NAPCO Security Technologies, Inc. (NSSC) Failed to Disclose Material Weaknesses with Internal Controls Regarding Costs of Goods Sold
A shareholder filed a class action on behalf of persons or entities who purchased or otherwise acquired publicly traded NAPCO Security Technologies, Inc. (NASDAQ: NSSC) securities between November 7, 2022 and August 18, 2023. NAPCO engages in the development, manufacture, and distribution of security products. Its products include access control systems, door security products, intrusion and fire alarm systems, video surveillance products, and cellular communication services.
According to the complaint, during the class period, defendants failed to disclose that: (1) NAPCO failed to address any material weaknesses with internal controls regarding COGS and inventory; (2) NAPCO downplayed the severity of material weaknesses regarding their internal controls; (3) NAPCO’s unaudited financial statements from September 30, 2022 to the present included “certain errors” such as overstating inventory and understanding net COGS, resulting in overstated gross profit, operating income, and net income for each period; and (4) as a result, NAPCO would need to restate its previously filed unaudited financial statements for certain periods.
On August 18, 2023, NAPCO announced it would restate its unaudited financial statements from September 30, 2022 to the present. On this news, NAPCO’s share price fell $17.30, or over 45%, to close at $21.11 on August 21, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against NAPCO Security Technologies, Inc. Shareholders who want to act as lead plaintiff for the class must file their motion for lead plaintiff by October 30, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.