CRI, RNIN, BI Officially Merge; Behold The Power

CRIBIRNIN

The merger of Creative Realities and Wireless Ronin Technologies, and by extension Broadcast International, has closed.

This, if you are into over-reaching, unsubstantiated boasts, “results in one of the largest and most innovative marketing technology solutions companies in the world.”

Sure it does.

I can’t say much about CRI, but Ronin and BI have not exactly lit it up on their own – with RNIN racking up a $100 million deficit and an endless string of red-soaked quarterlies, and BI losing its one whale account a couple of years back.

There was some doubt as to whether the deal would happen because of intricate funding stipulations, but apparently they got over that and the combined bunch raised yet more money.

In connection with the merger, the combined company sold $5.19 million of Series A Convertible Preferred Stock to institutional and accredited investors, including an additional investment from an affiliate of Pegasus Capital Advisors. The preferred stock entitles its holders to a 6% dividend, payable semi-annually in cash or in kind, and may be converted into common stock at the option of a holder at an initial conversion price of $0.40 per share. Subject to certain conditions, the company may call and redeem the preferred shares after three years. During such time as a majority of the preferred stock sold remains outstanding, holders will have the right to elect a member to the Board of Directors. Purchasers of the preferred stock also received five-year warrants to purchase an aggregate of 6.49 million shares of common stock at a per-share price of $0.50. 

The news release says:

Under the terms of the agreement and as previously announced, Creative Realities merged into a subsidiary of Wireless Ronin, with the sole equity holder of Creative Realities (an affiliate of Pegasus Capital Advisors), receiving approximately 59.2% of the outstanding shares of Wireless Ronin common stock, calculated on a modified fully-diluted basis, including the shares of common stock issued in connection with Wireless Ronin’s merger with Broadcast International, Inc. that closed on August 1, 2014. In the transaction, Creative Realities’ sole equity holder also received warrants to acquire an additional 1.5% of Wireless Ronin’s common stock. The combined companies are now operating under the Creative Realities brand name and will trade on the OTCQB under the ticker symbol RNIN.

Paul Price, previously Chief Executive Officer (“CEO”) of Creative Realities has been named CEO of the combined company and will also serve as a director. Scott Koller, previously CEO of Wireless Ronin has been named President of the combined company, and John Walpuck, previously Chief Financial Officer (“CFO”) of Wireless Ronin has been named Chief Operating Officer and CFO of the combined company. The combined company will be headquartered in New York, NY with operational facilities in Fairfield, NJ, Minneapolis, MN, Salt Lake City, UT, and Windsor, Ontario.

Commenting on the merger, Paul Price stated, “We are very excited to have completed this merger and look forward to providing our customers, whether retailers, venue operators or brands, with the latest technologies to create better shopping experiences. Collectively, with Wireless Ronin’s cloud-based content management platform, Broadcast International’s award-winning Managed Media Services platform and Creative Realities’ full service approach, we now offer customers a one-stop, single source solution. We truly believe that through the combination of our resources which include the latest innovations in software, display, sensor and mobile technologies, we are better positioned to deliver the most effective marketing technology programs to help improve the in-store engagement of customers, increase customer loyalty and drive increased sales.”

Since its inception, Creative Realities has partnered with some of the world’s most recognized retailers, venues and brands. Creative Realities provides a host of marketing technology solutions across multiple verticals, including beauty, fashion, consumer packaged goods, digital place-based media networks, electronics, eyewear, financial services, health and wellness, and hospitality. Through the combination of the three companies, Creative Realities counts among its customers Adidas, Adspace, Aramark, Calvin Klein, Caterpillar, Chrysler, KFC, Macy’s, Nestle, Rite Aid, Sunglass Hut, and many more.

Price continued, “We see significant growth opportunities for our company both near- and long-term, and with both existing and new global customers. Companies no longer need to work with multiple vendors as we can provide them with a full-service offering that begins in the planning and design stage and runs all the way through in-store implementation. Furthermore, we have the tools and wherewithal to help retailers and brands effectively manage their programs upon roll-out, while quickly adapting to consumer preferences and any changes in their strategies. The seniority of our management team and their collective experiences across marketing categories and technologies represent a truly unique combination of talents to help retailers and brands leverage marketing technology.”

In conjunction with the closing of the merger, the combined company is providing limited guidance for the financial performance of the combined company. The combined company expects combined 2014 revenue to be in a range of $23-26 million, and Earnings before Interest, Tax, Depreciation and Amortization (EBITDA), a non-GAAP measure, to be approximately breakeven for the full calendar year 2014. The company does not, however, intend to provide ongoing guidance on the company’s future financial performance.