Iroquois Capital Raises Several Concerns In Letter To LRAD Corp (LRAD)’s Board, Goes Activist

Another concern raised by Iroquois Capital is the sale of LRAD Corp (NASDAQ:LRAD)’s shares by certain insiders, including the company’s Chief Executive Officer Thomas R. Brown, and Chief Financial Officer Katherine H. McDermott. The fund adds that these insiders have recently unloaded the company’s shares immediately upon the exercise of options, thus sending the wrong message to shareholders. The two executives have sold over 200,000 shares collectively in June alone, through 24 separate transactions. Iroquois Capital is concerned that Brown and McDermott have been exercising their options and immediately selling large amounts of stock at a substantial profit, higher than the price at which the company has offered to repurchase its own shares from its shareholders, according to the letter.

“In light of these concerns, we have converted our Schedule 13G back to a Schedule 13D so that we may be able to more actively engage with the Company and shareholders regarding these concerns and the most effective manner for addressing them,” Iroquois Capital’s letter states.

Lastly, Iroquois Capital notes that it is open to discussing the best ways to work together with LRAD Corp (NASDAQ:LRAD)’s Board to create value for the benefit of shareholders.

LRAD Corp (NASDAQ:LRAD) is engaged in the making of directed sound technologies and products. The company provides long-range acoustic hailing devices (AHDs), and advanced mass notification systems, and has a market cap of $71.23 million. For its fiscal second quarter ended March 31, the company’s financial results were not very impressive, with net income declining to $291,000, compared to $526,000 in the same period last year. Revenues also dropped to $4.5 million, compared to $5.4 million in the same quarter a year ago. Nonetheless, during the past year, shares of the company have risen by 4.95%.

Other big shareholders of LRAD Corp (NASDAQ:LRAD) include Mark Broach’s Manatuck Hill Partners and Chuck Royce’s Royce & Associates, owning 2.58 million shares and 965,100 shares, respectively, as of March 31.

Disclosure: None