Did you not notice the upward trend on the share price of Advanced Environmental Petrolm Prdcr Inc (OTCMKTS:AEPP) commenced at the end of June? Not many people in Wall Street got to know it, because the volume shown was very light. In addition, the press release, which we believe caused the market move, was not put out on every website. On Yahoo Finance, for example, nobody could find it. It was this hidden document that the company released here, which caused the share price spike. This is exclusive information from us. Do you want to know what is it about? Keep reading after you note the 300% return that AEPP returned in less than five days. We will explain what happened.SourceBusiness - What did go wrong?Advanced Environmental Petroleum Producers, Inc. (AEPP) was founded in Florida in June 2013. In an initial phase, the company provided consultancy services to the electric vehicle research and technologies industry, but the business objective was expanded in 2015. The company commenced "energy operations through a planned acquisition of exploration properties in Peru", which recently turned to be a bad business.The acquisition of Peruvian exploration properties was unfortunately terminated, as the terms of the acquisition were not fulfilled. This is from one of the documents released by the company:
"During February 2017, the planned acquisition of the Peruvian exploration properties was terminated because of the failure to complete the terms of the acquisition. Immediately following this termination, AEPP had limited or no operating activities and no tangible assets, but had significant liabilities." Source
How did the company react to the failure? Management was quite fast. It rapidly decided to exchange the common stock for outstanding debt to reduce the liabilities of the company. This was completely necessary in order to commence a new activity.
"On March 1, 2017, Interim Management was issued 60,000,000 shares of common stock to pay, acquire or reach agreement with AEPP’s creditors to extinguish all of the existing indebtedness of AEPP and eliminate any ongoing financial obligations, including any fees for services rendered." Source
The company found a new activity and a new partner soon. On March 6, 2017, Oncolix, Inc., a Houston-based clinical-stage biotechnology company, acquired all the common stock owned by the management. This is what we found hidden in one of the documents released by the company. The change of control was announced on April 6, 2017:
"On April 6, 2017, Interim Management completed the sale 61,465,130 shares of common stock to Oncolix. Interim Management resigned all positions with the Company, and two officers of Oncolix were appointed as the sole Directors of AEPP, resulting in a change in control of AEPP." Source
It seems that Oncolix will merge with AEPP, but this potential buyer has not announced anything yet. The market reacted by pushing up the share price when Oncolix appeared in April, later in May and June, the share price remained quiet and calm until this document was released on June 28, 2017.The new announcements that caused the spike: listing on a more-established trading venue and reverse mergerIn the document that was released to the market in this corporate website, the following words were found of Michael T Redman, Chairman of the Board.
"We have no current plans to effect a forward or reverse split of AEPP’s common stock. We will continue to evaluate the establishment of new operations with the goal to attract external financing and allow us to ultimately seek listing on a more-established trading venue, which we believe is in the best interest of our stockholders." Source
In our opinion, the market celebrated that the chairman will not effect a reverse split, rather he plans to list the shares on a better exchange. The stock split does not generally help stockholders. It is an artificial modification of the share price that is usually not appreciated by the market and tends to erode shareholders’ value. It is a great news that the company will not do it. Additionally, if the shares are listed on a better exchange, such as the NASDAQ, or the NYSE, many more market participants will check the share price. Consequently, demand for the stock may increase and the share price could raise. Be alert on this type of news either by visiting the company's website or subscribing to our newsletter.In addition, the chairman said the following:
“We continue to evaluate options which we consider to be in the best interest of AEPP’s stockholders. These options include an offer to the stockholders of Oncolix to acquire all of the outstanding stock of Oncolix and merge the two companies. In consultation with our legal, tax and financial advisers, we intend to finalize the terms and conditions of such offer during July 2017. Of course, there can be no assurance that such terms and conditions with be acceptable to the stockholders of Oncolix.” Source
Hence, the company may be preparing an offer to merge Oncolix and AEPP. That is what excited the market participants recently. In addition, the fact that the contract may be put out in July increased the market expectation. For both companies, a reverse merger could be great. AEPP will be running again an activity and will obtain assets, and Oncolix will obtain access to the financial markets. Is that a good deal for Oncolix? Yes, absolutely; being public means that companies can obtain better financing.ConclusionThe beginning of 2017 was terrible for AEPP stockholders. The company could not finish the acquisition in Peru, and it ceased its operations. Consequently, management exited the company and it was sold to debt holders. It was a disaster and the share price collapsed.Things have changed recently showing what we always say: "the market always overreacts to bad news." The company was sold to another partner, Oncolix, Inc., which is a clinical-stage biotechnology company. The corporate move was celebrated by the market and the share price was pushed up in May and April. Most recently, we could find in a new document that the company is planning to merge the two companies. The press release about the deal is expected to be published this month. Be alert on that news, since it may be very beneficial for the share price. Subscribe to our newsletter if you need rapid information.We will be updating our subscribers as soon as we know more. For the latest updates on AEPP, sign up below!Image courtesy of David J Russell via FlickrDisclosure: We have no position in AEPP and have not been compensated for this article.
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