revenue Recognition](index=15&type=section&id=NOTE%204:%20REVENUE%20RECOGNITION) - The company's revenue is disaggregated into Hardware and various Services categories, including Installation, Software Development, Media, and Managed Services. Managed Services, which includes recurring software licensing and support, is a significant component of service revenue[67](index=67&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) Disaggregated Revenue (in thousands) | Revenue Source | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Hardware** | $5,667 | $1,296 | $12,126 | $4,112 | | **Services** | $5,256 | $1,981 | $9,554 | $4,169 | | *Managed Services* | *$3,832* | *$1,391* | *$6,535* | *$2,730* | | **Total Revenue** | **$10,923** | **$3,277** | **$21,680** | **$8,281** | [Note 5: Business Combination](index=18&type=section&id=NOTE%205:%20BUSINESS%20COMBINATION) - The company acquired Reflect Systems, Inc. on February 17, 2022. The total consideration was approximately **$36.4 million**, consisting of cash, common stock, a secured promissory note, and a contingent earnout liability[81](index=81&type=chunk)[90](index=90&type=chunk) Preliminary Purchase Price Allocation for Reflect Acquisition (in thousands) | Assets Acquired / Liabilities Assumed | Fair Value | | :--- | :--- | | Identified intangible assets | $17,160 | | Goodwill | $18,569 | | Net tangible assets acquired | $(1,369) | | **Total** | **$34,360** | - The acquisition added significant definite-lived intangible assets, including customer relationships (**$11.0 million**), developed technology (**$5.1 million**), and trade names (**$1.0 million**), which will be amortized over 2 to 10 years[105](index=105&type=chunk) [Note 8: Intangible Assets, Including Goodwill](index=23&type=section&id=NOTE%208:%20INTANGIBLE%20ASSETS,%20INCLUDING%20GOODWILL) - Net book value of amortizable intangible assets increased to **$23.2 million** at June 30, 2022, from **$4.9 million** at year-end 2021, due to the Reflect acquisition[118](index=118&type=chunk) - A significant decline in the company's market capitalization below its book value as of June 30, 2022, was deemed an indicator of potential impairment for goodwill. However, management concluded no impairment was necessary at the time, attributing the stock price decline to macroeconomic factors and specific investor selling pressure rather than a decline in the underlying business value[121](index=121&type=chunk)[123](index=123&type=chunk) [Note 9: Loans Payable](index=24&type=section&id=NOTE%209:%20LOANS%20PAYABLE) - On February 17, 2022, the company refinanced its debt, resulting in a new **$10.0 million** Acquisition Loan and a consolidated **$7.2 million** Consolidation Term Loan, both maturing in February 2025. The company also issued a **$2.5 million** Secured Promissory Note related to the Reflect acquisition, due February 2023[132](index=132&type=chunk)[134](index=134&type=chunk)[130](index=130&type=chunk) Outstanding Debt as of June 30, 2022 (in thousands) | Debt Type | Principal | Maturity Date | | :--- | :--- | :--- | | Acquisition Loan | $10,000 | 2/15/2025 | | Reflect Seller Secured Promissory Note | $2,089 | 2/17/2023 | | Consolidation Term Loan | $7,185 | 2/15/2025 | | **Total Debt, Gross** | **$19,274** | | [Note 12: Warrants](index=28&type=section&id=NOTE%2012:%20WARRANTS) - In Q1 2022, the company issued **13,761,000** warrants classified as liabilities in connection with financing activities. These warrants were initially recorded at fair value, with subsequent changes recognized in the statement of operations[152](index=152&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Effective June 30, 2022, the company amended the terms of these liability warrants. The amendments resulted in the warrants being reclassified from liability to equity. This led to a final gain on fair value change of **$2.4 million** and a loss on amendment of **$345 thousand** in Q2 2022, with the remaining **$5.7 million** liability reclassified to additional paid-in-capital[158](index=158&type=chunk)[159](index=159&type=chunk) [Note 14: Significant Customers/Vendors](index=34&type=section&id=NOTE%2014:%20SIGNIFICANT%20CUSTOMERS%2FVENDORS) - The company has significant customer concentration. For the six months ended June 30, 2022, three customers accounted for **54.3%** of total revenue[182](index=182&type=chunk) - As of June 30, 2022, one customer accounted for **25.7%** of accounts receivable[181](index=181&type=chunk) - Vendor concentration is also present, with two vendors accounting for **48.3%** of accounts payable at June 30, 2022[183](index=183&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results, highlighting revenue growth from the Reflect acquisition, impacts on margins, expenses, liquidity, and Adjusted EBITDA [Results of Operations - Three Months Ended June 30, 2022 vs 2021](index=40&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030,%202022%20vs%202021) - Total sales for Q2 2022 increased by **233%** to **$10.9 million** from **$3.3 million** in Q2 2021, driven by the Reflect acquisition and **74%** organic growth compared to pro forma combined results[219](index=219&type=chunk) - Gross profit margin decreased to **42.7%** from **57.2%** year-over-year due to a higher mix of hardware sales (**52%** of revenue), but improved from **36.2%** in Q1 2022[222](index=222&type=chunk) - Operating expenses increased by **103%** to **$4.6 million**, driven by the inclusion of Reflect's operations, increased investment in sales and marketing, and the absence of Employee Retention Credits (ERC) that benefited the prior year[218](index=218&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) - Net income was **$1.3 million**, compared to **$1.0 million** in the prior year, largely due to a **$2.4 million** non-cash gain on the change in fair value of warrant liability[218](index=218&type=chunk)[229](index=229&type=chunk) [Results of Operations - Six Months Ended June 30, 2022 vs 2021](index=44&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030,%202022%20vs%202021) - Total sales for the first six months of 2022 grew **162%** to **$21.7 million** from **$8.3 million** in the prior-year period, reflecting the Reflect acquisition and **58%** organic growth[235](index=235&type=chunk) - Managed services revenue, a key recurring revenue stream, grew **139%** year-over-year to **$6.5 million** for the six-month period[236](index=236&type=chunk) - Gross profit margin for the six-month period decreased to **39.5%** from **49.6%** due to a higher mix of hardware sales[238](index=238&type=chunk) - Net income for the six months was **$3.8 million**, compared to **$2.3 million** in the prior year, primarily driven by a **$7.9 million** non-cash gain on the change in fair value of warrant liability[234](index=234&type=chunk)[246](index=246&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2022, the company had cash and cash equivalents of **$2.8 million** and a working capital surplus of **$0.6 million**[35](index=35&type=chunk) - For the first six months of 2022, net cash used in operating activities was minimal at **$63 thousand**. Net cash used in investing activities was **$19.5 million**, primarily for the Reflect acquisition. Net cash provided by financing activities was **$19.6 million** from debt and equity raises to fund the acquisition[257](index=257&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Quarter | Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **GAAP Net Income (Loss)** | $1,262 | $2,502 | $(1,722) | $(343) | $1,025 | | **Adjusted EBITDA** | $933 | $635 | $(31) | $292 | $286 | [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2022[264](index=264&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[265](index=265&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) This section reports no new material legal proceedings - The company reports no new material legal proceedings[267](index=267&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) Creative Realities, as a smaller reporting company, refers to its Form 10-K for a discussion of risk factors - The company, as a smaller reporting company, refers to its Form 10-K filed on March 22, 2022, for a discussion of risk factors[268](index=268&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including officer certifications, a press release, and stock option agreements - A list of filed exhibits is provided, including officer certifications (31.1, 31.2, 32.1, 32.2), a press release dated August 15, 2022 (99.1), and various stock option agreements[271](index=271&type=chunk)

Creative Realities, Inc. (NASDAQ:CREX) Q1 2022 Earnings Conference Call May 16, 2022 9:00 AM ET Company Participants Will Logan - CFO Rick Mills - CEO Conference Call Participants Will Logan Good morning. This is Will Logan, Chief Financial Officer of Creative Realities Inc. Welcome to our first quarter 2022 financial results and earnings call. All lines have been placed on mute to prevent any background noise. The company has prepared remarks summarizing the Q1 results along with additional industry and co ...

Revenue Growth - Revenue for the three months ended March 31, 2022, was $10,757, representing an increase of $5,753, or 115%, compared to the same period in 2021[196]. - Core digital signage products and services revenue increased by $6,647, or 133%, despite supply chain disruptions related to semiconductor chips[197]. - Hardware revenues were $6,459 in 2022, an increase of $3,643, or 129%, driven by a large customer transaction expected to exceed $10,000 in revenues[200]. - Services and other revenues increased by $2,110, or 96%, to $4,298 for the three months ended March 31, 2022, due to the inclusion of 44 days of Reflect's operations[201]. Profitability - Gross profit for the three months ended March 31, 2022, was $3,892, reflecting an increase of $1,658, or 74%, compared to the same period in 2021[196]. - Gross profit rose by $1,658, or 74%, but gross profit margin decreased to 36.2% from 44.6% due to a shift in revenue mix to 60% hardware[202]. - Net income for the three months ended March 31, 2022, was $2,502, representing an increase of $1,230, or 97%, compared to the same period in 2021[196]. Operating Expenses - Total operating expenses for the three months ended March 31, 2022, were $4,906, an increase of $2,459, or 100%, compared to the same period in 2021[196]. - Sales and marketing expenses increased by $372, or 111%, to $707 for the three months ended March 31, 2022, compared to the same period in 2021[196]. - Research and development expenses increased by $70, or 41%, to $241 for the three months ended March 31, 2022, compared to the same period in 2021[196]. - General and administrative expenses, excluding bad debt, increased by $645, or 31%, driven by the acquisition of Reflect, with integration activities expected to yield savings by the end of 2022[205]. - Bad debt expenses increased by $618, or 121%, in 2022 compared to 2021, returning to a more normalized rate[207]. - Depreciation and amortization expenses increased by $363, or 106%, due to the addition of $21,500 in amortizing intangible assets from the Merger[208]. Cash Flow - Cash flows provided by operating activities were $1,201 for the period ended March 31, 2022, compared to cash flows used of $21 for the same period in 2021[217]. - Net cash used in investing activities was $17,969 for the three months ended March 31, 2022, driven by the completion of the Merger and investments in software platforms[218]. - Net cash provided by financing activities was $19,873 for the three months ended March 31, 2022, resulting from the completion of Equity Financing and Debt Financing[219]. Acquisition Impact - The Company acquired Reflect on February 17, 2022, and included 44 days of Reflect's operations in the consolidated results for the three months ended March 31, 2022[199]. - Sales and marketing expenses increased by $372, or 111%, driven by the acquisition of Reflect, with expectations for continued high expenses in future periods[203]. - Research and development expenses increased by $70, or 41%, primarily due to the acquisition of Reflect, with an expectation for continued elevated expenses[204].

Creative Realities, Inc. (NASDAQ:CREX) Q4 2021 Earnings Conference Call March 23, 2022 9:00 AM ET Company Participants Rick Mills - Chief Executive Officer Will Logan - Chief Financial Officer Conference Call Participants Will Logan Good morning. This is Will Logan, Chief Financial Officer of Creative Realities, Inc. Welcome to the CRI’s Year-End 2021 Financial Results and Earnings Call. All lines have been placed on mute to prevent any background noise. The Company has prepared remarks, summarizing the 20 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-K (Mark one) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 001-33169 Creative Realities, Inc. (Exact name of registrant as specified in its charter) Minnesota State or other ...

Creative Realities, Inc. (NASDAQ:CREX) Q3 2021 Earnings Conference Call November 16, 2021 9:00 AM ET Company Participants Will Logan - CFO Rick Mills - CEO Conference Call Participants Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear. The machine-assisted output provided is partly edited and is designed as a guide. Will Logan 00 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-33169 Creative Realities, Inc. (Exact Name of Registrant as Specified in its Charter) | --- | --- | ...

Start Time: 09:00 January 1, 0000 9:23 AM ET Creative Realities, Inc. (NASDAQ:CREX) Q2 2021 Earnings Conference Call August 17, 2021, 09:00 AM ET Company Participants Rick Mills - CEO Will Logan - CFO Conference Call Participants Will Logan Good morning. I’m Will Logan, Chief Financial Officer of Creative Realities, Inc. Welcome to the CRI's Second Quarter 2021 Financial Results and Earnings Call. All lines have been placed on mute to prevent any background noise. The company's prepared remarks will include ...