Quarterhill Inc T.QTRH

Rekor

[mrmoribund]

So Rekor had a director, Anne Townsend, resign on November 12, a few days before Q3 results were released.

Not hard to see why.

Rekor's expenses are wildly out of control. Their G&A plus S&M (sales and marketing) costs were just under 100% of revenues in Q3.

Q3 G&A was up 25.7% from year ago (S&M up 14.9%) vs. sales growth of 15.6%. No surprise their loss expanded.

Note--and this is amazing--in Q3 Rekor had higher SG&A costs ($10.4 million) on $10.5 million in sales than Quarterhill had ($8.1 million) on $38.0 million in sales.

You'd think Rekor would reorganize to cut costs. But look at this from page 32 of their 10-Q:

"We expect our general and administrative expenses to continue to remain high for the foreseeable future due to the costs associated with our growth and the costs of accounting, compliance, legal, insurance, and investor relations as a public company."

Then, next paragraph:

"We will require significant investments in our sales and marketing expenses to continue the rate of growth in our revenues, further penetrate existing markets and expand our customer base into new markets."

(BTW, some of these crazy costs are "as a public company," i.e., including listing costs. People here still in a hurry to see Q get that NASDAQ listing?)

Bottom line here, Rekor is trying to fix their out-of-control cost structure entirely by growing sales. Good luck with that.

Quarterhill should get prepared to buy whatever they might want (if anything) from a Rekor bankruptcy sale. It would be crazy to buy the company or even a part of it pre-bankruptcy because the out-of-control costs would likely come with it.

[mrmoribund]

Let me add a little to my earlier Rekor comment. Although their Q3 financials were horrible, they make a plausible-sounding case that they are seeing strong sales growth. In the conference call the CEO talks about breakthroughs in Texas, Florida and elsewhere. They're projecting 5-year sales growth at 40% per year compounded. If what's reasonable is even close to that then Rekor will

[Socrates1]

How about commenting on the stock you are invested in and posting on the board of? Yes not MUCH to say there is it? Come on mrm you are always so energetic and fresh...... stay laser sharp focused on one looser at a time........ehhh

[Socrates1]

https://stockhouse.com/companies/bullboard?symbol=rekr

[BuyNmonitor]

And more Rekor shares to be issed in early 2025 to pay for the deferred price on a recent acquisition and one of the Rekor lenders clearly wants to convert to shares, before loan maturity, that can then sold be in the market.  Some of Rekor's best quality A/R is specificaly pledged to another lender(s) with sinking fund obligations that might ramp.   I can see why a director of