HITEC CORP (OTCMKTS:HTIC) Flying Higher

In January 2018, HITEC CORP (OTCMKTS:HTIC) broke almost all previous resistance. From the $0.002 support level, an unexpected momentum drove the price to hit the one-year record of $0.009 before retracing back to $0.07 mark.Why?Since many in the market seem to be expecting great things from CHUN HONG CHENG, the recently hired President of HTIC. Nobody wants to remain sitting on the sidelines with new management in place. In our opinion, that's the reason behind the unprecedented share price and the market volume spike; such spike has never happened in the year 2017.Check the following chart: Two months chart for HTICHITEC CORP Business OverviewThis company was founded in 2003 in the state of Delaware and is currently headquartered in Jefferson City, Missouri.HTIC functions as a collector and processor of oversize off-road tires; used with large mining trucks and agricultural vehicles.How is the revenue model designed?The revenues are received through the collection of fees. These tires are then treated and divided into component parts, such as synfuel, syngas, carbon black and steel, which are sold to petroleum product manufacturers and rubber blenders. The company is still in the testing phase and expects its market to expand in the near future once full production commences.The amount of properties and equipment is very significantIn the balance sheet, we saw that the amount of properties is very large for a company in a pre-revenue stage. As of August 31, 2017, the PP&E was equal to $938,000. We rapidly became interested in these assets. The acquisition was executed on March 28, 2016. According to the information given by the company, this equipment is an operating plant under construction pursuant to HTIC's business plan.Why is this very important?The market always studies equipment and properties owned by a company commencing a new business venture. The reason is that in case of having an unsuccessful business model, the market participants are sure that the company will have assets to sell. It is a great assurance. Licensing AgreementWe saw that HTIC had obtained rights to certain patents for the use of a technology involving pyrolysis system. 20,625,000 shares of common stock were issued to pay for this asset.What's out take?These are valuable intangible assets. They could multiply HTIC's value and believe that it could be a great catalyst for the share price action.The new CEO - What can it mean to the company?On March 31, 2016, we received the resignation of Director Jeffrey Michel." Please note that he left the company in good terms. Check the kind words of the management included in the press release:

“It is with regret we accept the resignation of Jeff. He has served the Company and shareholders of Hitec with great diligence and care. We wish him well in his future pursuits.” said Harvey Buhr, Chairman.

Reading this announcement, we commenced to believe that the company had started a period of transformation and restructuring. What now?We yet don't know the business profile of Mr. Cheng. So, we cannot say something with certainty about the next steps of the new management. However, in our experience, new people usually bring new know-how, new business contacts, and new opportunities. Thus, we encourage readers to be very alert on this name in the new year.There are market participants in the social media claiming that the company could execute a reverse merger with a Chinese company. Let us say that before the company announces it, we don't believe anything.Additionally, we encourage readers to be vigilant about new information coming from Facebook, Twitter, or other forums. Social media can sometimes manipulate the share price of microcap companies like HTIC.Bottom Line and ConclusionCurrently trading with a market cap of $2.4 million, HTIC is an exciting story among small caps. With a total outstanding share count of 351,907,314 and a float of 102,785,873 shares, HTIC is a low float runner that can move quickly on large market orders. In addition, the company shows a negative net asset per share and the asset side is not liquid. So, we believe that the next step will be raising capital or issuing debt.To sum up, the companies are making a large number of changes in management, so we will be expecting surprises on this name!We will be updating our subscribers as soon as we know more. For the latest updates on HTIC, sign up below!Disclosure: We have no position in HTIC and have not been compensated for this article.Image courtesy of Jamey Cassell via Flickr