Columbia-Based Company Named In Class-Action Lawsuit

COLUMBIA, MD —Rekor, a Columbia-based company that produces license plate scanning technology, has been named in a securities class action that was filed Tuesday in federal court in Maryland.

The case: Miller v. Rekor Systems Inc et al, was filed by investor Robert Keith Miller, who alleges the company overstated its potential revenues, profitability and business prospects for its license plate recognition software, which led to greater investment and an inflated stock price.

Charles Degliomini, Rekor's vice president of government relations and corporate communications, denied the charges in a statement reported by Reuters on Wednesday.

"The company and defendants believe that the lawsuit is without merit, and we intend to defend it vigorously," Degliomini said.

According to Reuters, Rekor's allegedly misleading claims are related to a partnership the company has with the state of Oklahoma, which uses Rekor's license-plate scanning technology to identify uninsured motorists. Rekor actually earns a cut of the fines levied upon uninsured drivers identified with its technology.

The Plaintiff claims Rekor consistently touted the value of this partnership, which the company claimed would be a "stepping-stone to capturing similar deals with other municipalities."

Miller, the Plaintiff, said Rekor made these statements in regulatory filings, including stating that legislation had been introduced in Tennessee to allow the state to enter into a similar partnership with Rekor.

The prospect of partnerships in Tennessee and other states was responsible for a sharp rise in Rekor's stock price, which "ballooned" the lawsuit said.

However, the lawsuit alleges that the technology was never likely gain traction in other states because those states were unlikely to pass legislation greenlighting such partnerships.

When the media reported last month that the bill in Tennessee might be dead, Rekor's stock price plummeted, falling 40.45 percent within two days.

In the lawsuit, Miller also cited research reports suggesting that even Rekor's deal with Oklahoma was not as lucrative as the company stated.

According to a press release, the class action was filed on behalf of investors who purchased or otherwise acquired Rekor securities between April 12, 2019 and May 25, 2021.

The release said the class action seeks to recover damages against the Defendants for alleged violations of federal securities laws under the Securities and Exchange Act of 1934.