UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the
Securities Exchange Act of 1934
Check the appropriate box:
☐ Preliminary Information
Statement
☒ Definitive Information
Statement
☐ Confidential, for Use
of the Commission Only (as permitted by
Rule 14c-5(d)(2))
REKOR SYSTEMS, INC.
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
☒ No fee
required
☐ Fee computed on table
below per Exchange Act Rules 14c-5(g) and 0-11.
(1)
Title
of each class of securities to which transaction
applies:
(2)
Aggregate
number of securities to which the transaction applies
(3)
Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was
determined):
(4)
Proposed
maximum aggregate value of transaction:
☐ Fee paid previously
with preliminary materials
☐ Check box if any part
of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
(1)
Amount
previously paid:
(2)
Form,
Schedule or Registration Statement No.:
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
THIS INFORMATION STATEMENT IS BEING PROVIDED TO YOU BY THE BOARD OF
DIRECTORS OF THE COMPANY
GENERAL INFORMATION
This
Notice and the accompanying Information Statement
(“Information Statement”) are being furnished by Rekor
Systems, Inc., a Delaware corporation (the “Company”)
to the holders of shares of our common stock, par value $0.0001 per
share (“Common Stock”) to inform you that, on
January 28, 2020, the Board of Directors of the Company (the
“Board”) adopted resolutions of the Board to ratify,
approve and recommend stockholder approval of an amendment to the
Company’s Amended and Restated Certificate of Incorporation,
as amended, to revise Article IV, Section 4.1 thereof in
order to effect an increase in the authorized number of shares of
the Company’s Common Stock from 30,000,000 to 100,000,000
(the “Amendment”). No change is being made to the
authorized shares of the Company’s Preferred Stock which
shall remain at 2,000,000. On February 21, 2020, the holders of a
majority in voting power of issued and outstanding shares of our
Common Stock, par value $0.0001 (the “Majority
Holders”) approved the Amendment by written consent in lieu
of a meeting (the “Written Consent”). The holders of
the Company’s Series A Preferred Stock and Series B Preferred
Stock are not entitled to vote on the Amendment.
The
accompanying Information Statement is being furnished to our
stockholders for informational purposes only, pursuant to
Section 14(c) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the rules and
regulations prescribed thereunder. We are also furnishing the
Information Statement to our stockholders in satisfaction of the
notice requirement under Section 228 of the DGCL. Because the
Written Consent of the Majority Holders satisfies all applicable
stockholder voting requirements, the Board is not soliciting your
proxy or consent in connection with the matters discussed above.
You are urged to read the Information Statement carefully and in
its entirety for a description of the action taken by the Company
and the Majority Holders.
The Amendment will not become effective before the
date which is 20 days after the Information Statement is first
mailed to our stockholders. The Information statement is being
mailed on or about February 26, 2020 to
our stockholders of record on February 18,
2020.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED
NOT TO SEND US A PROXY.
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By Order of the Board of Directors,
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Dated: February 21, 2020
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/s/
Robert Berman
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Robert Berman President and Chief Executive Officer
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REKOR SYSTEMS, INC.
7172 Columbia Gateway Drive, Suite 400
Columbia, MD 21046
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE
SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED
This
Information Statement (the “Information Statement”) is
being mailed on or about February 26, 2020 to the holders of
record at the close of business on February 18, 2020 (the
“Record Date”) of the shares of common stock, par value
$0.0001 per share (“Common Stock”) of Rekor Systems,
Inc., a Delaware corporation (“Rekor”,
“we,” “our,” “us,” or the
“Company”), in connection with an action taken by
written consent (the “Written Consent”) of the holders
of a majority in voting power of issued and outstanding shares of
our Common Stock (the “Majority Holders”) in lieu of a
meeting to approve an amendment to the Company’s Amended and
Restated Certificate of Incorporation, as amended (the
“Certificate”), to increase the authorized number of
shares of our Common Stock from 30,000,000 to 100,000,000 (the
“Amendment”). The holders of the Company’s Series
A Preferred Stock and Series B Preferred Stock are not entitled to
vote on the Amendment.
The
Majority Holders, beneficially owning 13,943,841 shares of our
issued and outstanding Common Stock, have executed the Written
Consent approving the Amendment. The Majority Holders held of
record on the Record Date approximately 63.1% of the issued and
outstanding shares, and therefore more than the 50.1% majority
voting power necessary to approve the proposed Amendment.
Dissenting stockholders do not have any statutory appraisal rights
as a result of the action taken. The Board of Directors of the
Company (the “Board”) does not intend to solicit any
proxies or consents from any other stockholders in connection with
this action. All necessary corporate approvals have been obtained,
and this Information Statement is furnished solely to advise
stockholders of the action taken by the Written
Consent.
Section 228
of the Delaware General Corporation Law (the “DGCL”)
generally provides that any action required to be taken at a
meeting of stockholders may be taken without a meeting, without
prior notice and without a vote, if a written consent thereto is
signed by stockholders having not less than the minimum number of
votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present
and voted. Pursuant to Section 242 of the DGCL, a majority of
the outstanding voting shares of stock entitled to vote thereon is
required in order to amend our Certificate to effect the Amendment.
In order to eliminate the costs and management time involved in
obtaining proxies and to effect the above action as early as
possible in order to accomplish the purposes of the Company as
herein described, the Board consented to the utilization of, and
successfully obtained, written consent of the Majority
Holders.
This
Information Statement is being distributed pursuant to the
requirements of Section 14(c) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) to our
stockholders of record on the Record Date. The Amendment will not
become effective before the date which is 20 days after this
Information Statement is first mailed to our stockholders. The
20-day period is expected to conclude on or about March 17,
2020.
The
entire cost of furnishing this Information Statement will be borne
by the Company. We will request brokerage houses, nominees,
custodians, fiduciaries and other like parties to forward this
Information Statement to the beneficial owners of the Common Stock
held of record by them and will reimburse such persons for their
reasonable charges and expenses in connection
therewith.
Record Date and Vote Required
The
close of business on February 18, 2020 has been fixed as the Record
Date for the determination of stockholders entitled to vote via
written consent. As of such date, we had 22,111,273 shares of our
Common Stock outstanding and entitled to vote. Each share of Common
Stock is entitled to one vote on each matter to be voted upon at a
meeting or via written consent.
Pursuant
to Section 228 of the DGCL, unless otherwise provided in the
Certificate, any corporate action required to be taken at a meeting
of stockholders may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by stockholders
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which
all members having a right to vote thereon were present and voted.
The Majority Holders, who held in the aggregate the equivalent of
13,943,841 votes, or approximately 63.1% of the voting equity of
the Company, voted in favor of the Amendment by executing the
Written Consent in lieu of a meeting in accordance with our By-Laws
and the DGCL. The Written Consent is sufficient under the DGCL and
our By-laws to approve and adopt the action described in this
Information Statement. Consequently, no further stockholder action
is required.
No Dissenters’ Rights
Under
the DGCL, the Company’s stockholders are not entitled to
dissenters’ rights with respect to the Amendment effecting
the increase in authorized shares of the Company’s Common
Stock, and the Company will not independently provide stockholders
with any such right.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED
UPON
None
of our directors, executive officers or any associate of a director
or executive officer has a substantial interest, direct or
indirect, by security holdings or otherwise, in any matter
described in this Information Statement.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth certain information
as of February 18, 2020 with
respect to the holdings of: (i) each person known to us to be
the beneficial owner of more than 5% of our Common Stock; (ii) each
of our directors, nominees for director and named executive
officers; and (iii) all directors and executive officers as a
group. In accordance with applicable Securities and Exchange
Commission (the “SEC”) rules, the number of shares
reflected as beneficially owned by each entity, person, director or
executive officer is determined in accordance with the rules of the
SEC. Under those rules, beneficial ownership includes any shares
over which the individual has sole or shared voting power or
investment power as well as any shares that the individual has the
right to acquire within 60 days after February
11, 2020 through the exercise of any
stock option, warrants or other rights. To the best of our
knowledge, each of the persons named in the table below as
beneficially owning the shares set forth therein has sole voting
power and sole investment power with respect to such shares, unless
otherwise indicated. Applicable percentages are based
upon 22,111,273
shares of our Common Stock outstanding
as of February 18,
2020.
Name
and address of beneficial owner
(1)
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Number of Shares beneficially owned (2)
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Directors and Named Executive Officers
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Robert
A. Berman
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4,462,104
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(3)
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20.2%
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James
McCarthy
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2,725,835
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12.3%
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Richard
Nathan
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1,614,666
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(4)
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7.3%
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Matthew
Hill
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1,155,000
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(5)
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5.1%
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Paul
de Bary
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118,499
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(6)
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*
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Glenn
Goord
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150,999
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(7)
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*
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Christine
Harada
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70,999
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(8)
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*
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David
Hanlon
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70,999
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(8)
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*
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Steven
Croxton
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48,499
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(9)
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*
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Eyal
Hen
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-
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(10)
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*
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Riaz
Latifullah
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174,595
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(11)
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*
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All
directors and named executive officers as a group (11
persons)
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10,592,195
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45.5%
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5% or Greater Shareholders
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Avon
Road Partners, L.P.
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4,440,104
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(3)
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20.1%
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Superius
Securities Group Inc Profit Sharing Plan
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1,090,639
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(12)
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4.9%
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* Less than 1%
(1)
Unless
otherwise indicated, the address of those listed is c/o Rekor
Systems, Inc., 7172 Columbia Gateway Drive, Suite 400, Columbia, MD
21046. Unless otherwise indicated, all shares are owned directly by
the beneficial owner.
(2)
Based
on 22,111,273 shares of our common stock issued and outstanding as
of the February 18, 2020.
(3)
As
the general partner of Avon Road, Mr. Berman may be deemed to be
the beneficial owner of 4,462,104 shares of Rekor Systems, Inc.
common stock, or 20.2% of the class of securities. He may be deemed
to share with Avon Road (and not with any third-party) the power to
vote or direct the vote of and to dispose or direct the disposition
of the 4,440,104 shares of Rekor Systems, Inc. common stock
beneficially owned by Avon Road, or 20.1% of the class of
securities.
(4)
Consists
of: 1,593,020 shares of our common stock; a Unit Warrant to
purchase 4,849 shares of our common stock exercisable within 60
days of February 18, 2020; and 16,797 shares of our common stock
acquirable through the conversion of 10,000 shares of Rekor
Systems, Inc. Series A Preferred Stock.
(5)
Consists
of 530,000 shares of Rekor Systems, Inc. common stock and warrants
to purchase 625,000 shares of our common stock.
(6)
Consists
of options to purchase 108,499 shares of our common stock
exercisable within 60 days of February 18, 2020, and 10,000 shares
of our common stock.
(7)
Consists
of options to purchase 70,999 shares of our common stock
exercisable within 60 days of February 18, 2020, and 80,000 shares
of our common stock.
(8)
Consists
of options to purchase 70,999 shares of our common stock
exercisable within 60 days of February 18, 2020.
(9)
Consists
of options to purchase 48,499 shares of our common stock
exercisable within 60 days of February 18, 2020.
(10)
Mr.
Hen serves as our Chief Financial Officer and Principal Financial
and Accounting Officer since May 15, 2019.
(11)
Consists
of options to purchase 174,595 shares of our common stock
exercisable within 60 days of February 18, 2020.
(12)
Based
on the Schedule 13G/A Amendment No. 1 as filed with the Securities
and Exchange Commission on January 28, 2020, reporting beneficial
ownership of 5.14% based on 21,027,401 shares issued and
outstanding. The address of the reporting person is 94 Grand Ave,
Englewood, NJ 07631.
ACTION BY BOARD OF DIRECTORS AND MAJORITY HOLDERS
AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION
TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The
Board and the Majority Holders have adopted and approved the
Amendment to increase the number of our authorized shares of Common
Stock from 30,000,000 to 100,000,000. The rights and privileges
terms of the additional authorized shares of Common Stock will be
identical to those of the currently outstanding shares of Common
Stock. However, because the holders of Common Stock do not have
preemptive rights to purchase or subscribe for any new issuances of
Common Stock, the subsequent potential issuance of additional
shares of Common Stock will reduce the current stockholders’
percentage ownership interest in the total outstanding shares of
Common Stock. The Amendment and the creation of additional shares
of authorized Common Stock will not alter current
stockholders’ relative rights and limitations.
The
Certificate of Amendment of the Company’s Amended and
Restated Certificate of Incorporation that reflects the increase in
the authorized Common Stock is attached hereto as Appendix A.
The increase in authorized Common Stock will become effective upon
the filing of the Certificate of Amendment with the Secretary of
State of the State of Delaware, which is expected to occur as soon
as is reasonably practicable on or after the twentieth (20th) day
following the mailing of this Information Statement to the
Company’s stockholders.
Reason for Increase in Authorized Capital
In
order to permit us to raise capital or issue our Common Stock for
other business purposes, we need to have available unissued but
authorized shares of Common Stock and therefore need to increase
the number of shares of our Common Stock authorized for issuance.
We anticipate that this increase in authorized shares of Common
Stock will be sufficient to support the Company’s business
plan and expected growth over the next five years.
Except
as may be effected under our At Market Issuance Sales Agreement
dated August 14, 2019 as presently in effect, we do not currently
have any specific plans to effect public offerings of shares of our
Common Stock under our registration statement on Form S-3.
However, in the future we may use the additional shares of Common
Stock for such public offerings, and we may also pursue private
placements or other capital raising opportunities if we believe
them to be in the best interests of the Company and our
stockholders.
As
a result of the increase in authorized Common Stock, the Company
will have additional flexibility to be able to issue shares from
time to time as may be required for proper business purposes, such
as paying debt, raising additional capital for ongoing operations,
establishing strategic relationships with corporate partners,
acquiring or investing in complementary businesses or products, and
providing equity incentives to employees.
Effects of Increase
In
general, the issuance of any new shares of Common Stock will cause
immediate dilution to the Company’s existing stockholders,
may affect the amount of any dividends paid to such stockholders
and may reduce the share of the proceeds of the Company that they
would receive upon liquidation of the Company. Another effect of
increasing the Company’s authorized Common Stock may be to
enable the Board to render it more difficult to, or discourage an
attempt to, obtain control of the Company by means of a merger,
tender offer, proxy contest or otherwise, and thereby protect the
continuity of present management. The Board would, unless
prohibited by applicable law, have additional shares of Common
Stock available to effect transactions (such as private placements)
in which the number of the Company’s outstanding shares would
be increased and would thereby dilute the interest of any party
attempting to gain control of the Company, even if such party is
offering a significant premium over the current market price of the
Common Stock. Such an issuance of shares of Common Stock would
increase the number of outstanding shares, thereby possibly
diluting the interest of a party attempting to obtain control of
the Company. The Board is not aware of any attempt, or contemplated
attempt, to acquire control of the Company, and the Amendment was
not presented with the intent that the increase in the
Company’s authorized Common Stock be utilized as an
anti-takeover measure.
ADDITIONAL INFORMATION
We
file reports with the SEC on an annual basis using Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K. You
may read and copy any such reports and amendments thereto at the
SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549 on official business days during the hours
of 10:00 a.m. to 3:00 p.m. Please call the SEC at
1-800-SEC-0330 for information on the Public Reference Room.
Additionally, the SEC maintains a website that contains annual,
quarterly, and current reports, proxy statements, and other
information that issuers (including us) file electronically with
the SEC. The SECs website address is http://www.sec.gov. You can
also obtain copies of materials we file with the SEC from our
Internet website found at www.rekorsystems.com. Our stock is quoted
on the Nasdaq Capital Market under the symbol
“REKR.”
Appendix A
SECOND CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
REKOR SYSTEMS, INC.
Rekor Systems, Inc. (the
“Corporation”),
a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the
“DGCL”), does hereby certify
that:
(1)
The
Amended and Restated Certificate of Incorporation of the
Corporation, as amended, is hereby amended by deleting the second
sentence of Article IV, Section 4.1 thereof in its
entirety and inserting the following in lieu thereof:
“The
total number of shares of all classes of capital stock which the
Corporation shall have authority to issue is One Hundred-Two
Million (102,000,000) shares, of which One Hundred Million
(100,000,000) shares shall be designated as Common Stock with
a par value of $0.0001 per share, and Two Million
(2,000,000) shares shall be designated as Preferred Stock with
a par value of $0.0001 per share.
(2)
The
foregoing amendment was duly adopted in accordance with the
provisions of Section 242 of the DGCL.
IN WITNESS
WHEREOF, the Corporation has
caused this Second Certificate of Amendment of the Amended and
Restated Certificate of Incorporation, as amended, to be executed
and acknowledged by its duly appointed officer as of this [___] day
of March 2020.
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REKOR SYSTEMS, INC.
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By:
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Name: Robert Berman
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Title: President and Chief Executive Officer
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