What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2026-03-31 compared with 2025-03-31 · 129 added, 74 removed, 302 unchanged (40% of the section changed)

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Our common stock is listed on the Nasdaq Capital Market under the symbol “REKR”.

As of March 28, 2025, there were 48 registered holders of record of our common stock, excluding stockholders for whom shares are held in “nominee” or “street name.” The actual number of common stockholders is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

As of March 25, 2026, there wer e 47 registered holders of record of our common stock, excluding stockholders for whom shares are held in “nominee” or “street name.” The actual number of common stockholders is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

This number of holders of record also does not include stockholders whose shares may be held in trust by other entities .

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As previously disclosed under Item 3.02 in the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2024, as part of the purchase price for the ATD acquisition the Company issued 2,832,135 shares of the Company’s common stock as part of the consideration.

Additionally, 664,329 shares were be issued and delivered to the Seller on the twelve-month anniversary of the Closing Date.

Additionally, 664,329 shares were to be issued and delivered to the Seller on the twelve-month anniversary of the Closing Date.

The ATD Holdback Shares were deemed to be liability based and are measured at fair value each reporting period.

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The shares issued in connection with the Warrant Exercise Agreement have been registered on a resale registration statement on Form S-3 filed with the SEC on July 19, 2024, and declared effective by the SEC on July 30, 2024.

December 2025 Underwriting Agreement Warrants

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 direct offering of 8,571,428 units at a public offering price of $1.75 per unit (the "2025 Underwriting Agreement").

Each unit consisted of one share of the Company's common stock and one warrant to purchase one share of the Company's common stock.

The shares the Company's common stock and warrants comprising the units were immediately separable and were issued separately.

The offering closed on December 16, 2025.

Each warrant has an exercise price of $2.40 per share, is immediately exercisable, and expires on December 16, 2032 (seven years from the date of issuance).

The warrants are subject to a 9.99% beneficial ownership limitation and contain standard adjustment provisions for stock dividends, splits and similar events.

The warrants may be exercised on a cashless basis if, at the time of exercise, there is no effective registration statement registering the shares of common stock underlying the warrants.

The shares the Company's common stock included in the units that were offered and sold pursuant to the Company’s shelf registration statement on Form S-3 (File No.

333-280913), as supplemented by a prospectus supplement dated December 15, 2025.

The warrants were issued in a private placement to a single institutional investor in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, as a transaction not involving a public offering.

The Company did not register the warrants under the Securities Act, and the warrants may not be offered or sold absent registration or an applicable exemption from registration.

The shares the Company's common stock issuable upon exercise of the warrants have been registered for resale pursuant to a registration statement on Form S-3.

In connection with the offering, the Company also entered into a Side Letter Agreement with Anson Advisors Inc.

(the “Side Letter”), which includes, among other things, a restriction prohibiting the Company from effecting or entering into any Variable Rate Transaction (as defined in the Side Letter) while any December 2025 warrants remain outstanding.

The Side Letter also provides the investor with participation rights in future firm-commitment underwritten offerings, subject to customary exceptions.

The gross proceeds to the Company from the offering were approximately $15.0 million.

After deducting underwriting discounts and commissions and estimated offering expenses, the net proceeds to the Company were approximately $13.9 million.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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The information provided in this discussion and analysis of Rekor’s financial condition, and results of operations covers the years ended December 31, 2025 and 2024.

In 2024, we completed the acquisition of 100% of the issued and outstanding limited liability company interests of All Traffic Data Systems (“ATD”).

In 2024, we completed the acquisition of 100% of the issued and outstanding limited liability company interests of All Traffic Data Services, LLC (“ATD”).

Acquisitions and Dispositions

On January 2, 2024, we completed the acquisition of All Traffic Data Services, LLC (“ATD”) for an aggregate purchase price of $20,576,000.

In 2024, we completed the acquisition of All Traffic Data Services, LLC (“ATD”) for an aggregate purchase price of $20,576,000.

See Note 2 to our consolidated financial statements for additional information related to our acquisition of ATD.

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$150 million for the current administration to establish a grant program to modernize state data collection systems $500 million for the Strengthening Mobility and Revolutionizing Transportation (“SMART”) Grant Program that would support demonstration projects on smart technologies that improve transportation efficiency and safety.

Recent Acquisition - In the current year, Rekor has acquired one subsidiary as part of its plans to advance its appeal to national and local transportation agencies.

We acquired one of the leading existing providers of traffic data services in the United States.

This acquisition has led to increased visibility for the Company among national and state level DOTs in the United States.

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.

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Should the Company be unable to defend against such claims, the Company’s business, operating results, and financial condition can be adversely affected.

Strategic Consolidation of Engineering Operations - Subsequent to year end, we announced a strategic consolidation of our global engineering operations, including transitioning engineering activities from Israel to our United States-based teams and consolidating key product development and technology functions in the United States.

This initiative is intended to improve operational efficiency, enhance coordination across product development, delivery and customer-facing teams, and better align our cost structure with current revenue levels.

We expect to incur one-time costs in connection with the transition, including employee-related separation costs and other exit-related costs, and the timing and amount of realized savings and incurred costs may differ from our current expectations.

This initiative could impact the timing of certain longer-range product development initiatives and may not achieve the anticipated savings.

Video Verification - In 2024, we developed and applied for a patent on a procedure to identify the time, place and device on which a video was recorded and provide the means to verify whether it had been altered.

Although initially developed to support public safety clients, we believe there may be significant demand for such a product in the insurance and news media markets, as well as others.

Pending the approval of our patent applications relating to the product, we have developed an application that can be installed on certain cameras and a companion website.

This product is sufficiently different in its potential end user market and functionality that we believe it should be pursued as a separate venture.

Consequently, the intellectual property for this technology has been transferred to Rekor Labs, LLC.

("Rekor Labs") and we have established a separate board of managers to concentrate on the commercialization of the product.

Other than as discussed above and elsewhere in this Annual Report on Form 10-K, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition.

Subsequent to year end, we announced certain actions intended to further align our cost structure with current revenue levels, as discussed above under "Opportunities, Trends and Uncertainties."

Components of Operating Results

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Additional expenses include office leases, professional fees, and insurance.

We expect our general and administrative expenses to continue to remain high for the foreseeable future due to the costs associated with our growth and the costs of accounting, compliance, legal, insurance, and investor relations as a public company.

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.

However, our general and administrative expenses have decreased as a percentage of our revenue and, to the extent we continue to be successful in generating increased revenue, we expect our general and administrative expenses to decrease as a percentage of our revenue over the long term.

However, our general and administrative expenses have decreased as a percentage of our revenue and, to the extent we continue to generate increased revenue and realize efficiencies from these actions, we expect our general and administrative expenses to decrease as a percentage of our revenue over the long term.

Sales and Marketing

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Research and development expenses

Impairment of intangible assets

Asset impairment charges

Depreciation and amortization

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Other income (expense):

(Loss) gain on extinguishment of debt

Loss on extinguishment of debt

Interest expense, net

Gain on remeasurement of ATD Holdback Shares

(Loss) gain on remeasurement of ATD Holdback Shares

Loss on offering costs - Prepaid Advance

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(Dollars in thousands)

The increase in revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily attributable to our Urban Mobility product line.

During the year ended December 31, 2024, revenue attributable to our Urban Mobility product line was $28,688,000 compared to $16,773,000 for the year ended December 31, 2023.

During the year ended December 31, 2024, revenue attributable to our ATD acquisition was $10,125,000 and is included as part of our Urban Mobility revenue stream.

The increase in revenue for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily attributable to our Public Safety product line.

During the year ended December 31, 2025, revenue attributable to our Public Safety product line was $17,401,000 compared to $14,807,000 for the year ended December 31, 2024.

This increase was primarily due to higher perpetual license sales in 2025.

Cost of Revenue, Excluding Depreciation and Amortization

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Cost of revenue, excluding depreciation and amortization

For the year ended December 31, 2024, cost of revenue, excluding depreciation and amortization increased compared to prior year primarily due to an increase in personnel and other direct costs such as hardware that were incurred to support our increase in revenue.

The costs of revenue increased at a higher rate than our revenue increased as our mix of revenue shifted to more labor intensive activities.

As we continue to deploy our technology, we anticipate our margins to improve.

Additionally, during the year ended December 31, 2024, $3,672,000 of the increase was related to our acquisition of ATD.

For the year ended December 31, 2025, cost of revenue, excluding depreciation and amortization decreased compared to prior year primarily due to a favorable revenue mix of software versus hardware, which resulted in higher margins from increased software license sales.

Operating Expenses

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Research and development expenses

Impairment of intangible assets

Asset impairment charges

Depreciation and amortization

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General and Administrative Expenses

For the year ended December 31, 2024, the increase in general and administrative expenses compared to the year ended December 31, 2023, was primarily due to:

a $2,150,000 increase in payroll and payroll related expenses which includes $1,294,000 related to our operations of ATD.

a $661,000 and $323,000 increase in rent and utility expense, respectively, which are primarily related to the additional leases as part of the ATD acquisition.

a $269,000 increase in insurance expense which is primarily related to higher premiums and the addition of the ATD operations.

a $236,000 increase in board fees, excluding share-based compensation due to the additional board members in 2024.

For the year ended December 31, 2025, the decrease in general and administrative expenses compared to the year ended December 31, 2024, was primarily due to:

a $2,960,000 decrease in payroll and payroll related expenses primarily due to cost-efficiency initiatives implemented to better align with operations.

a $1,900,000 decrease in expense attributable to the remeasurement of the contingent consideration associated with the acquisition of STS.

a $594,000 decrease in bad debt expense attributable to the absence of a significant, nonrecurring write-off recorded in the prior year.

There was no comparable charge recognized in 2025.

a $289,000 decrease in professional fees due to the absence of higher accounting fees such as those associated with the acquisition of ATD in 2024.

a $332,000 decrease in board fees, including lower share-based compensation as part of cost-efficiency initiatives.

Selling and Marketing Expenses

The increase in selling and marketing expenses during the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to a $610,000 increase as result of the acquisition of ATD.

The decrease in selling and marketing expenses during the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to a $1,670,000 decrease in payroll and payroll related expenses driven by cost-efficiency initiatives implemented to better align with operations.

Research and Development Expense

Research and development expenses during the year ended December 31, 2024, compared to the year ended December 31, 2023, remained consistent.

Impairment of Intangible Assets

As a result of sales performance being below expectation in part due to slower customer adoption, longer sales cycles and market conditions, the Company identified a triggering event and performed an analysis of its intangible assets.

As a result of the forementioned factors and their potential future impact, the Company recognized an impairment charge of $10,214,000 as of December 31, 2024.

Research and development expenses during the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily due to a $3,774,000 decrease in payroll and payroll related expenses driven by cost-efficiency initiatives implemented to better align with operations.

Asset impairment charges

In December 2025, the Company determined that the operations of its wholly owned subsidiary, Waycare Technologies LTD, 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.

As a result, the Company recognized total impairment charges of $3,754,000 during the year ended December 31, 2025, consisting of $1,046,000 related to property and equipment and $2,708,000 related to the operating lease ROU asset.

During 2024, sales performance was below expectations, driven in part by slower customer adoption, extended sales cycles and market conditions.

As a result, we identified a triggering event and performed an analysis of its intangible assets.

As a result of that analysis and updated projections on future cash flows, we recognized an impairment charge of $10,214,000 as of December 31, 2024.

Depreciation and Amortization

The increase in depreciation and amortization during the year is attributable primarily to the intangible assets that were acquired as part of our acquisition of ATD.

The decrease in depreciation and amortization during the year ended December 31, 2025, is attributable to an impairment that we recognized as of December 31, 2024, following the identification of a triggering event.

Other Income (Expense)

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Other income (expense):

(Loss) gain on extinguishment of debt

Loss on extinguishment of debt

Interest expense, net

Gain on remeasurement of ATD Holdback Shares

(Loss) gain on remeasurement of ATD Holdback Shares

Loss on offering costs - Prepaid Advance

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Total other expense, net

Loss on extinguishment of debt was a result of early redemption of the 2023 Promissory Notes.

As part of the redemption, we recorded accelerated debt issuance costs of $2,818,000 and a Redemption Payment of $1,875,000 which we settled through the issuance of common stock.

Interest expense decreased period over period due to the early redemption of the 2023 Promissory Notes.

In connection with the sale of Global Public Safety , we recognized a gain on the sale of the business of $1,500,000 during the year ended December 31, 2024.

On August 14, 2024, we entered into a Prepaid Advance Agreement under which funds were advanced to the Company and the lender had the ability to satisfy the advance in exchange for shares in the Company.

We incurred issuance costs and original issuance discounts totaling approximately $888,000 associated with the issuance of the Prepaid Advance.

Additionally, during the year the Company elected to terminate the Prepaid Advance Agreement.

All amounts due were settled and we recorded $900,000 in charges related to the settlement of the Prepaid Advance liability.

For the year ended December 31, 2025.

the decrease in other expense, net compared to the year ended December 31, 2024, was primarily due to:

The absence of a $4,693,000 loss on extinguishment of debt recorded during 2024 in connection with the early redemption of the 2023 Promissory Notes.

The absence of non-operating charges recorded during 2024 related to the Prepaid Advance Agreement.

Partially offset by the absence of a $1,500,000 gain recognized during 2024 related to the sale of Global Public Safety.

Partially offset by a $719,000 unfavorable change related to the remeasurement of ATD Holdback Shares and a $348,000 decrease in net interest expense in 2025 compared to 2024.

Non-GAAP Measures

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Share-based compensation

Loss (gain) on extinguishment of debt

Impairment of intangible assets

Loss on extinguishment of debt

Asset impairment charges

Loss on offering costs - Prepaid Advance

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Gain on the sale of Global Public Safety

Loss due to the remeasurement of the STS Earnout and Contingent Consideration, net

Impairment of SAFE agreement

(Gain) loss due to the remeasurement of the STS Earnout and Contingent Consideration, net

Adjusted EBITDA

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Adjusted Gross Margin

Adjusted Gross Margin for the year ended December 31, 2024 decreased from 52.8% to 49.3% compared to the year ended December 31, 2023 .

Adjusted Gross Margin for the year ended December 31, 2025 increased from 49.3% to 55.9% compared to the year ended December 31, 2024 .

The fluctuation in Adjusted Gross Margin is typically correlated to the mix of software sales versus service type work.

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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.

Performance obligations may decline or increase significantly as large contracts approach their expiration date and are then renewed.

Lease Obligations

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Tel Aviv, Israel

We believe our facilities are in good condition and adequate for their current use.

The Company initiated a plan to wind down the Tel Aviv operations and consolidate all engineering functions into its U.S.

We believe our facilities are in good condition and adequate for their current use, although we have consolidated engineering operations in the United States and are no longer using our Tel Aviv office.

We expect to improve, replace and increase facilities as considered appropriate to meet the needs of our planned operations.

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Year ended December 31,

Net cash used in operating activities - continuing operations

Net cash (used in) provided by investing activities

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash and cash equivalents - continuing operations

Net cash used in operating activities for the year ended December 31, 2024, increased by $291,000, which was primarily attributable to an increased loss which was offset by non-cash adjustments during the year, primarily the loss on extinguishment of debt of $4,693,000.

The increase in net cash used in investing activities was primarily due to the net cash outflow of $9,222,000 related to the acquisition of ATD.

Net cash provided by financing activities for the year ended December 31, 2024 decreased by $14,147,000 from the year ended December 31, 2023.

During the year ended December 31, 2024, as part of our 2024 Public Offering and Prepaid Advance, we received net proceeds of $26,362,000 and $14,100,000, respectively, these proceeds were partially offset by the repayment of our 2023 Promissory Notes.

During the year ended December 31, 2023, as part of our 2023 Promissory Notes and the 2023 Registered Direct Offering, we received net proceeds of $11,100,000 and $9,159,000, respectively.

Additionally, in the third quarter of 2023, we received gross proceeds of $10,996,000 related to the exercise of warrants associated to the 2023 Registered Direct Offering.

Lastly, in the fourth quarter of 2023, we raised $14,330,000 related to our Series A Prime Revenue Sharing Notes.

Net increase (decrease) in cash, cash equivalents and restricted cash

Net cash used in operating activities for the year ended December 31, 2025, decreased by $12,097,000, which was primarily attributable to a lower net loss, partially offset by lower non-cash adjustments during the year, primarily a $6,460,000 decrease in impairment charges, $4,693,000 loss on extinguishment of debt, and $900,000 loss on settlement of prepaid advance recognized in the prior year, as well as lower amortization of intangible assets and share-based compensation, and changes in working capital.

Net cash used in investing activities for the year ended December 31, 2025, decreased by $6,858,000, which was primarily attributable to the absence of the $9,222,000 net cash outflow related to the acquisition of ATD in the prior year, partially offset by higher capital expenditures during the year.

Net cash provided by financing activities for the year ended December 31, 2025 increased by $2,963,000 from the year ended December 31, 2024.

During the year ended December 31, 2025, we received net proceeds of $22,350,000 from the At Market Issuance Sales Agreement (the "2025 Sales Agreement") and $13,891,000 from the underwriting agreement with William Blair & Company, L.L.C., that we entered into in December 2025 relating to an underwritten direct offering (the "2025 Underwriting Agreement").

During the year ended December 31, 2024, we received net proceeds of $26,362,000 from our public offering and net proceeds of $14,100,000 from the Prepaid Advance Agreement, which were partially offset by the repayment of $12,500,000 of our 2023 Promissory Notes.

These activities were partially offset by scheduled repayments of our STS Notes and payments related to financing leases in both periods.

For the years ended December 31, 2025 and 2024 , we funded our operations primarily through cash from operating activities, the issuance of debt and the sale of equity.

As of December 31, 2024 , we had unrestricted cash and cash equivalents of $5,329,000 and working capital of $1,707,000, as compared to unrestricted cash and cash equivalents of $15,713,000 and working capital of $8,100,000 as of December 31, 2023 .

As of December 31, 2025 , we had restricted cash of $297,000, cash and cash equivalents of $16,566,000 and working capital of $1,640,000, as compared to restricted cash of $316,000 cash, cash and cash equivalents of $5,013,000 and working capital of $1,707,000 as of December 31, 2024 .

Liquidity and Going Concern

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These assumptions include, among other factors, its ability to raise additional capital, the expected timing and nature of the Company’s programs and projected cash expenditures and its ability to delay or curtail these programs or expenditures to the extent management has the proper authority to do so and considers it probable that those implementations can be achieved within the look-forward period.

The Company has generated losses and negative operating cashflows since its inception and has relied on external sources of financing to support the 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 existing and new products and services.

We have generated losses and negative operating cashflows since our inception and have relied on external sources of financing to support our cash flow from operations.

We attribute 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 existing and new products and services.

As of and for the year ended

December 31, 2024, the Company had working capital of

December 31, 2025, we had working capital of

$1,640,000 and a net loss of

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These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

On February 10, 2025, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with Northland Securities, Inc., pursuant to which the Company may, from time to time, offer and sell shares of the Company’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $25,000,000.

See Note 16 to our consolidated financial statements for additional information related to the Sales Agreement.

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.

On February 10, 2025, we entered into an At Market Issuance Sales Agreement (the "Sales Agreement") with Northland Securities, Inc.

(the "Agent"), pursuant to which we could, from time to time, offer and sell shares of our common stock, par value $0.0001 per share ("Common Stock"), having an aggregate offering price of up to $25,000,000.

The Agent was entitled to receive from us a commission in an amount equal to (i) 3.0% of the gross sales prices per share sold through it as agent in agency transactions and (ii) 6.0% of the purchase price per share sold to the Agent, as principal in principal transactions.

We incurred issuance costs of approximately $245,000 related to legal, accounting, and other fees in connection with the Sales Agreement.

These costs were charged against the gross proceeds of the Sales Agreement and presented as a reduction to additional paid-in-capital on the accompanying consolidated balance sheets.

On August 12, 2025, we elected to voluntarily terminate our Sales Agreement.

As of December 31, 2025, we issued 18,888,832 shares of our common stock at a weighted average selling price of $1.23 per share in accordance with the Sales Agreement.

Net cash provided from the Sales Agreement was $22,350,000 after paying $245,000 in issuance costs, as well as 3.0%, or $699,000 related to cash commissions provided to the Agent.

On December 13, 2025, we entered into the 2025 Underwriting Agreement with William Blair & Company L.L.C., as representative of the several underwriters, relating to an underwritten registered direct offering of 8,571,428 units at a public offering price of $1.75 per unit.

Each unit consisted of one share of our common stock and one warrant to purchase one share of our common stock at an exercise price of $2.40 per share.

The warrants are immediately exercisable and expire on December 16, 2032.

The offering closed on December 16, 2025.

Gross proceeds from the offering were approximately $15.0 million.

After deducting underwriting discounts and commissions and estimated offering expenses, the net proceeds were approximately $13.9 million.

We intend to use the net proceeds for working capital, capital expenditures and general corporate purposes.

The December 2025 offering, together with the proceeds from the Sales Agreement, contributed to the increase in our cash and cash equivalents from $5,013,000 as of December 31, 2024 to $16,566,000 as of December 31, 2025.

In connection with the December 2025 offering, we entered into a Side Letter Agreement with Anson Advisors Inc.

(the “Side Letter”).

Among other things, the Side Letter prohibits us from effecting or entering into any “Variable Rate Transaction” (as defined in the Side Letter) while the investor holds any of the December 2025 warrants, which expire on December 16, 2032.

A “Variable Rate Transaction” generally includes any transaction in which we issue or sell securities that are convertible into, exchangeable for, or represent the right to receive shares of common stock at a price that is subject to being reset at a future date based on trading prices or volumes, or upon the occurrence of specified events.

This restriction may limit the types of financing instruments available to us during the period in which the warrants remain outstanding.

The Side Letter also provides the investor with participation rights in future firm-commitment underwritten offerings, subject to customary exceptions.

Our ability to generate positive operating results and execute our business strategy will depend on (i) our ability to continue the growth of our customer base, (ii) our ability to continue to improve our quarterly financial metrics such as net loss and cash used from operating activities (iii) the continued performance of our contractors, subcontractors and vendors, (iv) our ability to maintain and build good relationships with investors, lenders and other financial intermediaries, (v) our ability to maintain timely collections from existing customers, and (vi) the ability to scale our business processes.

To the extent that events outside of our control have a significant negative impact on economic and/or market conditions, they could affect payments from customers, services and supplies from vendors, our ability to continue to secure and implement new business, raise capital, and otherwise, depending on the severity of such impact, materially adversely affect our operating results.

Off-Balance Sheet Arrangements, Contractual Obligations and Commitments

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See Note 7 to our consolidated financial statements for our required operating and financing lease payments and Note 9 for our required debt payments.

Recent Developments

Effective January 14, 2026, Timothy Davenport and Viraj Mehta each resigned from the Board of Directors.

Davenport had served on the Board since January 2023, and Mr.

Mehta had served on the Board since May 2024.

The resignations were not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.

Effective March 25, 2026, Prof.

Sanjay Sarma resigned from the Board of Directors.

Sarma had served on the Board since January 2023.

The resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices.

Following these departures, the Board of Directors consists of six members:

Berman (Chairman), Paul A.

de Bary (Lead Director), Glenn Goord, David P.

Hanlon, Steven D.

Croxton, and Andrew Meyers.

The Board of Directors set March 25, 2026 as the record date for the Company's 2026 Annual Meeting of Stockholders, to be held on May 15, 2026.

Critical Accounting Estimates

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Conducting a fair value analysis is an exercise in judgment, requiring us to evaluate data points, forecasts, and qualitative insights to arrive at a comprehensive assessment of our ability to derive value from our assets during the look-forward period.

In this process, we must exercise caution, recognizing the inherent uncertainties and limitations of our estimations and financial analysis while striving to provide feasible plan.

Business Combinations

We account for business combinations by recognizing the fair value of acquired assets and liabilities.

The excess purchase consideration over the fair value of acquired assets and liabilities is recorded as goodwill.

When determining the fair value of assets acquired and liabilities assumed, we make estimates and assumptions, especially with respect to intangible assets such as identified customer relationships and trade names.

We generally determine the fair value of acquired customer relationships using the multi-period excess earnings method, a form of the income approach.

Estimates in valuing identifiable intangible assets include, but are not limited to, projected revenue growth rates, customer retention rates and an appropriate discount rate.

Our estimate of fair value is based upon assumptions we believe to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates.

During the measurement period, we may make adjustments to the fair value of assets acquired and liabilities assumed, with offsetting adjustments to goodwill.

In this process, we must exercise caution, recognizing the inherent uncertainties and limitations of our estimations and financial analysis while striving to provide a feasible plan.

New Accounting Pronouncements

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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.

What changed 10-K

Item 5. Market for Registrant’s Common Equity