Shareholders will have a chance to vent their frustrations on Irvine-based Ubiquity Inc. at a public hearing Monday, according to Strategic Capital Management Ltd.
Strategic owns more than 21 million shares in the video production company, which is under investigation for failing to disclose routine and necessary financial documents.
“Shareholders are bitterly distressed over the lack of transparency and respect provided by management and the board towards them. Since Ubiquity has never had a shareholders’ meeting in its multi-year existence, the SEC hearing provides the first real opportunity for shareholders to confront Ubiquity’s management in person regarding their actions that disregard the most basic shareholder rights,” the company said in a statement.
The company’s stock on the OTC Markets exchange was temporarily suspended by the SEC last month because of a “lack of current and accurate information about the company.”
The public hearing will be held at 9:30 a.m. at SEC headquarters: 100 F Street, NE, Washington, D.C., Room 2.
Ubiquity, a digital video and technology company, says it does some work in virtual reality. Other information about the company has been scant as it hasn’t posted financial data in nearly two years.
The SEC probe will determine if it will be necessary to suspend the company’s stock for up to 12 months or revoke the company’s registration.
In March, Strategic Capital and other shareholders demanded Ubiquity hold a meeting and replace the company’s management. The group wants to remove the entire board, elect a new board of directors and void the award to top executives of 500 million voting shares.
Ubiquity has not filed any periodic reports since September 30, 2015, the SEC stated.
Last month not the first time the media company came under fire.
In August, former interim Chief Executive Nicholas Mitsakos was arrested and charged with securities and wire fraud by creating a fund and faking assets at Matrix Capital, a hedge fund he manages. Charges were filed by both the SEC and the Department of Justice.
Last year, Ubiquity appointed Bola Ajere to its board as “an independent director to lead Ubiquity’s Audit and Governance committee and ensure the company becomes current in its filings,” according to a company press release.
In November, the company notified the SEC it would be delayed in filing a Form 10-K for the fiscal year that ended Dec. 31, 2015.
“Ubiquity’s market cap on June 16, 2016 exceeded $100 million, but a multitude of late SEC filings, missing SEC filings, and an opaque business financing model are significant red flags,” the financial site Seeking Alpha wrote in July.
“Executive compensation is literally ‘out of control’ – completely unrelated to Ubiquity’s financial performance,” the site added.
In October, Ubiquity was ordered to pay $7.7 million to Chicago-based Gerald D.W. North & Associates principal Gerald North over a 2014 breach of contract lawsuit.
When North & Associates entered into an agreement with Ubiquity Holdings in 2006, it found previously undisclosed bankruptcies and pending lawsuits alleging fraud by the company, according to the Orange County Business Journal.
In 2014, the Investment Protection Association received emails touting the company’s stock.
“The timing of the emails promoting UBIQ coincides with what seems to be an abnormal rise in the trading volume of the stock,” the group said. “The recent financials of the company appear to be very bleak due to nearly zero revenue and negative income. We have tried contacting the company via the online form on the company’s website; however, it appears to be out of service.”
“In our opinion, it is clear that the price of UBIQ has nothing in common with the stock’s true value. If we take a look at UBIQ’s income statement, we can see that the company’s revenue has remained nearly zero while the company’s net income has been negative during the entire year of 2014,” the Investment Protection Association said.
The group added that the company is “having its shares promoted and sold at over-inflated prices, rather than delivering or attempting to deliver a true product to the market.”
Ubiquity was co-founded by Chris Carmichael and his wife Connie Jordan, according to the company’s website.
The investor tab on the company’s website was not working Wednesday afternoon.