Gel Tech Solutions, Inc. (OTC:GLTC) Breaks Climb on Record Selling

Gel Tech Solutions, Inc. (OTC:GLTC) was charting a good trend in March when Wednesday’s session sent it down a fifth on a record selling spree. Without reminders in the form of paid promotional emails or press releases, GLTC lost the appeal with investors and they shed around 800,000 shares. The stock slid back to $1.36 and the next few days will show if GLTC recovers or dips again, as it did after reaching record highs in 2011.

The company’s business is in chemical technologies- fire extinguishing water additives and a specialized formula that absorbs water and prevents soil from dusting. With its inventions, GLTC has had some success, limited by high debt:

• $280,549 cash

• $1.15 million current assets

• $2.3 million total current liabilities

• $37,453 revenues for the quarter ended December 2012

• $1.4 million net loss

One of the latest mentions of GLTC, from the end of February, reminds that the company’s products were tested with Con Edison (NYSE:ED), a specialized subsidiary of energy giant Consolidated Edison, Inc. Yet this testing only underlines how in fact the products of GLTC are still in development, and stated as “patent pending”. Whether the firefighting technology of GLTC will pick up is still unknown, but so far the stock has shown the possibility of moving fast and sharp.

The next few days will show if GLTC resumes the trend or the $1.36 price is still considered disproportionate, and a further press release may add to the attention. The past few days saw several small transactions of insider buying at $1.17, around 5,000 shares. The biggest insider holding is of 1.8 million shares acquired at 50 cents. There is no way to know if any of the holders plan to sell any time soon, but most of the purchases are at a serious discount to the current market price. Potential gains may be higher with a pump campaign, or a more active PR message campaign.

There is a further sale of 482,778 unregistered shares as of the end of February, for total proceeds of $280,000, citing exemptions that allow such a new issue. In the same filing, GLTC announced another sale of 1.4 million shares for $500,000. A further $1.4 million convertible note may mean extra share dilution and further insider holdings out of the 29 million shares outstanding.

New and promising technologies are a double-edged sword when it comes to penny stocks. Tickers like Nano Labs, Corp. (OTC:CTLE) manage to offer a credible-sounding development story. In the case of CTLE, the company has been drifting sideways for a while, supported by promotions. Still, the ticker corrected by more than 60% after the initial phase of the promotions. While a business with specialized nanotechnology paints may sound promising, it is best to decide for yourself if you can absorb the unexpected and disproportionate movements of a penny stock.