Our readers will remember our last article about 12 Retech Corp (OTCMKTS:RETC).
We said that the company had again become interesting after the share price decline that occurred a few months ago. The reason was that new corporate changes had been announced and good news had started to flow.
We were not wrong in saying so.
In October, the share price has picked up again. From the share price level of $0.10, the stock price spiked up to touch the level of $0.20 in only one session. On top of it, market interest on this name seemed to increase as well as the volume increased to almost 2 million shares.
Have a look at it and form your own opinion before we provide more details:
The company continued to release good news, which excited the market. New directors were appointed, a new subsidiary was formed, a new acquisition was highlighted, and more money was raised. We will explain everything in this new update.
For those readers who are learning about the company in this article, only check the following video to understand the business of RETC. It is self explanatory:
On September 26, 2017, the company noted the appointment of Daniele Monteverde to its Board of Directors. It is again a good sign that new people with a lot of experience have chosen this company.
Mr Monteverde is the co-founder, President and Director of the recently acquired 12 Japan, Inc. subsidiary. Additionally, instead of leaving the company with the money earned from the acquisition, he decided to continue with RETC. It shows that the company is correctly integrating 12 Japan, Inc.
On October 3, 2017, the company released that a new wholly owned subsidiary had been formed. We believe that the most significant in the press release is what was said by Angelo Ponzetta, CEO of 12 Retech Corporation:
Angelo Ponzetta, CEO of 12 Retech Corporation, commented “We took this action today to prepare for our future operations. There are several timely acquisition opportunities that we are contemplating that would fundamentally change the operational footprint of our Company. ” Source
The company seems to have identified other businesses to acquire. New transactions will increase the revenue line, deliver cost synergies and affect the share price positively. Thus, this is a very good news. Additionally, it shows that we need to be alert, as an announcement about a new acquisition could be close.
That was not all. On October 10, 2017, the company entered into a Letter of Intent with EP Acquisition Vehicle Corp. to acquire 100% of the stock of Colorado Trading & Clothing Company. This target is a company designing and manufacturing “lifestyle apparel brands for active men and women under a number of proprietary brands which are Soybu, Colorado Clothing, and Tranquility brands to name a few.”
We appreciate the news, as we believe that it will increase shareholder value by increasing both revenues and net income. On top of it, we also need to highlight that the company also communicated the new plans. The CEO talked about it:
“We plan to leverage Active Fashion Group’s long-term relationships with major retailers to speed up the acceptance of our cutting-edge retail technology products like the 12 Mirror, 12 Mobile App and 12 Kiosk, that will benefit retailers by making ‘shopping an experience again’ .”Source
On October 12, 2017, the company released that it had hosted a group of European business leaders at ITOYA’s Flagship Retail Store in Tokyo. According to the press release, they were able to see the technology and features that RETC provides.
This shows that the company is trying to look for business opportunities in Europe. In fact, Angelo Ponzetta, CEO of 12 Retech Corporation, highlighted by saying that they are optimistic that there will be several opportunities to expand operations in Europe. You know how it works, expansion usually means a larger market and new revenues.
Finally, on October 17, 2017, the company noted that it will receive $12 million in equity funding commitments to fuel the Company’s growth. It was said to be included in the agreement with EP Acquisition Vehicle Corp. to acquire Active Fashion Group. Additionally, the company signed a debt agreement with SBI Investments, LLC, to borrow up to $1 million in funds to bridge the Company’s needs until the acquisition of AFG is completed.
We appreciate the announcement, as it seems that the company has found the way of minimizing dilution while, at the same time, obtaining new financing. Angelo Ponzetta, 12 Retech’s CEO was quoted:
“We wanted a funding mechanism that minimized the dilution to our shareholders while providing funds as needed. This format accomplishes that goal providing funding when we need it and allows us to execute our plans to increase revenue and earnings and enhance shareholder value in a timely fashion.” Source
Additionally, it was noted that the company has been interviewing several candidates for the position of Chief Marketing Officer for the new company. We will need to be alert, as the new business profile could surprise the market and send the share price higher.
Currently trading with a market cap of $30 million, RETC is an exciting story among small caps. We believe that the company did a great job recently with the investor relations firm hired a few months ago. It is sending good announcements that have captured investor attention.
Additionally, we believe that there are many catalysts inside the company that could increase shareholder value. Thus, we encourage readers to follow closely the new announcements. This is what will drive the price dynamics in the near future.
We will be updating our subscribers as soon as we know more. For the latest updates on RETC, sign up below!
Image courtesy of Josh Wilhelm via Flickr
Disclosure: We have no position in RETC and have not been compensated for this article.