According to Hindenburg Research, which has shorted Predictive Technology shares, said the company falsely claimed that a Chinese manufacturing partner received Chinese government approval to distribute the antibody tests. The tests were still being marketed on Predictive Technology’s website on Tuesday.
In response, Predictive Technology called the firm’s claims “misleading” and said that “the company will not dignify the opinion piece with a point-by-point response.”
Federal securities law allows the SEC to suspend trading in the shares of public companies for as many as 10 days if it deems that doing so is in the public interest, according to the regulator. After the period lapses, shares can trade on the over-the-counter market but generally at lower prices.
The agency warns investors to be “very skeptical” when investing after the period ends. Shares of Predictive Technology have fallen 57% since the trading halt was lifted, to 35 cents. They have declined 92% in the last year.
Congress passed the PPP legislation in March to help companies meet expenses such as payroll after the coronavirus pandemic all but shut down businesses all across the U.S. The Trump administration’s rollout of the program has been criticized by Democratic lawmakers for allowing publicly traded companies, which can raise money from capital markets, to receive the loans at the expense of smaller mom and pop businesses.
After the criticism, the Treasury Department and SBA have since issued new guidance, warning companies with large valuations and access to capital markets that it’s unlikely they could certify in good faith that a PPP loan is “necessary to support the ongoing operations of the applicant.”
More than 60 out of the roughly 400 public companies that received the loans have returned them, according to data from FactSquared.
This article was provided by Bloomberg News.