Current Report Filing (8-k)
January 27 2023 - 5:09PM
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 25, 2023
COMSOVEREIGN HOLDING CORP.
(Exact name of registrant as specified in charter)
Nevada |
|
001-39379 |
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46-5538504 |
(State or other Jurisdiction of
Incorporation or Organization) |
|
(Commission File Number) |
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(IRS Employer
Identification No.) |
6890 E Sunrise Drive, Suite 120-506
Tucson, AZ |
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85750 |
(Address of Principal Executive Offices) |
|
(zip code) |
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b)) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock, par value $0.0001 per share |
|
COMS |
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The Nasdaq Stock Market LLC |
|
|
|
|
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Warrants to purchase Common Stock |
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COMSW |
|
The Nasdaq Stock Market LLC |
|
|
|
|
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9.25% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.0001 per share |
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COMSP |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities
Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On January 25, 2023, management
and the Audit Committee (the "Committee") of COMSovereign Holding Corp. (the “Company”) concluded that (a) the Company’s
first quarter 2022 amortization of intangible assets was overstated, (b) the Company will restate its financial statements for the three
month period ended March 31, 2022 (the “Restated Period”) to correct the error, and (c) the Company’s previously issued
unaudited interim consolidated financial statements for the Restated Period included in its Quarterly Report on Form 10-Q for the Restated
Period, as originally filed with the Securities and Exchange Commission ("SEC") on December 15, 2022, should no longer be relied
upon. Management and the Committee came to this conclusion after discussions with the Company's independent auditors.
It was determined that, due
to the small size of our accounting staff, inadequate segregation of duties resulted in the error not being detected in a timely manner.
Specifically, the 2021 year end impairment of intangible assets should have resulted in a rescheduling of the amortization of the remaining
intangible assets, which did not occur. The error resulted in amortization of intangible assets being overstated by $1.3 million. The
revised financials correct this error and will change the reported net loss of $1.2 million to net income of $0.1 million.
The restatement is not expected by the Company
to have an adverse effect on the Company’s operations, liquidity and overall business plan.
The Company’s management
has concluded that, in light of the information described above, the Company’s disclosure controls and procedures remained not effective
at March 31, 2022 and that the error was consistent with the current material weaknesses in the Company’s internal control over
financial reporting disclosed in the Company’s Quarterly Report on Form 10-Q for the Restated Period.
The Company expects to file
its restated Form 10-Q for the Restated Period with the SEC shortly.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are filed with this Current
Report on Form 8-K:
Exhibit
Number |
|
Description |
|
|
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Cautionary Note Regarding Forward-Looking Statements
The information in this Current
Report on Form 8-K may contain “forward looking statements” within the meaning of the “safe harbor” provisions
of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange
Act. Certain statements furnished are not historical facts are forward-looking statements that reflect management’s current expectations,
assumptions, and estimates of future performance and economic conditions, and involve risks and uncertainties that could cause actual
results to differ materially from those anticipated by the statements made herein. Forward-looking statements are generally identifiable
by the use of forward-looking terminology such as “believe,” “expect,” “may,” "looks to,"
“will,” “should,” “could,” “continue,” “anticipate” “optimistic,”
“forecast” “intend,” “estimate,” “preliminary,” “project,” “seek,”
“plan,” “looks to,” “on condition,” “target,” “potential,” “guidance,”
“outlook” or “trend,” or other comparable terminology, or by a general discussion of strategy or goals or other
future events, circumstances, or effects. Such statements include, but are not limited to, statements about our plans, objectives, expectations,
intentions, estimates and strategies for the future, and other statements that are not historical facts. These forward-looking statements
are based on our current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause
actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements.
These risks and uncertainties include, but are not limited to, those set forth in our Annual Report on Form 10-K for the year ended December
31, 2021 (particularly in Part I, Item 1A. Risk Factors and Part II, Item 7. Management’s Discussion and Analysis of Financial Condition
and Results of Operations), and other risks and uncertainties listed from time to time in our other filings with the SEC. There may be
other factors of which we are not currently aware that may affect matters discussed in the forward-looking statements and may also cause
actual results to differ materially from those discussed. In addition, there is uncertainty regarding the COVID-19 virus and the impact
it may have on our operations, the demand for our products or services, global supply chains and economic activity in general. We do not
assume any obligation to publicly update or supplement any forward-looking statement to reflect actual results, changes in assumptions
or changes in other factors affecting these forward-looking statements other than as required by law. Any forward-looking statements speak
only as of the date hereof or as of the dates indicated in the statement. Further information relating to factors that may impact our
results and forward-looking statements are disclosed in our filings with the SEC. The forward-looking statements contained in this report
are made as of the date of this report, and we disclaim any intention or obligation, other than imposed by law, to update or revise any
forward-looking statements, whether as a result of new information, future events, or otherwise.
SIGNATURE
Pursuant to the requirement
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Date: January 27, 2023 |
COMSOVEREIGN HOLDING CORP. |
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By: |
/s/ David Knight |
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David Knight |
|
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Interim Chief Executive Officer |
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