The notification of late filing form (FORM 12b-25) stated:
The Registrant anticipates that its consolidated statements of operations for the three- and nine-month periods ended September 30, 2013 to be included in the Quarter Report will reflect: (i) a net loss of approximately $568,492 for the three months ended September 30, 2013, compared to a net loss of approximately $50,948 for the corresponding period of 2012; (ii) a net loss of approximately $968,960 for the nine months ended September 30, 2013, compared to net income of approximately $198,895 for the corresponding period of 2012; and (iii) basic and diluted net loss per common share of $0.01 and $0.02 for the three and nine months ended September 30, 2013, compared to basic and diluted earnings per common share of $0.00 and $0.00 for the corresponding periods of 2012. The reduction in net income for the 2013 periods when compared to the 2012 periods resulted primarily from increased expenses related to salaries, benefit programs and associated support costs for the expansion of ATSE without corresponding increases in revenue as certain program implementations were delayed. Increased depreciation expense associated with newly installed technology infrastructure and camera equipment also contributed to the loss.In late 2012, Brekford was riding high on having won the contract in Baltimore City, only to have the program shut down shortly after Brekford took over in 2013 after hundreds of tickets had been found to have been issued by improperly programmed cameras. Brekford also found itself unable to meet contract obligations when the prior contractor, Xerox Corp, failed to turn over software required to run speed cameras already deployed in that city.
Brekford stated in August that they anticipated the city's program would restart the third quarter. However, according to an article in the Baltimore Sun, "Tests by the city have shown that 11 months after Brekford took over, the system is still troubled by inaccurate speed readings, incorrect addresses and tickets listing wrong information on how to pay a citation, city officials have said. Now officials are working to end the five-year contract, the sources said."
The manner by which local government have tried to privatize law enforcement by outsourcing the functions of their speed camera programs to private companies has raised issues in the past. Now a new question is raised: what happens when a speed camera company begins to fail? Would municipal governments provide a speed camera company with some form of "government bailout?" Would a local government assist a hemorrhaging speed camera company in keeping secrets, by agreeing to allow Public Records to be withheld if those documents might reveal some problem which might force that company to face embarrassment or incur the expense of refunding more citations? And might a desperate for-profit company, whose fee depends on the number of tickets issued, reconcile its need to keep stockholders happy by increasing revenues with the demands of maintaining quality control to avoid ticketing innocent people?