Rekor Systems, Inc 10-Q for FY2025 Q3
Rekor Systems, Inc. (REKR)
About this 10-Q
Rekor Systems, Inc filed this 10-Q on November 13, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $14.19M
- up 34.6% from $10.55M a year earlier
- Net loss
- $4.15M
- compared with a net loss of $12.65M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from _________ to _________
Commission File Number:
| Rekor Systems, Inc. |
| (Exact name of registrant as specified in its charter) |
| | | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address principal executive offices)
(Zip Code)
(
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| | | The |
As of November 12, 2025, the Registrant had
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties, including particularly statements regarding our future results of operations and financial position, business strategy, prospective products and services, timing and likelihood of success, plans and objectives of management for future operations and future results of current and anticipated products and services. These statements involve uncertainties, such as known and unknown risks, and are dependent on other important factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance or achievements we express or imply. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described under the sections in our Annual Report on Form 10-K for the year ended December 31, 2024 entitled “Risk Factors” and elsewhere in this Quarterly Report. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the SEC that disclose risks and uncertainties that may affect our business. The forward-looking statements in this Form 10-Q do not reflect the potential impact of any divestiture, merger, acquisition, or other business combination that had not been completed as of the date of this filing. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. We undertake no obligation to update any forward-looking statement as a result of new information, future events or otherwise.
REKOR SYSTEMS, INC. AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED September 30, 2025
REKOR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
| September 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net of allowance for credit losses of $ and $, respectively | ||||||||
| Inventory | ||||||||
| Note receivable, current portion | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Long-term assets | ||||||||
| Property and equipment, net | ||||||||
| Right-of-use operating lease assets, net | ||||||||
| Right-of-use financing lease assets, net | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Note receivable, long-term | ||||||||
| Deposits | ||||||||
| Total long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Notes payable, current portion | ||||||||
| Loan payable, current portion | ||||||||
| Lease liability operating, short-term | ||||||||
| Lease liability financing, short-term | ||||||||
| Contract liabilities | ||||||||
| Liability for ATD Holdback Shares, at fair value | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term Liabilities | ||||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of $ and $, respectively | ||||||||
| Series A Prime Revenue Sharing Notes - related party, net of debt discount of $ and $, respectively | ||||||||
| Loan payable, long-term | ||||||||
| Lease liability operating, long-term | ||||||||
| Lease liability financing, long-term | ||||||||
| Contract liabilities, long-term | ||||||||
| Deferred tax liability | ||||||||
| Other non-current liabilities | ||||||||
| Total long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, $ par value, authorized, shares designated as Series A and shares designated as Series B as of September 30, 2025 and December 31, 2024, respectively. preferred stock was issued or outstanding as of September 30, 2025 or December 31, 2024, respectively. | ||||||||
| Common stock, $ par value; authorized shares; and shares issued as of September 30, 2025 and December 31, 2024, respectively; and shares outstanding as of September 30, 2025 and December 31, 2024, respectively. | ||||||||
| Treasury stock, and shares as of September 30, 2025 and December 31, 2024, respectively. | ( | ) | ( | ) | ||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REKOR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Revenue |
$ | $ | $ | $ | ||||||||||||
| Cost of revenue, excluding depreciation and amortization |
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| Operating expenses: |
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| General and administrative expenses |
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| Selling and marketing expenses |
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| Research and development expenses |
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| Depreciation and amortization |
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| Total operating expenses |
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| Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income (expense): |
||||||||||||||||
| Loss on extinguishment of debt |
( |
) | ||||||||||||||
| Interest expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Gain (loss) on remeasurement of ATD Holdback Shares |
( |
) | ||||||||||||||
| Loss on offering costs - Prepaid Advance |
( |
) | ( |
) | ||||||||||||
| Gain on the sale of Global Public Safety |
||||||||||||||||
| Other (expense) income |
( |
) | ||||||||||||||
| Total other (expense) income, net |
( |
) | ( |
) | ( |
) | ||||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Loss per common share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Weighted average shares outstanding |
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| Basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REKOR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Dollars in thousands, except share amounts)
(Unaudited)
| Shares of Common Stock |
Common Stock |
Shares of Treasury Stock |
Treasury Stock at Cost |
Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders' Equity |
||||||||||||||||||||||
| Balance as of July 1, 2025 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Stock-based compensation |
- | - | ||||||||||||||||||||||||||
| Issuance upon exercise of stock options |
- | |||||||||||||||||||||||||||
| Issuance upon vesting of restricted stock units |
- | |||||||||||||||||||||||||||
| Shares withheld upon vesting of restricted stock units |
( |
) | ||||||||||||||||||||||||||
| Issuance of common stock pursuant to the 2025 Sales Agreement, net |
- | |||||||||||||||||||||||||||
| Net loss |
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Balance as of September 30, 2025 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Balance as of July 1, 2024 |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||||||||
| Stock-based compensation |
- | - | ||||||||||||||||||||||||||
| Issuance upon vesting of restricted stock units |
- | |||||||||||||||||||||||||||
| Shares withheld upon vesting of restricted stock units |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Issuance upon exercise of 2023 Warrants |
- | |||||||||||||||||||||||||||
| Shares issued under the Prepaid Advance |
||||||||||||||||||||||||||||
| Net loss |
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Balance as of September 30, 2024 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Balance as of January 1, 2025 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Stock-based compensation |
- | - | ||||||||||||||||||||||||||
| Issuance upon exercise of stock options |
- | |||||||||||||||||||||||||||
| Issuance upon vesting of restricted stock units |
- | |||||||||||||||||||||||||||
| Shares withheld upon vesting of restricted stock units |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| ATD Holdback Shares |
- | |||||||||||||||||||||||||||
| Issuance of common stock pursuant to the 2025 Sales Agreement, net |
||||||||||||||||||||||||||||
| Net loss |
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Balance as of September 30, 2025 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Balance as of January 1, 2024 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
| Stock-based compensation |
- | - | ||||||||||||||||||||||||||
| Issuance upon exercise of stock options |
- | |||||||||||||||||||||||||||
| Issuance upon vesting of restricted stock units |
- | |||||||||||||||||||||||||||
| Shares withheld upon vesting of restricted stock units |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||
| Shares issued as part of the ATD Acquisition |
- | |||||||||||||||||||||||||||
| Retirement of the 2023 Promissory Notes |
||||||||||||||||||||||||||||
| 2024 Public Offering |
- | |||||||||||||||||||||||||||
| Issuance upon exercise of 2023 Warrants |
- | |||||||||||||||||||||||||||
| Shares issued under the Prepaid Advance |
||||||||||||||||||||||||||||
| Net loss |
- | - | ( |
) | ( |
) | ||||||||||||||||||||||
| Balance as of September 30, 2024 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REKOR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| Nine Months Ended September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Cash Flows from Operating Activities: |
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| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Bad debt expense |
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| Depreciation |
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| Amortization of right-of-use financing lease asset |
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| Non-cash operating lease expense |
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| Share-based compensation |
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| Amortization of debt discount |
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| Amortization of intangible assets |
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| Loss due to the remeasurement of the STS Earnout and Contingent Consideration, net |
||||||||
| Loss (gain) on remeasurement of ATD Holdback Shares |
( |
) | ||||||
| Gain on sale of property and equipment |
( |
) | ( |
) | ||||
| Loss on financing lease abandonment |
||||||||
| Gain on the sale of Global Public Safety |
( |
) | ||||||
| Loss on extinguishment of debt |
||||||||
| Loss on the remeasurement of Prepaid Advance |
||||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
( |
) | ||||||
| Inventory |
( |
) | ||||||
| Other current assets |
||||||||
| Deposits |
||||||||
| Accounts payable, accrued expenses and other current liabilities |
( |
) | ( |
) | ||||
| Contract liabilities |
( |
) | ||||||
| Lease liability |
( |
) | ( |
) | ||||
| Net cash used in operating activities |
( |
) | ( |
) | ||||
| Cash Flows from Investing Activities: |
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| Capital expenditures |
( |
) | ( |
) | ||||
| Proceeds from the sale of property and equipment |
||||||||
| Proceeds from the sale of Global Public Safety |
||||||||
| Cash paid for ATD acquisition, net |
( |
) | ||||||
| Net cash used in investing activities |
( |
) | ( |
) | ||||
| Cash Flows from Financing Activities: |
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| Proceeds from 2025 Sales Agreement, net |
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| Proceeds from public offering |
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| Net proceeds from the Prepaid Advance |
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| Proceeds from notes receivable |
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| Net proceeds from exercise of options |
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| Net proceeds from exercise of warrants |
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| Payments related to financing leases |
( |
) | ( |
) | ||||
| Repayments of loans payable |
( |
) | ( |
) | ||||
| Repurchases of common stock |
( |
) | ( |
) | ||||
| Repayment of STS Notes |
( |
) | ( |
) | ||||
| Repayment of 2023 Promissory Notes |
( |
) | ||||||
| Net cash provided by financing activities |
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| Net decrease in cash, cash equivalents and restricted cash |
( |
) | ( |
) | ||||
| Cash, cash equivalents and restricted cash at beginning of period |
||||||||
| Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
| Reconciliation of cash, cash equivalents and restricted cash: |
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| Cash and cash equivalents at end of period |
$ | $ | ||||||
| Restricted cash and cash equivalents at end of period |
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| Cash, cash equivalents and restricted cash at end of period |
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
REKOR SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – GENERAL, BASIS OF PRESENTATION, AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Rekor Systems, Inc. (“Rekor”) was formed in February 2017. The consolidated financial statements include the accounts of Rekor, the parent company, and its wholly-owned subsidiaries Rekor Recognition Systems, Inc., Waycare Technologies Inc. and Waycare Technologies Ltd. (collectively, “Waycare”), Southern Traffic Services, Inc. (“STS”) All Traffic Data Services, LLC (“ATD”) and Rekor Labs, LLC (collectively, the “Company”).
The Company provides roadway intelligence products and services, working to address critical needs in public safety, urban mobility, and transportation management. The Company's vision is to improve the lives of citizens and the world around them by enabling safer, smarter, and greener roadways and communities. The Company works towards this vision by collecting, connecting, and organizing the world’s mobility data, and making it accessible and useful to its customers for real-time insights and decisioning for situational awareness, rapid response, risk mitigation, and predictive analytics for resource and infrastructure planning and reporting.
These unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s unaudited condensed consolidated financial statements as of and for the periods ended September 30, 2025 and 2024.
The financial data and other information disclosed in these notes are unaudited. The results for the three and nine months ended September 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025.
These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the full year ended December 31, 2024. The year-end condensed balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP.
Dollar amounts, except per share data, in the notes to these unaudited condensed consolidated financial statements are rounded to the nearest $1,000.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the extensive use of management’s estimates. Management uses estimates and assumptions in preparing consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and reported revenues and expenses. On an ongoing basis, the Company evaluates its estimates, including those related to the collectability of accounts receivable, the fair value of intangible and long lived-assets, the fair value of goodwill, the fair value of debt and equity instruments, income taxes and the determination of standalone selling prices in contracts with customers that contain multiple performance obligations. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions.
Liquidity and Going Concern
Management has assessed going concern uncertainty to determine whether there is sufficient cash on hand, together with expected capital raises and working capital, to assure operations for a period of at least one year from the date these unaudited condensed consolidated financial statements are issued, which is referred to as the “look-forward period”, as defined in U.S. GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management has considered various scenarios, forecasts, projections and estimates and will make certain key assumptions. These assumptions include, among other factors, its ability to raise additional capital, the expected timing and nature of the Company’s programs and projected cash expenditures and its ability to delay or curtail these programs or expenditures to the extent management has the proper authority to do so and considers it probable that those implementations can be achieved within the look-forward period.
The Company has generated losses and negative operating cashflows since its inception and has relied on external sources of financing to support cash flow from operations. The Company attributes losses to non-capital expenditures related to the scaling of existing products and services, development of new products and services and marketing efforts associated with these products and services. As of and for the nine months ended September 30, 2025, the Company had working capital of $
Based on the Company's current business plan assumptions and the expected cash burn rate, the Company believes that the existing cash is insufficient to fund its current level of operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the next twelve months following the issuance of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
The Company is actively monitoring its operations, cash on hand and working capital. The Company continuously reviews and explores external financing options in order to sustain its operations. If additional financing is not available, the Company also has contingency plans to continue to reduce or defer expenses and cash outlays in the look-forward period.
Segment Information
The Company operates as a operating and reportable segment. Rekor offers a variety of platforms that collect, connect and organize mobility data, making it accessible and useful to its customers for real-time insights and decision-making.
The Company’s chief operating decision maker (“CODM”) is the interim president and chief executive officer.
The Company does not report balance sheet information by segment since it is not reviewed by the CODM.
The CODM uses net income to assess segment performance. The significant expenses regularly reviewed by the CODM are cost of revenues, excluding depreciation and amortization and the Company’s operating expenses. The presentation of these items to the CODM is consistent with the Company’s presentation of these items on the unaudited condensed consolidated statement of operations.
Goodwill
The excess purchase consideration over the fair value of acquired assets and assumed liabilities is recorded as goodwill. Goodwill is subject to impairment testing on an annual basis. The Company will assess goodwill for impairment annually on October 1st of each year, or more often if events or changes in circumstances indicate that it might be impaired, by comparing its carrying value to the reporting unit’s fair value. The Company will perform a qualitative assessment, to determine its fair value which includes an evaluation of relevant events and circumstances, including macroeconomic, industry and market conditions, the Company's overall financial performance, and trends in the value of the Company's common stock. As of September 30, 2025, the Company did not identify any events that would cause it to assess goodwill for impairment.
Fair Value of Financial Instruments
The carrying amounts reported in the consolidated balance sheets for accounts receivable, notes receivable and accounts payable approximate fair value as of September 30, 2025 and December 31, 2024 because of the relatively short-term maturity of these financial instruments. The carrying amount reported for long-term debt and long-term receivables approximates fair value as of September 30, 2025 and December 31, 2024, given management’s evaluation of the instrument’s current rate compared to market rates of interest and other factors.
The determination of fair value is based upon the fair value framework established by ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”). Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. ASC 820 also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by
observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities
within the fair value hierarchy.
The Company’s goodwill and other intangible assets are measured at fair value at the time of acquisition and analyzed on a recurring and non-recurring basis for impairment, respectively, using Level 3 inputs.
The Company does not have any Level 1 or Level 2 assets or liabilities. The Company considers its contingent consideration and ATD Holdback Shares to be Level 3 securities as the fair value measurement is based on significant inputs that are unobservable in the market and thus represents a Level 3 fair value measurement.
There were no changes in levels during the period ended September 30, 2025.
The following is a rollforward of the company’s contingent consideration liability and ATD Holdback Shares:
| STS Contingent Consideration | ||||
| Balance as of January 1, 2025 | $ | |||
| Change in fair value | ||||
| Balance as of September 30, 2025 | $ | |||
| ATD Holdback Shares | ||||
| Balance as of January 1, 2025 | $ | |||
| Loss due to change in fair value | ||||
| Settlement of ATD Holdback Shares | ( | ) | ||
| Balance as of September 30, 2025 | $ | |||
Revenue Recognition
The Company derives its revenues primarily from the licensing and sale of its roadway data and traffic management product and service offerings. These offerings include a mixture of data collection, implementation, engineering, customer support and maintenance services, as well as software and hardware. Revenue is recognized upon transfer of control of promised products and services to the Company’s customers, in an amount that reflects the consideration the Company expects to receive in exchange for those products and services.
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:
| ● | Identification of the contract, or contracts, with a customer | |
| ● | Identification of the performance obligations in the contract | |
| ● | Determination of the transaction price | |
| ● | Allocation of the transaction price to the performance obligations in the contract | |
| ● | Recognition of revenue when, or as, performance obligations are satisfied |
The following table presents a summary of revenue (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Recurring revenue | $ | $ | $ | $ | ||||||||||||
| Product and service revenue | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Revenues
Recurring revenue
Recurring revenue includes the Company’s SaaS revenue, subscription revenue, eCommerce revenue and customer support revenue. The Company generates recurring revenue both from long-term contracts with customers that provide for periodic payments and from short-term contracts that are automatically invoiced on a monthly basis. The Company’s recurring revenue is generated by a combination of direct sales, partner-assisted sales, and eCommerce sales.
Recurring revenues are generated through the Company’s Software-as-a-Service ("SaaS") model, where the Company provides customers with the right to access the Company’s software solutions for a fee. These services are made available to the customer continuously throughout the contractual period. However, the extent to which the customer uses the services may vary at the customer’s discretion. The contracts with customers are generally for a term of one to five years. The payments for SaaS solutions may be received either at the inception of the arrangement or over the term of the arrangement. These SaaS solutions are considered to have a single performance obligation where the customer simultaneously receives and consumes the benefit, and as such, we recognize revenue for these arrangements ratably over the term of the contractual agreement.
The Company also currently receives recurring revenues under contracts entered into using a subscription model for data collection services and bundled hardware and software over a period. Payments for these services and subscriptions are received periodically over the term of the agreement and revenue is recognized ratably over the term of the agreement. In addition, some of our subscription revenue includes providing, through a web server, access to the Company’s software solutions, a self-managed database, and a cross-platform application programming interface. The subscription arrangements with these customers typically do not provide the customer with the right to take possession of the Company’s software at any time. Instead, customers are granted continuous access to the Company’s solutions over the contractual period. The Company’s subscription services arrangements are non-cancelable and do not contain refund-type provisions. Accordingly, any fixed consideration related to the arrangement is generally recognized as recurring revenue on a straight-line basis over the contract term beginning on the date access to the Company’s software is provided.
eCommerce revenue is defined by the Company as revenue obtained through direct sales on the Company’s eCommerce platform. The Company’s eCommerce revenue generally includes subscriptions to the Company’s vehicle recognition software that can be purchased online and activated through a digital key. The Company's contracts with eCommerce customers are generally for a term of one month with automatic renewal each month. The Company invoices and receives fees from its customers monthly. Revenue is recognized ratably over the term of the contract.
Customer support revenue is associated with perpetual licenses and long-term subscription arrangements and consists primarily of technical support and product updates. The Company’s customer support team is ready to provide these maintenance services, as needed, to the customer during the contract term. The customer benefits evenly throughout the contract period from the guarantee that the customer support resources and personnel will be available to them. As customer support is not critical to the customers' ability to derive benefit from their right to use the Company’s software, customer support is considered a distinct performance obligation when sold together with a long-term license for software. Customer support for perpetual and term licenses is renewable, generally on an annual basis, at the option of the customer. Customer support for subscription licenses is renewable concurrently with such licenses for the same duration of time. Revenue for customer support is recognized ratably over the contract period based on the start and end dates of the customer support obligation, in line with how the Company believes services are provided.
Product and service revenue
Implementation revenue is recognized when the Company provides installation, construction and other implementation services to its customers. These services involve a fee and are typically associated with the sale of the Company’s data collection services, software and hardware. The Company’s implementation revenue is recognized over time as the implementation is completed.
In addition to recurring revenue from software sales, the Company recognizes point-in-time revenue related to the sale of perpetual software licenses. The Company sells perpetual licenses that provide customers the right to use software for an indefinite period in exchange for a one-time license fee, which is generally paid at contract inception. The Company’s perpetual licenses provide a right to use intellectual property (“IP”) that is functional in nature and has significant stand-alone functionality. Accordingly, for perpetual licenses of functional IP, revenue is recognized at the point-in-time when the customer has access to the software, which normally occurs once software activation keys have been made available to the customer.
The Company also generates revenue through the sale of hardware through its partner program and internal sales force distribution channels. The Company satisfies its performance obligation upon the transfer of control of hardware to its customers. The Company invoices end-user customers upon transfer of control of the hardware to its customers. The Company provides hardware installation services to customers which range from one to six months. The revenue related to the installation component is recognized over time as the implementation is completed.
Contactless compliance revenues reflect arrangements to provide hardware systems and services that identify uninsured motor vehicles, notify owners of non-compliance through a diversion citation, and assist them in obtaining the required insurance as an alternative to traditional enforcement methods. Revenue is recognized monthly based on the number of diversion citations collected by the relevant jurisdiction.
The Company also generates revenue through its engineering services, which include short-term data collections services. These services are provided at the request of its customers and the revenue related to these services is recognized over time as the service is completed.
Revenue by Customer Type
The following table presents a summary of revenue by customer type (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Urban Mobility | $ | $ | $ | $ | ||||||||||||
| Transportation Management | ||||||||||||||||
| Public Safety | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Urban Mobility
Urban mobility revenue consists of revenue derived from the Company's roadway data aggregation activities. These activities can include the use of software applications that are part of the Rekor Discover® platform, the primary application being Rekor’s count, class & speed application. The application fully automates the aggregation of Federal Highway Administration (“FHWA”) 13-bin vehicle classification, speed, and volume data. Revenues associated with the deployment of other traffic sensors, traffic studies, or construction associated with traffic data collection are also part of data aggregation revenue, which is generated through both recurring pay-for-data contracts and hardware sales with a recurring software maintenance component.
Transportation Management
Transportation management revenue is associated with the Rekor Command® platform and the associated applications underneath the platform. These provide traffic operations and traffic management centers with support through actionable, real-time incident reports integrated into a cross-agency communication and response system. Revenue is generated through contracts that include an upfront as well as recurring component.
Public Safety
Public safety revenue consists of licensing of the Rekor Scout® platform, licensing of Rekor CarCheck™ API, licensing of Rekor’s vehicle recognition software, as well as systems deployed for security, contactless compliance and public safety. Revenue is generated through recurring and perpetual license sales as well as one-time hardware sales.
Performance obligations
The Company contracts with customers in a variety of ways, including contracts that obligate the Company to provide services over time. Some contracts include performance obligations for several distinct services. For those contracts that have multiple distinct performance obligations, the Company allocates the total transaction price to each performance obligation based on its relative standalone selling price, which is determined based on the Company’s overall pricing objectives, taking into consideration market conditions and other factors. This may result in a deferral or acceleration of revenue recognized relative to cash received for each distinct performance obligation.
Where performance obligations for the remaining term of a contract with a customer are not yet satisfied or have only been partially satisfied as of a particular date, the unsatisfied portion is to be recognized as revenue in the future. As of September 30, 2025, the unsatisfied portion of the remaining performance obligation was approximately $
Unbilled accounts receivable
The timing of revenue recognition, billings and cash collections result in billed accounts receivable, unbilled accounts receivables, and contract liabilities on the unaudited condensed consolidated balance sheets. Billed and unbilled accounts receivable are presented as part of accounts receivable, net, on the unaudited condensed consolidated balance sheets. When billing occurs after services have been provided, such unbilled amounts will generally be billed and collected within 60 to 120 days, but typically no longer than over the next twelve months. Unbilled accounts receivables of $
Contract liabilities
When the Company advance bills clients prior to providing services, generally such amounts will be earned and recognized in revenue within the next six months to five years, depending on the length of the period during which services are to be provided. This revenue and the corresponding decrease in liabilities are recognized on a contract-by-contract basis at the end of each reporting period and reflected on the unaudited condensed consolidated balance sheet for such period. During the nine months ended September 30, 2025, $
The services due for contract liabilities described above are shown below as of September 30, 2025 (dollars in thousands):
| 2025, remaining | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ |
Cash and Cash Equivalents, and Restricted Cash
The Company considers all highly-liquid debt instruments to be cash equivalents.
Cash subject to contractual restrictions and not readily available for use is classified as restricted cash. The Company’s restricted cash balances are primarily made up of cash collected on behalf of certain client jurisdictions. Restricted cash for these client jurisdictions as of September 30, 2025 and December 31, 2024 were $
Concentrations of Credit Risk
The Company deposits its temporary cash investments with highly rated quality financial institutions that are located in the United States and Israel. The United States deposits are federally insured up to $250,000 per insured bank, for each account ownership category. As of September 30, 2025 and December 31, 2024, the Company had deposits totaling $
Customer B accounted for
As of September 30, 2025, Customer B accounted for
Accounts Payable and Other Current Liabilities
As of September 30, 2025 and December 31, 2024, amounts owed to board members of $
A summary of other current liabilities is as follows (in thousands):
| September 30, 2025 | December 31, 2024 | |||||||
| Payroll and payroll related expense | $ | $ | ||||||
| Right of offset to restricted cash | ||||||||
| STS Contingent Consideration, at fair value | ||||||||
| Other | ||||||||
| Other current liabilities | $ | $ | ||||||
New Accounting Pronouncements Effective in Future Periods
In December 2023, the FASB issued ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold. The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold. The guidance is effective for the Company's annual periods beginning January 1, 2025 on a prospective basis, with a retrospective option, and early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which is intended to provide more detailed information about specified categories of expenses (purchases of inventory, employee compensation, depreciation and amortization) included in certain expense captions presented on the consolidated statement of operations. The guidance in this ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either (1) prospectively to financial statements issued for periods after the effective date of this ASU or (2) retrospectively to all prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.
The Company does not believe that any recently issued, but not yet effective, accounting standards, other than the standards discussed above, could have a material effect on the accompanying unaudited condensed consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.
Additional significant accounting policies of the Company are also described in Note 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
NOTE 2 – ACQUISITION
ATD Acquisition
On January 2, 2024 (the “Closing Date”), the Company acquired All Traffic Data Services, LLC, a Colorado limited liability company (“ATD”), pursuant to that certain Interest Purchase Agreement (the “ATD Purchase Agreement”), dated as of the Closing Date, by and among the Company, ATD and All Traffic Holdings, LLC (the “Seller”). The Seller is a portfolio company of Seaport Capital, a private equity firm. ATD is engaged in the business of traffic data collection. Under the terms of the ATD Purchase Agreement, the Company acquired all of the issued and outstanding limited liability company interests of ATD (the “ATD Acquisition”).
The acquisition met the criteria to be accounted for as a business combination in accordance with ASC 805, Business Combinations (“ASC 805”). This method requires, among other things, that assets acquired, and liabilities assumed be recognized at their fair values as of the acquisition date and that the difference between the fair value of the consideration paid for the acquired entity and the fair value of the net assets acquired be recorded as goodwill, which is not amortized but is tested at least annually for impairment. The aggregate purchase price for the interests of ATD was approximately $
The Company incurred $
In accordance with the acquisition method of accounting for a business combination, the purchase price has been allocated to the assets acquired and liabilities assumed based on their fair values as of the Closing Date. The table below shows the breakdown related to the purchase price allocation for the acquisition (dollars in thousands):
| Consideration | ||||
| Cash paid | $ | |||
| Liability classified holdback shares ( shares measured at fair value as of the Closing Date) | ||||
| Common stock issued ( shares at closing price of $ per share) | ||||
| Total Consideration | $ | |||
| Recognized amounts of identifiable assets acquired and liabilities assumed |
| |||
| Assets | ||||
| Cash and cash equivalents | $ | |||
| Accounts receivable | ||||
| Property and equipment | ||||
| Right-of-use operating lease assets | ||||
| Other current assets | ||||
| Intangible assets | ||||
| Total assets acquired | $ | |||
| Liabilities | ||||
| Accounts payable and accrued expenses | $ | |||
| Lease liability operating | ||||
| Other current liabilities | ||||
| Total liabilities assumed | $ | |||
| Fair value of identifiable net assets acquired | ||||
| Purchase price consideration | ||||
| Goodwill | $ | |||
NOTE 3 - LEASES
The Company has operating leases for office facilities in various locations throughout the United States and Israel. Additionally, the Company has financing leases for vehicles it uses for its operations throughout the United States. The Company’s leases have remaining terms of to years. Certain of the Company’s leases include options to extend the term of the lease or to terminate the lease prior to the end of the initial term. When it is reasonably certain that the Company will exercise the option, the Company will include the impact of the option in the lease term for purposes of determining total future lease payments.
During the first quarter of 2025, the Company entered into a lease amendment that modified the timing of contractual lease payments related to its lease in Columbia Maryland. Based on the Company's evaluation, the amendment qualified as a lease modification under ASC 842. As a result of the modification, the Company recognized a decrease of $
Lease cost recognized in our consolidated statements of operations is summarized as follows (dollars in thousands):
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Operating lease cost |
$ | $ | ||||||||||||||
| Finance lease cost |
||||||||||||||||
| Amortization of right-of-use assets |
||||||||||||||||
| Interest on lease liabilities |
||||||||||||||||
| Finance lease cost |
||||||||||||||||
| Total lease cost |
$ | $ | $ | $ | ||||||||||||
Other information about lease amounts recognized in our consolidated financial statements is as follows:
| September 30, 2025 |
December 31, 2024 |
|||||||
| Weighted-average remaining lease term (years) |
||||||||
| Operating leases |
||||||||
| Financing leases |
||||||||
| Weighted-average discount rate |
||||||||
| Operating leases |
% | % | ||||||
| Financing leases |
% | % | ||||||
Maturities of operating and financing lease liabilities for continuing operations on September 30, 2025 were as follows (dollars in thousands):
| Operating Leases |
Financing Leases |
|||||||
| 2025, remaining |
$ | $ | ||||||
| 2026 |
||||||||
| 2027 |
||||||||
| 2028 |
||||||||
| 2029 |
||||||||
| Thereafter |
||||||||
| Total lease payments |
||||||||
| Less imputed interest |
||||||||
| Maturities of lease liabilities |
$ | $ | ||||||
NOTE 4 – SUPPLEMENTAL NON CASH DISCLOSURES OF CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the nine months ended September 30, 2025 and 2024 were as follows (dollars in thousands):
| Nine Months Ended September 30, |
||||||||
| 2025 |
2024 |
|||||||
| Cash paid for interest |
$ | $ | ||||||
| Cash paid for taxes |
||||||||
| Increase in accounts payable and accrued expenses related to purchases of property and equipment |
||||||||
| Increase in accounts payable and accrued expenses related to purchases of inventory |
||||||||
| Increase in inventory related to the transfer of property and equipment |
( |
) | ||||||
| Decrease in deposits related to property and equipment received |
||||||||
| Decrease in deposits related to Inventory |
( |
) | ||||||
| Abandonment of financing lease |
||||||||
| Contract modification resulting in a measurement of an operating lease |
||||||||
| Non-cash financing activities: |
||||||||
| Settlement of ATD Holdback Shares with common stock |
||||||||
| Fair market value of shares issued in connection with the acquisition of ATD |
||||||||
| Fair value of ATD Holdback Shares at the acquisition date |
||||||||
| 2023 Promissory Note redemption premium settled in shares of the Company’s common stock |
||||||||
| Conversion of Prepaid Advance to common stock |
||||||||
| New Leases under ASC-842: |
||||||||
| Right-of-use assets obtained in exchange for new finance lease liabilities |
||||||||
| Right-of-use assets obtained in exchange for new operating lease liabilities |
||||||||
NOTE 5 – INTANGIBLE ASSETS
Intangible Assets Subject to Amortization
The following provides a breakdown of identifiable intangible assets, net as of September 30, 2025 and December 31, 2024 (dollars in thousands):
| September 30, 2025 |
December 31, 2024 |
|||||||
| Customer relationships |
$ | $ | ||||||
| Marketing related |
||||||||
| Internally capitalized software |
||||||||
| Total |
||||||||
| Less: accumulated amortization |
( |
) | ( |
) | ||||
| Identifiable intangible assets, net |
$ | $ | ||||||
These intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the three months ended September 30, 2025 and 2024 was $
As of September 30, 2025, the estimated impact from annual amortization from intangible assets for each of the next five fiscal years and thereafter is as follows (dollars in thousands):
| 2025, remaining |
$ | |||
| 2026 |
||||
| 2027 |
||||
| 2028 |
||||
| 2029 |
||||
| Thereafter |
||||
| Total |
$ |
NOTE 6 – DEBT
On June 17, 2022, pursuant to the terms of the Company’s acquisition of STS, the Company issued an aggregate of $
Series A Prime Revenue Sharing Notes
On December 15, 2023, the Company issued $
Interest is based on revenue received from an initial pool of “prime” accounts which are related to contracts from transportation agencies in five states, each of which has been highly rated for their respective unsecured general obligation debt by nationally recognized credit rating agencies. The Company entered into a base Indenture for the Series A Prime Revenue Sharing Notes as of December 15, 2023 with Argent Institutional Trust Company, as trustee. The Indenture creates a first priority security interest for the benefit of the holders of all subsequent notes issued under the Indenture. The Series A Prime Revenue Sharing Notes rank senior to the Company’s existing and future secured and unsecured debt with respect to the pool of revenue securing the Series A Prime Revenue Sharing Notes.
As part of the terms of the Series A Prime Revenue Sharing Notes the Company is required to maintain an interest reserve related to not less than three times the next monthly interest payment. Additionally, there is a sinking fund requirement which takes effect if the three year value of eligible contracts is less than
The Company may prepay the Series A Prime Revenue Sharing Notes at any time up until December 15, 2026 by paying a premium ranging from
Interest Expense
The following table presents the interest expense net of interest income related to the contractual interest and the amortization of debt issuance costs for the Company’s debt arrangements (dollars in thousands):
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Contractual interest expense |
$ | $ | $ | $ | ||||||||||||
| Amortization of debt issuance costs |
||||||||||||||||
| Total interest expense |
||||||||||||||||
| Less: interest income |
||||||||||||||||
| Total interest expense, net |
$ | $ | $ | $ | ||||||||||||
Schedule of Principal Amounts Due of Debt
The principal amounts due for loans and notes payable are shown below as of September 30, 2025 (dollars in thousands):
| 2025, remaining |
$ | |||
| 2026 |
||||
| 2027 |
||||
| 2028 |
||||
| Total |
||||
| Less unamortized debt discount |
( |
) | ||
| Total notes payable |
$ |
NOTE 7 – INCOME TAXES
The Company maintains a full valuation allowance against its net deferred taxes, outside of the deferred tax liability related to the indefinite lived intangibles, through September 30, 2025.
The Company files income tax returns in Israel, the United States and in various states. No U.S. Federal, state or foreign income tax audits were in process as of September 30, 2025.
The Company evaluated the recoverability of the net deferred income tax assets and the level of the valuation allowance required with respect to such net deferred income tax assets. After considering all available facts, the Company fully reserved for its net deferred tax assets, outside of the deferred tax liability related to the indefinite lived intangibles, because the Company does not believe that it is more likely than not that their benefits will be realized in future periods. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s net deferred income tax assets satisfy the realization standard, the valuation allowance will be reduced accordingly.
For the nine months ended September 30, 2025 and 2024, the Company did record any interest or penalties related to unrecognized tax benefits. It is the Company’s policy to record interest and penalties related to unrecognized tax benefits as part of income tax expense. The 2019 through 2024 tax years remain subject to examination by the Internal Revenue Service. As of September 30, 2025 and December 31, 2024, our evaluation revealed no uncertain tax positions that would have a material impact on the unaudited condensed consolidated financial statements.
For the three and nine months ended September 30, 2025 and 2024, the Company did record any expense or benefit related to income tax.
NOTE 8 – COMMITMENTS AND CONTINGENCIES
From time to time, the Company may be named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, infringement of proprietary rights, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated.
H.C. Wainwright & Co., LLC
In March 2023, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC, ("HCW"), related to a capital raise (see NOTE 9 – STOCKHOLDERS’ EQUITY). That letter agreement contained provisions for both a “tail” fee due to HCW for any subsequent transactions the Company may enter into during the specified tail period with investors introduced to the Company by HCW during the term of the letter, as well as a right of first refusal ("ROFR") to act as the Company's exclusive underwriter or placement agent on any subsequent financing transactions utilizing an underwriter or placement agent occurring within twelve months from the consummation of a transaction pursuant to the engagement letter.
In July 2023, the Company entered into an agreement with one of its warrant holders in connection with the exercise of warrants, which the Company refers to as the July Warrant Exercise Transaction. Subsequent to the July Warrant Exercise Transaction, the Company received a letter from HCW claiming entitlement to certain “tail” fees and warrant consideration stemming from the July Warrant Exercise Transaction. The Company believed then, and believes now, that this claim is without merit. As a result of this claim and for other reasons articulated to HCW, the Company terminated its engagement letter with HCW, including for cause, which, the Company believes, eliminated both the “tail” provision and the ROFR provision with respect to the engagement letter.
On or about October 23, 2023, HCW filed a complaint in New York State Supreme Court asserting a claim for breach of contract against the Company relating to the July Warrant Exercise Transaction. HCW sought to recover compensatory and consequential damages and certain warrants under its letter agreement with Rekor and other fees, not less than a cash fee of $
On February 29, 2024, HCW initiated the new action with the filing of complaint in New York State Supreme Court. In this lawsuit, HCW advances the same breach of contract theory and seeks to recover the same damages as sought in the prior now-dismissed lawsuit. In addition, HCW seeks to recover an additional $
The Company believes HCW's claims are without merit and intends to vigorously defend itself in this lawsuit.
Occupational Safety and Health Administration (“OSHA”) Claim
In 2023 two previous employees of the Company (the “Claimants”) filed a complaint with OSHA (the “OSHA Complaints”) against the Company. Shortly after the OSHA Complaints were filed against the Company, the Company filed a position statement to address the OSHA Complaints. On November 30, 2023, OSHA issued its determination that, based on the information gathered thus far in its investigation, OSHA was unable to conclude that there was reasonable cause to believe that a violation of the statute occurred. OSHA thereby dismissed the complaint.
Thereafter, Claimants appealed the determination by filing objections and requesting a hearing before an Administrative Law Judge. The Company likewise filed a request for an award of attorneys’ fees. On January 4, 2024, the Office of Administrative Law Judges (“OALJ”) processed the appeals and issued its Notice of Docketing and Order of Consolidation. The parties were able to settle the claim filed by one employee in advance of a March 3, 2025 hearing scheduled by the OALJ. After the hearing, at the Court's request, the parties submitted post-hearing briefs in April 2025.
On September 30, 2025, the OALJ issued an Order in Rekor’s favor, dismissing all aspects of Claimant’s Complaint. Claimant subsequently submitted a request for appellate review to the Appellate Review Board (“ARB”). The ARB must accept Claimant’s request for appeal in order to conduct a review of the Order. The ARB has not yet decided if it will accept Claimant’s request for appeal. Generally, the decision to conduct a review must be made within thirty (30) days of the submission of the request. This deadline is likely delayed/stayed by the government shutdown.
The Company believes these claims are without merit and intends to vigorously defend itself in this administrative proceeding.
NOTE 9 – STOCKHOLDERS’ EQUITY
Authorized Common Stock
On April 22, 2024, following approval by the Company's stockholders, the Company amended its charter to increase the number of authorized shares of common stock from
At Market Issuance Sales Agreement
On February 10, 2025, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with Northland Securities, Inc. (the “Agent”), pursuant to which the Company could, from time to time, offer and sell shares of the Company’s common stock, par value $
On August 12, 2025, the Company elected to voluntarily terminate its Sales Agreement.
As of September 30, 2025 the Company issued
ATD Acquisition
In connection with the acquisition of ATD on January 2, 2024, the Company issued
2024 Public Offering
On February 9, 2024, the Company issued and sold
On February 9, 2024, the Underwriters exercised in-full their option to purchase up to
Prepaid Advance
On August 14, 2024, the Company entered into a Prepaid Advance Agreement (the “Prepaid Advance”) with YA II PN, Ltd., a Cayman Islands exempt limited company (the “Investor”), an affiliate of Yorkville Advisors Global, LP. In accordance with the terms of the Prepaid Advance, the Investor advanced $
Pursuant to the terms of the Prepaid Advance, within one year the Company could have received an additional $
The Company incurred issuance costs and original issuance discounts totaling approximately $
As of December 31, 2024, the Company has terminated and fully satisfied the outstanding balance of $
Redemption of 2023 Promissory Notes
On March 4, 2024, the Company elected to prepay the outstanding 2023 Promissory Notes. The 2023 Promissory Notes were redeemed at the redemption price of
Warrants
There was no activity related to the Company warrants during the period ended September 30, 2025. The table below shows the Company's outstanding warrants as of September 30, 2025:
| 2023 Promissory Notes (1) |
2023 Registered Direct Offering (2) |
2023 Private Warrants (3) |
Total |
|||||||||||||
| Outstanding warrants as of September 30, 2025 |
||||||||||||||||
| Weighted average strike price of outstanding warrants as of September 30, 2025 |
$ | $ | $ | $ | ||||||||||||
| Intrinsic value of outstanding warrants as of September 30, 2025 |
$ | $ | $ | $ | ||||||||||||
| (1)
|
On January 18, 2023, in connection with the 2023 Promissory Notes, the Company issued the investors warrants to purchase |
|
| (2)
|
On March 23, 2023, in connection with the 2023 Registered Direct Offering the Company issued warrants to the placement agent to purchase up to 481,100 shares of common stock. Each warrant for the placement agent is exercisable for one share of common stock at an exercise price of $1.8188 per share. These warrants were exercisable commencing March 27, 2023 and expire on March 27, 2028. | |
| (3) | On July 25, 2023, in connection with the 2023 Letter Agreement, the Company issued warrants to purchase |
NOTE 10 – EQUITY INCENTIVE PLAN
In August 2017, the Company approved and adopted the 2017 Equity Award Plan (the “2017 Plan”). The 2017 Plan permits the granting of stock options, stock appreciation rights, restricted and unrestricted stock awards, phantom stock, performance awards and other stock-based awards for the purpose of attracting and retaining quality employees, directors and consultants. Maximum awards available under the 2017 Plan were initially set at
On April 29, 2024, the Company filed a registration statement on Form S-8 solely to register an additional
Stock Options
Stock options granted under the 2017 Plan may be either incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”). ISOs may be granted to employees and NSOs may be granted to employees, directors, or consultants. Stock options are granted at exercise prices as determined by the Board of Directors. The vesting period is generally years with a contractual term of years.
For the three and nine months ended September 30, 2025 and 2024 there was
A summary of stock option activity under the Company’s 2017 Plan during the period ended September 30, 2025 is as follows:
| Number of Shares Subject to Option | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Outstanding balance as of January 1, 2025 | $ | $ | ||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Outstanding and exercisable balance as of September 30, 2025 | $ | $ | ||||||||||||||
As of September 30, 2025, there was $
Restricted Stock Units
Stock compensation expense related to Restricted Stock Units ("RSUs") for the three months ended September 30, 2025 and 2024 was $
A summary of RSU activity under the Company’s 2017 Plan for the nine months ended September 30, 2025 is as follows:
| Number of Shares | Weighted Average Unit Price | Weighted Average Remaining Contractual Term (Years) | ||||||||||
| Outstanding balance as of January 1, 2025 | $ | |||||||||||
| Granted | ||||||||||||
| Vested | ( | ) | ||||||||||
| Forfeited | ( | ) | ||||||||||
| Outstanding balance as of September 30, 2025 | $ | |||||||||||
All RSUs granted vest upon the satisfaction of a service-based vesting condition.
As of September 30, 2025, there was $
NOTE 11 – LOSS PER SHARE
The following table provides information relating to the calculation of loss per common share:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2025 |
2024 |
2025 |
2024 |
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| (Dollars in thousands, except per share data) |
(Dollars in thousands, except per share data) |
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| Basic and diluted loss per share |
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| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Weighted average common shares outstanding - basic and diluted |
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| Basic and diluted loss per share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Potentially dilutive securities excluded due to the anti-dilutive effect |
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As the Company had a net loss for the three and nine months ended September 30, 2025, the following
As the Company had a net loss for the three and nine months ended September 30, 2024, the following
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties including particularly statements regarding our future results of operations and financial position, business strategy, prospective products and services, timing and likelihood of success, plans and objectives of management for future operations, and future results of current and anticipated products and services. These statements involve uncertainties, such as known and unknown risks, and are dependent on other important factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements we express or imply. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties, and assumptions described under the sections in our Annual Report on Form 10-K for the year ended December 31, 2024, entitled “Risk Factors” and elsewhere in this Quarterly Report. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”) that disclose risks and uncertainties that may affect our business. The forward-looking statements in this Form 10-Q do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that had not been completed as of the date of this filing. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. We undertake no obligation to update any forward-looking statement as a result of new information, future events or otherwise.
Specific factors that might cause actual results to differ from our expectations include, but are not limited to:
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significant risks, uncertainties and other considerations discussed in this report; |
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operating risks, including supply chain, equipment or system failures, cyber and other malicious attacks, wars and local conflicts and other events that could affect our operations and the amounts and timing of revenues and expenses; |
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reputational risks affecting customer confidence or willingness to do business with us; |
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financial market conditions, including the continuation of significant national and global uncertainties that may affect these conditions, and the results of financing efforts; |
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our ability to successfully identify, integrate and complete acquisitions and dispositions, including the integration of the ATD Acquisition; |
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our continued ability to successfully access the public markets for debt or equity capital; |
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political, legal, regulatory, administrative, military and economic conditions and developments in the United States (“U.S.”) and other countries in which we operate and, in particular, the impact of ongoing hostilities in the Middle East and recent and future federal, state and local regulatory proceedings and changes, including legislative and regulatory initiatives associated with our products; | |
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current and future litigation; |
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competition from other companies with an established position in the markets we have recently entered or are seeking to enter or from other companies who are seeking to enter markets we already serve; |
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our failure to successfully develop products using our technology that are accepted by the markets we serve or intend to serve or the development of new technologies that change the nature of our business or provide our customers with products or services superior to or less expensive than ours; |
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the inability of our strategic plans and goals to expand our geographic markets, customer base and product and service offerings; |
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| ● | risks associated with pandemics and other global health emergencies, and their impact U.S. and international markets and economies; and | |
| ● | risks associated with cyberattacks on international, national, local and Company information infrastructure by rogue businesses or criminal elements or by agents of governments engaged in asymmetric disruptions for competitive, economic, or military reasons. |
Investors are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. Other than as required by law, we undertake no obligation to update forward-looking statements even though our situation may change in the future. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”) and any updates contained herein as well as those set forth in our reports and other filings made with the SEC.
General
Overview
Rekor serves governmental and commercial customers by providing advanced roadway intelligence products and services. Our customers include federal, state and local governments and large commercial customers in the North America, as well as commercial customers in many other countries. Rekor generates and distributes roadway data used in the management, maintenance and planning of transportation infrastructure. We have been working for many years to develop and deploy proprietary systems that modernize and improve the collection and use of roadway data. Our systems employ advanced models developed using machine learning and other recent advances in artificial intelligence (“AI”) to enhance public safety, urban mobility, and transportation management. By collaborating closely with our public and private sector customers, we deliver mission-critical services and solutions that enable them to achieve their objectives effectively, while simultaneously working toward creating a connected, data-driven infrastructure ecosystem.
Our vision is to create safer, smarter, and more sustainable roadways and communities, improving the lives of citizens and the world around them. Our approach leverages its AI capabilities to collect, organize and analyze mobility data and distribute it securely and efficiently, making it useful, accessible, and actionable for real-time insights and decision-making. This provides our customers with significantly enhanced situational awareness, rapid response capabilities, risk mitigation strategies, and predictive analytics. To assist our customers in realizing this vision, we’ve developed purpose-built software platforms and a complimentary suite of interconnected AI-enabled hardware offerings. We’ve designed these solutions to exploit a set of diverse multi-modal datasets using our proprietary AI technologies, with the objective of delivering unparalleled roadway intelligence. They enable clients to more effectively monitor, manage, and optimize the movement of vehicles and activities in and around roadways and communities with precision. Through real-time insights and predictive analytics, our platforms enable rapid decision-making, proactive risk mitigation, and streamlined operations across public safety, urban mobility, and transportation systems and agencies, ensuring smarter and safer outcomes for all.
Our operations are conducted primarily by our wholly-owned subsidiaries, Rekor Recognition Systems, Inc. (“Rekor Recognition”), Waycare Technologies, Ltd. (“Waycare”), Southern Traffic Services, Inc. (“STS”), and All Traffic Data Systems (“ATD”).
A New Operating System for Roadways
We believe the United States of America is undergoing significant transition in the evolution of its transportation and roadway infrastructure. For over 70 years, the nation has relied on legacy technologies that depend on analog and manual methodologies, resulting in inefficiencies, rising costs, and preventable safety hazards. While innovations like sensor technology, Internet of Things (“IoT”), AI, cloud computing, and autonomous vehicles are advancing rapidly, fundamental challenges such as poor roadway quality, traffic congestion, and driver safety continue. A concentrated recent effort by federal, state and local governments to repair and upgrade the nation’s roadways has provided an exciting opportunity to modernize the nation’s transportation infrastructure and address these challenges.
Since 2018, Rekor has positioned itself to participate in this modernization effort by actively designing, building, testing and deploying its AI solutions through public-private collaborations with departments of transportation (“DOTs”), public safety agencies, and private sector partners. Rekor is committed to keep a leadership role in laying the foundation of a new digital infrastructure operating system for roadways—and has already delivered proven value across multiple domains:
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Enhanced Roadway Safety: Real-time AI monitoring systems detect roadway hazards and reduce incident response times, helping to prevent injuries and fatalities. |
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Optimized Traffic Flow: Intelligent analytics alleviate congestion, improve commute times, and boost productivity. |
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Cost Savings & Efficiency: AI automation streamlines operations, maximizing resource allocation for agencies. |
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Improved Data Accuracy & Insights: Precise, real-time traffic data drives smarter decision-making and better resource planning. |
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Border & Freight Management: AI-driven vehicle identification enhances security while minimizing bottlenecks. |
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Uninsured Driver Reduction: Automated enforcement ensures insurance compliance, improving public safety. |
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With these forward-thinking infrastructure strategies, Rekor is playing a leading role in reshaping how transportation systems operate. Its solutions empower agencies to prevent accidents, reduce inefficiencies, and optimize resources, driving smarter, safer, and more efficient roadways across the nation.
Roadway Intelligence
Rekor is a leader in roadway intelligence, committed to supporting the process of revolutionizing transportation systems by collecting, connecting, and organizing the world’s mobility data. Improving and making effective use of roadway intelligence requires the ability to harness vast amounts and varieties of data from roadways, vehicles, transportation systems, and hundreds of external elements like weather, special events, and work zones, and do the analysis and distribution that transforms them into actionable insights that operators and planners can use productively. These unique insights permit our customers to enhance public safety, visualize and optimize traffic flows more quickly, and improve other operational efficiencies. Through our Rekor One® roadway intelligence engine, we aggregate these datasets from diverse sources and securely deliver these insights to government agencies and private-sector clients, driving smarter, more effective decision-making across transportation management, urban mobility, and public safety ecosystems, as well as multiple commercial market segments.
Inspired by the Open System Interconnection (“OSI”) model, Rekor works to integrate fragmented transportation systems into a cohesive, unified network. Collaborating with government agencies, infrastructure operators, transit providers, and technology partners, we can consolidate hardware, software, and data into a connected platform that delivers smarter, safer, and more efficient roadways.
Our mission extends beyond connectivity—we are building dynamic, AI-enabled networks to modernize traffic management, public safety, and emergency services. By supporting the establishment of a digital overlay on existing physical infrastructure, Rekor is helping to create a new generation digital operating system for roadways, delivering real-time intelligence that powers economic growth, operational excellence, and improved quality of life for communities.
Roadway Intelligence Powered by Rekor
The Rekor One® roadway intelligence engine serves as a central data and analytics platform that integrates multimodal mobility and roadway data into actionable insights. Powered by advanced AI and fueled by diverse data sources, Rekor delivers real-time and predictive solutions that enhance mobility, safety, and operational efficiency across public and private sectors. Our platforms aggregate and analyze trillions of data points from IoT devices, roadway sensors, cameras, and an expansive partner network, enabling customers to make proactive, informed decisions and optimize resources, and enabling us to deliver tailored solutions for government and commercial customers in public safety, urban mobility, and transportation management.
Within this suite, Rekor has developed specialized AI-powered platforms that serve as core revenue streams:
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Rekor Command®: A cutting-edge, AI-enabled platform that provides Transportation Management Centers with a rapid and holistic view of roadway activity. By collecting and analyzing multiple real-time and historical data sources efficiently, Rekor Command delivers our customers with actionable alerts for more incidents, at greater speed, transforming roadway management by enabling faster detection, situational awareness, and proactive response. |
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Rekor Discover®: Leveraging artificial intelligence models developed through years of supervised machine learning analysis of high-resolution video streams, Rekor Discover fully automates the capture of comprehensive traffic and vehicle analytics across a wide variety of use cases. Strategically deployed, non-intrusive, video-based camera systems with AI-powered edge processing deliver powerful roadway intelligence and operational efficiencies. |
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Rekor Scout®: A versatile platform that enables accurate license plate and vehicle recognition on nearly any IP, traffic, or security camera. With quick deployment and a web-based interface hosted in the cloud or on-premise, Rekor Scout provides scalable security enhancements for government agencies, law enforcement, businesses, and even residential customers. |
Rekor’s solutions support a variety of use cases, including:
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Traffic Analysis |
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Comprehensive traffic reports, including Federal Highway Administration (“FHWA”)-mandated vehicle classification, count and speed analytics. |
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Analytics on bicycles, pedestrians, and other micro-mobility modes. |
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Identification of patterns and hot spots for emissions and traffic impacts. |
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Traffic Operations & Management |
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Data-driven traffic operations for improved efficiency. |
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Real-time incident detection and response for proactive problem-solving. |
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Proactive traffic calming around events to minimize congestion and enhance safety. |
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Intelligent analytics to alleviate congestion, shorten commute times, and boost productivity. |
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High-Definition Video Monitoring |
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Traffic monitoring to assist law enforcement. |
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Support for intelligence-based policing to improve crime prevention. |
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Contactless compliance and enforcement solutions for safety and legal adherence. |
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Enhanced Roadway Safety |
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Real-time AI enabled monitoring systems to detect hazards and help reduce roadway fatalities. |
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Predictive analytics to anticipate and address potential safety risks. |
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Optimized Resource Allocation |
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AI assistance to allow managers to streamline operations and maximize resource allocation. |
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Improved data accuracy to support better decision-making and strategic planning. |
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Border & Freight Management |
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AI-assisted vehicle identification to enhance national security and minimize bottlenecks at borders and ports. |
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Weigh-in-Motion (“WIM”) systems for real-time commercial trucking analytics |
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Insurance Compliance & Public Safety |
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Automated enforcement systems to reduce uninsured drivers and improve overall public safety. |
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Opportunities, Trends and Uncertainties
We look to identify the various trends, market cycles, uncertainties and other factors that may provide us with opportunities and present challenges that impact our operations and financial condition from time to time. Although there are many that we may not or cannot foresee, we believe that our results of operations and financial condition for the foreseeable future will be primarily affected by the following:
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Growing Smart City Market – According to a United Nations report, about two-thirds of the world population will live in urban areas by 2050. The world’s cities are getting larger, with longer commutes and the resulting impact on the environment and the quality of life. This trend requires forward-thinking officials to manage assets and resources more efficiently. We believe that advancements in “big data” connected devices and artificial intelligence can provide Intelligent Transportation System (“ITS”) solutions that can be used to reduce congestion, keep travelers safe, improve transportation, protect the environment, respond to climate change, and enhance the quality of life. We believe our data-driven, artificial intelligence-aided solutions provide useful tools that can effectively tackle the challenges cities and communities are facing today and will face over the coming decades. |
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AI for Infrastructure – We believe that the application of AI to the analysis of conditions on roadways and other transportation infrastructure can significantly affect the safety and efficiency of travel in the future. As vehicles move towards full automation, there is a need for real-time data and actionable insights around traffic flow, identification of anomalous and unsafe movements – e.g. wrong way vehicles, stopped vehicles, or/and pedestrians on the roadway. Marketers and drive-thru retailers with loyalty programs can also benefit from rapid, lower cost identification of existing and potential customers in streamlining and accelerating local vehicular flow as well as data about the vehicles on the roadway. |
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Connected Vehicle Data – Today’s new vehicles are equipped with dozens of sensors, collecting information about internal systems, external hazards, and driving behaviors. This data is a resource that transportation and other agencies are beginning to find valuable uses for. Notably, the data from these vehicles represent a virtual network that is independent of the infrastructure which is maintained and operated by the public agencies. Connected vehicle sensors can provide important information related to hazardous conditions, speed variations, intersection performance, and more. This data can help agencies and municipalities gain more visibility about conditions on their roads, supplementing data from existing infrastructure and allowing transportation information from rural areas that are not served by ITS infrastructure to be integrated into the overall analysis. |
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New and Expanded Uses for Vehicle Recognition Systems – We believe that reductions in the cost of vehicle recognition products and services will significantly broaden the market for these systems. We also expect the availability of faster, higher-accuracy, lower-cost systems to dramatically increase the ability of crowded urban areas to manage traffic congestion and implement smart city programs. We currently serve many users who could not afford the cost, or adapt to the restrictions of, conventional vehicle recognition systems. These include smaller municipalities, homeowners’ associations, and organizations finding new applications such as innovative customer loyalty programs. As larger agencies implement and grow more familiar with the new systems, we have seen and responded to increased awareness among smaller agencies. |
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Adaptability of the Market – We have made a considerable investment in our advanced vehicle recognition systems because we believe their increased accuracy, affordability and ability to capture additional vehicle data will allow them to compete effectively with existing providers. Based on published benchmarks, our software currently outperforms competitors. However, large users of existing technology, such as toll road operators, have long-term contracts with service providers that have made considerable investments in their existing technologies and may not consider the improvements in accuracy or reductions in cost sufficient to justify abandoning their current systems in the near future. In addition, existing providers may be able to reduce the cost of their current offerings or elect to reduce prices and accept reduced profitability while working to develop their own systems or secure advanced systems from others who are also working to develop them. As a result, our success in establishing a major position in these markets will depend on being able to effectively communicate our presence, develop strong customer relationships, and maintain leadership in providing the capabilities that customers want. As with any large market, this will require considerable effort and resources. |
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Expansion of Automated Enforcement of Motor Vehicle Laws – We expect contactless compliance programs to be expanded as the types of vehicle related violations authorized for automated enforcement increase and experience provides localities with a better understanding of the circumstances where it is and is not beneficial. We believe that future legislation will increasingly allow for automated enforcement of weight requirements and regulations such as motor vehicle insurance and registration requirements. Communities are currently searching for better means of achieving compliance with minor vehicle offenses, such as lapsed registrations, and safety issues such as motorists who fail to stop for school buses or incursions into restricted lanes. For example, due to high rates of fatalities and injuries to law enforcement and other emergency response crews on roadsides, several states have considered authorizing automated enforcement of violations where motorists fail to slow down and/or move over for emergency responders and law enforcement vehicles at the side of the road. To the extent that legislative implementation is required, a deliberative and necessarily time-consuming process is involved. However, as states expand auto-enforcement, the market for these products and services should broaden in the public safety market. |
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Graphic Processing Unit (“GPU”) Improvements – We expect our business to benefit from more powerful and affordable GPU hardware that has recently been developed. These GPUs are more efficient for image processing because their highly parallel structure makes them more efficient than general-purpose central processing units (“CPUs”) for algorithms that process large blocks of data, such as those produced by video streams. GPUs also provide superior memory bandwidth and efficiencies as compared to their CPU counterparts. The most recent versions of our software have been designed to use the increased GPU speeds to accelerate image recognition. The GPU market is predicted to grow as a result of a surge in the adoption of the Internet of Things (“IoT”) by the industrial and automotive sectors. If GPU manufacturers are able to increase production volume, we hope to benefit from the reduced cost to manufacture the hardware included in our products or available to others using our services. |
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Edge Processing – Demand for actionable roadway information continues to grow in parallel with sensor improvements, such as increasingly sophisticated internal software and optical and other hardware adapted to the use of this software. Over the last several decades, sensors have evolved and unlocked new capabilities with each advancement. Further, cellular networks have been optimized for downloading data rather than uploading data. As a result, while download speeds have improved significantly due to large investments in cellular infrastructure, this has resulted in relatively small improvements to cellular upload speeds. With roadside deployments experiencing explosive growth in count and density, scalability, latency and bandwidth have become aspects of competition in the market. Our systems have been designed to address these issues through the use of more effective edge processing, enabled both by incorporating the increasingly effective new GPUs into our systems and continual improvements in the efficiency of our AI algorithms. Our edge processing systems ingest local HD video streams at the source and convert the raw video data to text data, dramatically reducing the volume of data that needs to be uploaded and transferred through the network. Edge processing allows us to scale a network dramatically without the bandwidth, cost, latency and dependability limitations that are experienced by other networks where raw video needs to be streamed to the cloud for processing. |
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Accelerated Business Development and Marketing – Our ability to compete in a large, competitive and rapidly evolving industry will require us to achieve and maintain a visible leadership position. As a result, we will need to make significant investments in our business development, marketing and eCommerce activities to increase awareness and market adoption of our products and services within key markets. If we are able to maintain a sustained presence in the market, the continued development of strategic partnerships and other economies of scale will reduce the level of costs necessary to support sales of our products and services. However, the speed at which these markets grow to the degree to which our products and services are adopted is uncertain. |
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Infrastructure Investment and Jobs Act (“IIJA”) and the Bipartisan Infrastructure Law (“BIL”) - The IIJA, signed into law on November 15, 2021, provides for significant national investments in the transportation systems in the United States, including over $150 billion in new spending on roadway infrastructure, including intelligent transportation systems. We believe that there will continue to be bi-partisan support for these programs and that our comprehensive offering of solutions positions the Company well to emerge as a technology leader in the expanded market for roadway intelligence that will benefit from this legislation. We have identified opportunities to access federal funding streams, and we are working to implement a program that capitalizes on this unprecedented U.S. federal investment in public safety, homeland security, and transportation infrastructure and ensures that our customers are positioned to capture as much of this extraordinary government spending as possible. Beyond the many recurring federal grant programs that could support customer purchases, and the $350 billion in American Rescue Plan Act allocations that public agencies are receiving now, we are particularly excited about the prospect of benefitting from the following new grant sources that are contained in the IIJA: $200 million annually for a “Safe Streets and Roads for All” program that would make competitive grants for state projects that significantly reduce or eliminate transportation-related fatalities. $150 million for the current administration to establish a grant program to modernize state data collection systems $500 million for the Strengthening Mobility and Revolutionizing Transportation (“SMART”) Grant Program that would support demonstration projects on smart technologies that improve transportation efficiency and safety. |
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Challenges to Executing on the Corporate Strategy – As an acquirer and integrator of established technology companies in the ITS industry, there is an inherent risk associated with the successful implementation and execution of the strategy. If Rekor is unable to successfully implement and execute its plans, there could be a material and adverse effect on the Company’s business, results of operations, and financial condition. |
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Inability to Achieve Profitability - Rekor continues to grow its business, its operating expenses and capital expenditures have increased, and it has not yet achieved the level of sustaining profitability. As a result, if the Company is unable to generate additional revenue or achieve planned efficiencies in operations, or if its revenue declines significantly, Rekor may not be able to achieve profitability in the future, which would materially and adversely affect the Company’s business. |
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Inability to Retain Qualified Personnel – Rekor’s success depends on the continued efforts and abilities of the senior management team and key engineering and marketing specialists. Although Rekor has employment agreements with these employees, they may not choose to remain employed by Rekor. Should one or more key personnel leave the Company or join a competitor, the Company’s business, operating results, and financial condition can be adversely affected. |
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Inability to Compete Effectively - Competition and technological advancements by others may erode the Company’s business and result in inability to capture new business and revenue. Each business line faces significant competitive pressures within the markets in which they operate. While Rekor continues to work to develop and strengthen its competitive advantages, many factors such as market and technology changes may erode or prevent this. If the Company is unable to successfully maintain its competitive advantage, the Company’s business, operating results, and financial condition can be adversely affected. |
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Cyber Security Risks - Rekor relies on information technology in all aspects of its business. A significant disruption or failure in the information technology systems could result in services interruptions, safety failures, security violations, regulatory compliance failures, an inability to protect information and assets against intruders, and other operational difficulties. This could result in the loss of assets and critical information and expose the Company to remediation costs and reputational damage. Although Rekor takes reasonable steps intended to mitigate these risks, a significant disruption or cyber intrusion could lead to misappropriation of assets or data corruption and could adversely affect the Company’s results of operations, financial condition, and liquidity. |
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Intellectual Property Claims - Third parties that have been issued patents or have filed for patent applications similar to those used by the Company’s operating subsidiaries may result in intellectual property claims against the Company. Rekor cannot determine with certainty whether existing third-party patents or the issuance of any future third party patents would require any of its operating subsidiaries to alter their respective technologies, obtain licenses or cease certain activities. Should the Company be unable to defend against such claims, the Company’s business, operating results, and financial condition can be adversely affected. |
Components of Operating Results
Revenues
The Company derives its revenues primarily from the sale of its roadway data aggregation, traffic management and licensing offerings. These offerings include a mixture of data collection, implementation, engineering, customer support and maintenance services as well as software and hardware. Revenue is recognized upon transfer of control of promised products and services to the Company’s customers, in an amount that reflects the consideration the Company expects to receive in exchange for those products and services.
Costs of revenues, excluding depreciation and amortization
Direct costs of revenues consist primarily of the portion of technical and non-technical salaries and wages and payroll-related costs incurred in connection with revenue-generating activities. Direct costs of revenues also include production expenses, data subscriptions, sub-consultant services and other expenses that are incurred in connection with our revenue-generating activities. Direct costs of revenues exclude the portion of technical and non-technical salaries and wages related to marketing efforts, vacations, holidays, and other time not spent directly generating fees under existing contracts. Such costs are included in operating expenses. We expense direct costs of revenues when they incur.
Operating Expenses
Our operating expenses consist of general and administrative expenses, sales and marketing, research and development and depreciation and amortization. Personnel costs are the most significant component of operating expenses and consist of salaries, benefits, bonuses, payroll taxes and stock-based compensation expenses.
General and Administrative
General and administrative expenses consist of personnel costs for our executive, finance, legal, human resources, and administrative departments. Additional expenses include office leases, professional fees, and insurance.
We expect our general and administrative expenses to continue to remain high for the foreseeable future due to the costs associated with our growth and the costs of accounting, compliance, legal, insurance, and investor relations as a public company. Our general and administrative expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. However, our general and administrative expenses have decreased as a percentage of our revenue and, to the extent we continue to be successful in generating increased revenue, we expect our general and administrative expenses to decrease as a percentage of our revenue over the long term.
Sales and Marketing
Sales and marketing expenses consist of personnel costs, marketing programs, travel and entertainment associated with sales and marketing personnel, expenses for conferences and trade shows. We will require significant investments in our sales and marketing expenses to continue the rate of growth in our revenues, further penetrate existing markets and expand our customer base into new markets.
Research and Development
Research and development expenses consist of personnel costs, software used to develop our products and consulting and professional fees for third-party development resources. Our research and development expenses support our efforts to continue to add capabilities to and improve the value of our existing products and services, as well as develop new products and services.
Depreciation and Amortization
Depreciation and amortization expenses are primarily attributable to our capital investments and consist of fixed asset depreciation, amortization of intangibles considered to have definite lives, and amortization of capitalized internal-use software costs.
Other Income (Expense)
Other income (expense) consists primarily of legal settlements, legal judgements, interest income and expense in connection with our debt arrangements, costs associated with the extinguishment of our debt arrangements, gains on the sale of subsidiaries, gains or losses on the sale of fixed assets, gain or losses on the change in fair value of our liabilities, and interest income earned on cash and cash equivalents and note receivables.
Income Tax Provision
Income tax provision consists primarily of income taxes in certain domestic jurisdictions in which we conduct business. We have recorded deferred tax assets for which a full valuation allowance has been provided, including net operating loss carryforwards and tax credits. We expect to maintain this full valuation allowance for the foreseeable future as it is more likely than not that some or all of those deferred tax assets may not be realized based on our history of losses.
Critical Accounting Estimates and Assumptions
A comprehensive discussion of our critical accounting estimates and assumptions is included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report on Form 10-K for the year ended December 31, 2024.
New Accounting Pronouncements
See Note 1 to our unaudited condensed consolidated financial statements set forth in Item 1 of this quarterly report for information regarding new accounting pronouncements.
Results of Operations
Our historical operating results in dollars are presented below.
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| (Dollars in thousands) |
2025 |
2024 |
2025 |
2024 |
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| Revenue |
$ | 14,194 | $ | 10,546 | $ | 35,751 | $ | 32,751 | ||||||||
| Cost of revenue, excluding depreciation and amortization |
5,195 | 5,903 | 16,200 | 16,964 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| General and administrative expenses |
6,299 | 8,637 | 20,519 | 23,669 | ||||||||||||
| Selling and marketing expenses |
1,465 | 1,721 | 4,923 | 6,156 | ||||||||||||
| Research and development expenses |
3,660 | 4,740 | 11,289 | 14,732 | ||||||||||||
| Depreciation and amortization |
1,545 | 2,399 | 4,662 | 7,075 | ||||||||||||
| Total operating expenses |
12,969 | 17,497 | 41,393 | 51,632 | ||||||||||||
| Loss from operations |
(3,970 | ) | (12,854 | ) | (21,842 | ) | (35,845 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Loss on extinguishment of debt |
- | - | - | (4,693 | ) | |||||||||||
| Interest expense, net |
(568 | ) | (496 | ) | (1,744 | ) | (2,094 | ) | ||||||||
| Gain (loss) on remeasurement of ATD Holdback Shares |
- | 192 | (120 | ) | 937 | |||||||||||
| Loss on offering costs - Prepaid Advance |
- | (888 | ) | - | (888 | ) | ||||||||||
| Gain on the sale of Global Public Safety |
- | 1,500 | - | 1,500 | ||||||||||||
| Other (expense) income |
389 | (100 | ) | 25 | 28 | |||||||||||
| Total other (expense) income, net |
(179 | ) | 208 | (1,839 | ) | (5,210 | ) | |||||||||
| Net loss |
$ | (4,149 | ) | $ | (12,646 | ) | $ | (23,681 | ) | $ | (41,055 | ) | ||||
Comparison of the Three and Nine Months Ended September 30, 2025 and the Three and Nine Months Ended September 30, 2024
Total Revenue
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2025 |
2024 |
$ |
% |
2025 |
2024 |
$ |
% |
||||||||||||||||||||||||
| Revenue |
$ | 14,194 | $ | 10,546 | $ | 3,648 | 35 | % | $ | 35,751 | $ | 32,751 | $ | 3,000 | 9 | % | ||||||||||||||||
Revenue increased for the three and nine months ended September 30, 2025, compared to the corresponding periods in 2024, primarily due to higher perpetual license sales in Q3 2025.
Cost of Revenue, Excluding Depreciation and Amortization
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2025 |
2024 |
$ |
% |
2025 |
2024 |
$ |
% |
||||||||||||||||||||||||
| Cost of revenue, excluding depreciation and amortization |
$ | 5,195 | $ | 5,903 | $ | (708 | ) | -12 | % | $ | 16,200 | $ | 16,964 | $ | (764 | ) | -5 | % | ||||||||||||||
Cost of revenue, excluding depreciation and amortization, decreased for the three and nine month periods ended September 30, 2025, compared to the corresponding prior-year periods, primarily due to a favorable revenue mix of software versus hardware, which resulted in higher margins from increased software license sales.
Operating Expenses
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2025 |
2024 |
$ |
% |
2025 |
2024 |
$ |
% |
||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| General and administrative expenses |
$ | 6,299 | $ | 8,637 | $ | (2,338 | ) | -27 | % | $ | 20,519 | $ | 23,669 | $ | (3,150 | ) | -13 | % | ||||||||||||||
| Selling and marketing expenses |
1,465 | 1,721 | (256 | ) | -15 | % | 4,923 | 6,156 | (1,233 | ) | -20 | % | ||||||||||||||||||||
| Research and development expenses |
3,660 | 4,740 | (1,080 | ) | -23 | % | 11,289 | 14,732 | (3,443 | ) | -23 | % | ||||||||||||||||||||
| Depreciation and amortization |
1,545 | 2,399 | (854 | ) | -36 | % | 4,662 | 7,075 | (2,413 | ) | -34 | % | ||||||||||||||||||||
| Total operating expenses |
$ | 12,969 | $ | 17,497 | $ | (4,528 | ) | -26 | % | $ | 41,393 | $ | 51,632 | $ | (10,239 | ) | -20 | % | ||||||||||||||
General and Administrative Expenses
General and administrative expenses decreased for the three and nine months ended September 30, 2025, compared to the prior-year periods. The decrease was primarily driven by reductions in payroll and related expenses of $1,085,000 and $1,766,000, respectively, as a result of cost-containment initiatives implemented to better align with operations. In addition, bad debt expense decreased by $591,000 and $798,000, respectively, and professional fees decreased by $571,000 and $390,000, respectively.
Selling and Marketing Expenses
For the three and nine months ended September 30, 2025, the decrease in selling and marketing expenses was primarily due to a $388,000 and $1,091,000 decrease related to payroll and payroll related costs as a result of cost-containment initiatives implemented to better align with operations.
Research and Development Expense
For the three and nine months ended September 30, 2025, the decrease in research and development expenses was primarily due to a $1,000,000 and $3,138,000 decrease related to payroll and payroll related costs as a result of cost-containment initiatives implemented to better align with operations.
Depreciation and Amortization
The decrease in depreciation and amortization during the period is attributable to an impairment we recognized as of December 31, 2024, following the identification of a triggering event.
Other Income (Expense)
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2025 |
2024 |
$ |
% |
2025 |
2024 |
$ |
% |
||||||||||||||||||||||||
| Other income (expense): |
||||||||||||||||||||||||||||||||
| Loss on extinguishment of debt |
$ | - | $ | - | $ | - | - | $ | - | $ | (4,693 | ) | $ | 4,693 | 100 | % | ||||||||||||||||
| Interest expense, net |
(568 | ) | (496 | ) | (72 | ) | -15 | % | (1,744 | ) | (2,094 | ) | 350 | 17 | % | |||||||||||||||||
| Gain (loss) on remeasurement of ATD Holdback Shares |
- | 192 | (192 | ) | -100 | % | (120 | ) | 937 | (1,057 | ) | -113 | % | |||||||||||||||||||
| Loss on offering costs - Prepaid Advance |
- | (888 | ) | 888 | 100 | % | - | (888 | ) | 888 | 100 | % | ||||||||||||||||||||
| Gain on the sale of Global Public Safety |
- | 1,500 | (1,500 | ) | -100 | % | - | 1,500 | (1,500 | ) | -100 | % | ||||||||||||||||||||
| Other (expense) income |
389 | (100 | ) | 489 | 489 | % | 25 | 28 | (3 | ) | -11 | % | ||||||||||||||||||||
| Total other (expense) income, net |
$ | (179 | ) | $ | 208 | $ | (387 | ) | -186 | % | $ | (1,839 | ) | $ | (5,210 | ) | $ | 3,371 | 65 | % | ||||||||||||
For the three months ended September 30, 2025, interest expense increased by 15%, however, for the nine months ended September 30, 2025 interest expense decreased compared to the corresponding period in 2024 due to the early redemption of the 2023 Promissory Notes.
Loss on extinguishment of debt is a result of early redemption of the 2023 Promissory Notes in 2024. As part of the redemption, we recorded accelerated debt issuance costs of $2,818,000 and a redemption payment of $1,875,000 which we settled through the issuance of common stock.
Additionally, in 2024 we recorded non-operating items, including a loss on offering costs related to our Prepaid Advance and a gain on the sale of Global Public Safety. These items were one-time in nature and did not recur in 2025.
Non-GAAP Measures
EBITDA and Adjusted EBITDA
We calculate EBITDA as net loss before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net loss before interest, taxes, depreciation and amortization, adjusted for (i) impairment of intangible assets, (ii) loss on extinguishment of debt, (iii) stock-based compensation, (iv) losses or gains on sales of subsidiaries, (v) losses associated with equity method investments, (vi) merger and acquisition transaction costs and (vii) other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the U.S. (“U.S. GAAP”) and should not be considered as an alternative to net earnings or cash flow from operating activities as indicators of our operating performance or as a measure of liquidity or any other measures of performance derived in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA are presented because we believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of a company’s ability to service and/or incur debt. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.
The following table sets forth the components of the EBITDA and Adjusted EBITDA for the periods included (dollars in thousands):
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| Net loss |
$ | (4,149 | ) | $ | (12,646 | ) | $ | (23,681 | ) | $ | (41,055 | ) | ||||
| Interest, net |
568 | 496 | 1,744 | 2,094 | ||||||||||||
| Depreciation and amortization |
1,545 | 2,399 | 4,662 | 7,075 | ||||||||||||
| EBITDA |
(2,036 | ) | (9,751 | ) | (17,275 | ) | (31,886 | ) | ||||||||
| Share-based compensation |
577 | 1,148 | 2,670 | 3,430 | ||||||||||||
| Loss on extinguishment of debt |
- | - | - | 4,693 | ||||||||||||
| (Gain) loss on remeasurement of ATD Holdback Shares |
- | (192 | ) | 120 | (937 | ) | ||||||||||
| Loss on offering costs - Prepaid Advance |
- | 888 | - | 888 | ||||||||||||
| Gain on the sale of Global Public Safety |
- | (1,500 | ) | - | (1,500 | ) | ||||||||||
| Adjusted EBITDA |
$ | (1,459 | ) | $ | (9,407 | ) | $ | (14,485 | ) | $ | (25,312 | ) | ||||
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We expect Adjusted Gross Margin to continue to improve over time to the extent that we can gain efficiencies through the adoption of our technology and successfully cross-sell and upsell our current and future offerings. However, our ability to improve Adjusted Gross Margin over time is not guaranteed and could be impacted by the factors affecting our performance. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors, as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other nonrecurring operating expenses.
The following table sets forth the components of the Adjusted Gross Profit and Adjusted Gross Margin for the periods included:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2025 |
2024 |
2025 |
2024 |
|||||||||||||
| (Dollars in thousands, except percentages) |
(Dollars in thousands, except percentages) |
|||||||||||||||
| Revenue |
$ | 14,194 | $ | 10,546 | $ | 35,751 | $ | 32,751 | ||||||||
| Cost of revenue, excluding depreciation and amortization |
5,195 | 5,903 | 16,200 | 16,964 | ||||||||||||
| Adjusted Gross Profit |
$ | 8,999 | $ | 4,643 | $ | 19,551 | $ | 15,787 | ||||||||
| Adjusted Gross Margin |
63.4 | % | 44.0 | % | 54.7 | % | 48.2 | % | ||||||||
Adjusted Gross Margin for the three and nine months ended September 30, 2025 increased compared to the three and nine months ended September 30, 2024. The fluctuation in Adjusted Gross Margin is typically correlated to the mix of software sales versus service type work. Typically our software sales carry a higher Adjusted Gross Margin.
Key Performance Indicators
We regularly review several indicators, including the following key indicators, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.
Recurring Revenue Growth
As part of the ongoing development of our selling strategy, we have been focusing on sales that employ contracts with recurring revenue. We expect these contracts to provide a more predictable stream of revenues, compared to one-time sales of hardware and software licenses which are generally more difficult to predict. Our recurring revenue model and revenue retention rates provide significant visibility into our future operating results and cash flow from operations. This visibility enables us to better manage and invest in our business. The following table sets forth our recurring revenue for the periods included (dollars in thousands):
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| 2025 |
2024 |
$ |
% |
2025 |
2024 |
$ |
% |
|||||||||||||||||||||||||
| Recurring revenue |
$ | 6,520 | $ | 5,511 | $ | 1,009 | 18 | % | $ | 17,537 | $ | 16,757 | $ | 780 | 5 | % | ||||||||||||||||
We expect to continue to focus on long-term contracts with recurring revenue as part of our business model, which is intended to cause recurring revenue growth in future periods to continue to increase. However, procurement requirements for some of our largest customers may result in periods when there is an increase one-time sales as compared to recurring revenues, which may cause the proportion of recurring revenues generated in those periods to fluctuate. In addition, there may be an increase in one time sales as a result of initial installations related to the development of recurring revenue.
Performance Obligations
As of September 30, 2025, we had approximately $13,157,000 of contracts that were closed prior to September 30, 2025 but have a contractual period beyond September 30, 2025. These contracts generally cover a term of one to five years, in which the Company will recognize revenue ratably over the contract term. Performance obligations for large contracts gradually decrease as they approach the renewal stage and increase if and when renewed. We currently expect to recognize approximately 86% of this amount over the succeeding twelve months, and the remainder is expected to be recognized over the following four years. On occasion, our customers will prepay the full contract or a substantial portion of the contract. Amounts related to the prepayment of the contract related to the performance obligation for a service period that is not yet met are recorded as part of our contract liabilities balance.
Lease Obligations
As of September 30, 2025, we had material leased building space at the following locations in the U.S. and Israel:
| ● |
Columbia, Maryland – The corporate headquarters |
|
| ● |
Tel Aviv, Israel |
We believe our facilities are in good condition and adequate for their current use. We expect to improve, replace and increase or decrease facilities as considered appropriate to meet the needs of our planned operations.
Liquidity and Capital Resources
The following table sets forth the components of our cash flows for the periods included (dollars in thousands):
| Nine Months Ended September 30, |
||||||||||||||||
| 2025 |
2024 |
Change |
||||||||||||||
| $ |
% |
|||||||||||||||
| Net cash used in operating activities |
$ | (20,582 | ) | $ | (27,552 | ) | $ | 6,970 | 25 | % | ||||||
| Net cash used in investing activities |
(1,981 | ) | (8,561 | ) | 6,580 | 77 | % | |||||||||
| Net cash provided by financing activities |
20,645 | 31,367 | (10,722 | ) | -34 | % | ||||||||||
| Net decrease in cash, cash equivalents and restricted cash |
$ | (1,918 | ) | $ | (4,746 | ) | $ | 2,828 | 60 | % | ||||||
Net cash used in operating activities for the nine months ended September 30, 2025 had a decrease of $6,970,000, which was primarily attributable to a reduction in our net loss.
The decrease in net cash used in investing activities of $6,580,000 was primarily due to the net cash outflow of $9,222,000 related to the acquisition of ATD. The decrease in net cash used in investing activities was partially offset by an increase in capital expenditures, which are directly tied to revenue generating contracts.
Net cash provided by financing activities for the nine months ended September 30, 2025 decreased by $10,722,000 from the prior nine month period ended September 30, 2024. During the nine months ended September 30, 2025, as part of our Sales Agreement, we received net proceeds of $22,350,000. During the nine months ended September 30, 2024, as part of our 2024 Public Offering and Prepaid Advance, we received net proceeds of $26,362,000 and $14,100,000, respectively, these proceeds were partially offset by the repayment of our 2023 Promissory Notes.
For the three and nine months ended September 30, 2025 and 2024, we funded our operations primarily through cash from operating activities, the issuance of debt and the sale of equity. As of September 30, 2025, we had cash and cash equivalents and restricted cash of $3,411,000 and a working capital of $6,959,000, as compared to cash and cash equivalents and restricted cash of $5,329,000 and working capital of $1,707,000 as of December 31, 2024.
Management has assessed going concern uncertainty to determine whether there is sufficient cash on hand, together with expected capital raises and working capital, to assure operations for a period of at least one year from the date these consolidated financial statements are issued, which is referred to as the “look-forward period”, as defined in U.S. GAAP. As part of this assessment, based on conditions that are known and reasonably knowable to management, management has considered various scenarios, forecasts, projections, and estimates and will make certain key assumptions. These assumptions include, among other factors, its ability to raise additional capital, the expected timing and nature of the Company’s programs and projected cash expenditures and its ability to delay or curtail these programs or expenditures to the extent management has the proper authority to do so and considers it probable that those implementations can be achieved within the look-forward period.
We have generated losses since our inception and have relied on cash on hand and external sources of financing to support cash flow from operations. We attribute losses to non-capital expenditures related to the scaling of existing products, development of new products and service offerings and marketing efforts associated with these products and services. As of and for the nine months ended September 30, 2025, we had working capital of $6,959,000 and a net loss of $23,681,000.
Our cash decreased by $1,918,000 for the nine months ended September 30, 2025 primarily due to the net loss of $23,681,000, this amount was partially offset by external financing activity.
On February 10, 2025, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with Northland Securities, Inc. (the “Agent”), pursuant to which the Company may, from time to time, offer and sell shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), having an aggregate offering price of up to $25,000,000. The Agent is entitled to receive from the Company a commission in an amount equal to (i) 3.0% of the gross sales price per share sold through it as agent in agency transactions and (ii) 6.0% of the purchase price per share sold to the Agent, as principal in principal transactions. The Company incurred issuance costs of approximately $245,000 related to legal, accounting, and other fees in connection with the Sales Agreement. These costs were charged against the gross proceeds of the Sales Agreement and presented as a reduction to additional paid-in capital on the accompanying consolidated balance sheets.
On August 12, 2025, the Company elected to voluntarily terminate its Sales Agreement.
As of September 30, 2025 the Company issued 18,888,832 shares of its common stock at a weighted average selling price of $1.23 per share in accordance with the Sales Agreement. Net cash provided from the Sales Agreement was $22,350,000 after paying $245,000 related to the issuance cost, as well as 3.0% or $699,000 related to cash commissions provided to the Agent. See Note 9 – Stockholders’ Equity for details on shares issued under the Sales Agreement.
Based on the Company's current business plan assumptions and the expected cash burn rate, the Company believes that the existing cash is insufficient to fund its current level of operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern for the next twelve months following the issuance of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
The Company's ability to generate positive operating results and execute its business strategy will depend on (i) its ability to continue the growth of its customer base, (ii) its ability to continue to improve its quarterly financial metrics such as net loss and cash used from operating activities (iii) the continued performance of its contractors, subcontractors and vendors, (iv) its ability to maintain and build good relationships with investors, lenders and other financial intermediaries, (v) its ability to maintain timely collections from existing customers, and (vi) the ability to scale its business processes. To the extent that events outside of the Company's control have a significant negative impact on economic and/or market conditions, they could affect payments from customers, services and supplies from vendors, its ability to continue to secure and implement new business, raise capital, and otherwise, depending on the severity of such impact, materially adversely affect its operating results.
As of September 30, 2025, we did not have any material commitments for capital expenditures.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, Rekor is not required to provide the information required by Item 3.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information we are required to disclose in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.
Based on management’s review, our Interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2025.
Changes to Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
H.C. Wainwright & Co., LLC
In March 2023, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC, ("HCW"), related to a capital raise (see NOTE 9 – STOCKHOLDERS’ EQUITY). That letter agreement contained provisions for both a “tail” fee due to HCW for any subsequent transactions the Company may enter into during the specified tail period with investors introduced to the Company by HCW during the term of the letter, as well as a right of first refusal ("ROFR") to act as the Company's exclusive underwriter or placement agent on any subsequent financing transactions utilizing an underwriter or placement agent occurring within twelve months from the consummation of a transaction pursuant to the engagement letter.
In July 2023, the Company entered into an agreement with one of its warrant holders in connection with the exercise of warrants, which the Company refers to as the July Warrant Exercise Transaction. Subsequent to the July Warrant Exercise Transaction, the Company received a letter from HCW claiming entitlement to certain “tail” fees and warrant consideration stemming from the agreement with the warrant holder. The Company believed then, and believes now, that this claim is without merit. As a result of this claim and for other reasons articulated to HCW, the Company terminated its engagement letter with HCW, including for cause, which, the Company believes, eliminated both the “tail” provision and the ROFR provision with respect to the 2023 Registered Direct Offering.
On or about October 23, 2023, HCW filed a complaint in New York State Supreme Court asserting a claim for breach of contract against the Company relating to the July Warrant Exercise Transaction. HCW sought to recover compensatory and consequential damages and certain warrants under its letter agreement with Rekor and other fees, not less than a cash fee of $825,000 and the value of warrants to purchase an aggregate of up to 481,100 shares of common stock of the company at an exercise price of $2.00 per share as well as attorneys’ fees. On February 29, 2024, HCW filed a notice of discontinuance without prejudice and advised the court that it intended to commence a new proceeding by filing a new complaint that would address the claim in this lawsuit and subsequent events. On March 4, 2024, the court discontinued this lawsuit without prejudice.
On February 29, 2024, HCW initiated the new action with the filing of complaint in New York State Supreme Court. In this lawsuit, HCW advances the same breach of contract theory and seeks to recover the same damages as sought in the prior now-dismissed lawsuit. In addition, HCW seeks to recover an additional $2,156,000 in damages plus the value of warrants to purchase an aggregate of up to 805,000 shares of common stock at an exercise price of $3.125 per share in connection with Rekor’s February 2024 offering, which we refer to as the 2024 Public Offering. HCW alleges that Rekor breached its engagement letter with HCW by failing to give HCW notice of this offering and failing to provide HCW with the opportunity to exercise the ROFR with respect to this transaction. On May 3, 2024, Rekor answered HCW’s complaint and filed counterclaims against HCW and Armistice Capital LLC ("Armistice") relating to Rekor’s March 2023 Registered Direct Offering, Armistice’s trading activity in Rekor common stock, and Rekor’s 2024 Public Offering. After HCW and Armistice moved to dismiss Rekor’s counterclaims, Rekor filed amended counterclaims on October 1, 2024. In Q3 2025, Rekor resolved its claims with Armistice and came to a settlement agreement. The proceeds from the settlement are presented as part of other expense (income) in the condensed consolidated statement of operations. Rekor now seeks to recover damages from HCW and HCW moved to dismiss the amended counterclaims. The Court granted HCW’s motion to dismiss Rekor’s counterclaims. Rekor has filed a notice of appeal of that ruling.
The Company believes HCW's claims are without merit and intends to vigorously defend itself in this lawsuit.
Occupational Safety and Health Administration (“OSHA”) Claim
In 2023 two previous employees of the Company (the “Claimants”) filed a complaint with OSHA (the “OSHA Complaints”) against the Company. Shortly after the OSHA Complaints were filed against the Company, the Company filed a position statement to address the OSHA Complaints. On November 30, 2023, OSHA issued its determination that, based on the information gathered thus far in its investigation, OSHA was unable to conclude that there was reasonable cause to believe that a violation of the statute occurred. OSHA thereby dismissed the complaint.
Thereafter, Claimants appealed the determination by filing objections and requesting a hearing before an Administrative Law Judge. The Company likewise filed a request for an award of attorneys’ fees. On January 4, 2024, the Office of Administrative Law Judges (“OALJ”) processed the appeals and issued its Notice of Docketing and Order of Consolidation. The parties were able to settle the claim filed by one employee in advance of a March 3, 2025 hearing scheduled by the OALJ. After the hearing, at the Court's request, the parties submitted post-hearing briefs in April 2025.
On September 30, 2025, the OALJ issued an Order in Rekor’s favor, dismissing all aspects of Claimant’s Complaint. Claimant subsequently submitted a request for appellate review to the Appellate Review Board (“ARB”). The ARB must accept Claimant’s request for appeal in order to conduct a review of the Order. The ARB has not yet decided if it will accept Claimant’s request for appeal. Generally, the decision to conduct a review must be made within thirty (30) days of the submission of the request. This deadline is likely delayed/stayed by the government shutdown.
The Company believes these claims are without merit and intends to vigorously defend itself in this administrative proceeding.
Tariffs and Trade Policy Changes Could Adversely Affect Our Supply Chain and Financial Performance
We depend on international suppliers for certain hardware components, such as cameras and sensors, used in our AI-driven roadway intelligence solutions. Recent U.S. tariffs on imports, from trading partners, could significantly increase our component costs. If we are unable to pass these increased costs to customers due to competitive pressures, our gross margins could decline, further straining our financial condition. Moreover, ongoing trade policy uncertainty could hinder our ability to plan effectively, adversely affecting our business, operating results, and financial condition.
An extended U.S. Government Shutdown Could Adversely Affect Our Ability to Execute Contracts, Receive Payments, and Secure New Awards.
A portion of our revenue is derived, directly or indirectly, from contracts with U.S. federal, state, and local government agencies. As a result, our business is subject to risks associated with changes in government funding priorities, budgetary constraints, and administrative disruptions.
During a shutdown or delay in the passage of appropriations bills, government agencies may experience interruptions in procurement, contracting, and payment activities. Consequently, agencies may be unable to issue new awards, exercise contract options, or obligate additional funding under existing contracts. Ongoing projects could be delayed or suspended, and payments to us may be deferred due to the unavailability of appropriated funds or furloughs of government personnel responsible for contract administration and approvals. These disruptions could negatively impact our cash flows, the timing of revenue recognition, and our overall financial results.
Even short-term shutdowns or funding delays can create uncertainty for our customers and partners, lengthen sales and contracting cycles, and affect our ability to forecast and close new business. There can be no assurance as to when a U.S. government shutdown would end or how quickly our customers and partners could resume normal operations and payment activities. Prolonged or repeated shutdowns, or material delays in government appropriations, could have a material adverse effect on our business, results of operations, liquidity, and financial condition.
Other than the risk factor discussed above, there have been no material changes to the risk factors disclosed in “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC on September 30, 2025. We encourage investors to review the risk factors and uncertainties relating to our business disclosed in that Form 10-K, as supplement by this Form 10-Q, as well as those contained in Part 1, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, above.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
of the Company’s directors or officers adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended September 30, 2025, as such terms are defined under Item 408(a) of Regulation S-K.
(a) Exhibits
| Incorporated by Reference |
Filed/Furnished |
|||||||||||
| Exhibit Number |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
Herewith |
||||||
| 3.1 |
8-K |
333-216014 |
3.1 |
8/25/17 |
||||||||
| 3.2 |
8-K |
001-38338 |
3.1 |
4/30/19 |
||||||||
| 3.3 |
8-K |
001-38338 |
3.1 |
3/18/20 |
||||||||
| 3.4 | Third Certificate of Amendment to Amended and Restated Certificate of Incorporation of Rekor Systems, Inc. as filed with the Secretary of the State of Delaware on April 22, 2024. | 8-K | 001-38338 | 3.1 | 4/22/24 | |||||||
| 3.5 |
8-K |
001-38338 |
3.2 |
12/15/21 |
||||||||
| 31.1 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
* |
||||||||||
| 31.2 |
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
* |
||||||||||
| 32.1 |
** |
|||||||||||
| 32.2 |
** |
|||||||||||
| 101.INS |
Inline XBRL Instance Document |
* |
||||||||||
| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
* |
||||||||||
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
* |
||||||||||
| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
* |
||||||||||
| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
* |
||||||||||
| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
* |
||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) | |||||||||||
* Filed herewith.
** Furnished herewith.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Rekor Systems, Inc. |
|||
| By: |
/s/ Robert A. Berman |
||
| Name: |
Robert A. Berman | ||
| Title: |
Interim President and Chief Executive Officer and Chairman of the Board Principal Executive Officer |
||
| Date: |
November 13, 2025 | ||
| By: |
/s/ Eyal Hen |
||
| Name: |
Eyal Hen |
||
| Title: |
Chief Financial Officer Principal Financial and Accounting Officer |
||
| Date: |
November 13, 2025 | ||
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Robert A. Berman, certify that:
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Rekor Systems, Inc. |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d 15(f)) for the registrant and have: |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation. and |
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. and |
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information. and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
|
Date: November 13, 2025 |
/s/ Robert A. Berman |
|
| Robert A. Berman | ||
| Interim President and Chief Executive Officer and Chairman of the Board | ||
|
Principal Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Eyal Hen, certify that:
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Rekor Systems, Inc. |
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d 15(f)) for the registrant and have: |
|
(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. |
|
(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. |
|
(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation. and |
|
(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. and |
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information. and |
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 13, 2025 |
/s/ Eyal Hen |
|
|
Eyal Hen |
||
|
Chief Financial Officer and Principal Financial and Accounting Officer |
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certify, pursuant to, and as required by, 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that the Quarterly Report of Rekor Systems, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: November 13, 2025 |
/s/ Robert A. Berman |
|
| Robert A. Berman | ||
| Interim President and Chief Executive Officer and Chairman of the Board | ||
|
Principal Executive Officer |
A signed original of this written statement required by Section 906 of the Sarbanes Oxley Act of 2002 has been provided to Rekor Systems, Inc. and will be retained by Rekor Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certify, pursuant to, and as required by, 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that the Quarterly Report of Rekor Systems, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2025 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Date: November 13, 2025 |
/s/ Eyal Hen |
|
|
Eyal Hen |
||
|
Chief Financial Officer and Principal Financial and Accounting Officer |
A signed original of this written statement required by Section 906 of the Sarbanes Oxley Act of 2002 has been provided to Rekor Systems, Inc. and will be retained by Rekor Systems, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.