SW China Imports Inc (OTC:SWCI) Step Onto the Scene
Yesterday, a few hours after the trading session closed, we received an email from 10 Baggas Factory. In it they boast about how SW China Imports Inc (OTC:SWCI) gained 13% yesterday, how they reached as much as $0.20 during the day, and how today could be even more lucrative for the people who buy in on their hype.
10 Baggas Factory received $50 thousand for their emails, however, they are not the ones who will profit the most from all the touting. The pump was actually started by a promoter called Penny Stock Momentum (PSM) who paid the $50 thousand compensation to 10 Baggas Factory. So if they are willing to shed that much money on a bit more awareness, how much did PSM themselves receive? A quick look into their disclaimer reveals that the total budget of the pump is a whopping $400 thousand as well as 39 million restricted shares of SWCI common stock.
The fact that the shares are restricted means that the pumpers won’t be able to sell them right away, but that’s not the only worry. The sole fact that the budget is this big means that someone (probably the paying party for PSM’s pump) intends to profit big time from SWCI. Can you do it, however?
If you are considering SWCI as a long-term investment, no. For all intents and purposes, they are currently a shell and they are not shy to disclose this fact in their latest 10-K for the fiscal 2012. Even if they hadn’t, the figures are enough of a proof:
- total assets: $600 in cash
- current liabilities: $40 thousand
- no revenue since inception
- yearly net loss: $58 million (!!!)
The bulk of the humongous losses was generated from consulting and director fees and it begs the question: “How come they spent so much money on services and yet, they are not able to generate even a dime in revenue?”. We’ll leave it up to you to decide.
Other than that, they say that they intend to import and sell high-end wigs, hairpieces and other beauty products but, having in mind that they have already issued all of their authorized shares, we’re struggling to see how they will manage to raise any sort of capital. Debt financing will be a tall order as well, since the gigantic losses will scare even the boldest financial institutions away.
Speaking of financial institutions, we noticed a familiar name in SWCI‘s 10-K – the one of Taurus Financial Partners LLC. Taurus are an offshore limited liability company based in the Dutch West Indies. They helped SWCI with the registration to the OTC Bulletin Board and they also provided them with financial advice and services. In exchange Taurus received 24.5 million SWCI shares.
This wasn’t the only stock that saw the light of day in exchange for services. A certain Mr. J. Scott Sitra also received some common shares instead of money for his valuable advices. A quick look up on Mr. Sitra reveals that back in 1998 he was charged by the SEC for fraudulent activities, and when you dig a bit further, you will see that he is also the sole owner and President of the aforementioned Taurus Financial Partners, LLC. This means that, all in all, he has control of at least 39 million SWCI shares. That’s quite a lot of stock issued to a man who was once charged with defrauding investors. There’s one more thing that you might be interested in.
Although SWCI say that their website isn’t ready yet, we decided to do a quick check on their domain name, http://swchinaimports.com and, at first glance at least, it would appear that there’s nothing of interest. It was first bought around the inception of the company, it’s registered to the name of Seon Won (SWCI‘s CEO), the mailing address matches with SWCI‘s principal offices, but when you get to the administrative email, things start to look interesting. As of right now, the email through which Mr. Won can be contacted according to the search tool is info@taurusfp.com. You’d have probably guessed by now that http://taurusfp.com is Taurus Financial Partners LLC’s website, which leads us to believe that Mr. Won is quite close to the financial institution run by J. Scott Sitra.
