Rekor Systems: $5.09M cash and going-concern warning
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rekor Systems, Inc. (REKR) reported third-quarter revenue of $10.904 million, down from $14.194 million a year earlier. Recurring revenue increased to $7.546 million from $6.520 million, while product and service revenue declined to $3.358 million from $7.674 million. Net loss narrowed to $2.857 million from $4.149 million. Results included a $3.920 million gain on lease remeasurement and a $2.170 million property-and-equipment write-off.
For the first nine months, revenue was $33.830 million versus $35.751 million, net loss was $12.769 million versus $23.681 million, and operating activities used $10.562 million of cash versus $20.582 million. Cash and cash equivalents were $5.088 million at September 30, 2026, and the working capital deficit was $10.210 million. Management said existing cash was insufficient to fund current operations and that these factors raise substantial doubt about the company’s ability to continue as a going concern. The $15 million Series A Prime Revenue Sharing Notes mature December 15, 2026; management expects refinancing, restructuring or other additional capital will be needed. In October, Rekor entered into a five-year lease for its new headquarters, with approximately $1.5 million in fixed payments and commencement expected in the fourth quarter of 2026.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter net loss narrowed to $2.857 million from $4.149 million.
- Moderate pointRecurring revenue rose to $7.546 million from $6.520 million in Q3.
- Moderate pointNine-month operating cash use fell to $10.562 million from $20.582 million.
Negative
- Major pointManagement cited substantial doubt about the company’s ability to continue as a going concern.
- Major point. Forward-looking: it has not happened yet and may not happen.$15 million in notes mature December 15, 2026; refinancing or other capital is expected. 34% of market cap
- Moderate pointThird-quarter revenue fell to $10.904 million from $14.194 million.
- Moderate pointWorking capital deficit was $10.210 million at September 30, 2026.
Key Figures
Key Terms
going concern financial
working capital deficit financial
Series A Prime Revenue Sharing Notes financial
performance obligations financial
right-of-use asset financial
Level 3 fair value measurement financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did REKR report in Q3 2026?
Why did REKR report substantial doubt about its ability to continue as a going concern?
What are the terms of Rekor’s Series A Prime Revenue Sharing Notes?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
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 10, 2026, 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, 2025 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, 2026
| PART I - FINANCIAL INFORMATION |
4 |
||
| ITEM 1. |
FINANCIAL STATEMENTS |
4 |
|
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
4 |
||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
5 |
||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY |
6 |
||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
7 |
||
| NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
8 |
||
| ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
25 |
|
| ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
37 |
|
| ITEM 4. |
CONTROLS AND PROCEDURES |
37 |
|
| PART II - OTHER INFORMATION |
38 |
||
| ITEM 1. |
LEGAL PROCEEDINGS |
38 |
|
| ITEM 1A. |
RISK FACTORS |
39 |
|
| ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
39 |
|
| ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
40 |
|
| ITEM 4. |
MINE SAFETY DISCLOSURES |
40 |
|
| ITEM 5. |
OTHER INFORMATION |
40 |
|
| ITEM 6. |
EXHIBITS |
40 |
|
| SIGNATURES |
41 |
||
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REKOR SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
| September 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net of allowance for credit losses of $604 and $519, 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 | ||||||||
| Deposits | ||||||||
| Total long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Series A Prime Revenue Sharing Notes, net of debt discount of $33 and $131, respectively | ||||||||
| Series A Prime Revenue Sharing Notes - related party, net of debt discount of $16 and $66, respectively | ||||||||
| Loan payable, current portion | ||||||||
| Lease liability operating, short-term | ||||||||
| Lease liability financing, short-term | ||||||||
| Contract liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Long-term Liabilities | ||||||||
| 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 7) | ||||||||
| Stockholders' equity | ||||||||
| Preferred stock, $0.0001 par value, 2,000,000 authorized, 505,000 shares designated as Series A and 240,861 shares designated as Series B as of September 30, 2026 and December 31, 2025. No preferred stock was issued or outstanding as of September 30, 2026 or December 31, 2025. | ||||||||
| Common stock, $0.0001 par value; 300,000,000 shares authorized; 138,032,299 and 136,791,826 shares issued as of September 30, 2026 and December 31, 2025, respectively; 137,715,291 and 136,477,697 shares outstanding as of September 30, 2026 and December 31, 2025, respectively | ||||||||
| Treasury stock, 317,008 and 314,129 shares as of September 30, 2026 and December 31, 2025, 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, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue, excluding depreciation and amortization | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| Selling and marketing expenses | ||||||||||||||||
| Research and development expenses | ||||||||||||||||
| Loss on write-off of property and equipment | ||||||||||||||||
| Gain on lease remeasurement, net | ( | ) | ( | ) | ||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss on remeasurement of ATD Holdback Shares | ( | ) | ||||||||||||||
| Other income (expense), net | ( | ) | ||||||||||||||
| Total other (expense) income, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Loss per common share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic and diluted | ||||||||||||||||
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, 2026 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance upon vesting of restricted stock units | - | |||||||||||||||||||||||||||
| Shares withheld upon vesting of restricted stock units | ( | ) | ||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
| 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 January 1, 2026 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
| Stock-based compensation | - | - | ||||||||||||||||||||||||||
| Issuance upon exercise of stock options | ||||||||||||||||||||||||||||
| Issuance upon vesting of restricted stock units | ||||||||||||||||||||||||||||
| Shares withheld upon vesting of restricted stock units | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
| 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 | $ | $ | ( | ) | $ | $ | ( | ) | $ | |||||||||||||||||||
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, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Bad debt expense | ||||||||
| Depreciation | ||||||||
| Amortization of right-of-use financing lease asset | ||||||||
| Non-cash operating lease expense | ||||||||
| Share-based compensation | ||||||||
| Amortization of debt discount | ||||||||
| Amortization of intangible assets | ||||||||
| Loss on remeasurement of ATD Holdback Shares | ||||||||
| Loss due to the remeasurement of the STS Earnout and Contingent Consideration, net | ||||||||
| Loss (gain) on sale of property and equipment | ( | ) | ||||||
| Loss on write-off of property and equipment | ||||||||
| Gain on lease remeasurement, net | ( | ) | ||||||
| Loss on operating lease abandonment | ||||||||
| Loss on financing lease abandonment | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ||||||||
| Other current assets and deposits | ||||||||
| Accounts payable, accrued expenses and other current liabilities | ( | ) | ||||||
| Contract liabilities | ( | ) | ||||||
| Lease liability | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities: | ||||||||
| Capital expenditures | ( | ) | ( | ) | ||||
| Proceeds from the sale of property and equipment | ||||||||
| Proceeds from notes receivable | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from 2025 Sales Agreement, net | ||||||||
| Net proceeds from exercise of options | ||||||||
| Payments related to financing leases | ( | ) | ( | ) | ||||
| Repayments of loans payable | ( | ) | ( | ) | ||||
| Repurchases of common stock | ( | ) | ( | ) | ||||
| Repayment of STS Notes | ( | ) | ||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| 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: | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
| Restricted cash and cash equivalents at end of period | ||||||||
| 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”).
Rekor is a technology company developing trusted-data, privacy, security, and intelligence solutions for real-world transportation, public-safety, video, and sensor networks. We work to modernize public safety, urban mobility, and transportation management through the development, implementation and application of digital technologies, with a focus on ensuring the security and reliability of data and appropriate privacy protections. By collaborating closely with public and private sector customers, we deliver services and solutions that enable them to improve the reliability, efficiency, accountability, safety and security of their operations. Our vision is to create safer, smarter, and more sustainable roadways and communities, improving the lives of citizens and the world around them. Our products and services collect, connect, and organize mobility data, making it more useful and accessible, while providing actionable real-time insights to enable better decision-making. This provides our customers with both enhanced real time and historical data and the tools to manage and use it efficiently, securely and responsibly. Our products and services support improved planning and situational awareness, rapid response capabilities, risk mitigation strategies, and predictive analytics. In our efforts to safeguard privacy and ensure the reliability of data, we have developed proprietary techniques for anonymization of data and verification of video and audio records, which we believe have broad applicability to the media, insurance and other markets beyond our traditional client bases.
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, 2026 and 2025.
The financial data and other information disclosed in these notes are unaudited. The results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026.
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, 2025. 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.
Certain prior-period amounts have been reclassified to conform with the current-period presentation. Most notably, proceeds from notes receivable, which were previously presented within net cash provided by financing activities, are now presented within net cash used in investing activities on the unaudited condensed consolidated statements of cash flows. Other reclassifications relate to the aggregation or disaggregation of certain captions within the financial statements. These reclassifications had no effect on previously reported net loss, total stockholders' equity, or net cash flows in the aggregate.
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 fund 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 cash flows 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, 2026, the Company had a working capital deficit 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 single operating and reportable segment.
The Company’s chief operating decision maker (“CODM”) is the president and chief executive officer.
The Company does not report balance sheet information by segment since balance sheet information by segment is not reviewed by the CODM.
The CODM uses net income to assess the performance of the business. The significant expenses regularly reviewed by the CODM are cost of revenues, excluding depreciation and amortization and the Company’s administrative and 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, 2026, 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 condensed consolidated balance sheets for accounts receivable, notes receivable and accounts payable approximate fair value as of September 30, 2026 and December 31, 2025 due to the short-term maturity of these instruments. The carrying amounts reported for long-term debt and long-term receivables also approximate fair value as of September 30, 2026 and December 31, 2025, based on management’s evaluation of current rates compared to market rates of interest and other relevant factors.
The Company applies the fair value framework established by ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"). Refer to the Company's 2025 Annual Report on Form 10-K for additional information regarding the Company's fair value measurement policies, including the Level 1, Level 2 and Level 3 input hierarchy.
The Company’s goodwill and other intangible assets are measured at fair value upon acquisition and assessed for impairment on a recurring and non-recurring basis, respectively, using Level 3 inputs.
As of September 30, 2026 and December 31, 2025, the Company had no Level 1, Level 2 or Level 3 assets or liabilities outstanding. The Company historically considered its STS Contingent Consideration and ATD Holdback Shares to be Level 3 instruments. The STS Contingent Consideration was remeasured to zero during the year ended December 31, 2025, and the ATD Holdback Shares were settled on January 2, 2025 through the issuance of
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. The Company recognizes revenue in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606"), which requires revenue to be 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, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Recurring revenue | $ | $ | $ | $ | ||||||||||||
| Product and service revenue | ||||||||||||||||
| Total revenue | $ | $ | $ | $ | ||||||||||||
Revenues
Recurring revenue
Recurring revenue includes the Company’s Software-as-a-Service ("SaaS") revenue, subscription revenue, eCommerce revenue, customer support revenue and contactless compliance revenue earned under long-term fixed monthly fee arrangements. The Company generates recurring revenue by a combination of direct sales, partner-assisted sales, and eCommerce sales. These sales involve both long-term contracts with customers that provide for periodic payments and short-term contracts that are automatically invoiced on a monthly basis.
Where recurring revenue is generated through the Company’s SaaS model, 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 revenue under contracts entered into using a subscription model for data collection services 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.
Recurring revenue also includes monthly contactless compliance revenue under the Company's Uninsured Vehicle Enforcement Diversion Program. 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.
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.
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.
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.
The Company also generates revenue through its engineering 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, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| 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 and speed application. This 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, 2026, 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, 2026, $
The services due for contract liabilities described above are shown below as of September 30, 2026 (dollars in thousands):
| 2026, remaining | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
Cash and Cash Equivalents, and Restricted Cash
The Company considers all highly-liquid debt instruments that are readily convertible into cash and have an original maturity of three months or less at the time of purchase 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, 2026 and December 31, 2025 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, 2026 and December 31, 2025, the Company had deposits totaling $
Customer A accounted for
As of September 30, 2026 and December 31, 2025, Customer A accounted for
Accounts Payable and Other Current Liabilities
As of September 30, 2026 and December 31, 2025, amounts owed to board members of $
A summary of other current liabilities is as follows (in thousands):
| September 30, 2026 | December 31, 2025 | |||||||
| Payroll and payroll related expense | $ | $ | ||||||
| Right of offset to restricted cash | ||||||||
| Other | ||||||||
| Other current liabilities | $ | $ | ||||||
New Accounting Pronouncements Effective in Current Period
In July 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient that permits entities to assume that current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable and current contract assets arising from revenue transactions within the scope of Topic 606 when estimating expected credit losses. The guidance in this ASU is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. The amendments should be applied prospectively. The guidance became effective for the Company on January 1, 2026. The Company did not elect the practical expedient, and the adoption did not have an impact on the Company's unaudited condensed consolidated financial statements or related disclosures for the three and nine months ended three and nine months ended September 30, 2026.
Recently Issued Accounting Pronouncements Not Yet Adopted
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 related disclosures.
In December 2025, the FASB issued ASU 2025-11 - Interim Reporting (Topic 270): Improvements to Interim Reporting Guidance, which is intended to improve the clarity and organization of the interim reporting guidance in Topic 270. The amendments clarify the scope and presentation requirements for interim financial statements and introduce a general disclosure principle requiring entities to disclose events or transactions occurring since the end of the last annual reporting period that have a material impact on the entity. The guidance also incorporates certain interim disclosure requirements from other Topics into Topic 270 to improve accessibility of the interim reporting guidance. The amendments in this ASU are effective for interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2025-11 will have on its consolidated financial statements and related 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, 2025.
NOTE 2 - LEASES
The Company has operating leases for office facilities in various locations throughout the United States. 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 one to five 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 $
In December 2025, the Company determined that the operations of its wholly owned subsidiary, Waycare Technologies Ltd. ("Waycare"), located in Tel Aviv, Israel, were no longer sustainable given the entity's operating cost structure. The Company initiated a plan to wind down the Tel Aviv operations and consolidate all engineering functions into its U.S. facilities. The plan was announced to employees on February 23, 2026, and Tel Aviv operations substantially ceased on February 24, 2026.
As a result of the decision, the Company identified a triggering event requiring an impairment assessment of the related long-lived assets, including the operating lease ROU asset associated with the Tel Aviv office lease. The Company determined that the undiscounted future cash flows expected from the use and eventual disposition of the operating lease ROU asset were less than its carrying amount and, accordingly, the asset was written down to its estimated fair value. The Company estimated the fair value of the operating lease ROU asset to be approximately $0, based on the expected abandonment of the asset with no material residual or sublease value (a Level 3 fair value measurement). As a result, the Company recognized an impairment charge of $
As part of the Company’s ongoing efforts to optimize operations and improve efficiency, the Company evaluated its lease portfolio and related renewal options. In connection with this review, the Company took certain actions with respect to its leased locations, including communicating with landlords where appropriate. In relation to the Tel Aviv lease, the Company notified the landlord of its intent to vacate the premises during the second quarter of 2026, which resulted in a remeasurement of the related lease liability. Because the right-of-use asset associated with the Tel Aviv office had previously been fully impaired, the reduction in the lease liability resulted in the recognition of an approximately $
In January 2026, the Company entered into an amendment to the lease for its corporate headquarters in Columbia, Maryland that revised the timing of monthly base rent payments through the remaining lease term. The Company accounted for the amendment as a lease modification that is not a separate contract under ASC 842. As a result of the modification, the Company recognized a decrease of approximately $
In September 2026, the Company entered into an agreement to terminate the lease for its corporate headquarters in Columbia, Maryland prior to the end of the lease term. Upon termination, the Company derecognized the related operating lease liability of approximately $
During the nine months ended September 30, 2026, the Company exercised its option to terminate its lease for office space in Plano, Texas, effective December 31, 2026. The Company recognized a loss on lease termination of approximately $
Lease cost recognized in our unaudited condensed consolidated statements of operations is summarized as follows (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| 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 condensed consolidated financial statements is as follows:
| September 30, 2026 | December 31, 2025 | |||||||
| 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 as of September 30, 2026 were as follows (dollars in thousands):
| Operating Leases | Financing Leases | |||||||
| 2026, remaining | $ | $ | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less imputed interest | ||||||||
| Maturities of lease liabilities | $ | $ | ||||||
NOTE 3 – SUPPLEMENTAL NON-CASH DISCLOSURES OF CASH FLOW INFORMATION
Supplemental disclosures of cash flow information for the nine months ended September 30, 2026 and 2025 were as follows (dollars in thousands):
| Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | ||||||||
| (Decrease) increase in accounts payable and accrued expenses related to purchases of inventory | ( | ) | ||||||
| Transfer of inventory to costs to fulfill a contract | ||||||||
| Decrease in deposits related to Inventory received | ( | ) | ||||||
| Abandonment of financing lease | ||||||||
| Derecognition of ROU asset upon lease termination | ||||||||
| Contract modification resulting in a remeasurement of an operating lease | ||||||||
| Contract termination resulting in a remeasurement of an operating lease | ||||||||
| Non-cash financing activities: | ||||||||
| Settlement of ATD Holdback Shares with 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 4 – INTANGIBLE ASSETS
Intangible Assets Subject to Amortization
The following provides a breakdown of identifiable intangible assets, net as of September 30, 2026 and December 31, 2025 (dollars in thousands):
| September 30, 2026 | December 31, 2025 | |||||||
| Customer relationships | $ | $ | ||||||
| Marketing related | ||||||||
| 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, 2026 and 2025 was $
As of September 30, 2026, 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):
| 2026, remaining | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ |
NOTE 5 – 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 $
The Series A Prime Revenue Sharing Notes are payable from a pool of revenues received from contracts with 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. In connection with the issuance of the Series A Prime Revenue Sharing Notes, the Company entered into a base Indenture (the Indenture), dated December 15, 2023 with Argent Institutional Trust Company, as trustee. The Indenture creates a first priority security interest in the contract revenues for the benefit of the holders of the Series A Prime Revenue Sharing Notes and 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.
Under the terms of the Indenture, 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 of
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, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| 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, 2026 (dollars in thousands):
| 2026, remaining | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Total | ||||
| Less unamortized debt discount | ( | ) | ||
| Total notes payable | $ |
NOTE 6 – 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, 2026.
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, 2026.
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, 2026 and 2025, the Company did not 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, 2026 and December 31, 2025, 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, 2026 and 2025, the Company did not record any expense or benefit related to income tax.
NOTE 7 – 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. 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 purported fees owed as a result of 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 a complaint in New York State Supreme Court. In the new action, 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. On November 24, 2025, the Appellate Review Board ("ARB") served a Notice of Appeal Acceptance and indicated they accepted the matter for review. They subsequently set a briefing schedule for the parties. Complainant's brief was filed on January 22, 2026. The Company's response brief was filed on March 31, 2026. Complainant filed his reply brief on April 14, 2026. The matter has now been fully briefed before the ARB and the Company is awaiting findings from the ARB. The Company does not know when the ARB will issue its finding.
The Company believes these claims are without merit. The Company intends to vigorously defend itself in this lawsuit.
Rekor Systems, Inc. v. Viraj Mehta
On December 16, 2025, the Company completed an underwritten registered direct offering of
NOTE 8 – STOCKHOLDERS’ EQUITY
Authorized Common Stock
The Company is authorized to issue
2025 Sales Agreement
On February 10, 2025, the Company entered into an At Market Issuance Sales Agreement (the "2025 Sales Agreement") with Northland Securities, Inc., pursuant to which the Company could, from time to time, offer and sell shares of common stock having an aggregate offering price of up to $
During the term of the 2025 Sales Agreement, the Company issued an aggregate of
ATD Acquisition
On January 2, 2025, the one year anniversary of closing of the ATD Acquisition, the Company issued and delivered to ATD’s former owners
2025 Underwriting Agreement
On December 13, 2025, the Company entered into an underwriting agreement with William Blair & Company, L.L.C., as representative of the several underwriters, relating to an underwritten registered direct offering of
Gross proceeds from the offering were approximately $
Warrants
There was no activity related to the Company warrants during the nine months ended September 30, 2026. The table below shows the Company's outstanding warrants as of September 30, 2026:
| 2023 Promissory Notes (1) | 2023 Registered Direct Offering (2) | 2023 Private Warrants (3) | 2025 Underwriting Agreement (4) | Total | ||||||||||||||||
| Outstanding warrants as of September 30, 2026 | ||||||||||||||||||||
| Weighted average strike price of outstanding warrants as of September 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
| Intrinsic value of outstanding warrants as of September 30, 2026 | $ | $ | $ | $ | $ | |||||||||||||||
| (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 | |
| (4) | On December 16, 2025, in connection with the 2025 Underwriting Agreement, the Company issued warrants to purchase |
NOTE 9 – 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. As of September 30, 2026, an aggregate of
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 three years with a contractual term of ten years.
For the three and nine months ended September 30, 2026 and 2025 there was
A summary of stock option activity under the Company’s 2017 Plan during the period ended September 30, 2026 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, 2026 | $ | $ | ||||||||||||||
| Exercised | ( | ) | ||||||||||||||
| Expired | ( | ) | ||||||||||||||
| Outstanding and exercisable balance as of September 30, 2026 | $ | $ | ||||||||||||||
As of September 30, 2026, there was $
Restricted Stock Units
Stock compensation expense related to Restricted Stock Units ("RSUs") for the three months ended September 30, 2026 and 2025 was $
On March 20, 2026, in connection with the Company's amended and restated employment agreement with Robert A. Berman, the Company's President and Chief Executive Officer, the Company granted
A summary of RSU activity under the Company’s 2017 Plan for the nine months ended September 30, 2026 is as follows:
| Number of Shares | Weighted Average Unit Price | Weighted Average Remaining Contractual Term (Years) | ||||||||||
| Outstanding balance as of January 1, 2026 | $ | |||||||||||
| Granted | ||||||||||||
| Vested | ( | ) | ||||||||||
| Forfeited | ( | ) | ||||||||||
| Outstanding balance as of September 30, 2026 | $ | |||||||||||
All RSUs granted vest upon the satisfaction of a service-based vesting condition.
As of September 30, 2026, there was $
Rekor Labs Profit Interests
On March 25, 2026, Rekor Labs, LLC (“Rekor Labs”), a consolidated subsidiary of the Company, adopted an amended and restated limited liability company agreement and authorized the issuance of profits interests to certain service providers. In connection with that authorization, Rekor Labs granted profits interests to certain service providers representing
The profits interests did not vest and expired on September 25, 2026. No profits interests were outstanding as of September 30, 2026.
NOTE 10 – 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, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| (Dollars in thousands, except per share data) | (Dollars in thousands, except per share data) | |||||||||||||||
| Basic and diluted loss per share | ||||||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding - basic and diluted | ||||||||||||||||
| Basic and diluted loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Potentially dilutive securities excluded due to the anti-dilutive effect | ||||||||||||||||
As the Company had a net loss for the three and nine months ended September 30, 2026, the following
As the Company had a net loss for the three and nine months ended September 30, 2025, the following
NOTE 11 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events through the date these unaudited condensed consolidated financial statements were issued.
Litigation Against Former Director
On October 16, 2026, the Company filed a verified complaint in the Court of Chancery of the State of Delaware against a former director alleging breach of fiduciary duty in connection with the December 2025 Financing. See Note 7. The Company is unable to estimate the financial effect, if any, of this action on its condensed consolidated financial statements.
New Corporate Headquarters Lease
In October 2026, the Company entered into a five-year lease for office space in Fulton, Maryland, which will serve as the Company's new corporate headquarters and replace its Columbia, Maryland headquarters (see Note 2). The Company expects the lease to commence in the fourth quarter of 2026, when the landlord makes the premises available for use, and will recognize a right-of-use asset and an operating lease liability at that date. Total fixed lease payments over the lease term are approximately $
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, 2025, 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:
| ● |
operating risks, including supply chain, equipment or system failures, cyber and other malicious attacks 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, wars and local conflicts and other events that could affect our operations and the amounts and timing of revenues and expenses; |
|
| ● |
reputational risks affecting customer confidence or willingness to do business with us, including the risk that adverse publicity concerning one or more competitors could adversely affect our business; |
|
| ● |
financial market conditions, including the continuation of significant national and global uncertainties that may affect these conditions, and the results of financing efforts; |
|
| ● |
our continued ability to successfully access the public markets for debt or equity capital; |
|
| ● |
our ability to regain and maintain compliance with Nasdaq's listing requirements; |
|
| ● |
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; | |
| ● |
current and future litigation; |
|
| ● |
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; |
|
| ● |
our failure to successfully develop and maintain the competitive position of 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; |
|
| ● |
the inability of our strategic plans and goals to maintain and expand our geographic markets, customer base and product and service offerings; |
|
| ● | risks associated with pandemics and other global health emergencies, and their impact on U.S. and international markets and economies; and | |
| ● | Other significant risks, uncertainties and other considerations discussed in this report. |
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, 2025 (the “2025 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 is a technology company developing trusted-data, privacy, security, and intelligence solutions for real-world transportation, public-safety, video, and sensor networks. We work to modernize public safety, urban mobility, and transportation management through with a focus on ensuring the security and reliability of data and appropriate privacy protections. By collaborating closely with public and private sector customers, we deliver services and solutions that enable them to improve the reliability, efficiency, accountability, safety and security of their operations.
Our vision is to create safer, smarter, and more sustainable roadways and communities, improving the lives of citizens and the world around them. To implement this vision, we have developed a suite of interconnected AI-driven hardware and purpose-built software platforms. Powered by diverse multi-modal datasets and proprietary AI technologies, these solutions deliver advanced roadway intelligence, enabling clients to more effectively monitor, manage, and optimize the movement of vehicles, traffic, and activities in and around roadways and communities with precision and sensitivity to privacy and environmental concerns. Our products and services collect, connect, and organize mobility data, making it more useful, and accessible, while providing actionable real-time insights to enable better decision-making. This provides our customers with both enhanced real time and historical data and the tools to manage and use it efficiently, securely and responsibly. Our products and services support improved planning and provide significantly enhanced situational awareness, rapid response capabilities, risk mitigation strategies, and predictive analytics.
We have also developed privacy protection and evidence authentication tools for responsible vehicle recognition. Our approach has been designed and implemented to protect non-relevant information by default, apply purpose-based retention, provide auditable access controls, and verify the integrity of video evidence, while preserving authorized public-safety and transportation uses. In our efforts to safeguard privacy and ensure the reliability of data, we have developed proprietary techniques for anonymization of ALPR data as well as proprietary techniques for verification of video and audio records that we believe have broad applicability to the media, insurance and other markets beyond our traditional client bases.
Our operations are conducted primarily by our wholly-owned subsidiaries, Rekor Recognition Systems, Inc. (“Rekor Recognition”), Waycare Technologies, Ltd. and Waycare Technologies, Inc. (combined “Waycare”), Southern Traffic Services, Inc. (“STS”), and All Traffic Data Services, LLC (“ATD”). We also have a separate subsidiary, Rekor Labs LLC ("Rekor Labs"), which develops media-authentication and data-security technologies, including BornAuthentic, a technology designed to authenticate video and audio at the point of capture and support later verification of whether the video or audio has been altered. Although developed in response to public-safety requirements, we believe this technology has broader applicability.
A New Operating System for U.S. Roadways
Over the past decade, the United States of America has begun to implement a critical turning point in the evolution of its transportation and roadway infrastructure. After many years of reliance on analog technologies and manual methodologies that have resulted in rising costs, and have involved inefficiencies and safety hazards that are now preventable, Federal, state and local transportation agencies are now looking to exploit innovations like sensor technology, Internet of Things (“IoT”), AI, cloud computing and autonomous vehicles. These technologies are advancing rapidly and can address fundamental challenges such as poor roadway quality, traffic congestion, and driver safety.
Since 2018, Rekor has worked to deserve a place at the forefront of this wave of transformation and modernization actively designing, building, and deploying AI solutions and other advanced complementary technologies through public-private collaborations with departments of transportation (“DOTs”), public safety agencies, and private sector partners. Rekor is committed to helping lay the foundation of a groundbreaking new digital infrastructure operating system for roadways—and has already delivered proven value across multiple domains:
| ● |
Enhanced Roadway Safety: Real-time AI monitoring systems detect hazards and reduce roadway fatalities. |
|
| ● |
Optimized Traffic Flow: Intelligent analytics alleviate congestion, improve commute times, and boost productivity. |
|
| ● |
Cost Savings & Efficiency: AI automation streamlines operations, maximizing resource allocation for agencies. |
|
| ● |
Improved Data Accuracy & Insights: Precise, real-time traffic data drives smarter decision-making and better resource planning. |
|
| ● |
Border & Freight Management: AI-driven vehicle identification enhances security while minimizing bottlenecks. |
|
| ● |
Uninsured Driver Reduction: Automated enforcement ensures compliance, improving public safety and reducing costs for all. |
By providing advanced AI-driven insights to assist forward-thinking infrastructure managers, Rekor is helping to reshape how transportation systems operate. Its solutions empower public agencies and public sector clients to prevent accidents, reduce inefficiencies, and optimize resources, driving smarter, safer, and more efficient roadways across the nation.
Roadway Intelligence
Roadway intelligence involves harnessing vast amounts and varieties of data from roadways, vehicles, transportation systems, and hundreds of external elements like weather, special events, and work zones, transforming it into actionable insights. Rekor is committed to revolutionizing transportation systems by collecting, connecting, and organizing mobility data. Through our Rekor One® roadway intelligence engine, we aggregate datasets from diverse sources and securely deliver insights to government agencies and private-sector clients, driving smarter, more effective decision-making across transportation management, urban mobility, and public safety ecosystems.
Our mission extends beyond connectivity—we are working toward building a dynamic, AI-driven network to modernize traffic management, public safety, and emergency services. By applying a digital layer to existing physical infrastructure and roadways, Rekor is creating a next-generation digital operating system for roadways, delivering real-time intelligence that powers economic growth, operational excellence, and improved quality of life for communities. While doing so, Rekor has been mindful of the challenges to personal privacy and the risks of malicious security breaches, developing proprietary processes for anonymizing data and ensuring its security and responsible transmission and use.
Roadway Intelligence Powered by Rekor
Rekor has been continuously working on better ways to transform transportation and mobility data into actionable insights. Powered by advanced AI and fueled by diverse data sources, Rekor delivers historical and real-time, as well as predictive alerts that can be used to enhance mobility, safety, and operational efficiency across public and private sectors. Our platforms aggregate and analyze trillions of data points from roadway sensors and other IoT devices, 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.
Rekor’s solutions support a variety of use cases, including:
| ● |
Traffic Analysis |
|||
| o |
Comprehensive traffic reports, including Federal Highway Administration (“FHWA”) mandated class, count and speed analytics. |
|||
| o |
Analytics on bicycles, pedestrians, and other micro-mobility modes. |
|||
| o |
Identification of patterns and hot spots for emissions and traffic impacts. |
|||
| ● |
Traffic Operations & Management |
|||
| o |
Data-driven traffic operations for improved efficiency. |
|||
| o |
Real-time incident detection and response for proactive problem-solving. |
|||
| o |
Proactive traffic calming around events to minimize congestion and enhance safety. |
|||
| o |
Intelligent analytics to alleviate congestion, shorten commute times, and boost productivity. |
|||
| ● |
High-Definition Video Monitoring with Privacy Protection |
|||
| o |
Traffic monitoring to assist law enforcement. |
|||
| o |
Support for intelligence-based policing with privacy protections to improve crime prevention. |
|||
| o |
Contactless compliance and enforcement solutions for safety and legal adherence. |
|||
| ● |
Enhanced Roadway Safety |
|||
| o |
Real-time privacy protected AI monitoring systems to detect hazards and reduce roadway fatalities. |
|||
| o |
Predictive analytics to anticipate and address potential safety risks. |
|||
| ● |
Optimized Resource Allocation |
|||
| o |
AI automation to streamline operations and maximize resource allocation. |
|||
| o |
Improved data accuracy to support better decision-making and strategic planning. |
|||
| ● |
Border & Freight Management |
|||
| o |
AI-based vehicle identification to enhance national security and minimize bottlenecks at borders and ports. |
|||
| o |
Weigh-in-Motion (“WIM”) systems for real-time commercial trucking analytics |
|||
| ● |
Insurance Compliance & Public Safety |
|||
| o |
Automated enforcement systems to reduce uninsured drivers and improve overall public safety. |
|||
By combining advanced technology, domain expertise, and implementation capacity, Rekor can offer end-to-end roadway intelligence solutions for public agencies and private sector clients. Using our solutions, we are able to generate unique and deep insights that enable proactive and privacy sensitive data-driven decision-making, enabling governments and businesses to unlock the full potential of their infrastructure, and foster safer, smarter, and more efficient roadways.
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:
| ● |
Increasing Concerns Regarding Personal Privacy and Authenticity of Data – Rekor has conscientiously developed its products and services with sensitivity to concerns about privacy and security, incurring higher costs to develop proprietary methods and process to support responsible security and privacy protections. These have included processes that allow vehicle data to be anonymized, aggregated, distributed and used responsibly and video and audio content to be verified as original from the point of capture as well as identify content that has been altered. Serious concerns about these issues have increasingly been recognized. We believe the processes we have developed can play a role in addressing these issues and will continue to pursue their adoption. |
|
| ● |
AI for Infrastructure – We believe that the application of AI to the analysis of conditions on roadways and other transportation infrastructure can significantly improve 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. |
|
| ● |
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. Connected vehicle sensors can provide important information related to hazardous conditions, speed variations, intersection performance, and more. Notably, the data from these vehicles represent a virtual network that is independent of the infrastructure maintained and operated by public agencies. Giving them the tools to efficiently and intelligently collect and use this data can help them 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. |
|
| ● |
New and Expanded Uses for Vehicle Recognition Systems – We believe that reductions in the cost of vehicle recognition products and services have significantly broadened 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. As larger agencies implement the new systems, we have seen and responded to increased familiarity and awareness among smaller agencies. |
|
| ● |
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. |
|
| ● |
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 for trucks 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. |
| ● |
Graphic Processing Unit (“GPU”) Improvements – The roadway intelligence market has benefited 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. |
|
| ● |
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. |
|
| ● |
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. |
|
| ● |
Inability to Achieve Profitability - Rekor has not yet achieved sustained profitability and continues to incur losses, notwithstanding the decreases in its operating expenses during the first nine months of 2026 resulting from its cost-containment initiatives. 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. |
|
| ● |
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. |
|
| ● |
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. |
|
| ● |
Cyber Security Risks - Rekor relies on information technology in all aspects of its business. A significant disruption or failure in the systems used in the information technology sector 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. |
|
| ● |
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 collection and aggregation, traffic management, public safety service 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 are incurred.
Operating Expenses
Our operating expenses consist of general and administrative expenses, sales and marketing, research and development, gain on lease remeasurement, net, loss on write-off of property and equipment and depreciation and amortization. Personnel costs have been 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, office leases, professional fees, insurance and related expenses.
We expect our general and administrative expenses to continue to reflect actions taken to align our cost structure with current revenue levels, while continuing to include the costs associated with operating as a public company, including accounting, compliance, legal, insurance and investor relations. 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.
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 focus on achieving 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.
Loss on Write-off of Property and Equipment
Loss on write-off of property and equipment consists of the net carrying amount of leasehold improvements and other property and equipment written off in connection with the exit of leased facilities.
Gain on Lease Remeasurement, net
Gain on lease remeasurement, net consists of gains and losses recognized upon the remeasurement, modification or termination of our operating leases, including the derecognition of lease liabilities in excess of the carrying amount of the related right-of-use assets, net of any termination payments. These amounts arise from actions taken to optimize our leased facilities and are not expected to recur on a regular basis.
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 interest expense incurred on our debt arrangements, partially offset by interest income earned on cash and cash equivalents and notes receivable, as well as other items that may include legal settlements, legal judgements, gains or losses on the sale of fixed assets, and gains or losses on the change in fair value of our liabilities.
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 will 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, 2025.
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, |
|||||||||||||||
| (Dollars in thousands) |
2026 |
2025 |
2026 |
2025 |
||||||||||||
| Revenue |
$ | 10,904 | $ | 14,194 | $ | 33,830 | $ | 35,751 | ||||||||
| Cost of revenue, excluding depreciation and amortization |
5,646 | 5,195 | 16,093 | 16,200 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| General and administrative expenses |
5,542 | 6,299 | 19,015 | 20,519 | ||||||||||||
| Selling and marketing expenses |
590 | 1,465 | 2,191 | 4,923 | ||||||||||||
| Research and development expenses |
2,088 | 3,660 | 8,009 | 11,289 | ||||||||||||
| Loss on write-off of property and equipment |
2,170 | - | 2,170 | - | ||||||||||||
| Gain on lease remeasurement, net |
(3,920 | ) | - | (6,673 | ) | - | ||||||||||
| Depreciation and amortization |
1,122 | 1,545 | 3,955 | 4,662 | ||||||||||||
| Total operating expenses |
7,592 | 12,969 | 28,667 | 41,393 | ||||||||||||
| Loss from operations |
(2,334 | ) | (3,970 | ) | (10,930 | ) | (21,842 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense, net |
(525 | ) | (568 | ) | (1,534 | ) | (1,744 | ) | ||||||||
| Loss on remeasurement of ATD Holdback Shares |
- | - | - | (120 | ) | |||||||||||
| Other income (expense), net |
2 | 389 | (305 | ) | 25 | |||||||||||
| Total other (expense) income, net |
(523 | ) | (179 | ) | (1,839 | ) | (1,839 | ) | ||||||||
| Net loss |
$ | (2,857 | ) | $ | (4,149 | ) | $ | (12,769 | ) | $ | (23,681 | ) | ||||
Comparison of the Three and Nine Months Ended September 30, 2026 and the Three and Nine Months Ended September 30, 2025
Total Revenue
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2026 |
2025 |
$ |
% |
2026 |
2025 |
$ |
% |
||||||||||||||||||||||||
| Revenue |
$ | 10,904 | $ | 14,194 | $ | (3,290 | ) | -23 | % | $ | 33,830 | $ | 35,751 | $ | (1,921 | ) | -5 | % | ||||||||||||||
Revenue decreased by 23% and 5% for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, respectively. The decrease was primarily due to lower product and service revenue, as the third quarter of 2025 included significant perpetual software license sales within our Public Safety segment that did not recur in 2026. The decrease was partially offset by growth in recurring revenue, supported by continued expansion within our existing customer base, including increased deployments and adoption of recurring services.
Cost of Revenue, Excluding Depreciation and Amortization
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2026 |
2025 |
$ |
% |
2026 |
2025 |
$ |
% |
||||||||||||||||||||||||
| Cost of revenue, excluding depreciation and amortization |
$ | 5,646 | $ | 5,195 | $ | 451 | 9 | % | $ | 16,093 | $ | 16,200 | $ | (107 | ) | -1 | % | |||||||||||||||
Cost of revenue, excluding depreciation and amortization, increased by 9% for the three months ended September 30, 2026 and decreased by 1% for the nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, respectively. The increase for the three months was primarily due to a less favorable revenue mix, as the third quarter of 2025 included perpetual software license sales that carry minimal associated cost, together with higher costs of revenue in our Urban Mobility segment. For the nine months, cost of revenue was consistent with the prior year period, as lower costs associated with software license sales were offset by higher costs in our Urban Mobility segment.
Operating Expenses
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2026 |
2025 |
$ |
% |
2026 |
2025 |
$ |
% |
||||||||||||||||||||||||
| Operating expenses: |
||||||||||||||||||||||||||||||||
| General and administrative expenses |
$ | 5,542 | $ | 6,299 | $ | (757 | ) | -12 | % | $ | 19,015 | $ | 20,519 | $ | (1,504 | ) | -7 | % | ||||||||||||||
| Selling and marketing expenses |
590 | 1,465 | (875 | ) | -60 | % | 2,191 | 4,923 | (2,732 | ) | -55 | % | ||||||||||||||||||||
| Research and development expenses |
2,088 | 3,660 | (1,572 | ) | -43 | % | 8,009 | 11,289 | (3,280 | ) | -29 | % | ||||||||||||||||||||
| Loss on write-off of property and equipment |
2,170 | - | 2,170 | 100 | % | 2,170 | - | 2,170 | 100 | % | ||||||||||||||||||||||
| Gain on lease remeasurement, net |
(3,920 | ) | - | (3,920 | ) | -100 | % | (6,673 | ) | - | (6,673 | ) | -100 | % | ||||||||||||||||||
| Depreciation and amortization |
1,122 | 1,545 | (423 | ) | -27 | % | 3,955 | 4,662 | (707 | ) | -15 | % | ||||||||||||||||||||
| Total operating expenses |
$ | 7,592 | $ | 12,969 | $ | (5,377 | ) | -41 | % | $ | 28,667 | $ | 41,393 | $ | (12,726 | ) | -31 | % | ||||||||||||||
General and Administrative Expenses
General and administrative expenses decreased by 12% and 7% for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, respectively. The decrease was primarily driven by reductions in payroll and related expenses of $467,000 and $915,000, respectively, as a result of cost-containment initiatives implemented to better align with our current strategic priorities.
Selling and Marketing Expenses
Selling and marketing expenses decreased by 60% and 55% for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, respectively. The decrease was primarily due to a reduction in payroll and related expenses of approximately $484,000 and $2,028,000, respectively, resulting from cost-containment initiatives implemented to better align operations with our current strategic priorities.
Research and Development Expense
Research and development expenses decreased by 43% and 29% for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, respectively. The decrease was primarily driven by reductions in payroll and related expenses of $1,563,000 and $3,635,000, respectively, as a result of cost-containment initiatives implemented to better align with our current strategic priorities, partially offset by increased use of outside consultants and professional services of approximately $75,000 and $602,000, respectively.
Gain on Lease Remeasurement, Net
In the second quarter of 2026 the Company remeasured its lease in Tel Aviv. Because the associated right-of-use asset had previously been fully impaired in the fourth quarter of 2025, the reduction in the lease liability resulted in the recognition of an approximately $2,753,000 gain on lease remeasurement during the second quarter of 2026. During the third quarter of 2026, the Company entered into an agreement to terminate the lease for its corporate headquarters in Columbia, Maryland and terminated the Tel Aviv lease. The Columbia termination resulted in a gain on lease termination of approximately $3,159,000, net of a $2,250,000 termination payment. The Tel Aviv termination resulted in a gain of approximately $761,000 from the derecognition of the remaining lease liability and other associated liabilities related to the lease in Tel Aviv. These items resulted in a net gain on lease remeasurement of approximately $3,920,000 for the three months ended September 30, 2026 and $6,673,000 for the nine months ended September 30, 2026.
Loss on Write-off of Property and Equipment
During the third quarter of 2026, the Company entered into an agreement to terminate the lease for its corporate headquarters in Columbia, Maryland. The Columbia termination resulted in a loss due to the write-off of leasehold improvements and other property and equipment at the premises of approximately $2,170,000.
Other Expense
| Three Months Ended September 30, |
Change |
Nine Months Ended September 30, |
Change |
|||||||||||||||||||||||||||||
| (Dollars in thousands) |
2026 |
2025 |
$ |
% |
2026 |
2025 |
$ |
% |
||||||||||||||||||||||||
| Other income (expense): |
||||||||||||||||||||||||||||||||
| Interest expense, net |
$ | (525 | ) | $ | (568 | ) | $ | 43 | 8 | % | $ | (1,534 | ) | $ | (1,744 | ) | $ | 210 | 12 | % | ||||||||||||
| Loss on remeasurement of ATD Holdback Shares |
- | - | - | - | - | (120 | ) | 120 | 100 | % | ||||||||||||||||||||||
| Other income (expense), net |
2 | 389 | (387 | ) | -99 | % | (305 | ) | 25 | (330 | ) | -1320 | % | |||||||||||||||||||
| Total other (expense) income, net |
$ | (523 | ) | $ | (179 | ) | $ | (344 | ) | -192 | % | $ | (1,839 | ) | $ | (1,839 | ) | $ | - | 0 | % | |||||||||||
For the three and nine months ended September 30, 2026, interest expense, net decreased by 8% and 12%, compared to the three and nine months ended September 30, 2025, respectively, due to higher interest income from interest-bearing accounts.
Non-GAAP Measures (Unaudited)
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) stock-based compensation, (ii) gains on lease remeasurement, net, (iii) losses on write-off of property and equipment related to lease exits, and (iv) losses on remeasurement of ATD holdback shares. 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. Management uses EBITDA and Adjusted EBITDA to evaluate operating performance excluding the items described above and believes these measures assist investors in comparing performance across periods. 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, |
|||||||||||||||
| 2026 |
2025 |
2026 |
2025 |
|||||||||||||
| Net loss |
$ | (2,857 | ) | $ | (4,149 | ) | $ | (12,769 | ) | $ | (23,681 | ) | ||||
| Interest, net |
525 | 568 | 1,534 | 1,744 | ||||||||||||
| Depreciation and amortization |
1,122 | 1,545 | 3,955 | 4,662 | ||||||||||||
| EBITDA |
(1,210 | ) | (2,036 | ) | (7,280 | ) | (17,275 | ) | ||||||||
| Share-based compensation |
353 | 577 | 1,487 | 2,670 | ||||||||||||
| Loss on write-off of property and equipment |
2,170 | - | 2,170 | - | ||||||||||||
| Gain on lease remeasurement, net |
(3,920 | ) | - | (6,673 | ) | - | ||||||||||
| Loss on remeasurement of ATD Holdback Shares |
- | - | - | 120 | ||||||||||||
| Adjusted EBITDA |
$ | (2,607 | ) | $ | (1,459 | ) | $ | (10,296 | ) | $ | (14,485 | ) | ||||
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 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.
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, |
|||||||||||||||
| 2026 |
2025 |
2026 |
2025 |
|||||||||||||
| (Dollars in thousands, except percentages) |
(Dollars in thousands, except percentages) |
|||||||||||||||
| Revenue |
$ | 10,904 | $ | 14,194 | $ | 33,830 | $ | 35,751 | ||||||||
| Cost of revenue, excluding depreciation and amortization |
5,646 | 5,195 | 16,093 | 16,200 | ||||||||||||
| Adjusted Gross Profit |
$ | 5,258 | $ | 8,999 | $ | 17,737 | $ | 19,551 | ||||||||
| Adjusted Gross Margin |
48.2 | % | 63.4 | % | 52.4 | % | 54.7 | % | ||||||||
Adjusted Gross Margin for the three and nine months ended September 30, 2026 decreased compared to the three and nine months ended September 30, 2025. 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 provides 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 |
|||||||||||||||||||||||||||||
| 2026 |
2025 |
$ |
% |
2026 |
2025 |
$ |
% |
|||||||||||||||||||||||||
| Recurring revenue |
$ | 7,546 | $ | 6,520 | $ | 1,026 | 16 | % | $ | 20,843 | $ | 17,537 | $ | 3,306 | 19 | % | ||||||||||||||||
Recurring revenue increased by 16% and 19% for the three and nine months ended September 30, 2026, compared to the three and nine months ended September 30, 2025, respectively. 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 in 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, 2026, we had approximately $23,399,000 of contracts that were closed prior to September 30, 2026 but have a contractual period beyond September 30, 2026. 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 88% 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
We lease office facilities in various locations throughout the United States under operating leases expiring through 2029, and vehicles and equipment under financing leases expiring through 2031. As of September 30, 2026, we had operating lease liabilities of $834,000, including $435,000 classified as current and $399,000 classified as noncurrent, and financing lease liabilities of $786,000, including $424,000 classified as current and $362,000 classified as noncurrent. Refer to Note 2 - Leases to our unaudited condensed consolidated financial statements.
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, |
||||||||||||||||
| 2026 |
2025 |
Change |
||||||||||||||
| $ |
% |
|||||||||||||||
| Net cash used in operating activities |
$ | (10,562 | ) | $ | (20,582 | ) | $ | 10,020 | 49 | % | ||||||
| Net cash used in investing activities |
(277 | ) | (1,754 | ) | 1,477 | 84 | % | |||||||||
| Net cash (used in) provided by financing activities |
(677 | ) | 20,418 | (21,095 | ) | -103 | % | |||||||||
| Net decrease in cash, cash equivalents and restricted cash |
$ | (11,516 | ) | $ | (1,918 | ) | $ | (9,598 | ) | -500 | % | |||||
Net cash used in operating activities for the nine months ended September 30, 2026 decreased by $10,020,000 compared to the nine months ended September 30, 2025. The decrease was primarily attributable to a reduction in our net loss of $10,912,000 resulting from the realignment of our business operations, and a $5,836,000 improvement in cash provided by changes in operating assets and liabilities. These improvements were partially offset by a decrease in non-cash adjustments to net loss, primarily because net loss for the nine months ended September 30, 2026 included $6,673,000 of a non-cash gain on the remeasurement and termination of operating leases which was partially offset by a $2,170,000 loss related to the write-off of property and equipment.
Net cash used in investing activities for the nine months ended September 30, 2026 decreased by $1,477,000 compared to the nine months ended September 30, 2025, primarily due to lower capital expenditures of $498,000 compared to $2,067,000 in the prior year period, partially offset by lower proceeds from the sale of property and equipment and from notes receivable.
Net cash (used in) provided by financing activities for the nine months ended September 30, 2026 decreased by $21,095,000 compared to the nine months ended September 30, 2025. During the nine months ended September 30, 2025, we received net proceeds of approximately $22,350,000 from the 2025 Sales Agreement, which was terminated in August 2025, partially offset by the $1,000,000 repayment of the STS Notes and $162,000 of repurchases of common stock. Cash outflows during the nine months ended September 30, 2026 consisted primarily of $648,000 of scheduled payments related to financing leases and $66,000 of repayments of loans payable, partially offset by $39,000 of net proceeds from the exercise of options.
For the nine months ended September 30, 2026, we funded our operations primarily through cash from operating activities and the sale of equity. As of September 30, 2026, we had cash and cash equivalents of $5,088,000 and restricted cash of $259,000 and working capital deficit of $10,210,000, as compared to cash and cash equivalents and restricted cash of $16,863,000 and working capital of $1,640,000 as of December 31, 2025.
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, 2026, we had working capital deficit of $10,210,000 and a net loss of $12,769,000.
Our cash and cash equivalents and restricted cash decreased by $11,516,000 for the nine months ended September 30, 2026 primarily due to the net loss of $12,769,000, which included a non-cash gain on lease remeasurement, net of $6,673,000 and a non-cash loss on write-off of property and equipment of $2,170,000, and the $2,250,000 termination payment for our corporate headquarters lease in Columbia, Maryland. These amounts were partially offset by other non-cash expenses which are highlighted in our unaudited condensed consolidated statements of cash flows and favorable working capital movements.
In February 2025, we entered into an At Market Issuance Sales Agreement (the "2025 Sales Agreement") with Northland Securities, Inc. for the offer and sale of shares of our common stock having an aggregate offering price of up to $25,000,000. The 2025 Sales Agreement was terminated on August 12, 2025. We did not receive any proceeds from the 2025 Sales Agreement during the nine months ended September 30, 2026, and the agreement is no longer available as a financing source. See Note 8 — Stockholders' Equity for additional information.
In September 2026, we entered into an agreement to terminate the lease for our corporate headquarters in Columbia, Maryland prior to the end of the lease term in exchange for a termination payment of $2,250,000, which eliminated our remaining payment obligations under that lease. As of September 30, 2026, our remaining undiscounted operating lease payments totaled $943,000. During the nine months ended September 30, 2026, we exercised our option to terminate our lease for office space in Plano, Texas, effective December 31, 2026. In connection with the termination, we expect to pay a termination fee of approximately $50,000 in 2026, in addition to monthly rent payments through the December 31, 2026 effective date. Refer to Note 2 — Leases for additional information.
As of September 30, 2026, we had $15.0 million aggregate principal amount of Series A Prime Revenue Sharing Notes outstanding, all of which, together with accrued and unpaid interest, matures on December 15, 2026. We are evaluating refinancing alternatives with respect to the Series A Prime Revenue Sharing Notes. Based on our current liquidity and expected operating requirements, we expect that satisfaction of the Series A Prime Revenue Sharing Notes at maturity will require refinancing, restructuring or other additional sources of capital, and there can be no assurance that we will be able to refinance, restructure or otherwise satisfy the notes on acceptable terms, or at all. See Note 5 — Debt.
Our financing alternatives are constrained by the Anson side letter described in Note 8, including restrictions on variable-rate transactions and at-the-market sales below $1.75 per share, and, subject to specified exceptions, 30% participation provisions for equity and equity-linked financings through December 16, 2027. Applicable shelf-registration limits also constrain our ability to raise capital.
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, 2026, 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 Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.
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.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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. 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 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 purported fees owed as a result of 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 a complaint in New York State Supreme Court. In the new action, 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. During the third quarter of 2025, Rekor resolved its claims with Armistice pursuant to a settlement agreement. The proceeds from the settlement were presented as part of other expense (income) in the condensed consolidated statement of operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. 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.
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.
The Company believes these claims are without merit. The Company intends to vigorously defend itself in this lawsuit.
Rekor Systems, Inc. v. Viraj Mehta
On December 16, 2025, the Company completed an underwritten registered direct offering of 8,571,428 units, each consisting of one share of common stock and one warrant, at a price of $1.75 per unit (the "December 2025 Financing"). Viraj Mehta, who served as a member of the Company's Board of Directors from May 16, 2024 until his resignation effective January 14, 2026, participated in the Board's evaluation of the December 2025 Financing. On October 16, 2026, the Company filed a verified complaint in the Court of Chancery of the State of Delaware against Mr. Mehta alleging breach of his fiduciary duty of loyalty, including his duties of candor and good faith, in connection with the December 2025 Financing. The complaint alleges that Mr. Mehta failed to disclose to the Board material information regarding his personal interests and those of an investment adviser of which he is an owner and Chief Investment Officer. The Company seeks a declaration that Mr. Mehta breached his fiduciary duty, compensatory damages in an amount to be proven at trial, disgorgement of any benefit realized from the alleged breach, restitution of director compensation, an accounting, interest, and attorneys' fees and costs. The allegations have not been adjudicated, and the Company cannot predict the outcome of this action. See Note 7 for related advancement obligations, which discussion is incorporated here by reference.
ITEM 1A. RISK FACTORS
Except as set forth below, there have been no material changes to the risk factors disclosed in “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 31, 2026. The risk factor set forth below should be read in conjunction with, and supplements, the risk factors disclosed in our Annual Report on Form 10-K. We encourage investors to review the risk factors and uncertainties relating to our business disclosed in that Form 10-K, as supplemented by this Form 10-Q, as well as those contained in Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, above.
Our common stock may be delisted from The Nasdaq Capital Market if we are unable to regain compliance with Nasdaq’s minimum bid price requirement.
On April 27, 2026, we received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we are not in compliance with Nasdaq Listing Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of at least $1.00 per share. The notice was based on the closing bid price of our common stock for the 30 consecutive business days from March 13, 2026 through April 24, 2026. The notice has no immediate effect on the listing or trading of our common stock, which continues to trade on The Nasdaq Capital Market under the symbol "REKR."
On October 27, 2026, Rekor Systems, Inc. (the “Company”) received written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) granting the Company an additional 180-calendar-day period, until April 26, 2027, to regain compliance with the minimum $1.00 bid price per share requirement under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an additional period of 180 calendar days, or until April 26, 2027, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must be at least $1.00 per share for a minimum of ten consecutive business days during the compliance period, unless Nasdaq exercises its discretion to extend that period. If we choose to implement a reverse stock split to regain compliance, we must complete the split no later than ten business days prior to the expiration of the compliance period.
There can be no assurance that we will regain compliance by April 26, 2027. If we are unable to regain compliance, Nasdaq will issue a delisting determination. We may appeal, but a hearing request would not stay suspension of trading. Any such delisting could materially adversely affect the liquidity and market price of our common stock, impair our ability to raise additional capital on acceptable terms, reduce investor confidence, decrease analyst coverage, and have other adverse effects on our business, financial condition and results of operations.
We intend to monitor the closing bid price of our common stock and consider available options to regain compliance, which may include seeking stockholder approval to effect a reverse stock split. Any reverse stock split would require stockholder approval, and there can be no assurance that we will be able to obtain a quorum or the requisite stockholder approval in time to complete a reverse stock split within the compliance period. There can be no assurance that any action taken by us would be successful or would result in a sustained increase in the market price of our common stock. Even if we regain compliance with the minimum bid price requirement, there can be no assurance that the market price of our common stock will not again fall below $1.00 per share, which could result in our receipt of one or more additional deficiency notices and ultimately in the delisting of our common stock from The Nasdaq Capital Market.
We may be unable to refinance or repay our Series A Prime Revenue Sharing Notes at their maturity on December 15, 2026.
As of September 30, 2026, $15.0 million aggregate principal amount of our Series A Prime Revenue Sharing Notes was outstanding, all of which is due and payable on December 15, 2026. As of September 30, 2026 we had cash and cash equivalents of $5.1 million, and, as discussed under “Liquidity and Capital Resources,” our existing cash is insufficient to fund our current level of operations. We are evaluating refinancing alternatives with respect to the notes. There can be no assurance that we will be able to refinance, restructure or repay the notes on acceptable terms, or at all. Any refinancing may be on terms less favorable to us, may increase our financing costs, may impose additional restrictions on our business, or may involve the issuance of equity or equity-linked securities that dilute existing stockholders. If we are unable to refinance or otherwise satisfy the notes at maturity, our liquidity, financial condition and ability to continue as a going concern would be materially adversely affected. Failure to pay the notes could result in default and enforcement against the pledged contract revenues. The pending litigation does not itself suspend our payment obligations or assure a recovery.
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.
ITEM 5. OTHER INFORMATION
None 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, 2026, as such terms are defined under Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS
(a) Exhibits
| Incorporated by Reference |
Filed/Furnished |
|||||||||||
| Exhibit Number |
Exhibit Description |
Form |
File No. |
Exhibit |
Filing Date |
Herewith |
||||||
| 3.1 |
Amended and Restated Certificate of Incorporation of Rekor Systems, Inc (formerly known as Novume Solutions, Inc.) as filed with the Secretary of State of Delaware on August 21, 2017. |
8-K |
333-216014 |
3.1 |
8/25/17 |
|||||||
| 3.2 |
Certificate of Amendment to Amended and Restated Certificate of Incorporation of Rekor Systems, Inc. as filed with the Secretary of State of Delaware on April 30, 2019. |
8-K |
001-38338 |
3.1 |
4/30/19 |
|||||||
| 3.3 |
Second Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Rekor Systems, Inc. as filed with the Secretary of State of Delaware on March 18, 2020. |
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 |
Amended and Restated Bylaws of Rekor Systems, Inc. |
8-K |
001-38338 |
3.2 |
12/15/21 |
|
|
|||||
| 3.6 | Amendment to and Restatement of Section 2.5 of the Amended and Restated Bylaws of Rekor Systems, Inc., effective October 6, 2026. | 8-K | 001-38338 | 3.1 | 10/09/26 | |||||||
| 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 |
Section 1350 Certification of Chief Executive Officer. |
** |
||||||||||
| 32.2 |
Section 1350 Certification of Chief Financial Officer. |
** |
||||||||||
| 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.
SIGNATURES
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: |
President and Chief Executive Officer and Chairman of the Board Principal Executive Officer |
||
| Date: |
November 12, 2026 | ||
| By: |
/s/ Joseph Nalepa |
||
| Name: |
Joseph Nalepa |
||
| Title: |
Chief Financial Officer Principal Financial and Accounting Officer |
||
| Date: |
November 12, 2026 | ||