Technical Communications (TCCO) Risk Analysis
Risk Overview Q3, 2022
Source: the company's latest filing for the period ended Sep 24, 2022, filed Dec 22, 2022
Risk Change Over Time
- Accounting & Financial Operations - Risk 1Our management has determined that the Company's disclosure control and procedures and internal control over financial reporting were not effective for fiscal year-end September 24, 2022.
Our management team, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an assessment of the effectiveness of the Company's disclosure controls and procedures and internal control over financial reporting as of the end of the Company's 2019 fiscal year. Management had concluded that the Company did not maintain effective internal control over financial reporting due to the misapplication of generally accepted accounting principles associated with revenue recognition, inventory reserves, accruals and the preparation of the consolidated financial statements, as well as the classification and disclosure of financial information, all caused by a lack of adequate skills and experience within the accounting department. In addition, management identified a material weakness due to a lack of sufficient staff to segregate accounting duties, as well as a material weakness in internal control over significant non-routine transactions, all as disclosed in the relevant quarterly reports filed during our 2022 fiscal year. These conditions have led management to conclude that neither the Company's disclosure controls and procedures nor its internal control over financial reporting were effective at September 24, 2022. The Company has made significant progress in improving its internal control over financial reporting but remediation efforts are ongoing; the Company's goal is to have all material weaknesses remediated in the early part of its 2023 fiscal year. Although we review and evaluate our internal control systems on a regular basis, we cannot assure you that we will not discover additional weaknesses in the future or that any corrective actions taken to remediate issues identified during the course of an assessment will be effective. Any such additional weaknesses could materially adversely affect our financial condition or ability to comply with applicable financial reporting requirements.
Risk Highlights Q3, 2022
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 20
- Accounting & Financial Operations - Risk 1Our quarterly operating results typically fluctuate and our future revenues and profitability are uncertain.
We have experienced significant fluctuations in our quarterly operating results during the last several years and anticipate continued substantial fluctuations in our future operating results. A number of factors have contributed to these quarterly fluctuations, including but not limited to: - foreign political unrest;- budgeting cycles of customers, including the U.S. government;- introduction and market acceptance of new products and product enhancements by us and our competitors;- timing and execution of individual contracts;- competitive conditions in the communications security industry;- changes in general economic conditions; and - shortfalls of revenues in relation to expectations that formed the basis for the calculation of fixed expenses.
- Accounting & Financial Operations - Risk 2We have suffered recurring operating losses from operations and there is doubt about our ability to continue as a going concern.
For the year ended September 24, 2022, the Company generated a net loss of $2,331,000. For the fiscal year ended September 25, 2021, the Company generated a net loss of $1,088,000 and, the Company suffered recurring losses from operations during the prior seven year period from fiscal 2012 to fiscal 2018 and had an accumulated deficit of $6,485,000 at September 24, 2022. We anticipate that our principal sources of liquidity, including the recent line of credit, will be sufficient to fund our activities through January 2023. We may never achieve or sustain profitability. We must raise additional capital to pursue our development initiatives, penetrate markets for the sale of our products and continue as a going concern. We cannot provide any assurance that we will be able to raise additional capital. If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce costs in order to conserve cash in amounts sufficient to sustain operations and meet our obligations. These factors continue to raise substantial doubt about the Company's ability to continue as a going concern. Such consolidated financial statements do not include any adjustments to reflect the substantial doubt about the Company's ability to continue as a going concern.
- Accounting & Financial Operations - Risk 3ChangedOur management has determined that the Company's disclosure control and procedures and internal control over financial reporting were not effective for fiscal year-end September 24, 2022.
Our management team, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, conducted an assessment of the effectiveness of the Company's disclosure controls and procedures and internal control over financial reporting as of the end of the Company's 2019 fiscal year. Management had concluded that the Company did not maintain effective internal control over financial reporting due to the misapplication of generally accepted accounting principles associated with revenue recognition, inventory reserves, accruals and the preparation of the consolidated financial statements, as well as the classification and disclosure of financial information, all caused by a lack of adequate skills and experience within the accounting department. In addition, management identified a material weakness due to a lack of sufficient staff to segregate accounting duties, as well as a material weakness in internal control over significant non-routine transactions, all as disclosed in the relevant quarterly reports filed during our 2022 fiscal year. These conditions have led management to conclude that neither the Company's disclosure controls and procedures nor its internal control over financial reporting were effective at September 24, 2022. The Company has made significant progress in improving its internal control over financial reporting but remediation efforts are ongoing; the Company's goal is to have all material weaknesses remediated in the early part of its 2023 fiscal year. Although we review and evaluate our internal control systems on a regular basis, we cannot assure you that we will not discover additional weaknesses in the future or that any corrective actions taken to remediate issues identified during the course of an assessment will be effective. Any such additional weaknesses could materially adversely affect our financial condition or ability to comply with applicable financial reporting requirements.
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