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

104       Cover Page Interactive Data File (embedded within the Inline XBRL document)




                                       1

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.





                                       2

© Edgar Online, source Glimpses