Penny Stock HDS International (HDSI) Hedge Fund Backed

One penny stock to watch closely on the open in the next trading session is HDS International (OTC Pink: HDSI.PK) which closed at $0.12, up 20%, on Friday. Move over Timothy Sykes and Jason Bond because HDS International, a green technology company providing renewable energy and eco-sustainability solutions, has a much better looking penny stock poster boy; Hedge Fund Manager Tassos Recachinas.

HDSI traded 1,777,249 shares in the last trading session, nearly 3x its 5 day average volume and 7x its 20 day average volume of 246,306. The penny stock has a market capitalization of $41.69 million with 347.38 shares outstanding.

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HDSI History:

Having filed Form NT-10K notifying a delay in timely filing of Form 10-K on Friday (See here), HDSI, based in Providence, RI, has not generated any revenues to date and has a history of operating losses.

HDS International was incorporated on Nov. 3, 2008 under the laws of the State of Nevada. On Aug. 16, 2011, HDSIexecuted an Asset Acquisition Agreement (AAA) with Hillwinds Ocean Energy, LLC (HOEL), to acquire a certain license owned and controlled by HOEL.

The acquisition was for certain renewable energy and eco-sustainability technologies, as well as all the assets owned by HOEL that relatied to the license. The licensed territory under the License consists of Back Bay, New Brunswick, Canada, and any geographical area within 50 miles from the center of Back Bay, with the boundary on the west being the border with the State of Maine in the United States. The acquisition was accomplished by issuing:

  • (a) 7,500,000 shares of Class A Preferred Stock, $0.001 par value per share;
  • (b) 250,000,000 shares of common stock, $0.001 par value per share, and
  • (c) a twelve month, 10% promissory note in the sum of $325,000, per the terms and conditions of the AAA.

The assets HDSI acquired from HOEL had a historical cost of a whopping $82,538. Once completed, HOEL became the majority owner of all of HDSI outstanding shares of common stock, the owner of all of HDSI issued and outstanding preferred stock, and exercises effective control over HDS International.

As per the AAA, Mark Simon, HDSI‘s former president, returned, for cancellation, 440,820,000 shares of common stock, The shares were cancelled by HDSI at which time Mark Simon resigned from his positions as officer and director of HDS International, and Tassos D. Recachinas, HDSI controlling shareholder, was appointed as president to HDS International board of directors, becoming the penny stock’s sole officer and director.

Tassos D. Recachinas Background:

Prior to all of the following, Mr. Recachinas received a Bachelor of Science summa cum laude Mechanical Engineering from The George Washington University, and spent one year studying engineering and economics at Oxford University. He is also a Pembroke Scholar having studied engineering and economics at Oxford University. Mr. Recachinas Corporate History;

  • From June 2005 to December 2006: Equity Research Associate at Raymond James & Associates, where he covered defense and technology equity securities,
  • From January 2007 to March 2008: Investment Analyst at Pirate Capital LLC, a $2 billion activist/event-driven hedge fund,
  • Founder and Managing Member of Sophis Investments LLC, an investment management firm specializing in multiple asset class, research-driven value investing,
  • Portfolio Manager of the Sophis Investments LLC’s investment partnerships,
  • Has worked closely with numerous company boards and management teams, and
  • Has helped plan, write and execute corporate strategy.

Lord of War?:

Tassos Recachinas recently served on the Board of Directors of The Allied Defense Group (OTCBB: ADGI) , a multinational defense and security company, as well as its Compensation Committee and Strategic Review Committee. (Good article about Tassos here)

Unfortunately, Neither Summa Cum Laude, First in His class nor Pembroke Scholar could prevent the penny stock ADGI, which did file its 10-Kon time.

Allied Defense Group’s Stock, ADG, was listed on the NYSE Amex until Sept. 20, 2010. From then until the end of August, 2011, ADG delisted down to the OTC Bulletin Board Market where it traded under the symbol ADGI.

ADGI ceased trading after Allied Defense Group filed a certificate of dissolution in Delaware on August 31, 2011. The table below shows the high and low sales prices of the company’s stock during 2011 and 2010:

       2011        2010  
       High        Low        High        Low  
1st Quarter      $ 3.75         $ 3.25         $ 7.25         $ 4.51   
2nd Quarter      $ 3.58         $ 3.15         $ 7.25         $ 1.85   
3rd Quarter      $ 3.50         $ 2.97         $ 3.72         $ 2.22   
4th Quarter        N/A           N/A         $ 3.48         $ 2.30   

As of August 31, 2011, there were 725 ADGI stockholders of record. ADGI closed their stock transfers on August 31, 2011.

ADG previously conducted a multinational defense business which was focused on the manufacture and sale of ammunition and ammunition related products for use by the U.S. and foreign governments. ADG’s business was conducted under the names of two wholly-owned subsidiaries: MECAR sprl, formerly MECAR S.A., and ADG Sub USA, Inc., formerly MECAR USA, Inc.

ADG received a subpoena from the Department of Justice (DOJ) on Jan. 19, 2010. The subpoena was a request for ADG to produce documents in relation to the company’s dealings with foreign governments. The DOJ initially limited its request of documents to those relating to an indicted former employee of Mecar USA. The DOJ subsequently advised ADG that it was conducting an industry-wide review which was going to be expanded and ongoing.

ADG also received inquiries from the Securities and Exchange Commission as to the matter.

A view of Tassos D. Recachinas Ownership can be seen on the webiste (click here)

Back to HDSI:

Unusual trading activity around HDS International grabbed the attention of many on Friday. It seemed unusual because there was no information about what was new or being planned with HDSI.

For more information on HDS Internatinal, visit their website:

Bottom Line: HDSI stock made the watch list because of the amount of newsletters that are profiling this pinksheets penny stock. With the amount of attention being brought to this one stock, there should be an enormous amount of volume traded which should allow for a quick opportunity to make some profits trading it.

Just stay on top of it and day trade it. HDSI could easily turn into ADGI without any notice from the DOJ or SEC. Forget everything else with this penny stock. If you do anything with it, Just day trade! Flip HDSI for quick profits if the opportunity prevails!

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