NEW YORK-Transcrypt International Inc., a Lincoln, Neb., manufacturer of wireless information security and land mobile radio products, has announced additional delays in filing its form 10-K annual report with the Securities and Exchange Commission.
The company already had said late in March that it would postpone filing the 10-K in order to allow its auditors to resolve “complex accounting principles” as they apply to certain transactions Transcrypt engaged in during fiscal 1997. Last week’s announcement indicated the company would miss an April 15 deadline set by its first postponement of its SEC filing.
“The further delay is the result of the ongoing work being done by the company and by Coopers & Lybrand (L.L.C.), the company’s independent accountants, which includes inquiry into several anonymous letters to Coopers & Lybrand,” Transcrypt’s April 13 announcement said.
“The audit committee has retained independent counsel to conduct an investigation, concurring with Coopers & Lybrand’s advice that it must do so. Together with the audit committee, the company also has decided to bring in another major independent accounting firm to review the accounting treatment of certain transactions in question.”
Transcrypt is the subject of a class-action shareholder lawsuit lodged March 31, just days after the company’s first announcement, March 27, that it must delay filing its annual report with the SEC. The lawsuit, brought in the U.S. District Court for the District of Nebraska, covers the period between Oct. 15 and March 27.
“Among other things, plaintiff claims that defendants’ material omissions and dissemination of materially false and misleading statements regarding the nature of Transcrypt operations drove [its] stock price to a class-period high of $27 per share, and enabled insiders to profit from sales of Transcrypt stock at artificially inflated prices,” the lawsuit alleged.
Transcrypt has acknowledged the lawsuit against the company, its president and chief executive officer, Jeffery L. Fuller, and its chairman of the board, John T. Connor.
“In light of the volume of shares that traded on Friday (March 27) and the decline in the stock price, it is not unexpected that the plaintiffs’ bar will file any number of class-action lawsuits,” Connor said in a prepared statement issued in early April.
