Our penny stock pick for Tuesday, CellTeck Inc. (CLTK) skyrocketed in yesterday’s session leading all of the OTCBB traded stocks in percentage gains. With their 8-K filed formally reverse merging with EOS Petro Inc., a revenue generating oil and gas company, CLTK stock more than tripled Tuesday reaching a penny plus with expectations of the shares to possibly go as high as a nickel now that the news is out and the upcoming proffered series B share conversion is better understood.
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CLTK Stock Chart
Market Cap: 887.52K
Close: 0.0144, up 0.0111 (336.36%)
Average Trade Size: 45,078
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Basically here’s the gist of it with CLTK stock:
As per the July 23d filed 8-K, each issued and outstanding share of common stock of EOS Petro will be converted into the right to receive one share of series B preferred stock of CellTeck. Each share of series B preferred stock of CellTeck will be convertible into 800 shares of Cellteck’s common stock and will automatically convert into shares of CellTeck’s common stock upon the filing, by the Company, of an amendment to the Company’s articles of incorporation for the authorization of a sufficient number of shares of common stock to convert all issued and outstanding shares of series B preferred stock into common stock.
Translation: Once CellTeck files with FINRA for an increase in their authorized shares, which is currently only 300,000,000, the Series B preferred stock will be converted into common stock and added to the 61,633,891 currently issued and outstanding.
How many series B preferred shares are there? 37,850,044 series B preferred shares were issued to the former Eos Petro Inc. stockholders. Sounds like a lot, 35,080,035,200 actually. It was expected that upon completion of the conversion of the series B preferred stock, the stockholders of EOS Petro will own in excess of 86% of the then outstanding shares of CellTeck’s common stock and the current holders of the outstanding debt and common stock of the Company will own the balance.
Furthermore, at the time of the merger closing, the holders of 40 million shares of Cellteck’s series A preferred stock converted their shares into 100,000 shares of Series B preferred stock. Also, the holders of $150,000 of outstanding indebtedness converted such debt into 5.9 million shares of series B preferred stock, 2.805 million shares of which were sold to former EOS Petro stockholders.
However, following the completion of the transactions, there were 61,633,891 shares of CLTK common stock and 43,850,044 shares of series B preferred stock issued and outstanding (subject to the rights of the former stockholders of Eos to exercise and perfect their appraisal rights under applicable provisions of Delaware law). In connection with the closing of the Merger, none of the 37,850,044 shares of Series B preferred stock otherwise issuable under the Merger Agreement to the former stockholders of Eos chose to exercise appraisal rights under applicable provisions of Delaware law. Eos delivered a notice to the former stockholders of Eos to the effect that they were entitled to appraisal rights, but none of the former stockholders of Eos chose to exercise those rights within the statutory time period.
So, who are the Eos Petro shareholders?
The biggest kahuna is Nikolas Konstant, President, Chief Executive Officer, Chief Financial Officer and Chairman of EOS Petro, Inc. Konstant now owns roughly 74% of the company, 26,000,080,000 shares assuming the conversion of the series B preferred shares. Why does that matter?
Konstant has served as the Chairman of EOS Petro, Inc. since 2011 and has more than 17 years of experience as a merchant financier, investor and advisor to public and private companies on mergers and acquisitions, capital formation and balance sheet restructurings providing equity and debt financing for public and private companies.
Previously, Konstant was the managing director of NCVC, LLC, a $200 million venture capital fund and indirect subsidiary of Nightingale Conant. While at NCVC, he provided equity for the Wolfgang Puck Food Company, Nutrition for Life (which was the number one stock on NASDAQ in the year of 1996), On Stage Entertainment, Platinum Technologies and several other public companies. Previously, Konstant founded nanoUniverse, PLC (AIM: NANO), co- founded Electric City Corporation (currently known as Lime Energy Co.) (NASDAQ: LIME) and co- founded Advanced Cell Technology, Inc. (OTCBB: ACTC). Mr. Konstant has been a board member of Nightingale Conant, On Stage Entertainment, UCLA Board of Governors and on the board of the investment Subcommittee of Cedars Sinai Hospital, currently serving on the Cedars Sinai Board of Governors.
Translation: Can you think of a better HNIC to have for an onshore oil exploration company that has pre-existing, working oil drills, revenues, and the ability to open up shut-in wells within the leased property they have in Illinois?
About CLTK Stock
EOS Petro, Inc. and Subsidiaries acquired “The Works” oil and Gas leases on May 10, 2011 and is engaged in the acquisition, development and operation of onshore oil and gas properties in Illinois and has applied for offshore concessions in Ghana Africa.
Click here to view the SEC filings of EOS Petro Inc.
Bottom Line: Get CLTK on your list of penny stocks in case you missed yesterday’s run while watching the destruction of PWEI stock by a silly article that couldn’t have been better planned. CLTK stock is still relatively unknown and has the makings of a ten-bagger from yesterday’s pre-market alert.
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