Ubiquity Inc (OTCBB:UBIQ) Wants to go to NASDAQ Despite the Skeletons in its Closet
We’ve said it before and we’ll say it again. Doing a lot of research and due diligence before investing in any OTC company is of paramount importance. Over the years, we’ve seen people pouring money into numerous shady penny stock companies which have later left thousands of disappointed and extremely angry investors behind. By the looks of things, Ubiquity Inc (OTCBB:UBIQ) is one of them.
Once you do a quick Google search, you’ll see that the number of Ripoff Reports is absolutely shocking. The public entity was set up with the help of Luis Carillo and Wade Huettel just ten months before the two were charged with orchestrating a huge pump-and-dump scheme. Between March 2013 and April 2014, the company altered its business plan once, changed its name twice, and performed three stock splits.
Even if you don’t dig that far into the past, you’ll see that UBIQ has shown nothing to prove to us that it’s one of the more solid stocks on the OTC Markets. The performance, for example, is absolutely catastrophic. In May, just a couple of weeks after the last stock split (a 1 for 3.5 reverse one), the ticker reached a 52-week high of $9 per share. On October 15, it bottomed out at just $1.05. That’s 88% of the value gone after less than five months.
In light of this, the fact that there’s no shortage of people who think that the company is nothing more than a scam is not that surprising.
It would appear, however, that UBIQ‘s management team have set themselves the task of proving the skeptics wrong. And what better way to do this than to uplist the ticker on one of the national exchanges. The company announced recently that there’s been a registration rights agreement which will help them promote the ticker to NASDAQ.
Not surprisingly, investors are reacting to the idea of getting a future NASDAQ stock while it’s still on the OTC Boards. Yesterday, for example, they traded more than 370 thousand shares which means that the dollar volume at the end of the day stood at over $1.1 million. The price failed to make a significant jump, but it stabilized itself above the $3 mark (at least for now) and it’s currently sitting at $3.08 per share.
The thing is, UBIQ‘s management team didn’t want to risk it by announcing any deadlines for the completion of the uplisting and although investors don’t seem too bothered about this fact at the moment, potential delays could cause some panic selling.
We also mustn’t ignore the fact that UBIQ‘s latest 10-Q doesn’t really befit its NASDAQ aspirations. Here’s what the company recorded on June 30:
- cash: $226 thousand
- current assets: $1.85 million
- current liabilities: $3.49 million
- quarterly revenues: $14,100
- quarterly net loss: $5.47 million
As you can see, the revenue stream is tiny and inconsistent, the expenses are huge, and the debt is also alarmingly big. The company did announce on Friday that they have raised around $11.1 million, but unfortunately, even that round of financing could spell trouble for the regular shareholder.
UBIQ secured the cash injection by selling a total of 16,988,143 shares at just over $0.65 a piece to some unnamed accredited investors. The profit opportunity for the aforementioned investors is huge at the moment and if they decide to take advantage of it, the ticker will be put under a lot of pressure. We’re not sure if UBIQ has what it takes to withstand it.
