SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a class action lawsuit has been filed in the District of Maryland on behalf of purchasers of Rekor Systems, Inc. (NASDAQ: REKR) securities between April 12, 2019 and May 25, 2021, inclusive (the “Class Period”). The case is captioned Miller v. Rekor Systems, Inc., No. 21-cv-01604, and is assigned to Judge George L. Russell III. The Rekor Systems class action lawsuit charges Rekor Systems and certain of its top executives with violations of the Securities Exchange Act of 1934.
If you wish to serve as lead plaintiff of the Rekor Systems class action lawsuit or have questions concerning your rights regarding the Rekor Systems class action lawsuit, please visit our website by clicking here or contact J.C. Sanchez of Robbins Geller, at 800/449-4900 or 619/231-1058 or via e-mail at email@example.com. Lead plaintiff motions for the Rekor Systems class action lawsuit must be filed with the court no later than August 28, 2021.
CASE ALLEGATIONS: Rekor Systems was formerly known as Novume Solutions, Inc. and traded under the ticker symbol NVMM before changing its name to Rekor Systems, Inc. and its ticker symbol to REKR on April 30, 2019.
The Rekor Systems class action lawsuit alleges that, throughout the Class Period, defendants made false and misleading statements and failed to disclose that: (i) Rekor System’s automatic license plate recognition (“ALPR”) technology and uninsured vehicle enforcement diversion (“UVED”) related business is outclassed by global competitors with an established, dominant market share; (ii) it was unlikely that states would pass legislation authorizing deals similar to Rekor Systems’ Oklahoma UVED partnership because of, among other things, state and local privacy laws and related public concerns; (iii) Rekor Systems’ UVED partnership was not as profitable as defendants had led investors to believe because of known impediments to enrollment rates and costs associated with the partnership; (iv) accordingly, Rekor Systems had overstated its potential revenues, profitability, and overall ALPR- and UVED-related business prospects; and (v) as a result, Rekor Systems’ public statements were materially false and misleading at all relevant times.
On May 10, 2021, a bill authorizing the establishment of a state UVED program was excluded from the Texas Legislature’s Daily House Calendar and left pending in a state committee. Because May 10, 2021 was the deadline for the Texas UVED bill to move from the committee, news sources reported significant market speculation that the bill was dead. On this news, Rekor Systems’ stock price fell nearly 28%.
Then, on an earnings call that same day to discuss Rekor Systems’ first quarter 2021 financial results, Rekor Systems’ President and Chief Executive Officer, defendant Robert A. Berman, also indicated that Rekor Systems may not secure a UVED agreement with Texas. On this news, Rekor Systems’ stock price fell nearly 18%.
Finally, on May 26, 2021, private investor Western Edge published a report entitled “Rekor Systems: Lackluster Growth Runway And Exaggerated Insurance Scheme Raise Substantial Downside Risk.” The report alleged, among other things, that global competition was “miles ahead” of Rekor Systems in ALPR development and market establishment; that Rekor Systems’ “realized results suggest management’s potential revenue guidance could be overstated by up to 80%”; and that investors were at risk of facing a “massive downside if [Rekor Systems’] growth doesn’t show up.” The report also noted that Rekor Systems’ predecessor in the Oklahoma UVED partnership had exited it because “the program is not economically feasible” given costs associated with the program and because “there was typically no consequences for individuals that simply ignored the fines/insurance requirements after they were identified.” Also on May 26, 2021, Mariner Research Group published another report entitled “REKR – Government documents do not support investor expectations.” The report “highlight[ed] government documentation which shows that REKR’s revenue opportunities are likely a fraction of what investors expect.” Among other things, the report alleged that “Oklahoma government budgets imply that REKR’s much vaunted UVED program is a sub $2MM revenue opportunity – almost 96% less than the >$40MM in revenue intimated by Rekor’s CEO.” The report likewise echoed the issues disclosed in the Western Edge report, including, among other things, those that had caused Rekor’s predecessor in the Oklahoma UVED partnership to exit the program. On this news, Rekor Systems’ stock price fell an additional 3.9%, further damaging investors.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Rekor Systems securities during the Class Period to seek appointment as lead plaintiff in the Rekor Systems class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Rekor Systems class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Rekor Systems class action lawsuit. An investor’s ability to share in any potential future recovery of the Rekor Systems class action lawsuit is not dependent upon serving as lead plaintiff.
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