No 10k And No Attendance At Investor Conference Raise More Questions For Resonant

No 10k And No Attendance At Investor Conference Raise More Questions For Resonant by Guest

Our previous two articles (that you can find here and here) raised several concerns about Resonant. We now have two additional questions which make us wonder if the company will soon raise equity or if, perhaps, there are more serious problems at the company.

• Why has the company not yet filed its 10k? Resonant issued a press release announcing its year end results 18 days ago. However, the company has not yet filed its 10k. Auditing the company’s results should not be very complicated or time consuming since the company doesn’t have any revenue. So, we wonder if the delay is something for investors to be concerned about. We can think of a few issues that might be causing the delay including:
  1. Perhaps the company is contemplating a financing.
  2. Perhaps the auditors are considering issuing Resonant a “going concern” (as they did in the 2013 audit).
  3. Perhaps the delay is related to the news that was released in an 8k (but not in a press release) on October 8, 2014 stating the company had identified a material weakness and that investors shouldn’t rely on certain previously disclosed financial results.
  4. Perhaps the company is dealing with new legal problems. Several law firms have announced they are investing potential securities fraud at the company.

Or, perhaps the delay relates to something else that should not at all worry investors.

• Why is Resonant no longer presenting at the Northland Capital Markets Conference in NYC this week. In the past, RESN has presented at several conferences. RESN had been scheduled to present at Northland’s conference, but we see the company is no longer presenting. From our experiences, very often when a company cancels a previously agreed to presentation at an investor conference it means the company is in the process of raising capital or there is bad news forthcoming. To be clear, we do not know why Resonant is no longer presenting at this conference. Perhaps RESN didn’t cancel and instead Northland rescinded its invitation (we doubt this occurred but of course it is a possible explanation). Maybe RESN decided it was too busy to come to NYC and meet with investors. Again, we don’t know why RESN is no longer presenting at the conference and it is possible this is not anything investors need to worry about.

Although the Resonant’s stock price has declined recently, it is still 66% higher than the price it came public at last May. In addition, it still trades at 7.3x our estimated cash balance at the end of March, 2015. Considering all the challenges the company faces, we believe Resonant’s stock price is significantly overvalued. However, we could be wrong and we encourage you to do your own research before making any investment decisions.

Disclosure: The author of this article has a short position in RESN