Nano Labs Corp (OTCBB:CTLE) Flying High Again
Our last article on Nano Labs Corp (OTCBB:CTLE) is dated May 28 and if you have a quick look at it, you’ll see that back then, the management team were hoping to have their corrosion protection coating products on the market by June 15. You’ll also see that we weren’t quite sure if this is really going to happen. Not surprisingly, the deadline was missed by quite a distance. In fact, CTLE launched their revolutionary coatings on Wednesday. Or did they?
Well, the pres release’s headline would suggest that this is indeed the case, but when you open the announcement and read through it carefully, you’ll see that all they talk about is the end of the development stage and the filing of a patent application. Dr. Victor Castano, the company’s Chief Research and Innovations Officer talks at length about the product, about the complicated process through which it protects equipment and about the numerous advantages it has over conventional solutions. What he doesn’t say, however, is when you will be able to buy it from the local hardware store.
Investors don’t seem bothered about this at all. In fact, the last three sessions have been an absolute blast. Quite a lot of interest propelled the price from under $0.02 per share all the way to 0.118. Yesterday’s performance was particularly impressive. In just six and a half hours, CTLE managed to gain no less than 65% while shifting more than 5.3 million shares. Astonishing figures, but also quite baffling.
The company published the 10-Q covering the third quarter of 2013 in the early afternoon, and while we’re used to seeing some disheartening figures from penny stocks, we must say that CTLE‘s latest financial statement ranks as one of the worst. Here are the figures:
- total assets: $6,798 in cash
- current liabilities: $21.9 million
- NO revenue since inception
- quarterly net loss: $11.6 million
We reckon that a further comment on these financials isn’t really necessary, but, just in case you’re wondering, CTLE‘s market cap at yesterday’s close amounts to no less than $24 million.
Sure, they might borrow some money from Asus Global Holding, Inc. (AGH) as they have done in the past, but that, in itself, presents another problem. According to the latest 10-Q, as of September 30, CTLE had $916 thousand in outstanding convertible notes and all of them can be turned into common stock at a 50% discount to the price on the open market. The conversion will present an enormous profit opportunity for AGH (an entity that, by the way, doesn’t appear to exist outside CTLE‘s filings) and will probably depress the price.
A plus point (if we can call it that way) is the fact that the current surge is not caused by a traceable paid promotion. CTLE have been the target of numerous pumps in the past and we don’t really need to tell you that they have all but destroyed the share price. Even so, the future success of the company is dependent on nothing more than $6,798 in cash and a few optimistic press releases which is, we reckon something well worth considering before putting any money on the line.
In many ways, CTLE‘s current performance reminds us of TheDirectory.com Inc (OTCMKTS:SEEK)’s position from a couple of weeks ago. SEEK soared last month fueled by nothing more than bright promises of a good-looking financial statement. It reached a 52-week high of $0.0077 on November 5, but when investors saw that the projections were grossly overestimated, it took a tumble. Now, just ten days later, its value has dropped by a whopping 68%.
