Rekor Systems Reports Material Agreement, Acquisition, Equity Sales

TL;DR

**Rekor Systems just made big moves with a new deal, an acquisition, and selling more stock.**

AI Summary

Rekor Systems, Inc. filed an 8-K on January 3, 2024, reporting several key events that occurred on January 2, 2024. These include entering into a material definitive agreement, completing an acquisition or disposition of assets, and unregistered sales of equity securities. This matters to investors because these actions can significantly impact the company's financial health, ownership structure, and future growth prospects, potentially affecting stock valuation.

Why It Matters

These events signal significant operational and financial changes for Rekor Systems, Inc., which could influence its market position and future profitability, directly impacting shareholder value.

Risk Assessment

Risk Level: medium — The filing indicates significant corporate actions like acquisitions and equity sales, which inherently carry both opportunities and risks that could impact the stock.

Analyst Insight

A smart investor would delve deeper into the specific details of the 'Material Definitive Agreement,' 'Acquisition or Disposition of Assets,' and 'Unregistered Sales of Equity Securities' once those details become public, as they could significantly alter Rekor Systems' financial outlook and share structure.

Key Players & Entities

• Rekor Systems, Inc. (company) — the registrant filing the 8-K
• January 2, 2024 (date) — date of the earliest event reported
• January 3, 2024 (date) — date the 8-K was filed

FAQ

Key Financial Figures

• $0.0001 — ange on which registered Common Stock, $0.0001 par value per share REKR The Nasdaq
• $19.0 m — the interests of ATD was approximately $19.0 million, subject to a customary working c
• $9.0 million — purchase price comprises approximately $9.0 million in cash and 3approximately 3.5 million
• $2.86 — te of the Purchase Agreement, which was $2.86. 662,329 of the 3.5 million shares of t

Filing Documents

• rekr_8k.htm (8-K) — 35KB
• rekr_ex101.htm (EX-10.1) — 507KB
• rekr_ex991.htm (EX-99.1) — 17KB
• rekr_ex991img3.jpg (GRAPHIC) — 6KB
• rekr_ex991img2.jpg (GRAPHIC) — 6KB
• rekr_ex991img1.jpg (GRAPHIC) — 6KB
• 0001654954-24-000099.txt ( ) — 822KB
• rekr-20240102.xsd (EX-101.SCH) — 6KB
• rekr-20240102_lab.xml (EX-101.LAB) — 14KB
• rekr-20240102_cal.xml (EX-101.CAL) — 1KB
• rekr-20240102_pre.xml (EX-101.PRE) — 9KB
• rekr-20240102_def.xml (EX-101.DEF) — 2KB
• rekr_8k_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. On January 2, 2024 (the "Closing Date"), Rekor Systems, Inc. (the "Company") acquired All Traffic Data Services, LLC, a Colorado limited liability company ("ATD"), pursuant to that certain Interest Purchase Agreement (the "Purchase Agreement"), dated as of the Closing Date, by and among the Company, ATD and All Traffic Holdings, LLC (the "Seller"). The Seller is a portfolio company of Seaport Capital, a private equity firm. ATD is engaged in the business of advanced traffic data collection. Under the terms of the Purchase Agreement, the Company acquired all of the issued and outstanding limited liability company interests of ATD (the "ATD Acquisition"). The aggregate purchase price for the interests of ATD was approximately $19.0 million, subject to a customary working capital adjustment. The purchase price comprises approximately $9.0 million in cash and 3approximately 3.5 million unregistered shares of the Company's common stock, par value $0.0001 (the "Stock Consideration"), based on a volume weighted average trading price of the Company's common stock over a thirty consecutive trading day period prior to the date of the Purchase Agreement, which was $2.86. 662,329 of the 3.5 million shares of the Stock Consideration will be issued and delivered to the Seller on the twelve-month anniversary of the Closing Date, subject to cutback for working capital adjustments and/or indemnification claims favoring the Company, if any. As a result of the transaction, ATD is a wholly-owned subsidiary of the Company. The Stock Consideration has been issued by the Company to the Sellers pursuant to an exemption under Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D, as promulgated thereunder. Pursuant to the terms of the Purchase Agreement, the Company will provide customary resale registration rights with respect to the Stock Consideration. The Purchase Agreement contains customary representa

01 Completion of Acquisition or Disposition of Assets

Item 2.01 Completion of Acquisition or Disposition of Assets. The information provided in Item 1.01 above is incorporated herein by reference.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information provided in Item 1.01 above is incorporated herein by reference. Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. Pursuant to the terms of the Purchase Agreement, the Seller was granted the right to designate a director to be seated on the Company's board of directors (the "Board") for a term expiring at the Company's 2024 annual meeting of stockholders, at which meeting such director shall be nominated by the Board to stand for election by the Company's stockholders to serve for a term to expire at the next annual meeting of the stockholders. The Seller has a right to a Board designee for so long as it holds at least 50% of the Stock Consideration. On January 2, 2024, at the designation of Seller, the Board appointed Andrew (Drew) Meyers as a member of the Board, with such appointment to take effect immediately. In connection with Mr. Mayer's appointment, the Board voted to increase the size of the Board to eight members, and appointed Mr. Meyers to fill the resulting vacancy. Mr. Meyers, age 55, has been a Partner at Seaport Capital since 2018. During his career, Mr. Meyers has worked closely with Seaport Capital's portfolio companies, including with ATD, to set strategic direction and establish annual budgets, organizational development, key performance indicators and monthly financial reporting. Mr. Meyers currently serves as a director of the following privately held companies: Healthcare Linen Services Group, Family Entertainment Holdings, LLC, Pearl Media Holdings, LLC and CyberlinkASP. Mr. Meyers earned a B.S. in Business Administration from University of Dayton and Masters of Management, Finance from J.L. Kellogg Graduate School of Management. The Board has determined that Mr. Meyers is an independent director within the meaning of NASDAQ Rule 5605. The Board has determined th

01 Regulation FD Disclosure

Item 7.01 Regulation FD Disclosure. The Company will host a special investor conference call on Tuesday, January 9, 2024, at 9:00 a.m., Eastern time, to provide shareholders and investors with further insights into the ATD Acquisition. The conference call can be accessed by dialing into 877-407-8037 or +1 201-689-8037, or can be accessed via webcast at the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Mq6exHO5. A recording of this call will also be posted to the Company's Investor Relations website and will be available following the event.

01 Other Events

Item 8.01 Other Events . On January 3, 2024, the Company issued a press release announcing the ADT Acquisition. A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. The Company intends to file the financial statements required to be filed pursuant to Item 9.01(a) of Form 8-K by amendment to this report not later than 71 calendar days after the date this report is required to be filed. (b) Pro Forma Financial Information. The Company intends to file the pro forma financial information required to be filed pursuant to Item 9.01(b) of Form 8-K by amendment to this report not later than 71 calendar days after the date this report is required to be filed. (d) Exhibits. Exhibit No. Description 10.1* Interest Purchase Agreement, dated as of January 2, 2024, by and among Rekor Systems, Inc., All Traffic Data Services, LLC and All Traffic Holdings, LLC. 99.1 Press Release dated January 3, 2024. * Rekor Systems, Inc. has omitted certain schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K and shall furnish supplementally to the Securities and Exchange Commission copies of any of the omitted schedules and exhibits upon request by the SEC. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. REKOR SYSTEMS, INC. Date: January 3, 2024 /s/ Robert A. Berman Name: Robert A. Berman Title: Chief Executive Officer

View Full Filing

View this 8-K filing on SEC EDGAR