Solaris Power Cells Inc (OTCMKTS:SPCL) Makes The Right Call And Exits Migme Deal

In the last coverage of Solaris Power Cells Inc (OTCMKTS:SPCL) by Insider Financial, we examined the acquisition trail of the company and highlighted some of the agreements the company had entered into as it works broaden its operations. Since that last report on SPCL, a lot more has transpired and in this new piece we discuss those new developments.But before we get into the details, take a look at SPCL’s share price action. SPCL Daily ChartBusinessIn case you are reading about SPCL for the first time, we’ll give you a little background about the company.SPCL is a diversified holding company that acquires and operates overlooked and undervalued media assets. Note that expansion into digital media industry marked a transformation for SPCL as the company was initially in the energy sector where it was focused on developing lithium battery technology for the commercial market. For a little perspective, electric cars such as those manufactured by Tesla Inc (NASDAQ:TSLA) are powered by lithium battery.Although digital media has become its primary focus, SPCL maintains a presence in the energy sector and it has continued to ink strategic partnerships to monetize its lithium battery technologies.In its core digital media industry, SPCL owns a portfolio of patents covering digital distribution. In the digital media industry, SPCL operates through a 100% owned subsidiary called PixelMags, which is a leading distribution-as-a-service provider. It takes publishers’ content and distributes it to digital platforms such as those operated by Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL)’s Google.Recent developments As we covered in the previous report, SPCL had entered into an agreement to acquire Migme (ASX:MIG)’s wholly-owned subsidiary called Project Goth, Inc. (PGI). Migme is a digital media company registered and listed in Australia and PGI is its operating arm. Therefore, PGI holds Migme’s entire operating units as well as intellectual property.In press releases issued on April 21, 2017 and June 27, 2017, SPCL said that it was paying for the acquisition of Migme’s operating assets using stock. As such, Migme was to own 45% of SPCL’s common stock once the deal closed.But before the transaction could close, there was a condition that Migme and its subsidiary PGI were to meet. They were to raise capital of at least $1.5 million through convertible debt based on terms acceptable to both Migme and SPCL. That didn’t happen and the deal collapsed. Migme was apparently unable to raise the financing, so SPCL decided to terminate the proposed acquisition of Migme’s operating businesses under PGI.For SPCL, there is life after the collapse of the acquisition deal with Migme. On August 22, SPCL said that while it believed in the benefits of acquiring PGI from Migme, terminating the transaction was in the best interest of its shareholders. The company went on to outline how ending the deal preserved it resources and protected shareholder value.Termination of the deal eliminated the risk of SPCL stock dilution that was imminent. Additionally, ending the deal saved SPCL the resources that would have gone into the integration of a foreign business.With issue of Migme and PGI now out of the way, SPCL said its focus is on its PixelMags business. It wants to strengthen the business in order to bolster its competitive position and enhance shareholder return.Here’s what Neil Kleinman, the CEO of SPCL, said about the next course of action after terminating the Migme deal:

“Our charge is to now focus on scaling and optimizing Pixel Mags through internal growth and acquisitions. Solaris will now focus on Pixel Mags and the market position it has already established. That should enhance our commercial strategy and deliver value to our shareholders.”

Source:With PixelMags now as the engine to drive growth and maximize shareholder value, here are some of the specific actions SPCL will take to achieve its goals.Expansion of current operations: SPCL intends to continue exploring new options for PixelMags business, expanding into new markets and growing and diversify customer base. To achieve this goal, SPCL has prioritized revamping of Pixel Mags’ sales force.Acquisition opportunities: SPCL will continue to evaluate suitable acquisition opportunities that are more closely aligned to PixelMags. In case of acquisitions, SPCL will ensure that the dilutive impact of the deals is minimal – not like the Migme deal it terminated.Finally, SPCL wants to become a fully current and compliant filer with the SEC.Conclusion To sum, SPCL seems to be making great moves that will sooner or later reflect more clearly on the stock price. The termination of the Migme deal reveals that the management of SPCL is not only working to create more shareholder value but is also careful not to destroy the value already created by avoiding transactions that could lead to significant dilution. In light of the action plan SPCL has outlined, this is the point where savvy investors need to stay very alert on this stock.We will be updating our subscribers as soon as we know more. For the latest updates on SPCL, sign up below!Disclosure: We have no position in SPCL and have not been compensated for this article.