Item 1A. Risk Factors
ITEM 1A. RISK FACTORS
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. 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. 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.
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.
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. 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. 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."
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. 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. 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.
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. 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. 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.
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. Our 2026 Annual Meeting of Stockholders, convened on May 15, 2026, was adjourned for lack of a quorum and is scheduled to reconvene on September 11, 2026. Any reverse stock split would require stockholder approval, and there can be no assurance that we will be able to obtain a quorum or the requisite stockholder approval in time to complete a reverse stock split within the compliance period. 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. 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.
We may be unable to refinance or repay our Series A Prime Revenue Sharing Notes at their maturity on December 15, 2026.
As of June 30, 2026, $15.0 million aggregate principal amount of our Series A Prime Revenue Sharing Notes was outstanding, all of which is due and payable on December 15, 2026. As of June 30, 2026, we had cash and cash equivalents of $9.8 million, and, as discussed under “Liquidity and Capital Resources,” our existing cash is insufficient to fund our current level of operations. We are evaluating refinancing alternatives with respect to the notes. There can be no assurance that we will be able to refinance, restructure or repay the notes on acceptable terms, or at all. Any refinancing may be on terms less favorable to us, may increase our financing costs, may impose additional restrictions on our business, or may involve the issuance of equity or equity-linked securities that dilute existing stockholders. If we are unable to refinance or otherwise satisfy the notes at maturity, our liquidity, financial condition and ability to continue as a going concern would be materially adversely affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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