IRVINE, Calif., April 12, 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 shareholders will be participants in the Security and Exchange Commission's ("SEC") April 17th public hearing to determine whether the SEC revokes Ubiquity's stock registration, permanently prohibiting its trading to the public or suspends trading of the stock for up to one year. The hearing will be held at SEC headquarters in Room 2, 100 F Street, N.E., Washington, D.C. 20549 at 9:30am.
The SEC ordered Ubiquity's stock suspended from trading "for the protection of investors" on March 20.
A spokesman for SCM, said, "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 awarding of special multi-million voting shares to senior management, the mismanagement resulting in million dollar litigation awards, the excessive non-performance linked executive remuneration and the SEC's enforcement actions are all contributing factors to shareholder disillusionment. SCM encourages all Ubiquity shareholders to be in attendance for this critical hearing." Information for shareholders regarding attending the SEC hearing is available by emailing to firstname.lastname@example.org Att: Ubiquity or by calling +61 2 9285 1320.
Shareholders issued a March 25 written demand to Ubiquity to immediately hold its years' delinquent required annual shareholder meeting to address shareholders' proposals 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 Chris Carmichael, CEO and Connie Jordan, senior vice president of 500 preferred shares (1 preferred share now owned by the executives equals 1 million shares of common voting stock for a total of 500 million shares). Additionally they seek a 'please explain' to address concerns regarding failing finances, missing SEC filings and numerous litigation actions.
At that time SCM stated, "We believe the management of the company has not acted in the best interest of shareholders, is in disarray and must be replaced for the company to survive. As demonstrated by the SEC's ongoing enforcement actions, 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 delinquent government filings, board resignations along with executive arrests and recent lawsuits filed against the Company alleging securities fraud all point to the need for an urgent change in personnel at both the management and board levels."
After receipt of SCM's written demand, Ubiquity informed the SEC it proposed to conduct its first, years- delayed shareholders meeting on September 5, 2017. Ubiquity's bylaws filed with the SEC require its annual meeting to occur by January 31. SCM stated, "The prolonged refusal to address shareholder proposals and major concerns is completely unacceptable and re-emphasizes the critical importance of shareholder involvement in the SEC's April hearing."
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 SCM, "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."
The shareholders' March 25 demand proposed 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 Ubiquity created 500 preferred shares of common stock in February 2015; all 500 shares were given to the couple on March 6, 2015 without shareholder approval. The transaction was not disclosed to shareholders until a delinquent filing on February 1, 2016. SCM stated, "This is a self-dealing, hidden transaction that eliminates the voting rights of shareholders and must be voided to protect the interests of all investors."
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 unrelated to the company's dismal performance and is out of control," stated SCM. "We have previously highlighted that Chris Carmichael gets more than the $503,205 salary of the CEO of Snapchat, a company that generated over $400m in annual sales in 2016. The correlation between performance and salary is brutally dislocated. Approval for such excess is determined by the board, the very same people as those in senior management."
Shareholders also demand that Ubiquity Chief Financial Officer Brendan Garrison 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," the spokesman said, "It is completely unacceptable."
Strategic Capital Management Ltd.
(t): +61 2 9285 1300
(d): +61 2 9285 1320
(m) +61 413 621 964
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SOURCE Strategic Capital Management