NanoTech Entertainment, Inc. (OTCMKTS:NTEK) Expands Its Business Strategy
One thing is for sure – the people at NanoTech Entertainment, Inc. (OTCMKTS:NTEK) are not short of ideas. They are developing arcade games but they’re also partnering with a fellow small cap enterprise called Hannover House Inc (OTCMKTS:HHSE) in an attempt to make books available for reading on your Smart TV. In the meantime, they also launched a website where you can pre-order their $300 media player that has some pretty exciting hardware and will allow you to do just about anything as long as you’re connected to the Internet.
That’s quite a lot of businesses running in parallel and yesterday they said that they will be adding a new one – ice sculpting. Yes, we were a bit baffled as well and we even read through the press release a few more times to make sure that there wasn’t some sort of mistake but it is true – NTEK are acquiring a California-based company called Clear Memories, Inc. (CM).
While, with yet another subsidiary running, multitasking will probably be taken to a whole new level, the merger might not be such a bad decision. According to the announcement, Clear Memories have already managed to achieve profitability – something that still remains a distant dream for NTEK. In addition to this, Mr. Ted Campbell, one of NTEK‘s Directors said that Clear Memories have a really cool piece of technology and because a large part of the process is automated, the additional expenses will be relatively low which will further maximize profits.
That all sounded really good, but we were still wondering: “Why would they venture into Ice Sculpting? And why, of all the ice sculpting companies, would they choose Clear Memories?”. It’s not like CM have the best internet presence in the world. They are quoted in the press release as “the premiere provider of 3D ice sculptures to the San Francisco Bay Area” but when you go to their website, you can’t even find the address. All they have put on their contact page is a P.O. Box and a telephone number. And while NTEK talk about how great CM’s proprietary technology is, there’s absolutely no concrete information on what it consists of.
So, if you only know that much, you will remain baffled by NTEK‘s decisions and hope for the best. There is one little piece of information, however, that sheds some light on CM’s acquisition. It’s not really mentioned in the announcement, but until yesterday, Clear Memories was owned by NTEK‘s CEO, Mr. Jeff Foley. He founded the company around 16 years ago and according to his LinkedIn profile, he has a passion for sculpting ice. There’s nothing wrong with that and while we can’t understand why he decided to take the his own business under the wing of the big corporation, no one really has the right to point a finger at him. At least until we find out if the decision was good or bad. Only the future financial reports will give a definitive answer to that question.
In the meantime, we’ll be left wondering about the details around the acquisition. Were this an OTCBB company, they would have been forced to file an 8-K report answering questions like “How much did NTEK pay for the acquisition?”, “Did they issue stock or was the transaction covered with cash?” etc. NTEK, however, follow the alternative reporting standard which means that all we can do at this point is wait for the next report and hope that the management decide to include that information in there.
Most of the people are not concerned about this, however. Not because it’s not important, but because they’re too busy worrying about the recent price movement. The ticker was displaying a solid performance during June and in a little over a month, the share price increased by more than 450%. Then the start of July came and some hesitation started to emerge. There were some quite sudden and unexpected corrections followed by violent bounces but the trend that is appearing this week, is even more disturbing. The last green session for NTEK was on Monday and since then, around a third of the price has been wiped out. Right now, about an hour into the trading session, NTEK are 12% below yesterday’s close and while it’s still too early to call it for sure, it would appear that the chances of them ending the week on a positive note are thinning out.
Who did this? Well, we can’t say for sure that it was only because of the pumpers, but quite a few emails about NTEK have been flying around during the last four days. As we wrote in one of our previous articles, 007 Stock Chat and Penny Penny St0ck Spy decided to revisit NTEK but this time, a number of smaller newsletters also jumped in and the promotional pressure might have gotten the better of the ticker. Just like it did with of Arch Therapeutics Inc (OTCBB:ARTH). The chart on the right as well as the one for NTEK clearly show that no matter how solid a penny stock looks, the risks are always there and treading carefully could save you a lot of headaches.
