The Registrant is investigating and assessing several control deficiencies noted recently that could be material weaknesses and needs more time to finalize its assessment on controls over financial reporting. The Registrant expects to file within the extension period.
That's not great news. The filing also disclosed:
Is it anticipated that any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements to be included in the subject report or portion thereof ? ¨ Yes x No
The company has an independent Chairman (hedge fund manager Himanshu Shah) who owns 28% of the stock.
My guess is that the "internal control weakness" is not going to affect the financial value of the company or its operating outlook. My guess is that the company still has $80mm of Cash+ST investments ($2.10/share). The "extension period" is 15 days so it should soon be clear what the problem was. My guess is that after filing the 20-F the stock will return before long to its prior trading range of $2.60-$3.00.
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