Borislav Tonev

Hydrophi Technologies Group Inc (OTCMKTS:HPTG) Picks Up the Pace

by Borislav Tonev February 29, 2016

Hydrophi Technologies Group Inc (OTCMKTS:HPTG, HPTG message board) has really been on a roll lately. On Friday, the ticker logged its seventh consecutive green session and thanks to a 26% jump, it managed to climb above the $0.01 per share mark for the first time in over nine months. The run has actually been going on for quite a while and the people who jumped in back in November are now looking at about 400% in potential profits.

Investors are properly excited about the company and you can sort of see why. Three months ago, HPTG announced that it's in the process of acquiring a freight company called Pro Star Freight Systems, Inc which purportedly generated more than $27 million in revenues in 2014. Since then, the company has also announced the acquisition of land which will serve as the location of a new truck repair center, and recently it said that the new subsidiary has expanded its fleet.

Basically, if the press releases are anything to go by, HPTG isn't the company it used to be, and that's a good thing because if you open the latest 10-Q, you'll see that the previous business plan wasn't yielding the desired results. The report says that on September 30, the company had:

  • less than $1 thousand in cash
  • a working capital deficit of more than $6 million
  • $69 thousand in quarterly revenues
  • a quarterly net loss of $437 thousand

So, where's the catch?

Well, the figures above, especially the revenues and the bottom line, are clearly irrelevant to the company's current state of affairs. The problem is, the results that do actually have a bearing on HPTG's future are still not out.

When it published the 8-K regarding the merger, the company said that the financial statements of Pro Star will be published within seventy-one days, but right now, ninety-four days later, they're nowhere to be found.

The 10-K for the period ended December 31 should also give us some vital information. It is supposed to say how much debt is left lying around for example. When the merger was announced, HPTG said that some of the older liabilities have been eliminated, but it also said that a new $1.25 million note has been issued which can be converted into stock at a 20% discount.

All in all, for the time being at least, a few vital pieces of the puzzle are missing which turns HPTG into a rather risky choice. Treading carefully is extremely important.

Comments 1

1. Guest
February 29, 2016, 08:06PM


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