Technical Communications Corporation (NASDAQ:TCCO) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
On January 16, 2019, Technical Communications Corporation (the “Company”) received notice from the Nasdaq Listing Qualifications department of the Nasdaq Stock Market (“Nasdaq”) that, because the Company had not yet filed its Annual Report on Form 10-K for the fiscal year ended September 29, 2018 (the “Filing”), the Company no longer complied with Nasdaq continued listing Rule 5250(c)(1), which rule requires companies with securities listed on Nasdaq to timely file all required periodic reports with the U.S. Securities and Exchange Commission. to such notice, the Company will have 60 calendar days to submit a plan to Nasdaq to regain compliance; if the plan is accepted, Nasdaq can grant an exception of up to 180 days from the due date of the Filing, or until July 15, 2019, to regain compliance.
The Company’s failure to timely file the Filing is primarily due to certain changes to the Company’s revenue recognition which has impacted the filing of both its 2018 Form 10-K and related financial statements and the reliance on certain previously issued financial statements, as described under Item 4.02 below. The Company will complete the required filings as soon as practical after the current and former independent registered public accounting firms review and complete the audits of such financial statements. The Company is currently working with its current and former independent registered public accounting firms to complete such audits and restatements, and will provide information to Nasdaq in its plan to regain compliance as to the expected filing date of the Filing, although at this time the Company does not have an estimate as to the date such Filing will be made.
|Item 4.02||Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.|
On January 15, 2019, the Audit Committee of the Board of Directors of the Company, based on the recommendation of management and after consultation with the Company’s current and former independent registered public accounting firms, concluded that certain previously issued financial statements and the audit report of the financial statements for the year ended September 30, 2017, dated December 29, 2017, should no longer be relied upon. Specifically, the Company believes that, based on information available to date, it will restate its financial statements for the quarter ended July 1, 2017 and fiscal year ended September 30, 2017 in connection with the correction of an error related to the Company’s application of its revenue recognition policy as identified by the Company’s current auditors. The Company also intends to restate and amend its financial statements for the quarterly periods, during its 2018 fiscal year, ended December 30, 2017, March 31, 2018 and June 30, 2018 in connection with, but not limited to, the correction of an error in its application of its revenue recognition policy, as well as corrections in its inventory reserve and certain accrual calculations. In addition, financial results for the quarter and year ended September 29, 2018, as announced by the Company in its Current Report on Form 8-K as filed with the U.S. Securities and Exchange Commission on December 10, 2018, should no longer be relied upon, as the Company expects these corrections to impact results for those periods as well. The Company is currently working on these restatements and amendments for the previously mentioned financial statements. At this time, the Company does not have an estimate of when all efforts will be completed and when their Form 10-K for the fiscal year ended September 29, 2018, as well as other amended and restated reports, will be filed.
The Company believes that the restatements will have no impact on total revenue recognized or to be recognized over the term of the service contract that is currently in effect. Furthermore, the Company believes, based on information available to date, that the restatements will have no impact on the timing or magnitude of cash flows from operations.
|Item 9.01||Financial Statements and Exhibits.|
|a.||Financial statements of businesses acquired. Not applicable.|
|b.||Pro forma financial information. Not applicable.|
|c.||Shell company transactions. Not applicable.|
|d.||Exhibits. Not applicable.|
About Technical Communications Corporation (NASDAQ:TCCO)
Technical Communications Corporation (TCC) is engaged in the design, development, manufacture, distribution, marketing and sale of communications security devices, systems and services. The Company’s products consist of electronic devices that enable users to transmit information in an encrypted format and permit recipients to reconstitute the information in a deciphered format if the recipient possesses the right decryption key. The Company’s products consist primarily of voice, data and facsimile encryptors. Its products can be used to protect confidentiality in communications between radios, telephones, mobile phones, facsimile machines and data network equipment over wires, fiber optic cables, radio waves, and microwave and satellite links. The principal markets for the Company’s products are foreign and domestic governmental agencies, law enforcement and military agencies, financial institutions, and multinational companies requiring protection of mission-critical information.