REKR 10-K & 10-Q changes, risk factors and insider trading

For the year ended December 31, 2024,2025, we had a net loss of $61,410,000.$31,460,000. We have experienced and expect to continue to experience significant expenses related to acquisitions and the development of new products and services. Although weWe have deliberately incurred losses in the past as we worked to develop, test and popularize our products and services,services. aAlthough the maintenance of these products and services is expected to be significantly less expensive than the initial development, competitive pressure and feedback from customers may result in further development efforts. In addition, significant portion of our expenses are fixed in advance and can only be reduced as on a percentage basis as our revenue increases. Accordingly, we cannot assure that we will be profitable in the future or that our financial performance will sustain a sufficient level to completely support operations.operations at any particular time in the future. Our ability to become profitable in future periods could be impacted by factors that are not in our control, including government activity and regulation, economic instability and other items. e. ,. Our success as a technology-based company focused on roadway intelligence will require us to generate sufficient new revenues from the roadway intelligence market to support our business plan while continuing to operate as a public company. As a result, we may continue to experience operating losses and net losses in the future, which would make it difficult to fund operations and achieve our business plan and could cause the market price of our common stock to decline.

WeFor our hardware product offerings we depend on component and product manufacturing provided by outsourcing partners, most of which are located outside of the U.S.

We may be limited in the portion of net operating loss carryforwards that we can offset future taxable income for U.S. federal and state income tax purposes. As of December 31, 2024,2025, we had gross federal and state net operating loss carryforwards, or NOLs, of approximately $190,624,000$229,894,000 and $180,859,000,$220,253,000, respectively.respectively, which include both domestic and foreign NOLs as further described in Note 10 to our consolidated financial statements. A lack of future taxable income could adversely affect our ability to use these NOLs. In addition, future changes in our stock ownership, including through acquisitions, could result in ownership changes under Section 382 of the Internal Revenue Code and may result in a limitation on the amount of NOL carryforwards that could be used annually to offset future taxable income and taxes payable. Our NOLs at December 31, 20242025 may also be impaired under similar provisions of state law and may expire unused or underused, which would prevent us from using our NOL carryforwards to offset future taxable income.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. We cannot assure investors that we will be able to sell shares or other securities in any other offering at a price per share that is equal to or greater than the price per share paid by investors, and investors purchasing our shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we may sell additional shares of our common stock or other securities convertible into or exchangeable for our common stock in future transactions may be higher or lower than the price per share paid by investors. On February 10, 2025, we entered into an At Market Issuance Sales Agreement pursuant to which we may, from time to time, offer and sell shares of our common stock having an aggregate offering price of up to $25,000,000. As of March 28, 2025, we issued 5,148,600 shares under the Sales Agreement.

The information provided in this discussion and analysis of Rekor’s financial condition, and results of operations covers the years ended December 31, 20242025 and 2023.2024. In 2024, we completed the acquisition of 100% of the issued and outstanding limited liability company interests of All Traffic Data SystemsServices, LLC (“ATD”).

On January 2,In 2024, we completed the acquisition of All Traffic Data Services, LLC (“ATD”) for an aggregate purchase price of $20,576,000. See Note 2 to our consolidated financial statements for additional information related to our acquisition of ATD.

Other than as discussed above and elsewhere in this Annual Report on Form 10-K, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition. Subsequent to year end, we announced certain actions intended to further align our cost structure with current revenue levels, as discussed above under "Opportunities, Trends and Uncertainties."

We expect our general and administrative expenses to continue to remainreflect highactions for the foreseeable future duetaken to align our cost structure with current revenue levels, while continuing to include the costs associated with ouroperating growthas anda thepublic costscompany, ofincluding accounting, compliance, legal, insurance,insurance and investor relations as a public company.relations. Our general and administrative expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses. However, our general and administrative expenses have decreased as a percentage of our revenue and, to the extent we continue to be successful in generatinggenerate increased revenue,revenue and realize efficiencies from these actions, we expect our general and administrative expenses to decrease as a percentage of our revenue over the long term.

The increase in revenue for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, was primarily attributable to our UrbanPublic MobilitySafety product line. During the year ended December 31, 2024,2025, revenue attributable to our UrbanPublic MobilitySafety product line was $28,688,000$17,401,000 compared to $16,773,000$14,807,000 for the year ended December 31, 2023.2024. DuringThis theincrease yearwas endedprimarily December 31, 2024, revenue attributabledue to ourhigher ATDperpetual acquisitionlicense wassales $10,125,000in and is included as part of our Urban Mobility revenue stream.2025.

For the year ended December 31, 2024,2025, the increasedecrease in general and administrative expenses compared to the year ended December 31, 2023,2024, was primarily due to:

The increasedecrease in selling and marketing expenses during the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, was primarily due to a $610,000$1,670,000 increasedecrease asin resultpayroll ofand thepayroll acquisitionrelated ofexpenses ATD.driven by cost-efficiency initiatives implemented to better align with operations.

Research and development expenses during the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, remainedwas consistent.primarily due to a $3,774,000 decrease in payroll and payroll related expenses driven by cost-efficiency initiatives implemented to better align with operations.

AsDuring a result of2024, sales performance beingwas below expectationexpectations, driven in part due toby slower customer adoption, longerextended sales cycles and market conditions,conditions. theAs Companya result, we identified a triggering event and performed an analysis of its intangible assets. As a result of thethat forementioned factorsanalysis and theirupdated potentialprojections on future impact,cash theflows, Companywe recognized an impairment charge of $10,214,000 as of December 31, 2024.

The increasedecrease in depreciation and amortization during the year ended December 31, 2025, is attributable primarilyto toan impairment that we recognized as of December 31, 2024, following the intangible assets that were acquired as partidentification of oura acquisitiontriggering of ATD.event.

Adjusted Gross Margin for the year ended December 31, 20242025 decreasedincreased from 52.8%49.3% to 49.3%55.9% compared to the year ended December 31, 2023.2024. The fluctuation in Adjusted Gross Margin is typically correlated to the mix of software sales versus service type work. Typically our software sales carry a higher Adjusted Gross Margin.

While a portion of the total contract value won in a particular period represents revenue earned during the period, the remainder represents future performance obligations that can provide an indication of our future revenues. As of December 31, 2024,2025, we had approximately $14,450,000$25,921,000 of performance obligations with respect to contracts that were closed prior to December 31, 20242025 but have a contractual period beyond December 31, 2024.2025. These contracts generally cover a term of one to five years, during which the Company will recognize revenue ratably over the contract term. We currently expect to recognize approximately $12,036,000$17,701,000 of this amount over the succeeding twelve months, and the remainder is expected to be recognized over the following four years. On occasion, our customers will prepay the full contract or a substantial portion of the contract. Amounts related to the prepayment of the contract related to the performance obligation for a service period that is not yet met are recorded as part of our contract liabilities balance. Performance obligations may decline or increase significantly as large contracts approach their expiration date and are then renewed.

We believe our facilities are in good condition and adequate for their current use.use, although we have consolidated engineering operations in the United States and are no longer using our Tel Aviv office. We expect to improve, replace and increase facilities as considered appropriate to meet the needs of our planned operations.

Net cash used in operating activities for the year ended December 31, 2024,2025, increaseddecreased by $291,000,$12,097,000, which was primarily attributable to ana increasedlower lossnet whichloss, waspartially offset by lower non-cash adjustments during the year, primarily thea $6,460,000 decrease in impairment charges, $4,693,000 loss on extinguishment of debtdebt, and $900,000 loss on settlement of $4,693,000.prepaid advance recognized in the prior year, as well as lower amortization of intangible assets and share-based compensation, and changes in working capital.

The increase in netNet cash used in investing activities for the year ended December 31, 2025, decreased by $6,858,000, which was primarily dueattributable to the absence of the $9,222,000 net cash outflow of $9,222,000 related to the acquisition of ATD.ATD in the prior year, partially offset by higher capital expenditures during the year.

For the years ended December 31, 20242025 and 2023,2024, we funded our operations primarily through cash from operating activities, the issuance of debt and the sale of equity. As of December 31, 2024,2025, we had unrestrictedrestricted cash of $297,000, cash and cash equivalents of $5,329,000$16,566,000 and working capital of $1,707,000,$1,640,000, as compared to unrestrictedrestricted cash of $316,000 cash, cash and cash equivalents of $15,713,000$5,013,000 and working capital of $8,100,000$1,707,000 as of December 31, 2023.2024.

TheWe Company hashave generated losses and negative operating cashflows since itsour inception and hashave relied on external sources of financing to support theour cash flow from operations. TheWe Company attributesattribute losses to non-capital expenditures related to the scaling of existing products and services, development of new products and services and marketing efforts associated with these existing and new products and services. As of and for the year ended December 31, 2024,2025, the Companywe had working capital of $1,707,000$1,640,000 and a net loss of $61,410,000.$31,460,000.

On February 10, 2025, the Companywe entered into an At Market Issuance Sales Agreement (the “"Sales Agreement”") with Northland Securities, Inc.,Inc. (the "Agent"), pursuant to which thewe Company may,could, from time to time, offer and sell shares of the Company’sour common stock, par value $0.0001 per share,share ("Common Stock"), having an aggregate offering price of up to $25,000,000. SeeThe NoteAgent 16was entitled to ourreceive consolidatedfrom financialus statementsa forcommission additionalin informationan amount equal to (i) 3.0% of the gross sales prices per share sold through it as agent in agency transactions and (ii) 6.0% of the purchase price per share sold to the Agent, as principal in principal transactions. We incurred issuance costs of approximately $245,000 related to legal, accounting, and other fees in connection with the Sales Agreement. These costs were charged against the gross proceeds of the Sales Agreement and presented as a reduction to additional paid-in-capital on the accompanying consolidated balance sheets.

The Company'sOur ability to generate positive operating results and execute itsour business strategy will depend on (i) itsour ability to continue the growth of itsour customer base, (ii) itsour ability to continue to improve itsour quarterly financial metrics such as net loss and cash used from operating activities (iii) the continued performance of itsour contractors, subcontractors and vendors, (iv) itsour ability to maintain and build good relationships with investors, lenders and other financial intermediaries, (v) itsour ability to maintain timely collections from existing customers, and (vi) the ability to scale itsour business processes. To the extent that events outside of the Company'sour control have a significant negative impact on economic and/or market conditions, they could affect payments from customers, services and supplies from vendors, itsour ability to continue to secure and implement new business, raise capital, and otherwise, depending on the severity of such impact, materially adversely affect itsour operating results.

Conducting a fair value analysis is an exercise in judgment, requiring us to evaluate data points, forecasts, and qualitative insights to arrive at a comprehensive assessment of our ability to derive value from our assets during the look-forward period. In this process, we must exercise caution, recognizing the inherent uncertainties and limitations of our estimations and financial analysis while striving to provide a feasible plan.

We intend to monitor the closing bid price of our common stock and consider available options to regain compliance, which may include seeking stockholder approval to effect a reverse stock split. Our 2026 Annual Meeting of Stockholders, convened on May 15, 2026, was adjourned for lack of a quorum and is scheduled to reconvene on September 11, 2026. Any reverse stock split would require stockholder approval, and there can be no assurance that we will be able to obtain a quorum or the requisite stockholder approval in time to complete a reverse stock split within the compliance period. There can be no assurance that any action taken by us would be successful or would result in a sustained increase in the market price of our common stock. Even if we regain compliance with the minimum bid price requirement, there can be no assurance that the market price of our common stock will not again fall below $1.00 per share, which could result in our receipt of one or more additional deficiency notices and ultimately in the delisting of our common stock from The Nasdaq Capital Market.

Rekor is a roadwaytechnology company developing trusted-data, privacy, security, and intelligence Company,solutions workingfor real-world transportation, public-safety, video, and sensor networks. We work to modernize public safety, urban mobility, and transportation management through cutting-edge solutions , with a focus on protecting the developmentsecurity and reliability of cutting-edgedata solutions.and appropriate privacy protections. By collaborating closely with public and private sector customers, we deliver services and solutions that enable them to achieveimprove the reliability, efficiency, accountability and security of their objectives effectively, while simultaneously building a new digital infrastructure operating system for roadways.operations.

Our vision is to create safer, smarter, and more sustainable roadways and communities, improving the lives of citizens and the world around them. To implement this vision, we have developed a suite of interconnected AI-driven hardware and purpose-built software platforms. Powered by vast and diverse multi-modal datasets and proprietary AI technologies, these solutions deliver advanced roadway intelligence, enabling clients to more effectively monitor, manage, and optimize the movement of vehicles, traffic, and activities in and around roadways and communities with precision and sensitivity to privacy and environmental concerns. Our products and services collect, connect, and organize mobility data, making it more useful, and accessible, while providing actionable real-time insights to enable better decision-making. This provides our customers with both enhanced real time and historical data and the tools to manage and use it efficiently, securely and responsibly. Our products and services support improved planning and provide significantly enhanced situational awareness, rapid response capabilities, risk mitigation strategies, and predictive analytics.

Our operations are conducted primarily by our wholly-owned subsidiaries, Rekor Recognition Systems, Inc. (“Rekor Recognition”), Waycare Technologies, Ltd. and Waycare Technologies, Inc. (combined “Waycare”), Southern Traffic Services, Inc. (“STS”), and All Traffic Data Services, LLC (“ATD”). We also have a separate subsidiary, Rekor Labs LLC ("Rekor Labs"), which isdevelops workingmedia-authentication and data-security technologies, including Go-Secure.Video, a technology designed to commercializeauthenticate avideo patent-pending technology for verifyingat the authenticitypoint of capture and support later verification of whether the video data.has been altered. Although developed in response to public-safety requirements, we believe this technology was developed to respond to requests from public safety customers, we believe it has broadbroader applicability and should therefore be pursued as a separate venture.applicability.

WeOver believethe thatpast governments indecade, the United States of America arehas atbegun to implement a critical turning point in the evolution of its transportation and roadway infrastructure. ForAfter overmany 70years years,of the nation has reliedreliance on analog technologies and manual methodologies that have resulted in rising costs, inefficiencies,and have involved inefficiencies and safety hazards that are now preventable.preventable, Federal, state and local transportation agencies are now looking to implement private-sectorexploit innovations like sensor technology, Internet of Things (“IoT”), AI, cloud computing,computing and autonomous vehicles, and smart drones.vehicles. These technologies are advancing rapidly and can address fundamental challenges such as poor roadway quality, traffic congestion, and driver safety.

Since 2018, Rekor has worked to deserve a place at the forefront of athis wave of transformation and modernization of roadways, actively designing, building, and deploying AI solutions and other advanced complementary technologies through public-private collaborations with departments of transportation (“DOTs”), public safety agencies, and private sector partners. Rekor is committed to helping lay the foundation of a groundbreaking new digital infrastructure operating system for roadways—and has already delivered proven value across multiple domains:

Our mission extends beyond connectivity—we are working toward building a dynamic, AI-driven network to modernize traffic management, public safety, and emergency services. By applying a digital layer to existing physical infrastructure and roadways, Rekor is creating a next-generation digital operating system for roadways, delivering real-time intelligence that powers economic growth, operational excellence, and improved quality of life for communities. While doing so, Rekor has been mindful of the challenges to personal privacy and the risks of malicious security breaches, developing proprietary processes for anonymizing data and ensuring its security and responsible transmission and use.

Rekor ishas been continuously working towardson transformingbetter ways to transform transportation and mobility data into actionable insights. Powered by advanced AI and fueled by diverse data sources, Rekor delivers historical and real-time, as well as predictive alerts that can be used to enhance mobility, safety, and operational efficiency across public and private sectors. Our platforms aggregate and analyze trillions of data points from roadway sensors and other IoT devices, enabling customers to make proactive, informed decisions and optimize resources, and enabling us to deliver tailored solutions for government and commercial customers in public safety, urban mobility, and transportation management.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and the Three and Six Months Ended MarchJune 31,30, 2025

Cost of revenue, excluding depreciation and amortization, increased by 2%decreased for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, primarily due to thea favorable revenue mix of software versus hardware, which resulted in higher revenuemargins infrom 2026.increased software license sales.

General and administrative expenses increaseddecreased by 14%26% and 5% for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increasedecrease was primarily driven by a $455,000 increasereductions in laborpayroll costs,and drivenrelated by the absenceexpenses of prior-year salary reductions$903,000 and compensation$448,000, arrangements,respectively, andas a $531,000result increaseof incost-containment professionalinitiatives fees, primarily relatedimplemented to higherbetter legal,align accountingwith andour otherstrategic advisory costs.priorities.

Selling and marketing expenses decreased by 48%60% and 54% for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025.2025, Thisrespectively. The decrease was primarily due to a reduction in payroll and related expenses of approximately $673,000$872,000 and $1,544,000, respectively, resulting from cost-containment initiatives implemented to better align operations with our strategic priorities.

For the three months ended March 31, 2026, the 12% decrease in researchResearch and development expenses decreased by 33% and 22% for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, respectively. The decrease was primarily duedriven toby a reductionreductions in payroll and related expenses of approximately$1,451,000 $621,000and resulting$2,072,000, fromrespectively, as a result of cost-containment initiatives implemented to better align operations with our strategic priorities.

The decrease in depreciation and amortization during the period is attributable to a reduction in the depreciation base resulting from the impairment of property and equipment recognized in connection with the wind-down of our Tel Aviv operations during the year ended December 31, 2025.2025 .

For the three and six months ended MarchJune 31,30, 2026, interest expense, net decreased by 16%,12% and 14%, compared to the three and six months ended June 30, 2025, respectively, due to higher interest income from interest-bearing accounts.

Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less cost of revenue, excluding depreciation and amortization. We define Adjusted Gross Margin as our Adjusted Gross Profit divided by our revenue. We expect Adjusted Gross Margin to continue to improve over time to the extent that we can gain efficiencies through the adoption of our technology and successfully cross-sell and upsell our current and future offerings. However, our ability to improve Adjusted Gross Margin over time is not guaranteed and could be impacted by the factors affecting our performance. We believe Adjusted Gross Profit and Adjusted Gross Margin are useful to investors, as they eliminate the impact of certain non-cash expenses and allow a direct comparison of these measures between periods without the impact of non-cash expenses and certain other nonrecurring operating expenses.

Adjusted Gross Margin for the three and six months ended MarchJune 31,30, 2026 increased compared to the three and six months ended MarchJune 31,30, 2025. The fluctuation in Adjusted Gross Margin is typically correlated to the mix of software sales versus service type work. Typically our software sales carry a higher Adjusted Gross Margin.

Recurring revenue increased by 28%14% and 21% for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. We expect to continue to focus on long-term contracts with recurring revenue as part of our business model, which is intended to cause recurring revenue growth in future periods to continue to increase. However, procurement requirements for some of our largest customers may result in periods when there is an increase one-time sales as compared to recurring revenues, which may cause the proportion of recurring revenues generated in those periods to fluctuate. In addition, there may be an increase in one timeone-time sales as a result of initial installations related to the development of recurring revenue.

As of MarchJune 31,30, 2026, we had approximately $22,250,000$23,709,000 of contracts that were closed prior to MarchJune 31,30, 2026 but have a contractual period beyond MarchJune 31,30, 2026. These contracts generally cover a term of one to five years, in which the Company will recognize revenue ratably over the contract term. Performance obligations for large contracts gradually decrease as they approach the renewal stage and increase if and when renewed. We currently expect to recognize approximately 72%88% of this amount over the succeeding twelve months, and the remainder is expected to be recognized over the following four years. On occasion, our customers will prepay the full contract or a substantial portion of the contract. Amounts related to the prepayment of the contract related to the performance obligation for a service period that is not yet met are recorded as part of our contract liabilities balance.

As of MarchJune 31,30, 2026, our principal leased facility was our corporate headquarters in Columbia, Maryland. We also leased office space in Plano, Texas. As described in Note 2 — Leases, we ceased operations at our previously-occupied office space in Tel Aviv, Israel during the threesix months ended MarchJune 31,30, 2026. In January 2026, we entered into an amendment to the lease for our corporate headquarters in Columbia, Maryland that revised the timing of monthly base rent payments through the remaining lease term. During the threesix months ended MarchJune 31,30, 2026, we exercised our option to terminate our lease for office space in Plano, Texas, effective December 31, 2026.

In December 2025, we initiated a plan to wind down the operations of our wholly owned subsidiary, Waycare Technologies LTD subsidiary in Tel Aviv, Israel, and consolidate all engineering functions into our U.S. facilities. Tel Aviv operations substantially ceased on February 24, 2026. In connection with this initiative, during the threesix months ended MarchJune 31,30, 2026, we incurred employee-related separation costs of approximately $278,000, which are reflected within general and administrative expenses and research and development expenses in our unaudited condensed consolidated statements of operations. Additionally, during the three months ended June 30, 2026, we notified the landlord of our intent to vacate the Tel Aviv premises, which resulted in a remeasurement of the related operating lease liability. Because the right-of-use asset associated with the Tel Aviv office had previously been fully impaired, this remeasurement resulted in a gain of approximately $2,753,000, which is reflected within gain on lease remeasurement, net in our unaudited condensed consolidated statements of operations.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 decreased by $4,334,000$9,602,000 compared to the threesix months ended MarchJune 31,30, 2025. The decrease was primarily attributable to a reduction in our net loss of approximately $1,513,000, favorable working capital movements driven primarily by changes in accounts receivable and accounts payable, and lower operating cash outflows$9,620,000 resulting from the wind-downrealignment of ourthe Telbusiness Aviv, Israel operations, which ceased on February 24, 2026.operations.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 increaseddecreased by $26,000$267,000 compared to the threesix months ended MarchJune 31,30, 2025, primarily due to higherlower capital expenditures, partially offset by higher proceeds from notes receivable.expenditures.

Net cash (used in) provided by financing activities for the threesix months ended MarchJune 31,30, 2026 decreased by $7,552,000$16,532,000 compared to the threesix months ended MarchJune 31,30, 2025. During the threesix months ended MarchJune 31,30, 2025, we received net proceeds of approximately $7,659,000$17,699,000 from the 2025 Sales Agreement, which was terminated in August 2025. We received no proceeds from the 2025 Sales Agreement during the threesix months ended MarchJune 31,30, 2026. Cash outflows during the threesix months ended MarchJune 31,30, 2026 included scheduled payments related to financing leases.

For the three and six months ended MarchJune 31,30, 2026 and 2025, we funded our operations primarily through cash from operating activities and the sale of equity. As of MarchJune 31,30, 2026, we had cash and cash equivalents and restricted cash of $12,599,000$10,041,000 and working capital deficit of $3,727,000,$6,598,000, as compared to cash and cash equivalents and restricted cash of $16,863,000 and working capital of $1,640,000 as of December 31, 2025.

We have generated losses since our inception and have relied on cash on hand and external sources of financing to support cash flow from operations. We attribute losses to non-capital expenditures related to the scaling of existing products, development of new products and service offerings and marketing efforts associated with these products and services. As of and for the threesix months ended MarchJune 31,30, 2026, we had working capital deficit of $3,727,000$6,598,000 and a net loss of $9,361,000.$9,912,000.

Our cash, cash and cash equivalents and restricted cash decreased by $4,264,000$6,822,000 for the threesix months ended MarchJune 31,30, 2026 primarily due to the net loss of $9,361,000,$9,912,000, this amount was partially offset by non-cash expenses which are highlighted in our unaudited condensed consolidated statements of cash flows and favorable working capital movements.

In February 2025, we entered into an At Market Issuance Sales Agreement (the "2025 Sales Agreement") with Northland Securities, Inc. for the offer and sale of shares of our common stock having an aggregate offering price of up to $25,000,000. The 2025 Sales Agreement was terminated on August 12, 2025. We did not receive any proceeds from the 2025 Sales Agreement during the threesix months ended MarchJune 31,30, 2026, and the agreement is no longer available as a financing source. See Note 8 — Stockholders' Equity for additional information.

In January 2026, we entered into an amendment to the lease for our corporate headquarters in Columbia, Maryland that revised the timing of monthly base rent payments through the remaining lease term. The amendment defers a portion of the base rent payments otherwise due during 2026 into 2027, reducing our near-term cash payment obligations. Total contractual lease payments under the lease were not significantly changed by the amendment. During the threesix months ended MarchJune 31,30, 2026, we exercised our option to terminate our lease for office space in Plano, Texas, effective December 31, 2026. In connection with the termination, we expect to pay a termination fee of approximately $50,000 in 2026, in addition to monthly rent payments through the December 31, 2026 effective date. Refer to Note 2 — Leases for additional information.

As of MarchJune 31,30, 2026, we did not have any material commitments for capital expenditures.