Business
Creative Realities Announces 2nd Amendment to Merger Agreement; Extends Secured Promissory Note Maturity and Settles Working Capital
LOUISVILLE, Ky., Feb. 15, 2023 (GLOBE NEWSWIRE) -- Creative Realities, Inc. (“Creative Realities,” “CRI,” or the “Company”) (NASDAQ: CREX, CREXW), a leading
About this update from Creative Realities, Inc.
[{"type":"text","content":"LOUISVILLE, Ky., Feb. 15, 2023 (GLOBE NEWSWIRE) -- Creative Realities, Inc. (“Creative Realities,” “CRI,” or the “Company”) (NASDAQ: CREX, CREXW), a leading provider of digital engagement solutions, announced the amendment of its agreements related to its previous acquisition of Reflect Systems, Inc. (“Reflect”) via merger on February 17, 2022 (the “Merger”), which, in part, extended the maturity date of the $2.5 million Secured Promissory Note by one year, from February 17, 2023 to February 17, 2024. Extension of Secured Promissory NoteOn February 11, 2023, Creative Realities and RSI Exit Corporation (the “Stockholders’ Representative”) executed an amendment to the $2.5 million Secured Promissory Note (the “Note Amendment”). The original terms of the note required the Company to pay to the Stockholders’ Representative a balloon payment of $1.25 million, plus all accrued and unpaid interest, on its stated maturity date, February 17, 2023. The Note Amendment eliminated the balloon payment, extending the maturity date for a one-year period, to February 17, 2024. During the extended period, the Company will continue to make monthly principal payments of $104,166.67, and the annual interest rate on the outstanding principal increased from 0.59% to 4.60%, which will accrue and is payable in full on the new maturity date. Second Amendment to Merger AgreementOn February 11, 2023, Creative Realities and Stockholders’ Representative executed a Second Amendment to the Merger Agreement, which provided that, among other things, the cash merger consideration payable in the Merger should be reduced by $0.2 million, or the “Claim Amount,” subject to a reduction in the Claim Amount to the extent that Reflect or Creative Realities receives payments of certain accounts receivable of Reflect. An employer retention credit of $0.2 million (the “ERC”) based on the operations of Reflect pre-Merger remains outstanding and will be paid to the Stockholders’ Representative for the benefit of former Reflect stockholders upon receipt, subject to the offset rights of Creative Realities described below. Offset Rights; Payment of Claim AmountIn light of the possible collection of the ERC and the Note Amendment, the parties agreed that the Claim Amount would be reduced by the amount of any ERC received by Creative Realities or Reflect prior to the maturity date...