Hybrid Coating Technologies Inc (OTCMKTS:HCTI) Loses its Straightjacket
A little less than two weeks ago, Hybrid Coating Technologies Inc (OTCMKTS:HCTI) was sitting at $0.005 per share. Yesterday, it closed the session at $0.009 and today might be the day that it attacks the $0.01 mark. In other words, it’s been on a crazy run.
“Crazy” isn’t normally our first choice when we’re trying to describe the performance of OTC stocks. That’s because what can normally be classified as “crazy” is often the norm in Pennyland. In HCTI‘s case, however, we decided to use the word “crazy” because once you take a look at the company and the stock, you’ll see that people in their right mind would try to avoid the ticker as much as possible.
You’ll see that investors already gave HCTI a chance. Back in July, we saw quite a lot of volume and in a move similar to the one we’re seeing today, the stock was trying to break out of sub-penny land. Sadly, instead of doing that, it slipped and fell, obliterating three quarters of its market cap in a matter of just two weeks.
There’s not a whole lot to suggest that things will be any different this time around. The latest press release, for example, is now more than a month old. As for the 10-Q, we reckon that you can draw your own conclusions with this one:
- NO cash or current assets
- $1.6 million in intangibles
- $6.8 million in current liabilities
- quarterly revenues: $4 thousand
- quarterly net loss: $735 thousand
Quite clearly, if you’re willing to jump in right now, you will be doing it because you’re hoping for something big to happen in the near or not-so-near future. There are certainly people who reckon that this is a good enough reason to put their money on the line. They mustn’t forget, however, that while they’re buying shares with both hands, others are selling. And they’re banking some tasty profits along the way.
During the first six months of the year, the people in question received 23.5 million shares at an average rate of $0.004 as a conversion of debt. In July and August, they pocketed a further 129 million shares, this time, at an even lower $0.0018 per share.
We don’t know how much toxic debt is still outstanding at the moment, but we do know that there was quite a lot of it at the end of Q2. We also know that some more was picked up in July and August and we know that it is convertible at discounts ranging from 40% to 50%. Last, but not least, we know that the number of authorized shares was recently raised to 1.6 billion which means that the dilution is unlikely to end any time soon.
Make sure you’re aware of this too before you reach for your wallet.
About ten minutes after today’s opening bell, HCTI is sitting at $0.0086 (about 4% in the red).
