Creative Realities Inc. Secures $2 Million Funding to Enhance and Expand Industry-Leading Automotive Software Support Platform
November 04 2022 - 7:00AM
Digital signage leader Creative Realities, Inc. (the “Company”)
(NASDAQ: CREX, CREXW) announced today an amendment to its Second
Amended and Restated Loan and Security Agreement (the “Credit
Agreement”) with their lender, Slipstream Communications, LLC
(“Slipstream”). The amendment provides the Borrowers with a $2
million term loan, the net proceeds of which are being used by the
Company to accelerate an active software development project with
the potential to expand SaaS revenues associated with an existing
customer by up to $5 million annually beginning in 2024.
The term loan has an annual interest rate of
12.5% and matures on September 1, 2023. Commencing on February 1,
2023, the Borrowers will make monthly installment payments of
approximately $270 thousand until the maturity date, consisting of
principal and interest sufficient to fully amortize the term loan
through the maturity date.
The Company has secured this loan to fund an
unplanned and extraordinary growth opportunity associated with its
automotive and vehicular dealership software platform. The Company
intends to utilize the proceeds to expand and enhance this existing
platform in conjunction with a global expansion opportunity with
one of the premier OEM dealership networks in the world. From the
Internet to the actual dealership, the platform features fully
integrated sales’ tools for automotive and vehicular dealers and
car-buyers, and will be an integral part of the ordering, inventory
and delivery process for dealers and their customers.
“We believe that this investment will catapult
the Company’s industry-leading platform to the global stage, with
sales ultimately in a number of domestic and international
markets,” stated Rick Mills, CEO of the Company. Mr. Mills added
“This expansion is further testament to the multi-faceted suite of
solutions offered by Creative Realities Inc., which already go well
beyond digital signage infrastructure plays with its omni-channel
marketing and ad-trafficking platforms.”
The additional development of the platform is
already underway and expanded commercialization is projected for
the latter half of 2023 with a full implementation of the
internationalized product beginning in 2024. The expanded
commercialization is projected to generate incremental subscription
(SaaS)-based annual recurring revenue (ARR) of up to $5 million in
2024.
Mr. Mills further stated, “This investment will
significantly increase the Company’s high-margin SaaS revenue in
2024. It is a transformational opportunity that we simply had to
seize.” Regarding the new funding, Mr. Mills continued “As this
opportunity and the related funding were not part of our initial
capital plan for 2022, we secured the loan under favorable terms,
especially given current market conditions, from a primary investor
in the Company, to expedite related value creation.” Mr. Mills
concluded, “Clearly, the support that we received from that
investor is representative of the confidence it has in the Company.
As we have communicated to investors, the Company has a number of
significant growth initiatives and this incremental funding permits
us to allocate resources accordingly without seeking incremental
financing via equity instruments or derivatives at valuations which
are disconnected from the intrinsic value of our business and would
be dilutive to our investor base.”
About Creative Realities,
Inc.Creative Realities helps clients use the latest
omnichannel technologies to inspire better customer experiences.
CRI designs, develops and deploys consumer experiences for high-end
enterprise-level networks, and is actively providing recurring SaaS
and support services across diverse vertical markets, including but
not limited to automotive, advertising networks, apparel &
accessories, convenience stores, food service/QSR, gaming, theater,
and stadium venues. The Company has operations across North America
with active installations in more than 10 countries.
Cautionary Note on Forward-Looking
StatementsThis press release contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, Section 21E of the Securities Exchange Act of
1934, as amended, and the Private Securities Litigation Reform Act
of 1995, and includes, among other things, discussions of our
business strategies, product releases, future operations and
capital resources. Words such as "estimates," "projected,"
"expects," "anticipates," "forecasts," "plans," "intends,"
"believes," "seeks," "may," "will," "should," "future," "propose"
and variations of these words or similar expressions (or the
negative versions of such words or expressions) are intended to
identify forward-looking statements. Forward-looking statements are
not guarantees of future performance, conditions or results. They
are based on the opinions, estimates and beliefs of management as
of the date such statements are made, and they are subject to known
and unknown risks, uncertainties, assumptions and other factors,
many of which are outside of our control, that may cause the actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking statements. Some of these risks are discussed in
the “Risk Factors” section contained in Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2021 and the
Company’s subsequent filings with the U.S. Securities and Exchange
Commission. Important factors, among others, that may affect actual
results or outcomes include: our ability to effectively integrate
Reflect’s business operations, our strategy for customer retention,
growth, product development, market position, financial results and
reserves, our ability to execute on our business plan, our ability
to retain key personnel, potential litigation, supply chain
shortages, and general economic and market conditions impacting
demand for our products and services, including those as a result
of the COVID-19 pandemic. Readers should not place undue reliance
upon any forward-looking statements. We assume no obligation to
update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise, except as
required by law.
Contacts
Media InquiriesChristina
Daviescdavies@ideagrove.com
Investor
Relationsir@cri.com
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