Creative Realities, Inc. announced the settlement and resolution of its dispute with former stockholders of Reflect Systems, Inc. regarding contingent supplemental cash payments from the Reflect merger. The settlement terminates the company's obligation to pay the Guaranteed Consideration. This resolution provides a great deal of financial flexibility and removes a significant overhang on the company's shares.
The settlement terms include a cash payment of $3 million, which will be paid utilizing the company's existing credit agreement with First Merchants Bank. Additionally, Creative Realities issued a $4 million, 30-month unsecured promissory note that accrues interest at 14.0% per annum. This note requires a balloon payment of $2.3 million on its maturity date, September 14, 2027.
The agreement also includes the issuance of certain warrants to purchase common stock of the company. CEO Rick Mills expressed satisfaction with the settlement, stating it quantifies a payment schedule and eliminates uncertainty through a clear, simplified financing structure. This allows the company to focus on expansion and improved operating results for the remainder of fiscal 2025.
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