Hydrophi Technologies Group Inc (OTCMKTS:HPTG) has started to turn things around and the share price looks to have found a support level as the company continues to execute on its strategy. The company recently announced that it had purchased 19 trucks to add to its fleet through its subsidiary. HPTG continues to capitalize on the growing opportunity in the South East USA. These new additions are expected to generate over $3 million annually. The stock has declined over 75% since hitting its peak in March.
The founder of the company commented on the purchase, ““The addition of these nineteen additional long haul trucks directly serves to bolster Pro Star’s existing operations in the southeastern United States. The Company is allocating resources to strengthen our position in this high-traffic territory in which we see great potential for existing and new business. We are confident on our ability to execute our strategy for sustained growth in the coming quarters.”
CEO Roger Slotkin’s stated, “Mr. Zaric and the entire Pro Star team have diligently worked to grow and improve the operations of the company. From our new location for operations in Indiana to these additions to our fleet, our sites are focused at continuing to grow the company geographically and logistically.”
On April 5, Hydrophi Technologies Group Inc (OTCMKTS:HPTG) announced it had appointed a new head of safety and compliance. Dejan Vucic was appointed the position and has over a decade of experience in the trucking industry for safety and compliance. The founder of Pro Star Freight Systems stated, “The addition of Dejan Vucic to our management team comes at a pivotal time for the Company, as we continue to add new trucks to our long-haul fleet and expand our operations throughout the continental United States.”
Investors are excited about HPTG and it’s easy to see why. This has been helped by the announcement of the company acquiring a freight company called Pro Star (Pro Star Freight Systems and Pro Star Truck Center). The 2014 unaudited results of Pro Star was $27.3M in revenues with net income of $660k. This is huge for HPTG which only has a market cap of $7.77M and only $280k in revenues. The acquisition will immediately increase HPTGs revenues by more than 96 times if Pro Star continues to perform at the same levels as 2014. In addition, profitability for HPTG should be just around the corner given this recent acquisition. It was purchased with a combination of cash, notes and preferred stock according to the SEC Filings.
HPTG’s CEO, Roger M. Slotkin stated “We believe the Pro Star business model, growth potential and significant expansion possibilities make this acquisition extremely prudent and should yield significant shareholder value.” Pro Star is a long haul freight company with a fleet of over 150 trucks. It is an interesting acquisition given that HPTG is “a leading developer of water-based hydrogen fuel production systems. The Company’s technology isn’t a fuel cell, nor is it a hydrogen alternative to traditional hydrocarbon fuels.” according to the company’s website.
In addition to the acquisition, HPTG has announced another purchase to further expand and grow Pro Star. It has acquired 30 New Semi-Trailers which will help decrease HPTG’s leasing expenses. The estimated savings is approximately $250k per year. The more recent acquisition HPTG has made is the purchase of land in Hammond, Indiana. The land is a 1 acre parcel that was purchased for $300,000. The land will be developed to help HPTG’s existing repair center and operation expansions throughout the USA.
It is clear that HPTG is moving aggressively to grow and expand. It has announced three major purchases and investors are bidding up the share price expecting bigger things to come. With the acquisition of Pro Star, 30 new Semi-Trailers, and land for a repair center it is not too hard to see why shareholders and potential shareholders are excited about the company and the recent run on the stock. The purchase of Pro Star will hopefully improve HPTG’s financial situation.
HPTG is currently trading at a $2 million market valuation. The company continues to execute on its strategy and expanding its fleet which should drive topline growth and eventually increase its profitability over the long-term. This story is just beginning. Stay tuned for updates.
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Disclosure: we hold no position in HPTG either long or short at the publication of this article.