Creative Realities(US:CREX)2025-11-12 13:22Financial Performance - For the three months ended September 30, 2025, sales decreased by $3,895, or 27%, compared to the same period in 2024, totaling $10,547[125] - Hardware revenues were $4,168, a decrease of $1,073, or 20%, primarily due to the absence of a significant sports and entertainment installation that occurred in the prior year[126] - Services and other revenues decreased by $2,822, or 31%, with installation services revenue dropping by $1,802, or 62%[126] - The net loss for the three months ended September 30, 2025, was $7,862, compared to a net income of $54 in the same period in 2024, representing a decrease of $7,916[125] - Sales decreased by $6,531, or 16%, for the nine months ending September 30, 2025, compared to the same period in 2024, with hardware revenues increasing by $226, or 2%[135] - Net loss for the nine months ending September 30, 2025, was $6,311, compared to a net loss of $670 in the same period in 2024, representing an increase of $5,641, or 842%[148] Operating Expenses - Total operating expenses increased by $6,594, or 121%, for the three months ended September 30, 2025, totaling $12,047[125] - The company recognized a non-cash impairment charge of $5,712 related to a proprietary software platform, significantly impacting total operating expenses[130] - Total operating expenses increased by $6,081, or 35%, primarily due to a non-cash impairment charge of $5,712 related to a proprietary software platform[139] - General and administrative expenses rose by $1,036, or 26%, driven by increased stock-based compensation and transaction costs related to the acquisition of Cineplex Digital Media[129] - General and administrative expenses rose by $1,249, or 10%, driven by a $1,669 increase in stock-based compensation and $766 in deal-related expenses for the acquisition of Cineplex Digital Media[138] Revenue Streams - Managed services revenue, including SaaS subscription services, decreased by $429, or 9%, due to a reduction in software subscription licenses[126] - Managed services revenue, including SaaS subscription services, decreased by $1,319, or 9%, due to a reduction in software licenses from a single customer[135] Cash Flow and Financing - Net cash used by operating activities for the nine months ended September 30, 2025 was $834, compared to net cash provided of $4,750 for the same period in 2024, reflecting a net loss of $6,311[152] - Net cash used in investing activities during the nine months ended September 30, 2025 was $1,973, a decrease from $2,302 in the same period in 2024[153] - Net cash provided by financing activities during the nine months ended September 30, 2025 was $2,084, compared to net cash used of $4,490 for the same period in 2024, primarily due to net proceeds of $5,119 from borrowings[154] - As of September 30, 2025, the company had $18,163 in outstanding borrowings under the revolving credit facility, with total availability of $3,937[157] - The effective interest rate on the revolving credit facility at September 30, 2025 was 7.74%[156] - The company issued 30,000 shares of Series A Convertible Preferred Stock for aggregate gross proceeds of $30,000 on October 15, 2025[163] - The company had a Promissory Note issued for $4,000, bearing interest at a fixed annual rate of 14%[159] - The company entered into a New Credit Agreement on November 6, 2025, obtaining a $36,000 term loan and a $22,500 secured revolving credit facility[158] Other Financial Metrics - The gross profit margin was 45% for the three months ended September 30, 2025, compared to 46% in the same period in 2024[127] - Gross profit margin declined to 43% for the nine months ending September 30, 2025, down from 48% in 2024, with a 2% increase in hardware gross margin but a 6% decrease in services and other gross margin[136] - Interest expense increased by $227, or 75%, for the three months ended September 30, 2025, totaling $530[125] - The company had an accumulated deficit of $63,165 and positive working capital of $526 as of September 30, 2025[148] - The company recognized $408 in other expenses, primarily from legal and severance-related costs[142] - The company is evaluating options for amending debt facilities or accessing capital markets, but substantial doubt exists about its ability to continue as a going concern within the next twelve months[149][151] - Outstanding warrants accounted for as equity instruments totaled 5,364,802 at September 30, 2025, with a weighted average exercise price of $4.66[161] - The company generated a depreciation and amortization expense of $5,308 during the nine months ended September 30, 2025[152]