Rekor Systems, Inc. (REKR) Earnings Call Transcript & Summary

Good morning. Will the meeting please come to order? My name is Robert Berman, and I serve as the Chief Executive Officer and Executive Chairman of the Board, and I'm also a candidate for election as a director. Welcome to the 2022 Annual Meeting of the Stockholders of Rekor Systems, Inc. This meeting is also being webcast live, and the webcast will be posted on our website after the meeting. Welcome to those stockholders participating by webcast. An agenda that outlines the order of business for the meeting has been made available. The matters of which the stockholders at the meeting are voting on are: to elect 6 directors, ratify the appointment of Friedman LLP as the company's independent registered public accounting firm for the period ending December 31, 2022, and approve the compensation of the company's named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the SEC and to transact any other business that may properly come before the meeting. I would like to begin the meeting by introducing the current members of the company's Board of Directors who are all present either in person or virtually. Joining me today are Paul A. de Bary, Dr. Richard Nathan, Mr. Glenn Goord, Mr. Dave Hanlon, Mr. Steve Croxton. Also joining today are Eyal Hen, the company's Chief Financial Officer; and Lex Eley, the company's General Counsel from Crowell & Moring. Mr. Eley will serve as the secretary of the meeting and record the proceedings. He has delivered an affidavit of Issuer Direct, the company's registrar and transfer agent, for our common stock. As to the distribution of the notices of the meeting, which states that on June 28, 2022, notice of the meeting and notice of Internet availability of proxy materials were distributed to all stockholders of record as of the close of business on June 16, 2022, and the record date for the meeting. This affidavit is available if any stockholder wishes to examine it and will be filed with the minutes of this meeting. Lex will now discuss the procedures for transacting the business of this meeting. Lex?

Good afternoon. For those of you who are here in person, if you do not have a copy of the agenda for this meeting and would like one, please raise your hand, and a copy will be given to you. For those of you participating remotely, the agenda has been posted on the webcast registration page. The meeting will take place as described in the agenda. When an item of business on the agenda is before the meeting for consideration, questions and comments should be limited to that item. If a stockholder has a question or comment not related to a business item on the agenda, an opportunity to raise other questions and comments will be provided after voting on the proposals described in the proxy statement. If you are recognized, please state your name and whether you are a stockholder or a proxy holder. If you are a proxy holder, please state the name of the stockholder that gave you the proxy. Please keep your questions and statements brief and limited to the specific item up for discussion. We may have to interrupt any question or statement that continues for an unreasonable amount of time. Ballots for matters to be voted on will be distributed to those desiring ballots, who are here in person. Any ballot not received when called for will not be counted. While the votes are being tabulated, Mr. Berman will give brief remarks about the business. Following his remarks, we will accept general questions from stockholders or proxy holders. Once you're recognized, please state your name and whether you are a stockholder or a proxy holder. We may have to interrupt any question that comes -- that continues for an unreasonable amount of time. When the report of the inspector of election is complete, we will announce the results. If any stockholder has any matter of individual concern, please raise it after the meeting. Other representatives of the company who are here can respond to the questions after the meeting.

Thank you, Lex. I hereby appoint [ Emily White ] from Issuer Direct, the company's registrar and transfer agent, as inspector of elections for the meeting and any adjournment or postponement of this meeting. She has signed an oath to act as inspector of election, and this oath will be filed with the minutes of this meeting. If there is any person present holding a proxy that has not yet submitted it to vote, please raise your hand, an inspector will pick up the proxies at this time. The inspector has the stockholder list of the company as of the close of business on June 16, 2022, the record date for determining stockholders eligible to vote at the meeting, which shows the stockholders and their respective number of shares entitled to vote at this meeting. This list is available if any stockholder wishes to examine it and will be filed with the minutes of this meeting. Mr. Eley has advised us that a quorum is present at the meeting, so I declare the meeting duly and lawfully convened. The meeting is now open and ready for business. The first item of business is the election of 6 directors of the company. The proxy statement made available to you earlier listed the nominees for director. The candidates for director who have been nominated to serve as directors are Mr. de Bary, Mr. Nathan, Mr. Goord, Mr. Hanlon, Mr. Croxton and myself. In accordance with our bylaws, stockholders are required to provide advanced notice of their intent to nominate candidates for directors. No such notices were received. Therefore, I declare the nominations for directors closed. A motion to elect 6 directors as described in the proxy statement is now in order.

My name is [ Alex Gauffin ], and I'm a stockholder. I hereby move that each of Robert Berman, Paul A. de Bary, Dr. Richard Nathan, Glenn Goord, David Hanlon and Steve Croxton be elected as directors to serve until the 2023 Annual Meeting of Stockholders or until their respective successors are elected and qualified.

Does anyone second this motion?

My name is [ Bernard Schott ]. I'm a stockholder. I second the motion.

Are there any questions or comments on this motion? There being no further discussion, I declare the polls open to vote on the motion. Any stockholders desiring to vote in person should do so at this time. If you have not already voted or you wish to change your vote, please raise your hand so that the inspector can give you a ballot. If any hands are raised for ballots, we expect there's no hands. Is there anyone else who wishes to vote in person? [Voting]

I now declare the polls closed on this motion. We will proceed with the agenda. The second item of business is to ratify the appointment of Friedman LLP as the company's independent registered accounting firm for the year ended December 31, 2022. The appointment of Friedman LLP is discussed in the proxy statement that was made available to you earlier. At this time, I would like to recognize Michael Cohen from Friedman LLP, who has worked on the audit of the company's financial statements and is virtually with us today. Would you please stand? One additional note, Friedman recently announced its intentions to merge with and into Marcum LLP, with the resulting entity being a national top 12 accounting firm. The merger with Marcum is expected to close in early September, and the combined entity will operate under the Marcum brand. When the combination is consummated, you will likely see us file an 8-K with the SEC noting a change in our independent auditor from Friedman to Marcum. Aside from the name change, we don't anticipate any disruption in the high-quality services provided by the Friedman team currently staffed on our account. A motion to ratify the auditor's appointment as described in the proxy statement is now in order.

My name is [ Alex Gauffin ], and I'm a stockholder. I hereby move that the appointment of Friedman LLP as the company's independent registered public accounting firm for the year ending December 31, 2022, be ratified.

Is there a second to this motion?

My name is [ Bernard Schott ], and I am a stockholder. I second the motion.

Are there any questions or comments on this motion? There being no further discussion, I hereby declare the polls open to vote on the motion. Any stockholders desiring to vote in person should do so at this time. If you have not already voted or if you wish to change your vote, please raise your hand so that the inspector can give you a ballot. Is there anyone else who wishes to vote in person? [Voting]

The polls are now closed. We will proceed with the agenda. The third item of business is to approve the compensation of the company's named executive officers. The proposal is a nonbinding stockholder advisory vote. The company's executive compensation is discussed in the proxy statement that was made available to you earlier. A motion to vote on the compensation of the named executive officers has been described in the proxy statement and is now in order.

My name is [ Alex Gauffin ], and I'm a stockholder. I hereby move that the compensation of the company's named executive officers as disclosed in the proxy statement pursuant to the compensation disclosure rules of the SEC, the Summary Compensation Tables and the related narrative discussion be approved.