−Removed: Tariffs and Trade Policy Changes Could Adversely Affect Our Supply Chain and Financial Performance
−Removed: We depend on international suppliers for certain hardware components, such as cameras and sensors, used in our AI-driven roadway intelligence solutions.
−Removed: tariffs on imports, from trading partners, could significantly increase our component costs.
−Removed: If we are unable to pass these increased costs to customers due to competitive pressures, our gross margins could decline, further straining our financial condition.
−Removed: Moreover, ongoing trade policy uncertainty could hinder our ability to plan effectively, adversely affecting our business, operating results, and financial condition.
−Removed: An extended U.S.
−Removed: Government Shutdown Could Adversely Affect Our Ability to Execute Contracts, Receive Payments, and Secure New Awards.
−Removed: A portion of our revenue is derived, directly or indirectly, from contracts with U.S.
−Removed: federal, state, and local government agencies.
−Removed: As a result, our business is subject to risks associated with changes in government funding priorities, budgetary constraints, and administrative disruptions.
−Removed: During a shutdown or delay in the passage of appropriations bills, government agencies may experience interruptions in procurement, contracting, and payment activities.
−Removed: Consequently, agencies may be unable to issue new awards, exercise contract options, or obligate additional funding under existing contracts.
−Removed: Ongoing projects could be delayed or suspended, and payments to us may be deferred due to the unavailability of appropriated funds or furloughs of government personnel responsible for contract administration and approvals.
−Removed: These disruptions could negatively impact our cash flows, the timing of revenue recognition, and our overall financial results.
−Removed: Even short-term shutdowns or funding delays can create uncertainty for our customers and partners, lengthen sales and contracting cycles, and affect our ability to forecast and close new business.
−Removed: There can be no assurance as to when a U.S.
−Removed: government shutdown would end or how quickly our customers and partners could resume normal operations and payment activities.
−Removed: Prolonged or repeated shutdowns, or material delays in government appropriations, could have a material adverse effect on our business, results of operations, liquidity, and financial condition.
−Removed: Other than the risk factor discussed above, there have been no material changes to the risk factors disclosed in “Risk Factors” in our Annual Report on Form 10-K as filed with the SEC on September 30, 2025.
−Removed: We encourage investors to review the risk factors and uncertainties relating to our business disclosed in that Form 10-K, as supplement by this Form 10-Q, as well as those contained in Part 1, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, above.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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."
+Added: In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have been provided an initial period of 180 calendar days, or until October 26, 2026, to regain compliance with the minimum bid price requirement.
+Added: 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.
+Added: 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.
+Added: There can be no assurance that we will regain compliance within the initial compliance period, that we will be eligible for an additional compliance period, or that Nasdaq will grant us additional time to regain compliance.
+Added: If we are unable to regain compliance, or otherwise fail to maintain compliance with Nasdaq’s continued listing standards, Nasdaq may determine to delist our common stock.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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