UBI Blockchain Internet Ltd (OTCBB:UBIA)
UBI Blockchain Internet Ltd (OTCBB:UBIA) has signed a definitive agreement that paves the way for it to complete the acquisition of Shenzhen Nova E-commerce. The acquisition comes at a time when the company is experiencing renewed interest in the market on the back of a growing focus on bitcoin.
Under the terms of the agreement, UBI Blockchain Internet Ltd (OTCBB:UBIA) is to acquire 100% ownership of the private Shenzhen Corporation in exchange for 25 million unregistered restricted Class C common shares. Nova owners are to receive Class C common shares.
Prior to its acquisition, Nova capital structure consisted of RMB 5 million shares. Currently, there is no pending investigation that could prevent the merger from coming to fruition. Completion of the transaction will result in Nova becoming a subsidiary of Nova.
Shenzhen Nova is a privately owned company that operates an online store in China. The store sells a variety of products ranging from cosmetics wine, household goods, and infant products. For the period ending December 31, 2016, the company had cash and cash equivalents of $3,160. Its non-current assets made up of plant and equipment had a net worth of $13, 260 with total liabilities of $46,334.
UBI Blockchain Internet Ltd (OTCBB:UBIA) acquisition comes at a time when it is aggressively expanding its footprint in China as it looks to generate a substantial amount of shareholder value from the recent bitcoin rally. The company is reportedly exploring ways of underpinning its technology in the country’s healthcare sector.
A recent S-1 filing shows the company is in the process of setting up a technology platform. The platform will reportedly allow customers to track food and healthcare products from the source by leveraging the capabilities of Blockchain technology.
The company stands to generate a lot of revenues if it is successful in integrating its Blockchain technology in the healthcare sector. Currently, the only major headwind is the fact that the company will need a substantial amount of capital to execute the technology’s development.
Separately, UBI Blockchain Internet Ltd (OTCBB:UBIA) is fresh from issuing 500,000 unregistered restricted Class A common shares at $0.001 a share. The shares were issued to an independent consultant who is poised to perform consulting services for the company.
UBI Blockchain Internet Ltd (OTCBB:UBIA) stock was down by 25% in Friday trading session and ended the week at $4.50 a share.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
About the author: James Marion is a University of Houston student studying Business with a concentration in Finance.