LEGAL PROCEEDINGS
+Added: Firestorm Principals
On August 19, 2019, we filed suit in the United States District Court for the Southern District of New York against three former executives of the Company who were founders of two related former subsidiaries (the “Firestorm Principals”)—Rekor Systems, Inc.
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(“Fordham”) commenced a lawsuit against the Company in the Supreme Court for the State of New York, New York County.
−Removed: Fordham alleges that the Company breached an underwriting agreement with Fordham.
−Removed: Fordham has brought claims for breach of contract, a declaratory judgment, and attorneys’
−Removed: fees and expenses, and seeks damages.
−Removed: The Complaint was served on the Company on September 25, 2020. The Company issued a motion to dismiss counterclaims on June 23, 2021. The Court granted Fordham’s motion to dismiss Rekor’s counterclaims on October 23, 2021. On November 29, 2021, the Company filed a notice of appeal with the Appellate Division and a motion to reargue that decision and order, arguing that the court misunderstood the nature and purpose of the prospectus supplement, which was actually prepared by the plaintiff after it set the prices for the 2018 offering. On March 3, 2022, the court denied the motion to reargue. In doing so, however, the court clarified that the dismissal was without prejudice, which would permit the Company to refashion the counterclaims in the future, although the Company’s has filed an appeal in the appellate division.
−Removed: The Company has cross-moved for summary judgment seeking the dismissal of plaintiff’s complaint on the basis that plaintiff opted against exercising its right of first refusal when it declined the opportunity to manage the 2019 ATM Program. 
−Removed: Both plaintiff’s motion and Rekor’s cross-motion are now returnable on August 18, 2022.
−Removed: At this stage of the Fordham litigation, we are unable to render an opinion regarding the likelihood of a favorable outcome.
−Removed: However, we maintain that Fordham’s claims have no merit.
−Removed: To that end we intend to vigorously litigate this action.
+Added: Fordham alleged that the Company offended an underwriting agreement with Fordham and brought claims for breach of contract.
+Added: On October 17, 2022, the Court granted Fordham’s motion for summary judgment and denied the Company’s cross-motions for summary judgment and to compel discovery.
+Added: The Court awarded Fordham $1,025,000, representing 3% of the gross proceeds generated from the Company’s previously announced and concluded at-the-market equity program commenced on August 14, 2019, plus pre-judgment interest accruing at 9% per annum since April 14, 2019, and reasonable attorneys’
+Added: The Company chose not to appeal the decision and satisfied the judgement.
+Added: In exchange for a payment of $1,320,000 by the Company, the plaintiff agreed to a full and complete discharge of the plaintiff’s claim. This amount was recorded in other (expense) income on the Company's unaudited condensed consolidated statements of operations. 
In addition, from time to time, we 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.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.