Rekor Systems, Inc.

Previous wording

For the year ended December 31, 2024, we had a net lossof$61,410,000. We have experienced and expect to continue to experience significant expenses related to acquisitions and the development of new products and services. Although we have deliberately incurred losses in the past as we worked to develop, test and popularize our products and services, a significant portion of our expenses are fixed in advance and we cannot assure that we will be profitable in the future or that our financial performance will sustain a sufficient level to completely support operations. Our ability to become profitable in future periods could be impacted by factors that are not in our control, including government activity and regulation, economic instability and other items. e. ,. Our success as a technology-based company focused on roadway intelligence will require us to generate sufficient new revenues from the roadway intelligence market to support our business plan while continuing to operate as a public company. As a result, we may continue to experience operating losses and net losses in the future, which would make it difficult to fund operations and achieve our business plan and could cause the market price of our common stock to decline.

Current wording

For the year ended December 31, 2025, we had a net lossof$31,460,000. We have experienced and expect to continue to experience significant expenses related to acquisitions and the development of new products and services. We have deliberately incurred losses in the past as we worked to develop, test and popularize our products and services. Although the maintenance of these products and services is expected to be significantly less expensive than the initial development, competitive pressure and feedback from customers may result in further development efforts. In addition, significant portion of our expenses are fixed in advance and can only be reduced as on a percentage basis as our revenue increases. Accordingly, we cannot assure that we will be profitable or that our financial performance will sustain a sufficient level to completely support operations at any particular time in the future. Our ability to become profitable in future periods could be impacted by factors that are not in our control, including government activity and regulation, economic instability and other items. Our success as a technology-based company focused on roadway intelligence will require us to generate sufficient new revenues from the roadway intelligence market to support our business plan while continuing to operate as a public company. As a result, we may continue to experience operating losses and net losses in the future, which would make it difficult to fund operations and achieve our business plan and could cause the market price of our common stock to decline.

Previous wording

We depend on component and product manufacturing provided by outsourcing partners, most of which are located outside of the U.S.

Current wording

For our hardware product offerings we depend on component and product manufacturing provided by outsourcing partners, most of which are located outside of the U.S.

Previous wording

We may be limited in the portion of net operating loss carryforwards that we can offset future taxable income for U.S. federal and state income tax purposes. As of December 31, 2024, we had gross federal and state net operating loss carryforwards, or NOLs, of approximately $190,624,000 and$180,859,000, respectively. A lack of future taxable income could adversely affect our ability to use these NOLs. In addition, future changes in our stock ownership, including through acquisitions, could result in ownership changes under Section 382 of the Internal Revenue Code and may result in a limitation on the amount of NOL carryforwards that could be used annually to offset future taxable income and taxes payable. Our NOLs at December 31, 2024 may also be impaired under similar provisions of state law and may expire unused or underused, which would prevent us from using our NOL carryforwards to offset future taxable income.

Current wording

We may be limited in the portion of net operating loss carryforwards that we can offset future taxable income for U.S. federal and state income tax purposes. As of December 31, 2025, we had gross federal and state net operating loss carryforwards, or NOLs, of approximately $229,894,000 and $220,253,000, respectively, which include both domestic and foreign NOLs as further described in Note 10 to our consolidated financial statements. A lack of future taxable income could adversely affect our ability to use these NOLs. In addition, future changes in our stock ownership, including through acquisitions, could result in ownership changes under Section 382 of the Internal Revenue Code and may result in a limitation on the amount of NOL carryforwards that could be used annually to offset future taxable income and taxes payable. Our NOLs at December 31, 2025 may also be impaired under similar provisions of state law and may expire unused or underused, which would prevent us from using our NOL carryforwards to offset future taxable income.

Previous wording

As of March 28, 2025, we have a total of 110,912,209 shares of common stock outstanding. Based on shares outstanding as of March 28, 2025, 14,479,276 shares of common stock, or 13.1%, are beneficially owned by our officers, directors and their affiliated entities, and will be subject to volume limitations under Rule 144 under the Securities Act and various vesting agreements. In addition, 9,255,659 shares of our common stock that are subject to outstanding options, restricted stock units and warrants as of March 28, 2025, will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements, and Rules 144 and 701 under the Securities Act.

Current wording

As of March 25, 2026, we have a total of 136,578,177 shares of common stock outstanding. Based on shares outstanding as of March 25, 2026, 4,430,219 shares of common stock, or 3.2%, are beneficially owned by our officers, directors and their affiliated entities, and will be subject to volume limitations under Rule 144 under the Securities Act and various vesting agreements. In addition, 13,682,656 shares of our common stock that are subject to outstanding options, restricted stock units and warrants as of March 25, 2026, will become eligible for sale in the public market to the extent permitted by the provisions of various vesting agreements, and Rules 144 and 701 under the Securities Act.

Previous wording

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure investors that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors, and investors purchasing our shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we may sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share paid by investors. On February 10, 2025, we entered into an At Market Issuance Sales Agreement pursuant to which we may, from time to time, offer and sell shares of our common stock having an aggregate offering price of up to $25,000,000. As of March 28, 2025, we issued 5,148,600 shares under the Sales Agreement.

Current wording

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure investors that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors, and investors purchasing our shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we may sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share paid by investors.