Solanbridge Group Inc (OTCMKTS:SLNX) Surges Out of the Triple-Zero Levels

We last wrote about Solanbridge Group Inc (OTCMKTS:SLNX) more than a year ago and it’s fair to say that the company wasn’t in a particularly good shape back then. They were just starting their restaurant business, there were lots of promises and just as many questions about the future. To top it all off, the financial statements looked rather disappointing and the stock was being pumped by an outfit called Small Moves Big Gains.

The advertising campaign didn’t really do the ticker any favors. When the pump started at the end of February 2013, SLNX was sitting quietly around the $0.004 per share mark. Two months later, it was already in the land of the triple zeros.

Not surprisingly, people stopped paying attention and SLNX sunk further down. Volumes gradually disappeared and a couple of weeks ago, the ticker seemed all but dormant. Now though, it’s on the move again.

A few sessions of buying helped it break through the $0.001 mark and although it showed some hesitation at first, it managed to gain as much as 181% yesterday. SLNX closed the day at $0.0045 per share and registered a dollar volume of over $2 million which means that there’s a lot of money at stake at the moment. So, are things around SLNX any different now?

Fortunately, the ticker doesn’t seem to be the target of a promotion at the moment. We now have some figures to tell us how the restaurant business is doing as well. There’s some good news, but unfortunately, there are some problems. Here’s a summary of the most important financials as found in the latest quarterly report:

• cash: $500
• current assets: $6 thousand
• current liabilities: $662 thousand
• quarterly revenue: $557 thousand
• quarterly net loss: $64 thousand

The highlight of the statement is, without a doubt, the 236% increase in revenues year over year, but the lack of substantial cash reserves and current assets should not be overlooked. The future reports will tell us if the company is capable of dealing with the problems, but in the meantime, the stock is still running high and at yesterday’s close, the market cap is hovering around the $11 million mark. What’s causing the surge?

SLNX issued a press release yesterday according to which there will be some changes to the share structure. David Green, SLNX‘s CEO, will apparently return a total of 1.5 billion of his own shares to the treasury which should result in an O/S count of around 950 million. Good news indeed, but is it enough to propel the ticker on such a run?

It isn’t. The whole commotion around SLNX was caused by a memorandum of understanding that was signed at the end of March with an unnamed Nova Scotia resident who also happens to own a license to grow medical marijuana. It seems that despite the unknowns around the deal, investors are willing to jump in on the hype.

And why wouldn’t they? According to yesterday’s press release, SLNX plan to close the MOU on time. That said, a year ago, they told us pretty much the same thing about the acquisition of a night club in North Carolina. Several other letters of intent and memorandums of understanding were signed in 2013, but the latest disclosure statement reveals that all the deals have been called off for various reasons.

Will the same thing happen to their marijuana adventure? We’re about to find out.