SAN JOSE, Calif., Dec. 30, 2013 /PRNewswire/ -- Sollensys Corp. (OTC Pink Sheets: SOLS) provided an update today regarding operations of its Korean subsidiary.
Mr. Frank Woo, CEO of Sollensys, stated: "We continue to work hard to re-start the operations of our Korean production subsidiary, Sollensys Korea ("Subsidiary"). Our key challenges at present are to raise funds to provide working capital, resolve a legal challenge facing our Subsidiary and assess recapitalization and/or restructuring alternatives."
Mr. Woo continued, "We're working with investors and our creditors to assess various financial alternatives, and our Korean legal team is addressing an ongoing lawsuit by the Korea Institute for Advancement of Technology ('KIAT'). Irrespective of these challenges, we remain committed to making our product line a success, and are confident our touchscreen products will provide an attractive input for cell product manufacturers such as Samsung."
As previously reported in our 2011 audited financial statements filed with the Securities and Exchange Commission's EDGAR system on April 22, 2013, the lawsuit filed against our Subsidiary by KIAT is based upon the Subsidiary being selected by the Korean government as a technology development company for "2011 Touch Convergence Cluster Project." The Subsidiary received support from the Korean government in 2011, but was unable to fulfill all its commitments under the KIAT agreement due to a suspension of production caused by insufficient capitalization.
KIAT's lawsuit is based on its claim against the Subsidiary for recovery of the subsidies paid to the Subsidiary. During 2012 and up to December 30, 2013, KIAT and the Subsidiary have held meetings to reach a resolution, but no agreement has yet been made. This lawsuit is in its early stage and the result cannot be reasonably estimated at this time, but the Subsidiary believes its maximum loss would be US$414,000, plus interest and court costs. No assets of the Subsidiary have been seized by KIAT as a result of this lawsuit.
During the coming weeks, we plan to continue to work with investors and our creditors to assess various financial alternatives. We expect to report again soon regarding our recapitalizing and/or restructuring plans.
About Sollensys Corp.
Sollensys Corp. was incorporated in Nevada on September 29, 2010 as Health Directory Inc. and on July 30, 2013 completed a name change in anticipation of a merger. On September 14, 2013, an agreement was executed to acquire Sollensys Corporation - a South Korean corporation, which was incorporated on May 27, 2010. Sollensys Corporation was formed as a manufacturer of the physical components of touch screens used in cellular communications products such as the iPhone, iPad and Android phone.
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