The US Securities and Exchange Commission (SEC) has temporarily suspended trading in securities of Hong Kong-based “Internet of Things” (IoT) company, UBI Blockchain Internet Limited (UBIA), currently valued at $1.2 Billion USD, citing recent anomalies in their market activity in late 2017, saying in a release:
“The Commission temporarily suspended trading in the securities of UBIA because of (i) questions regarding the accuracy of assertions, since at least September 2017, by UBIA in filings with the Commission regarding the company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the company’s Class A common stock since at least November 2017.”
Prior to 2017 the company operated under the name JA Energy, with a goal of creating new global energy solutions, but has made little progress since forming in 2010. Since the name change, UBIA stock sold for a low of $0.55 USD, and at one time shot above $100 USD bootstrapped to the cryptocurrency buying frenzy. Shortly after, CEO Tony Lui and other executives announced their intention to sell a total of 7.2 million shares according to Bloomberg.
In the 5th revision of the company’s S-1 filing on December 21st, UBI Blockchain disclosed an accumulated deficit of $6.3 million while holding just $15,406 in cash, and burn rate of $220,000 per month. The leadership team goes on to say in the document, “Based on our current burn rate, we will run out of funds immediately without additional capital.”
Despite their bleak financial outlook and lack of experience in the decentralized technology, the company’s timely name change prior to the market boom resulted in a 1,000% surge in their share prices. They aren’t the only ones trying to walk the line of regulation to capitalize on this growing industry. Long Island Iced Tea Company saw a 500% surge in their stock price after changing their name to Long Blockchain in December. Similarly, a US-based biotech company, Bioptix who has been faced with declining revenue in the last 10 years changed its name to Riot Blockchain and saw similar gains.