NanoTech Entertainment, Inc. (OTCMKTS:NTEK) Moving Along Nicely
Our first article on NanoTech Entertainment, Inc. (OTCMKTS:NTEK) went online back in November 2012 and things were quite a lot different back then. The ticker was deep in double zero territory and it had just wiped out as much as 60% of its value in a single day due to a paid pump.
The press releases back then were talking about NTEK introducing a new piece of technology that will convert normal television signal into 3-D and it all sounded very exciting, except for the financial resources. In addition to making a breakthrough in the television industry NTEK were also talking about revolutionizing the gaming business and they also had some ideas about mobile phone applications that are supposed to be really interesting.
This all sounded like the typical pumped penny stock – lots of PR and forward looking statements and not much in terms of financials and operations. Predictably, the ticker performed in the typical for promoted small cap ventures fashion – it destroyed quite a lot of investments.
A couple of days ago there was a new campaign and while the latest emails arrived on June 25, the excitement might still be alive. Especially when you consider the 18% gains from yesterday and the rather big trading volume. But is NTEK about to crash in the same way that it did back in November?
We’ve yet to find out, but in the interest of fairness, we should point out that things have really started to move around the company. According to a press release from Wednesday NTEK‘s founder and Senior Technologist, Mr. David Foley will speak about the future of television on a radio show today and the sole fact the hosts have decided to invite him is proof enough that people are starting to take NTEK seriously.
In addition to this, as we already wrote, they seem to be making progress with their operations as well. If you take a look at the financial statement for the third quarter of 2012 you will see that back then the total revenues for the period amounted to around $37 thousand whereas the latest report shows that between December 31 and March 31 they have managed to generate over $250 thousand. This kind of progress is rarely seen in Pennyland.
That said, they are still working at a loss and they still have to deal with the $5.2 million in accumulated deficit and the colossal liabilities. Not to mention that around $8 thousand in cash won’t last them long.
In many ways, NTEK‘s financial situation reminds us of the one we find in Creative Edge Nutrition Inc (OTCMKTS:FITX)’s filings. Just like NTEK, they have limited assets, quite a lot of debt and while they are capable of generating revenues, the end results have been negative from the very start.
The two companies have one more thing in common – they are frequently visited by paid promoters. The emails for FITX came in just a day after the ones for NTEK and they had a devastating effect yesterday when the ticker obliterated around 43% of its value.
NTEK has managed to stay relatively calm under the promotional pressure so far but we’re quite sure that if the shareholders see behavior similar to the one displayed by FITX, they will not be amused. We’re also quite certain that some of them believe such a thing to be impossible since NTEK now look like a much more solid venture.
Indeed, the positive news coming from the press releases and the quarterly reports do give some sense of security, but we’re not ready to say that NTEK‘s shares are immune to a crash. Not least because they have already shown us that they’re capable of losing quite a lot of value very quickly. As we wrote in our previous article, some facts from the past of the people running the venture might also serve as a reason to be extra cautious.