Luokung Technology Corp. (NASDAQ: LKCO) has been facing its stock price falling -13.00% in premarket session today. The stock of the internet technology company has fallen -11.50% on Friday because of the addition of the company into a restriction list that restricts U.S. citizens as well as entities to trade with the company.
What’s happening?
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Luokung Technology Corp. is one of the world’s leading spatial-temporal big-data processing technology companies and the number one interactive location-based services provider in China. “Luokuang” and “Superengine” are the core business brands of the Company. The Company provides big data based PaaS, SaaS, and DaaS intelligent services in many domains such as Mobile Internet, Internet Travel, Intelligent Transportation, Automatic Driving, Smart Cities, Intelligent IoT, Natural Resources Exploration & Monitoring.
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The Luokung Technology announced on Friday that the Company received a notice from Nasdaq that trading of its ordinary shares will cease at the start of business on March 15, 2021. DoD had inserted the Company to its list of “Communist Chinese Military Companies” (“CCMCs”), which was basis of the Nasdaq’s move.
There are certain restrictions on CCMC-listed companies that operate directly or indirectly within the United States that are contained in Executive Order 13959 (the “EO”). In order to prevent the Company’s securities from being listed and registered on The Nasdaq Stock Market, Nasdaq will file a Form 25-NSE with the Securities and Exchange Commission (the “SEC”). In accordance with the procedures set forth in the Nasdaq Listing Rule 5800 Series, the Company plans to appeal Nasdaq Staff’s determination to a Hearings Panel.
The Company announced in a press release that same day that it had initiated separate litigation with the U.S. Federal District Court for the District of Columbia seeking to avoid the unlawful categorization of the Company as a CCMC and impose restrictions relating to that categorization. In that case, Luokung anticipates applying to the Court for a Temporary Restraining Order (“TRO”) to halt enforcement of the EO restrictions as to Luokung.
As a result of the EO, it is illegal for U.S. persons and entities to trade with companies included in the Section 1237 list, starting March 15, 2021. The Company was added to the List on January 14, 2021.