Rekor Systems, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Rekor Systems filed its 2023 10-K, detailing financial performance, including $1.012M in revenue and $2M net income, alongside significant warrant issuances.</b>

AI Summary

Rekor Systems, Inc. (REKR) filed a Annual Report (10-K) with the SEC on March 25, 2024. Rekor Systems reported total assets of $69,273,334 and total debt of $54,446,602 as of December 31, 2023. The company's net income for the fiscal year ended December 31, 2023, was $2,000,000. Revenue for the fiscal year ended December 31, 2023, was $1,012,000. The company issued warrants to purchase 6,250,000 shares of common stock at $2.00 per share on January 18, 2023. On March 23, 2023, Rekor issued warrants to purchase up to 6,872,853 shares of common stock at $1.455 per share.

Why It Matters

For investors and stakeholders tracking Rekor Systems, Inc., this filing contains several important signals. The filing provides a comprehensive overview of Rekor Systems' financial health and operational activities for the fiscal year 2023, including asset and debt levels, and net income. Details on warrant issuances in 2023, such as those related to promissory notes and register direct offerings, offer insight into the company's capital-raising activities and potential future dilution.

Risk Assessment

Risk Level: medium — Rekor Systems, Inc. shows moderate risk based on this filing. The company has a history of warrant issuances and potential dilution, as evidenced by multiple warrant grants detailed in the filing, which could impact shareholder value.

Analyst Insight

Investors should monitor the exercise of outstanding warrants and their impact on share count and earnings per share.

Revenue Breakdown

Key Numbers

• 69,273,334 — Total Assets (As of December 31, 2023)
• 54,446,602 — Total Debt (As of December 31, 2023)
• 2,000,000 — Net Income (Fiscal year ended December 31, 2023)
• 1,012,000 — Revenue (Fiscal year ended December 31, 2023)
• 6,250,000 — Warrants Issued (January 18, 2023)
• 2.00 — Warrant Exercise Price (January 18, 2023 issuance)
• 6,872,853 — Warrants Issued (March 23, 2023)
• 1.455 — Warrant Exercise Price (March 23, 2023 issuance)

Key Players & Entities

• Rekor Systems, Inc. (company) — Filer name
• 20231231 (date) — Conformed period of report
• 20240325 (date) — Filed as of date
• Novume Solutions, Inc. (company) — Former company name
• Firestorm (company) — Acquisition context
• Secure Education Consultants (company) — Acquisition context

FAQ

Risk Factors

• Warrant Dilution [medium — financial]: The company has issued numerous warrants with varying exercise prices and expiration dates, which could lead to significant dilution of common stock upon exercise.
• Debt Obligations [medium — financial]: The company has substantial debt obligations, totaling $54,446,602 as of December 31, 2023, which requires ongoing servicing and repayment.

Key Financial Figures

• $0.0001 — nge on which registered Common Stock, $0.0001 par value per share REKR The Nasdaq
• $120 billion — stimated to cost US citizens a whopping $120 billion per year in economic and productivity l
• $10 — cted that the United States will face a $10 trillion loss in its gross domestic pro

Filing Documents

• rekr20231231_10k.htm (10-K) — 2323KB
• ex_599513.htm (EX-21.1) — 5KB
• ex_599514.htm (EX-23.1) — 3KB
• ex_599516.htm (EX-31.1) — 10KB
• ex_599517.htm (EX-31.2) — 10KB
• ex_599518.htm (EX-32.1) — 4KB
• ex_599519.htm (EX-32.2) — 4KB
• ex_642737.htm (EX-97) — 24KB
• m01.jpg (GRAPHIC) — 124KB
• p01.jpg (GRAPHIC) — 123KB
• u01.jpg (GRAPHIC) — 55KB
• 0001437749-24-009219.txt (&nbsp;) — 13451KB
• rekr-20231231.xsd (EX-101.SCH) — 98KB
• rekr-20231231_cal.xml (EX-101.CAL) — 128KB
• rekr-20231231_def.xml (EX-101.DEF) — 770KB
• rekr-20231231_lab.xml (EX-101.LAB) — 653KB
• rekr-20231231_pre.xml (EX-101.PRE) — 817KB
• rekr20231231_10k_htm.xml (XML) — 2213KB

Business

Business 4 Item 1A.

Risk Factors

Risk Factors 20 Item 1B. Unresolved Staff Comments 30 Item 1C. Cybersecurity 30 Item 2.

Properties

Properties 30 Item 3.

Legal Proceedings

Legal Proceedings 31 Item 4. Mine Safety Disclosures 32 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33 Item 6. [Reserved] 34 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk. 52 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data. 52 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 103 Item 9A.

Controls and Procedures

Controls and Procedures. 103 Item 9B. Other Information. 104 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 104 PART III Item 10. Directors, Executive Officers and Corporate Governance 105 Item 11.

Executive Compensation

Executive Compensation 105 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 105 Item 13. Certain Relationships and Related Transactions, and Director Independence 105 Item 14. Principal Accountant Fees and Services 105 Part IV Item 15. Exhibits, Financial Statements Schedules 106 Item 16. Form 10-K Summary. 109 2 Table of Contents CERTAIN TERMS Unless the context requires otherwise, all references in this Annual Report on Form 10-K (the "Annual Report") to "Rekor Systems, Inc.," "Rekor," "Company," "we," "our" and "us" refer to Rekor Systems, Inc. and its consolidated subsidiaries. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements within the meaning of the U.S. federal securities laws. All statements other than statements of historical facts, such as statements regarding the objectives of management, timing and the likelihood of success of various activities, the future performance of current and prospective products and services and our future results of operations and financial position, are forward-looking statements, which include all expressions of the expectations, hopes, beliefs, intentions, plans, prospects or strategies of the Company. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these statements. In some cases, you can identify forward-looking statements by terms such as "may," "might," "will," "would," "could," "should," "plan," "anticipate," "target," "expect," "project," "intend," "contemplates," "believes," "estimates," "predicts," "potential," "possible," or "continue" or the negative of these terms or other similar expressions. These forward-looking statements are based on certain assumptions and analyses made by the management of

BUSINESS

ITEM 1. BUSINESS Overview Rekor is working to revolutionize public safety, urban mobility, and transportation management using AI-powered solutions designed to meet the distinct demands of each market we serve. We work hand-in-hand with our customers to deliver mission-critical traffic and engineering services that assist them in achieving their goals. Our vision is to improve the lives of citizens and the world around them by enabling safer, smarter, and greener roadways and communities. We work towards this by collecting, connecting, and organizing mobility data, and making it accessible and useful to our customers for real-time insights and decisioning for situational awareness, rapid response, risk mitigation, and predictive analytics for resource and infrastructure planning and reporting. To achieve these goals, we have developed a robust, interconnected hardware infrastructure and advanced, purpose-built software platforms. These powerful tools, enriched by a diverse range of data and state-of-the-art AI, can produce a level of roadway intelligence that we believe is unmatched. Our solutions empower clients to efficiently manage and optimize the complex interactions of vehicles in motion, ensuring smooth operations within and around public safety, urban mobility, and transportation systems. Our operations are conducted primarily by our wholly-owned subsidiaries, Rekor Recognition Systems, Inc. ("Rekor Recognition"), Waycare Technologies, Ltd. ("Waycare"), Southern Traffic Services, Inc. ("STS"), and All Traffic Data Systems ("ATD"). A New Operating System for Roadways The condition of national transportation infrastructure systems is a matter of great concern, particularly in the United States. As the private sector continues to innovate and make headlines with cutting-edge technologies such as autonomous vehicles, flying taxis, and smart delivery drones, it's paradoxical that essential issues such as roadway congestion, safety, vehicle emissions and

View Full Filing

View this 10-K filing on SEC EDGAR