SYDNEY, March 28, 2017 /PRNewswire/ -- Strategic Capital Management LTD (SCM), owner of 21,038,678 shares of Irvine-based technology company, Ubiquity, Inc. (OTC: UBIQ), and representative to a large group of shareholders, announced today that it has made a written demand to Ubiquity for its mandatory annual shareholders meeting in order to address shareholders' proposals to immediately replace the management of Ubiquity, while addressing executive self-dealing and failing finances.
David Ledger, of SCM said, "It's deeply concerning that Ubiquity has not held a shareholders meeting in its multi-year existence, never filed even a preliminary proxy statement and awards executives special multi-million voting shares without shareholder consent. The annual meeting is many years delinquent."
The proposals, submitted in a formal letter to the board, are to remove all members of the board, Chris Carmichael, his wife Connie Jordan and Bola Ajere; elect a new independent board of directors and to void the award to married senior executives Carmichael, CEO and Jordan, senior vice president, of 500 preferred shares; each 1 preferred share now owned by the executives equals 1 million shares of common voting stock for a total of 500 million voting shares.
Ledger added, "We believe the management of the company has not acted in the best interests of shareholders, is in disarray and must be replaced for the company to survive. This is demonstrated by Ubiquity's representation to the SEC that it may be unable to continue as a going concern, the out of control executive compensation, self-dealing transactions, missing and outstanding government filings, board resignations, executive arrests and recent lawsuits filed against the Company alleging securities fraud and breach of fiduciary duty."
The compounding of these issues has now resulted in the SEC suspending the shares of Ubiquity on 20 March 2017 citing a lack of current and accurate information due to delinquent requisite periodic filings. The last filed report in the SEC announcement is claimed to be at the end of the September quarter 2015. Further, the Commission states that it is their opinion that in the public interest and for the protection of investors the stock remain suspended until further review on 31 March 2017.
A $7.7 million judgment against Ubiquity was issued by the U.S. District Court in Illinois on October 28, 2016. Ubiquity did not contest the litigation. Additional cases are pending in U.S. District courts in California against Ubiquity and its senior management, Carmichael, Jordan and Garrison, alleging fraud, violations of the securities laws and breach of fiduciary duty.
In August 2016, the FBI arrested Ubiquity's board co-chair and interim chief executive officer, Nicholas Mitsakos, for securities fraud associated with his hedge fund. Mitsakos had been Ubiquity's co-chair of the board of directors since March 2013. Also in 2016, the SEC filed a complaint for securities fraud against Ubiquity's general counsel, Gregg Jaclin.
OTC Markets suspended stock quotes for Ubiquity in 2016, labeling it "Caveat Emptor (Buyer Beware)," citing numerous possible reasons, including, "Investigation of Fraud or Other Criminal Activities" and "Promotion/Spam without Adequate Current Information." According to Ledger, "this unacceptable level of legal liabilities, including intervention by federal regulators and the SEC, greatly damages the company and demonstrates the complete incompetence of current management."
Shareholders propose to void the creation and award to married executive couple Jordan and Carmichael of 500 preferred shares equivalent to 500 million common voting shares. SEC public records show that 500 preferred shares were created in February 2015; all 500 shares were given to them on March 6, 2015 without shareholder approval. The transaction was not disclosed to shareholders until a delinquent filing on February 1, 2016. Ledger stated, "This is a self-dealing, hidden transaction which eliminates the voting rights of shareholders and must be voided to protect their best interests."
Ubiquity informed the SEC in 2016 that it had negative working capital, operating losses and no continuing revenue from operations. It also reported that the salaries of CEO Carmichael and his wife, executive senior vice president Jordan, both members of the board, increased by 25% -- to $525,000 and $250,000 annually, and gave the couple a collective 5% of the company's gross revenues. "This executive compensation is completely uncorrelated to the company's dismal performance and is out of control," stated Ledger. "Carmichael gets more than the $503,205 salary of the CEO of Snapchat, one of the world's hottest apps. We've got to put a stop to this now. We must have completely new management."
Shareholders also demand that the Chief Financial Officer, Garrison and the latest new accounting firm, Hall & Company, attend the meeting to explain the reasons for the lack of audited financial statements for Ubiquity and its missing SEC filings. SEC public records state Ubiquity has not filed an annual report since 2014 and other required financial statements are delinquent or missing. "The lack of audited financial statements deprives both shareholders and potential investors of critically important and legally required information," stated Ledger, "It is completely unacceptable."
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SOURCE Strategic Capital Management