REKRHIGH SIGNALFINANCIAL10-K

Revenue collapsed 52% while the company raised significant cash, suggesting potential financial distress or major business model disruption.

The dramatic revenue decline combined with substantial cash increase indicates REKR likely conducted an emergency capital raise to weather severe operational challenges. Despite improving losses due to lower revenue base, the company's core business appears to be deteriorating rapidly, raising questions about long-term viability and potential dilution from recent equity financing.

Comparing 2026-03-31 vs 2025-03-31View on EDGAR →
FINANCIAL ANALYSIS

REKR experienced severe operational deterioration with revenue plummeting 52% to $9.2M and gross profit falling 44%, indicating both volume and margin pressures. However, the company significantly bolstered its liquidity position with cash surging 231% to $16.6M, likely through equity financing that also drove the 60% increase in current liabilities. While net losses improved 49% due to the lower revenue base, the fundamental business decline combined with apparent emergency fundraising suggests the company is in financial distress despite temporarily stronger cash reserves.

FINANCIAL STATEMENT CHANGES
Cash & Equivalents
Balance Sheet
+230.5%
$5.0M→$16.6M

Cash position surged 230.5% — strong cash generation or capital raise providing significant financial cushion.

Current Liabilities
Balance Sheet
+59.6%
$18.2M→$29.1M

Current liabilities surged 59.6% — significant near-term obligations; verify ability to meet short-term debt.

Current Assets
Balance Sheet
+54.2%
$19.9M→$30.7M

Current assets grew 54.2% — improving short-term liquidity or inventory/receivables build.

Revenue
P&L
-52.2%
$19.3M→$9.2M

Revenue declined 52.2% — significant demand weakness or market share loss warrants investigation.

Net Income
P&L
+48.8%
-$61.4M→-$31.5M

Net income grew 48.8% — bottom-line growth signals improving overall business health.

Operating Income
P&L
+46.8%
-$54.3M→-$28.9M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

SG&A Expense
P&L
+45.1%
$13.0M→$18.8M

SG&A up 45.1% — significant increase in sales or administrative costs, monitor impact on operating leverage.

Gross Profit
P&L
-44.4%
$10.3M→$5.7M

Gross margin compression — rising input costs, pricing pressure, or unfavorable product mix shift.

Operating Cash Flow
Cash Flow
+37.3%
-$32.5M→-$20.4M

Operating cash flow surged 37.3% — exceptional cash generation, highest quality earnings signal.

Inventory
Balance Sheet
-28.5%
$4.3M→$3.1M

Inventory reduced 28.5% — lean inventory management or demand outpacing supply.

LANGUAGE CHANGES
NEW — 2026-03-31
PRIOR — 2025-03-31
ADDED
false --12-31 FY 2025 true Our information security procedures are overseen by our Vice President of Risk Management, supported by our Chief Technology Officer and our IT Manager, who are responsible to provide regular reports to our President and Chief Executive Officer and Chief Financial Officer as well as the Governance Committee of our Board.
These procedures are responsible for identifying, assessing, and managing cybersecurity threats and risks and work to monitor and evaluate our threat environment and risk profile using various methods.
These methods include evaluating our and our industry s risk profile, coordinating with law enforcement concerning select threats, and engaging with third parties to conduct external audits and threat assessments for certain systems.
Our information security procedures are overseen by our Vice President of Risk Management, supported by our Chief Technology Officer and our IT Manager, who are responsible to provide regular reports to our President and Chief Executive Officer and Chief Financial Officer as well as the Governance Committee of our Board.
These procedures are responsible for identifying, assessing, and managing cybersecurity threats and risks and work to monitor and evaluate our threat environment and risk profile using various methods.
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REMOVED
On July 25, 2023, in connection with the 2023 Letter Agreement, the Company issued warrants to purchase 2,850,000 shares of its common stock, exercisable over a period of five and half years, at an exercise price of $3.25 per share.
These warrants were exercisable commencing July 25, 2023 and expire on January 25, 2029.
On March 23, 2023, in connection with the 2023 Register Direct Offering the Company issued (i) pre-funded warrants exercisable for up to an aggregate of 772,853 shares of common stock, (ii) warrants to purchase up to 6,872,853 shares of common stock, and (iii) warrants to the placement agent to purchase up to 481,100 shares of common stock.
The exercise price per share of the warrants was $1.455 and each pre-funded warrant is exercisable for one share of common stock at an exercise price of $0.001 per share and will expire when exercised in full.
Each warrant for the placement agent is exercisable for one share of common stock at an exercise price of $1.8188 per share.
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