Borislav Tonev

Hybrid Coating Technologies Inc (OTCMKTS:HCTI) Enjoys the Exposure

by Borislav Tonev February 10, 2016

The latest press release to come out of Hybrid Coating Technologies Inc (OTCMKTS:HCTI, HCTI message board)'s headquarters is dated January 13. When an OTC company doesn't give out any updates for almost a month, you'd expect interest in the stock to wither. Yet, in HCTI's case, that's not happening.

Yesterday, for example, people poured $145 thousand into the ticker and after pushing it 24% up, they saw it reach $0.0036 per share – the highest close in more than four months. The reason for this is simple – although the company itself is pretty quiet, there's no shortage of people talking about it.

The January 13 press release talks about an article dedicated to the recently signed distribution agreement between HCTI and Industrial Finishes & Systems, and since then, we've seen outfits (that, for some reason, require your phone number in order to allow you to use their services) publish various reports on HCTI alongside other penny stock companies.

Basically, HCTI is receiving quite a lot of exposure and it's clearly reveling in it. And of course, there's nothing wrong with that... except for the fact that once the exposure is gone, HCTI will need to support itself. Whether it can do it is questionable.

Investors seem pretty pleased with the company's current situation and part of this lies with the fact that they don't seem to be paying any attention to the latest 10-Q. If they were, they would have been quite scared by the fact that at the end of September of last year, the company had a little over $400 in current assets, underwhelming revenues, and quite a lot of debt.

Speaking of debt, a vast portion of the money HCTI has borrowed over the years has been given to it under convertible notes and many of them have already been converted. Thanks to this, the number of issued and outstanding shares grew from 44 million at the beginning of last year all the way to more than 700 million in November.

In a word, the toxic debt has already wreaked havoc with the share structure and thanks to the recent increase in the A/S count, it might do some more damage in the near future.

About ten minutes into today's session, HCTI is traded at $0.0038 – a further 5% in the green.

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