Comtech Provides Update on Quarterly Filing Process

Rhea-AI Summary

Comtech Telecommunications (NASDAQ: CMTL) has received a notification letter from Nasdaq due to its failure to file its Quarterly Report (Form 10-Q) for the period ended October 31, 2024, by the extended deadline of December 16, 2024. The company has until February 17, 2025 to submit a compliance plan to Nasdaq. If accepted, Nasdaq may grant an extension until June 16, 2025 to regain compliance. The notification has no immediate impact on Comtech's stock listing or trading. The company states it is working to complete and file the report before the 60-day plan submission deadline.

Positive

• No immediate effect on stock listing or trading
• Company has 60 days to submit compliance plan
• Potential 180-day extension available if plan is accepted

Negative

• Failed to file Form 10-Q by extended deadline
• Non-compliance with Nasdaq listing requirements
• Risk of delisting if compliance plan is not accepted

Insights

Financial Regulatory Expert

<p>The delayed 10-Q filing and subsequent Nasdaq non-compliance notice represents a <b>serious regulatory concern</b> for Comtech. With a relatively small market cap of <money>$108.3 million</money>, this filing delay could significantly impact investor confidence and potentially trigger loan covenant issues. The company has until <b>February 17, 2025</b> to submit a compliance plan, but the real deadline pressure comes from the final <b>June 16, 2025</b> cutoff.</p><p>Late filings often indicate underlying accounting complexities, internal control weaknesses, or resource constraints. The extended delay suggests potential material issues requiring additional scrutiny. While Comtech expresses confidence in meeting the 60-day deadline, historical patterns show that companies missing initial filing deadlines frequently require the full 180-day extension period.</p><p>For context: approximately <percent>30%</percent> of companies receiving initial Nasdaq delinquency notices end up facing more severe consequences, including potential delisting proceedings. The situation warrants close monitoring, particularly given Comtech's small-cap status and the increased scrutiny such companies face from regulators and market makers.</p>

Market Risk Analyst

<p>This filing delay creates substantial market uncertainty and liquidity risks. Historical trading patterns show that small-cap stocks experiencing filing delays typically face <b>increased volatility</b> and reduced institutional interest. The market's reaction often manifests in wider bid-ask spreads and decreased trading volume, potentially creating challenging exit positions for current shareholders.</p><p>The timing is particularly concerning as it coincides with year-end portfolio rebalancing, when institutional investors typically make significant allocation decisions. The lack of current financial data could lead to forced selling by funds with strict compliance requirements regarding holdings in companies with filing delinquencies.</p><p>Simple explanation for retail investors: Think of this like missing a credit card payment - while there's a grace period, the situation raises red flags about financial health and reliability. The longer the delay, the more serious the market's concerns become, potentially leading to a downward spiral in stock value and trading interest.</p>

Announces Notification of Delinquency from Nasdaq for Late Filing of Form 10-Q for Period Ended October 31, 2024

CHANDLER, Ariz.--(BUSINESS WIRE)-- December 23, 2024-- Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or the “Company”), a global technology leader, received a letter (the “Letter”) from the Nasdaq Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that it is not in compliance with periodic requirements for continued listing set forth in Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”) because the Company’s Quarterly Report on Form 10-Q for the period ended October 31, 2024 (the “Report”) was not filed with the Securities and Exchange Commission (the “SEC”) by the required extended due date of December 16, 2024. This Letter received from Nasdaq has no immediate effect on the listing or trading of the Company’s shares.

The Letter states that the Company has 60 calendar days, or by February 17, 2025, to submit to Nasdaq its plan to regain compliance with the Listing Rule. Pursuant to the Letter, if Nasdaq accepts the plan, Nasdaq can grant an exception of up to 180 calendar days from the Report’s due date, or until June 16, 2025, to regain compliance. If Nasdaq does not accept the plan, the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel.

The Company is diligently working to complete its Report, and the Company expects to complete and file its Report with the SEC to regain compliance with the Listing Rule prior to the expiration of the 60-day period.

About Comtech

Comtech Telecommunications Corp. is a leading global technology company providing satellite and space communications technologies, terrestrial and wireless network solutions, NG911 emergency services and cloud native capabilities to commercial and government customers around the world. Our unique culture of innovation and employee empowerment unleashes a relentless passion for customer success. With multiple facilities located in technology corridors throughout the United States and around the world, Comtech leverages its global presence, technology leadership and decades of experience to create the world’s most innovative communications solutions. For more information, please visit www.comtech.com.

Forward-Looking Statements

Certain information in this press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements. Forward-looking statements include, among others, statements regarding our expectations regarding our response to the Letter, our expectations for our operational initiatives, future performance and financial condition, the plans and objectives of our management and our assumptions regarding such future performance, financial condition, and plans and objectives that involve certain significant known and unknown risks and uncertainties and other factors not under our control which may cause our actual results, future performance and financial condition to be materially different from the results, performance or other expectations implied by these forward-looking statements. Factors that could cause actual results to differ materially from current expectations are described in our filings with the SEC. We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements. The risks described above are not the only risks that we face. We do not intend to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241222617418/en/

Investor Relations Contact

Maria Ceriello

631-962-7102

investors@comtech.com

Media Contacts

Jamie Clegg

480-532-2523

jamie.clegg@comtech.com

Source: Comtech Telecommunications Corp.

FAQ

Why did Comtech (CMTL) receive a Nasdaq delinquency notice in December 2024?

Comtech received a Nasdaq delinquency notice for failing to file its Form 10-Q quarterly report for the period ended October 31, 2024, by the extended deadline of December 16, 2024.

What is the deadline for Comtech (CMTL) to submit its compliance plan to Nasdaq?

Comtech has until February 17, 2025 (60 calendar days) to submit its plan to regain compliance with Nasdaq listing requirements.

What is the maximum extension period Nasdaq can grant CMTL to regain compliance?

If Nasdaq accepts Comtech's compliance plan, they can grant an extension of up to 180 calendar days from the original due date, until June 16, 2025.

Will CMTL's stock continue trading on Nasdaq during the compliance period?

Yes, the notification has no immediate effect on the listing or trading of Comtech's shares on Nasdaq while the company works to regain compliance.