12 Retech Corp (OTCMKTS:RETC) is a great example of how bad it can go on the OTC. RETC is a recent rebranding of a former high-flyer, and so far, the outcome has been disastrous for those who bought into the promotion wave of this stock, when it was ticking up around the $2-$2.50/share levels. Now, after the crash, investors are wondering whether there might be value here or not.
RETC is trying to stoke new flames of investor interest, announcing recently that it has entered into a Share Exchange Agreement to acquire 100% of 12 Japan Limited, the Japanese incorporated company developing and marketing 12 Retech technologies for the Japan market. As a result of the Agreement, 12 Japan shall become a wholly-owned subsidiary of RETC. It will be interesting if this news can help to foster at least some kind of bounce because the action has certainly been dreadful here. Traders will note nearly a complete wipeout of shares during the past month. It has been a remarkable crash, as noted above. And the real question now is this: Is it the end? Or are we setting up for a bounce?
12 Retech Corp (OTCMKTS:RETC) frames itself as a company that has created a fully-integrated shopping experience driven by new technology and has integrated all aspects of social networking.
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“We refer to our technology simply as “12”. We anticipate will be the next disruptive innovator in the retail sector. Simply put, 12 is an interactive shopping cart that seamlessly combines shopping and social networking for a fun and unique shopping experience. 12 integrates in-store, online, and mobile shopping with its smart mirror, mobile app, and iKiosk, while an interactive advertising screen provides special offers from shops, restaurants, and service providers. Over the past 36 months 12RT has developed a proprietary technology (software, hardware (the “iMirror”, applications for the I-phone, I-pad, android phones and tablets) that integrates traditional shopping, on-line shopping, entertainment and social networking into a Totally Integrated Retail Platform.”
As noted above, RETC shares have summarily crashed. One interesting element here is that RETC has not received the caveat emptor signification from OTCmarkets.com. In fact, as far as we can see, there was no obvious catalyst at all for the crash. It just happened, and took everyone’s money like a thief in the night. And now we are trying to assess the new reality.
As far as we can tell, this was a major pump from a well-known boiler room. Rumors are floating around out there that the company consists of just two employees with no real business. It’s awfully difficult to confirm or deny any of this, but we generally trust the market to help in making determinations. If the stock were worth substantially more, those in the know such as insiders and the friends and family of those with intimate knowledge of the company would be buying massive shares on the open market right now. Given the stock’s failure to bounce at all, one surmises that we should maintain a skeptical bearing with this one.
Note that the onboarding of 12 Japan follows a similar move with “12 Hong Kong Limited”, ostensibly.
Angelo Ponzetta, CEO of 12 Retech, commented, “Acquiring and combining with the strengths of 12 Japan will created a larger and more versatile 12 Retech with a stronger corporate structure, deeper management team, and greater marketing capabilities across Asia. We look forward to continuing our work together to expand installations and operations with several potential new retail partners around the world.”
The specifics of the 12 Japan deal are noted to break down as such: “Pursuant to the Share Exchange Agreement, the Company will acquire 100% of the issued and outstanding equity of 12 Japan in exchange for Five Million (5,000,000) restricted shares of RETC Common Stock; and, (ii) Five Hundred Thousand (500,000) shares of RETC Series A Preferred Stock. The Agreement contains customary representations and warranties. Additionally, the Agreement required that concurrently with closing, the Company facilitate the cancellation of Five Million (5,000,000) of RETC Common Stock currently beneficially owned by the Company’s officers and directors; and the cancellation of Five Hundred Thousand (500,000) of RETC Series A Preferred Stock currently beneficially owned by the Company’s officers and directors. Collectively, such shares shall be canceled and returned to the Company’s treasury.”
Now commanding a market cap of $3.74M, RETC has virtually no cash on the books, which is balanced by virtually no total current liabilities. The company is pre-revenue at this point. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $RETC stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $RETC, either long or short, and we have not been compensated for this article.