According to the Complaint, 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.

Plaintiff alleges that Defendants made materially false and misleading statements throughout the Class Period.  Among other things, Defendants failed to disclose to investors that: (1) NAPCO failed to address any material weaknesses with internal controls regarding cost-of-goods-sold (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, after market hours, the Company issued a press release on Form 8-K announcing it would restate its unaudited financial statements from September 30, 2022 to the present.  The 8-K stated in relevant part: “On August 14, 2023, the Audit Committee of the Board of Directors of the Company, concluded that the Company’s previously issued unaudited interim financial statements for the fiscal quarters ended September 30, 2022, December 31, 2022 and March 31, 2023, respectively, included in the Company’s quarterly report on Form 10-Q for such respective quarters, should no longer be relied upon.”

On this news, NAPCO’s share price fell $17.30, or 45.04%, to close at $21.11 on August 21, 2023.

If you wish to serve as lead plaintiff, you must move the Court no later than October 30, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.

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