10 Aug Nano Labs Corp – Research Report
Some interesting block trades today sparked this research report.
Nano Labs Corp (CTLE) started out as Colorado Ceramic Tile Inc. Colorado Ceramic Tile Inc is a Colorado entity that was first incorporated several years ago in 1995. Setting up the company in 1995 were Sal & Sandra Venezia, Ben Casale, and Mark Rodenbeck. The entity stayed pretty active for the first few years then it went through a stretch from 2004 - 2010 when it did not file any annual reports with the Colorado SOS. Suddenly on August 3, 2010, with the help of attorney William T Hart, Sandra Venezia showed up after missing for 6 years to do a reinstatement filing.
On December 22, 2010, the authorized share count was raised from 50,000 to 100,000,000 to prepare the shell to attempt to go public. Attorney, William Hart once again did the filing.
Between June 30, 2010 and December 30, 2010, 4,125,000 shares were sold for $.02/share to some private investors many of whom were related to Venezia and Rodenbeck. The share sales raised $82,500. The following is a list of those seed shareholders:
Chris M. Grey 275,000 Anna Villalvazo 200,000 Michelle L. Grey 200,000 Philip F. Grey 350,000 Daniela S. Grey 375,000 Jon T. Burgin 375,000 Scott Miller 325,000 Bruce H. Penrod 250,000 Anthony S. Venezia 25,000 Michael Barela 50,000 Ryan Rodenbeck 50,000 Kevin R. Caughman 25,000 Marian R. Silcox 25,000 Vladimir A. Karatsoupa 25,000 Ivan Muzgehenko 50,000 C. James Padgett 75,000 Theodore W. Struhs 50,000 Donald L. Cox 100,000 Bryan Y, Rodenbeck 50,000 Randall J. Kendrick 25,000 Timothy C. Evans 50,000 Philip G. Barclay 25,000 Patricia L. Malunat 75,000 Paul E. Mendell 50,000 Delt 100 Alumni Counsel, LLC (David Jung) 250,000 Salvatore M. Venezia 25,000 Oleg V. Naumenko 25,000 Cindy McCoy 50,000 Steven Gellatly 50,000 Koby Westerholm 50,000 Sue Ann Guth 25,000 Chystal Durnan 375,000 Morgan Pylant 150,000
On January 11, 2011, the S-1 filing was done. The legal counsel doing the legal opinion letter was William Hart. The same William Hart that had already been involved in reinstating the shell several months before. William T. Hart is an old hat when it comes to publicly traded entities. He has been involved with dozens of public shells going back to 1996.
According to the financial statement provided in the S-1 filing, Colorado Ceramic Tile Inc pulled in over $1,000,000 in sales each of that last 2 years prior to attempting to go public. Profits from sales were $338,988 and $293,328 respectively, but despite the respectable sales numbers, Colorado Ceramic Tile Inc lost money each of those years because of operational and administrative expenses. That isn't surprising since Sandra Venezia was due to be paid a salary of $112,800 for 2011 and Mark Rodenbeck was due to be paid $56,400 in 2011. Here is the Colorado Ceramic Tile Inc website.
At this point it could have easily been believed that Colorado Ceramic Tile Inc was going public to raise funds to improve the business, but it wouldn't take long after the S-1 filing was made effective before CTLE turned into an obvious insider enrichment scheme.
The S-1 filing was made effective on March 29, 2011. At first Venezia and Rodenbeck were going to change the name of the shell to Carbon Based Partners Inc and do a 36:1 forward split. They even got as far as changing the name of the Colorado entity in December of 2011, but for some reason they reversed the name change and forward split in February of 2012 (maybe they had trouble getting FINRA to approve the split?).
Almost exactly one year after the S-1 filing was made effective, Sandra Venezia and Mark Rodenbeck found a new way to enrich the seed shareholders. On March 28, 2012, they sold all of their shares to two guys out of Mexico named Bernardo Camacho Chavarria and Jose Manuel Flores Hernandez for an undisclosed amount of cash. I do not think it was any coincidence that they waited exactly one year to sell control of the shell. I think finding a way to get millions of free trading shares in the hands of the seed shareholders for next to nothing was the plan beginning well before Colorado Ceramic Tile Inc filed to go public.
Bernardo Chavarria (600,000 shares) became the new CEO. Jose Hernandez (3,400,000 shares) became the new Chairman of the Board and secretary. The name of the shell was changed to Nano Labs Corp and the company filed to do a 25:1 forward split. The address for the shell was moved to Mexico. The 10Q filed following the change of control showed that Nano Labs Corp had no assets, no revenues, and no real business operations.
This time the forward split was approved. The 25:1 forward split cleared on May 12, 2012. The seed shareholders now had 103,125,000 free trading shares, Chavarria now had 15,000,000 restricted shares, and Hernandez now had 85,000,000 restricted shares for a total outstanding share count of 203,125,000 shares.
Apparently it wasn't enough that there were now 103,125,000 free trading shares currently valued at over $66,000,000 ready to make several insiders very rich. On August 1, 2012, another 100,000,000 shares were given to the shareholders of a company called Respect Innovations Inc for some of their assets, technology, and intellectual property.
Respect Innovations Inc must be one amazing company with some amazing assets for it to take 100,000,000 shares currently valued at $64,135,000 to acquire those assets, right?.... think again.
I found Respect Innovations Inc and spent some time trying to uncover their history. Respect Innovations Inc is based in East Hartford, Connecticut. The company was first incorporated in Nevada on February 14, 2000 by Andrew Spencer and others. The company had a big write up in 2001 about some of their products. Not much is found about Respect Innovations Inc after that.
According to this resource, in 2004, Respect Innovations Inc filed for Chapter 7 Bankruptcy. Chapter 7 is when assets are liquidated. What happened with the Nevada business entity after that seems to support that Respect Innovations Inc went out of business. After January of 2007 they stopped filing with the Nevada SOS and on April 1, 2008 their resident agent resigned.
Andrew Spencer incorporated a new Nevada business entity called Respect America Inc on July 31, 2008 under the business description of nanotechnology, but he abandoned that entity 1 year later.
Right before CTLE acquired the Respect Innovations Inc assets a few interesting things popped up on the internet. On January 4, 2012, a brand new Nevada business entity was created named Respect Innovations Inc mocking the old revoked Respect Innovations Inc. No officers were ever assigned to the new Nevada entity and it subsequently went into default. It seems to have been created for the mere purpose of mocking the old entity in order to create the illusion of a real business to facilitate the transfer of 100,000,000 CTLE shares to some unnamed insiders to get rich. This page shows somebody named H. Douglas Berardo as the president of a start up company founded in 2011 called Respect Innovations Inc with a business description of nanotechnology.
H. Douglas Berardo seems to be our guy involved with the CTLE shell, but since CTLE has failed to file any actual signed agreements and has failed to disclose any information at all about Respect Innovations Inc and its officers we have no idea for sure. The whole lack of disclosure by CTLE is very very shady, but everything about CTLE has been pretty shady from day one.
On August 1, 2012, the Nano Labs Corp Colorado Business entity went into default for failing to file their 2012 annual report.
So currently we have a delinquent shell with 303,125,000 outstanding shares, a market cap of over $195,000,000, no proven assets, a disturbing lack of disclosure, a shady corporate history, a foreign presence, and at least 103,125,000 free trading shares owned by insiders. Those things add up to a pretty scary investment but also the kind of insider enrichment scheme that could attract an expensive paid promo. For this reason I am adding Nano Labs Corp to our watch list for a future paid promotion.
It will be interesting to see what kind of disclosure CTLE offers in future filings.
I think Nano Labs Corp will probably receive a symbol change before any big paid promotion starts.