Hybrid Coating Technologies Inc (OTCMKTS:HCTI), filed a Schedule 14C in March, stating that it would like to undergo a 200:1 reverse split. Unfortunately, the market took the news hard and HCTI lost nearly a third of its value during the following session. A reverse split was all but inevitable, but with the passing of the reverse split, HCTI should finally have some room to breathe.
Because of the trading volatility often associated with low-priced stocks, many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. HCTI has had a series of recent meetings with certain investors and firms that were unable to close due to the share price. Now, that should all change.
HCTI has developed the world’s first (and only) zero isocyanate hybrid polyurethane industrial & commercial coatings. These are the first-ever modified hybrid polyurethane (currently used in coatings and paint) manufactured without the use of toxic isocyanates throughout the entire production process. What makes this so important? The problem with isocyanates is that conventional polyurethane paint and coatings are highly vulnerable to environmental degradation and ultimately leads to their chemical decomposition, especially when in contact with water.
The answer is in HCTI’s TRUE Green Poly™, a substitute for conventional polyurethane and epoxies that are hundreds of times less toxic, has superior properties, and should provide up to 30-60% in reduced costs. It is the first commercially-available zero isocyanate hybrid polyurethane coating. The product emits such low odor that it can be applied in environments where polyurethane coatings difficult to use, such as hospitals and schools.
Strict and costly health & safety measures have to be implemented in the manufacture and application of conventional polyurethane due to the toxicity of isocyanates. This is why regulatory bodies around the world are now looking toward phasing out the use of isocyanates. And, the Feds are clamping down in a big way. The Federal government just accused four of the country’s largest chemical companies of selling billions of dollars’ worth of harmful isocyanate chemicals but intentionally concealing their dangers to consumers and the U.S. Environmental Protection Agency (EPA) over the past several decades. The federal government intends to recover more than $90 billion in damages and penalties under the FCA, which imposes penalties for concealing obligations to the government.
HCTI has also just announced a partnership with Comex, a division of PPG Industries Inc. They have created a new coatings product utilizing Hybrid’s zero isocyanate Polyurethane technology. The product was recently launched in the Mexican market and is now sold in PPG-Comex stores in Mexico. PPG-Comex developed and launched the product in an effort to bring more environmentally friendly green products to customers without compromising on performance. The coating product has been reported to work exceptionally well and was found to perform better than competitor’s products on both durability and coating properties.
Later this year, PPG-Comex will also be launching a second coating product based on Hybrid’s zero isocyanate Polyurethane technology. This product launch demonstrates the strong desire and ability for companies to develop their own products using Hybrid’s zero isocyanate Green Polyurethane™ Hardener as a raw material. It also demonstrates a strong market demand for Green Polyurethane™ by some of the largest coatings companies in the world. Hybrid’s end goal is for numerous companies to develop multiple products based on Hybrid’s zero isocyanate Green Polyurethane™ Hardener as legislation for isocyanates eventually becomes more restrictive, thereby allowing Hybrid to deeply and broadly penetrate the coatings market not only as a finished goods supplier but also as a raw materials supplier. Hybrid is and continues to be the only supplier in the world of zero isocyanate polyurethane hardener and zero isocyanate polyurethane based finished goods.
It should also be noted that Green Polyurethane™ was the recipient of the prestigious 2015 Presidential Green Chemistry Challenge Award given by the U.S. Environmental Protection Agency (EPA) in cooperation with the American Chemical Society.
Doing this reverse split, dropping big news, and getting the share price up either before the split or after the split is obviously an important target for them as they seem to be looking for an investment from outside sourcing with strict guidelines.
This is ground breaking technology in a $65-billion-dollar industry, however, there is a concern. The Company is in a cash crunch. It has an accumulated deficit of $34,324,534 and has a working capital deficit of $9,256,050 as of June 30, 2016. They need to achieve a level of revenues through their sales with PPG-Comex, adequate to generate sufficient cash flow from operations; or obtain additional financing through either private placement, public offerings and/or bank financing necessary to support HCTI’s working capital requirements. The reverse split should make this feasible for investors and investment firms. We will be updating our subscribers as soon as we know more. For the latest updates on HCTI, sign up below!
Disclosure: We have no position in HCTI and have not been compensated for this article.