Stocks go up, stocks go down, but when your penny stock drops -94.5% in 3 months and goes to subpenny status, despite claims to have bagged a deal with a Fortune 500 company, you know something is seriously wrong from the inside. That’s what the ride has been like over the past 15 weeks for shareholders of Hybrid Coating Technologies Inc. (OTC PINK: HCTI) even though they are looking to bank $20 million in annual sales from the ghost agreement the San Francisco-based company, focused on improving the quality and safety of foam, coatings, and adhesives, put out not once, but twice back in early April. While the Form 4 was filed for Nanotech Industries Inc. (NNTH) to show payment to secure the rights to the spray foam insulation, nothing has been insulated about the share price of HCTI stock.
CHART
Disregarding the $1,821 in cash the Company had on the books and the complete lack of revenues as of March 31, 2015, investors were expected to jump at the chance to buy HCTI shares on April 7 when news was released that they had recently entered into an agreement with a Fortune 500 company to modify and then commercialize one of its products based on its non-isocyanate polyurethane platform technology. With no one biting and only 3.6 million shares trading @ between 0.03 and 0.05, someone thought it would be a good idea to re-release the same news a week later – still having no bullish effect whatsoever.
It’s a good thing no one with any sense reacted to the news of a possible $20 million and the Company co-owning any new patents based on modifications with this ghost partner considering how Teflon coated the chart has been for any upward momentum HCTI could attempt to luster. The news announcement did leave a window open, having mentioned the parties will enter into a subsequent definitive supply agreement within approximately 90 days. The possibility of seeing another attempt to pump via PR could be coming in the course of the month.
What product, let alone product modifications, Hybrid Coating could be working on is a mystery of its own since there was none on their balance sheet last Q and no funds to even pay an electric bill for a month. This is probably why, on April 17, 2015, the Company approved the increase in authorized share capital from 150 million shares to 650 million shares of HCTI stock. This should allow for a massive adjustment to the 57,856,880 shares issued and outstanding as of May 20, 2015.
Looking closer at the Subsequent Events on the last Q filing, Hybrid Coating Technologies and two related parties agreed to cancel 8,113,116 shares of common stock (held by Nanotech Industries) and 1,950,000 shares of HCTI stock (a shareholder – creditor). In return for their niceness, the two agreed to receive 8,113,116 and 1,950,000 warrants respectively, with a 5-year term and an exercise price of $0.001 per share – about 200% higher than where HCTI shares closed on Friday.
Nevertheless, it’s summer and grinding along with subpennies has long been a proven tradition which could spell upticks for HCTI in the coming sessions. With volume having increased substantially over the last two trading sessions, failure to recognize the short runs which have occurred since March could be a painful exercise in missing out on taking any profits which might never even materialize.
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