Date of Report (Date of earliest event reported): August
18, 2021
REKOR SYSTEMS, INC.
(Exact name of
registrant as specified in its charter)
Delaware
001-38338
81-5266334
(State or Other
Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
7172 Columbia Gateway Drive, Suite 400,
Columbia, MD 21046
(Address of Principal
Executive Offices)
Registrant's Telephone
Number, Including Area Code: (410) 762-0800
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following
provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on
which registered
Common Stock, $0.0001
par value per share
REKR
The Nasdaq Stock
Market
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter)
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Item 2.01 Completion of Acquisition or Disposition of
Assets.
On August 18, 2021, Rekor Systems, Inc. (the “Company”)
completed its previously announced acquisition of Waycare
Technologies Ltd. (“Waycare”) pursuant to that certain
share purchase agreement (the “Purchase Agreement”) by
and among the Company, Waycare, the sellers of Waycare named in the
Purchase Agreement (the “Sellers”), and Shareholder
Representative Services LLC, solely in its capacity as the
representative of the Sellers, pursuant to which the Company
acquired 100% of the issued and outstanding capital stock of
Waycare from the Sellers.
The aggregate purchase price for the shares of Waycare was
approximately $61 million, less the amount of Waycare’s debt
and certain transaction expenses and subject to a customary working
capital adjustment. The purchase price is comprised of
approximately $40.7 million in cash and 2.8 million shares of
the Company’s common stock, par value $0.0001 (“Common
Stock”), based on a volume weighted average trading price of
the Common Stock over a five consecutive trading day period prior
to the date of the Purchase Agreement, which was $7.286 (the
“Per Share Consideration”). Additionally, following the
closing the Company will reserve for Waycare’s continuing
employees an aggregate of 686,248 restricted stock units, to be
issued pursuant to the terms of the Company’s 2017 Equity
Award Plan, which amount represents $5 million in value based on
the Per Share Consideration (the “Waycare Continuing Employee
RSU Pool”). The restricted stock units in the Waycare
Continuing Employee RSU Pool will be subject to customary vesting
schedules and are intended to incentivize the continued performance
of Waycare’s employees. As a result of the transaction,
Waycare is a wholly-owned subsidiary of the Company.
The Purchase Agreement contains certain customary representations,
warranties and covenants, including representations and warranties
by the Sellers with respect to Waycare’s business, operations
and financial condition. The Purchase Agreement also includes
post-closing covenants relating to the confidentiality and employee
non-solicitation obligations of certain Sellers, and the agreement
of certain Sellers not to compete with the business of Waycare
following the closing of the transaction.
Subject to certain limitations, each of the parties will be
indemnified for damages resulting from third party claims and
breaches of the parties’ respective representations,
warranties and covenants in the Purchase Agreement.
The foregoing discussion of the Purchase Agreement does not purport
to be complete and is qualified by reference to the full text of
the Purchase Agreement, which was filed as Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission (the “SEC”) on
August 6, 2021 and is incorporated herein by reference.
On August 19, 2021, the Company issued a press release announcing
the closing of the acquisition. A copy of such press release is
attached hereto as Exhibit 99.1 and is incorporated herein by
reference.
Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On August 18 2021, in connection with the closing of the
acquisition of Waycare, the Company publicly announced the
appointment of Noam Maital, age 34, to serve as Chief Executive
Officer of Waycare, the Company’s wholly-owned subsidiary. On
August 18, 2021, Mr. Maital entered into an employment agreement
with the Company (the “Maital Employment
Agreement”).
Prior to the closing of the acquisition, Mr. Maital served as the
Chief Financial Officer and a Co-Founder of Waycare. Prior to
Waycare, Mr. Maital led global strategy projects in technology
implementation, growth strategy, and financial due diligence. He
holds a BSc, Summa Cum Laude, from Babson College with a dual
degree in Economics and Strategic Management. Prior to his studies,
Mr. Maital served as a First Sergeant in the Israeli Special
Forces.
The Maital Employment Agreement provides for an initial three-year
term, subject to automatic extension. Mr. Maital will receive an
annual base salary of $300,000, and will be eligible for a bonus as
determined by the Board of Directors of the Company (the
“Board”) in its sole discretion. Mr. Maital is eligible
to receive two times his base salary then in effect if his
employment with the Company is terminated within 120 days of a
change of control (as such term is defined in the Maital Employment
Agreement). Mr. Maital s eligible for benefits available to
management employees generally, as outlined in the Company’s
annual proxy statement filed with the Securities Exchange
Commission (“SEC”) on August 3, 2021. Following the
Company's 2021 annual meeting of stockholders to be held on
September 14, 2021, Mr. Maital will be granted 255,284 restricted
stock units from the Waycare Continuing Employee RSU Pool,
representing a value of $1,860,000 based on the Per Share
Consideration, which will be issued pursuant to the Company’s
2017 Equity Award Plan, and will vest in three equal annual
installments on the first (August 18, 2022), second (August 18,
2023), and third (August 18, 2024) anniversaries of the grant
date.
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There is no arrangement or understanding between Mr. Maital and any
other person pursuant to which Mr. Maital is to be selected as an
officer of the Company or its wholly owned subsidiary, Waycare,
that would require disclosure under Item 401(b) of Regulation S-K.
Additionally, there is no family relationship between Mr. Maital
and any other person that would require disclosure under Item
401(d) of Regulation S-K. Mr. Maital is also not a party to any
transactions that would require disclosure under Item 404(a) of
Regulation S-K.
The foregoing summary of the Maital Employment Agreement is not
complete and is qualified in its entirety by reference to the full
text of the Maital Employment Agreement attached as Exhibit 10.2
hereto and incorporated by reference herein.
Item 9.01. Financial Statements and
Exhibits.
(a) Financial Statements of Businesses Acquired.
The Company intends to file the financial statements required to be
filed pursuant to Item 9.01(a) of Form 8-K by amendment to this
report not later than 71 calendar days after the date this report
is required to be filed.
(b) Pro Forma Financial Information.
The Company intends to file the pro forma financial information
required to be filed pursuant to Item 9.01(b) of Form 8-K by
amendment to this report not later than 71 calendar days after the
date this report is required to be filed.
* Rekor Systems, Inc. has omitted certain schedules and exhibits
pursuant to Item 601(a)(5) of Regulation S-K and shall furnish
supplementally to the SEC copies of any of the omitted schedules
and exhibits upon request by the SEC.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
