Sollensys Corp (OTC:SOLS) Keep Their Heads Above the Water

The excitement around Sollensys Corp (OTC:SOLS) was sparked a couple of months ago when they announced that they are changing their business. Back then they said that they have acquired a South Korean company called Sollensys Korea and they are entering the business of manufacturing components for touch screen devices.

As we all know touch screens are really hot on the consumer electronics market and they are getting more and more popular with the general public which, in turn, means that SOLS are positioned in a business sector that could prove to be extremely lucrative for them. Can they make it, however?

Well, in a few words, it’s way too early to call it. The pumpers say that the potential for profit is huge and that investors are in with a chance of buying cheap shares of a company that is going to be a leader in a multi-billion dollar industry. SOLS‘ website features a number of videos in which they explain how well positioned they are and they have even chosen the popular Gangnam Style song as the background while they speak about their products and projected revenues.

The reality is, however, the acquisition of the South Korean company was completed only a couple of months ago and since then, we have seen nothing but press releases and bright promises from the pumpers. The latest financial report filed by SOLS covers the fourth quarter of 2012 which means that the assets and liabilities of the new, potentially extremely profitable subsidiary are not included in the statement.

We’re sure that SOLS‘ shareholders are hoping to see some good news when the new financial report comes out since the aforementioned 10-Q is not exactly confidence-inspiring. Here are the figures:

• cash: $460
• current assets: $21 thousand
• current liabilities: $149 thousand
• revenue since inception: $0
• quarterly net loss: $62 thousand

We’re pretty sure that SOLS long-suffering shareholders would also like to finally take a break from the constant dilution that has been crushing their investments over the last couple of years. Due to the company’s dreadful financial state, the previous management team were forced to push their printing press into overdrive and according to the 10-Q, stock has been issued for all sorts of services which, we’re sure, has made the shareholders quite angry.

Of course, there are now some new people who took the helm as soon as the change in business was announced and their policy will hopefully be different. Unfortunately, we can’t say that they’re off to the best of starts.

For one, they seem to be paying too much attention to the PR front and the timing of the press releases, when you have in mind the pumpers’ activity, is somewhat disturbing. Some of you would probably point out that SOLS are managing to stay afloat despite the promotional frenzy and indeed, in this respect, their performance is not that bad. That doesn’t mean that there’s no risk however. Oryon Technologies Inc (PINK:ORYN), for example, were also pumped by Stock Psycho, (one of the most active newsletters on SOLS‘ promotion) back in October 2012. Just like SOLS, they managed to remain relatively stable for some time, but not as soon as the excitement was over, they crashed hard.

The same thing could happen to SOLS and there will be no warnings beforehand, which means that an investment in their shares is still quite risky. And if they want to boost investors’ confidence, they should certainly think about changing their corporate headquarters.