Damn Good Penny Picks Fire Up the Promotional Machine for Eco-Tek Group Inc (PINK:ETEK)
No matter what they say on television, we’re not going to stop driving our cars any time soon. Even though environmentalists are not happy about it, the majority of automobiles on the road today still use internal combustion and this sort of power plants require motor oil to run properly. Eco-Tek Group Inc (PINK:ETEK) say that the one that they have been developing is absolutely brilliant.
It was not that long ago when the company now traded under the ETEK ticker was dealing with something altogether different. Sandalwood Ventures, Ltd. was incorporated back in 2007 as a mineral exploration company trading under the SWDZ ticker symbol. In June 2012 they realized that digging for minerals is not for them and they completed the acquisition of Eco-Tech, which was followed by a change in the name and the ticker symbol. For about nine months now they have been developing marketing and selling motor oils and if the email sent by Damn Good Penny Picks is to be believed they are doing rather well. But are they?
We opened the financial statement to find out. Straight away we saw that the picture, painted by the promoters, is somewhat off the mark. The latest financial report covers the third quarter of 2012 and it presented us with the following figures:
- cash: $765
- current assets: $111 thousand
- current liabilities: $839 thousand
- revenue: $70 thousand
- net loss: $168 thousand
It’s fair to say that ETEK are still a long way off the household name that they want to become. They are just as far away from the revenues that they want to achieve and while there is a chance for success, they will need a lot of determination, a little bit of luck and a lot more than $765 in the bank.
The financial woes did not start yesterday for ETEK and they have been struggling ever since the beginning. Then again, we doubt that even a huge brand like Castrol had truck loads of cash when they were getting started. To battle the financial troubles, ETEK had to borrow a considerable amount of money which, of course, meant that they needed to issue some notes. The problem is that the all the notes are convertible and their terms are not what you call favorable.
As at September 30 they had a total of $235 thousand worth of loans that they hadn’t paid. That’s not so bad considering the fact that some penny stocks owe millions of dollars. The real problem lies with the conversion price. Right now ETEK‘s shares are traded at around $0.68 per share. The notes, however, are convertible at just $0.0003. You can imagine what sort of profit that could bring. We took the time to calculate how many common shares would be issued if all the notes were to be converted at once. The number hovers around 670 million. Having in mind the financial statement, we doubt that ETEK will be able to prevent the issuance of this stock by paying off their debt in cash.
Nevertheless, Damn Good Penny Picks, having pocketed a healthy compensation ($30,000), are still happy to explain how good ETEK‘s motor oil is and how the millions are just around the corner. They were also very excited by Wiki Group Inc (PINK:TWGI)’s revolutionary online payment system back in January. When we covered that pump, we were struggling to see what they were on about and now, a month and a half later, we still haven’t figured it out. The fact remains, though, that TWGI lost a lot of ground once the emails stopped.