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Maybe the auditors had a breakthrough with the unexpected "road blocks". That would make make the promised news release, pointing out what the audit issues were, unnecessary. It's just a guess--but possible.
HPTG deserves a market cap of ~$20 million IMO.
Based on the trucking industry average price/sales ratio of .73 HPTG deserves a market cap of ~$20 million.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
($27 mill revenues X .73 = ~$20 million market cap)
With a market cap of $20 mill the price per share equates to about $.05
(20 mill market cap/405 mill shares outstanding= $.05 per share)
That's an 8 bagger from today's price.
The sooner they get the financials done-- the quicker we get our reward for finding this stock early.
IFCR is highly undervalued. But the market cap is no longer under $100,000 as stated in the April 6, 2016 PR.
If the current outstanding shares is 4 billion, as Wilma6311 referenced in the sticky post, that makes the current market cap $1.2 million.
(4,000,000,000 x .0003= 1,200,000)
IMO, the company deserves a typical market cap of $17.5 million based on the trucking industry average .73X sales. (24,000,000 x .73= 17,500,000)
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
That ratio would suggest a fair price of $.0044 per share.
(17,500,000/4,000,000,000= .00438)
A 14 bagger from today's price.
I'm not counting on it, but anything is possible. I own both stocks so it gives me enough reason to entertain the idea & lately, I'm not the only one giving it some thought.
That's right, they were looking to acquire a NJ trucking co but since that deal fell through, it's possible they may be looking for another acquisition/merger target.
I don't think IFCR is based in New Jersey. They're a holding company that owns three separate trucking firms in the NE, SE and Western parts of the country. Not much territorial overlap with Pro Star though.
A merger in the works might explain the delay in financials (for both companies). A merger with IFCR would be interesting. $50-$60 mill combined revenues and profitability. I don't expect such a merger, but you bring up an interesting idea.
Impressive upside potential for IFCR.
Reading the April 6, 2016 PR from the company, you can make some assumptions that place a much higher value on the stock.
https://finance.yahoo.com/news/ifcr-issues-companys-progress-155651137.html
In that PR, the President said this:
..."our enterprise value is above $10,000,000 but we trade at a market capitalization of less than $100,000."
What's Enterprise Value? (From Investopedia)
"Enterprise value can be thought of as the theoretical takeover price if the company were to bought."
http://www.investopedia.com/terms/e/enterprisevalue.asp?layout=infini&v=5B&adtest=5B&ato=3000
Note, from the quote above, that the President also mentioned that the current market cap was below $100,000 on April 6, 2016. The stock closed at $.0001 that day. Simple math will reveal that $100,000/$.0001=1 Billion shares outstanding on April 6, 2016.
Together, if the President said the company was worth ~$10,000,000 in takeover value and had 1 billion shares outstanding, then the fair price (market cap) would be $.01. (10,000,000/1,000,000,000=.01)
One Penny is a 25X bagger from the current price.
Of course that PR is from two months ago. Any number of things could have changed-- There may have been dilution since then, or some debt may have been favorably renegotiated, etc. But anyway you cut it, IMO, the stock is very undervalued. We will soon know just how undervalued when the filings hit...
It would be nice if they had the filings completed before they present at upcoming See Thru Equity Investor Conference on Tuesday May 31st.
http://www.steconference.com/presenting-companies/
Good question, but IMO, the answer is both IFCR and HPTG are undervalued. (I own both stocks)
They're in the same industry and are booking roughly the same annual revenues. Since they are both late on their SEC filings it's hard for me to make specific price targets on each but industry averages (Price to sales ratio) place an appropriate market cap of about $20 million for both companies.
HPTG has a market cap of ~$2.5 mill and IFCR less than $1 million??? (Not sure since we don't know the share count of IFCR)
Current market cap leave lots of room for share price appreciation for both stocks.
The stock is undervalued no question about it.
For the first quarter 2016, I'm looking for the 10-Q to show ~$7 million in revenue and either a small net profit or at least an operating profit.
The current debt structure will also be very important as well as any plans for the HydroPlant technology. Will also be checking to see how they paid for the new purchases since the merger & if they were able to reduce their insurance costs compared to 2015.
Any "positive" surprises would also be welcome. I really hope we see the filings this week.
I've been reading this board while making two small investments in IFCR and you make some valid points. Mostly, I agree with your point that if the stock is destined to rise to pennyland why aren't people buying the 2's?
My guess is that people know this stock is a big gamble. While many are willing to buy at the ones, they are not too thrilled at risking twice as much to get a share. Is that the result of greed or fear? I don't know for sure.
But, this is a company that is taking in revenues at the rate of $2 million per month. (According to the company press releases) and they are claiming to have an operating profit. That's enough for me to risk a little bit at .0001. And maybe at .0002 or even higher.
IF the company does release their financials and subsequently verifies their claims of revenues, the upside potential is substantial. Nobody knows how many shares are outstanding--but we know it's not more than 5 billion.
At the worst case scenario, where 5 billion shares are currently issued, using Stern University School of Business average Price to Sales ratio for Trucking Companies, we should be trading at a market cap of .73x annual revenues. $24,000,000 x .73= $17.5 million. That's a fair estimate of the company's market cap.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
$17.5 million market cap with 5 billion shares outstanding= $.0035 per share. (17.5 million/ 5 billion) That's 17X the current price. Not bad...
I realize there is litigation here, there is a history of promises not kept, the stock is trading at the lowest possible level--for a reason--. There is substantial risk involved. We could have been lied to and, if so, bankruptcy is definitely a possibility.
But I have a moderate level of trust that the CEO wasn't lying and that is where we differ. If the company really has paid off 1/2 their debt and continues to produce revenues at a $24 million annual rate, then they are worth a look at these levels. We won't know for sure until the audited financials are released-- but we've been given a time limit of end of June for those. That's not too far away...
IMO this IS a very risky investment. But it's a risk that makes every morning and afternoon a little bit more interesting and fun for me. I think it's a gamble with better odds than any lottery ticket...
No, I don't think they are the same.
http://li-public.fmcsa.dot.gov/reports/rwservlet?hidden_run_parameters=lirpt&report=%2Fu01%2Foracle%2Flirpts%2Fli_carrier.rdf&p_apcant=638737&p_user=WEBLIVIEW
Here is their active insurance company:
ILLINOIS NATIONAL INSURANCE CO.
AIG GLOBAL CASUALTY-MILTON WEST
BIPD/Primary
TP9882094 02 $0 $750,000
04/17/2016
Active/Pending Insurance:
Form: Type:
Policy/Surety Number: Coverage From: To:
Effective Date: Cancellation Date:
Insurance Carrier:
Attn:
Address:
Telephone:
503 CARR RD, 3RD FLOOR
WILMINGTON, DE 19809 US
(888) 609 - 7046
Here is their accounting firm:
GBH CPAs, PC
6002 Rogerdale Road, Suite 500
Houston, Texas 77072
Phone: (713) 482-0000
Right. Mr. Zaric and ProStar could have remained as a non-public company and continued being profitable. But he chose to go it as a public company where he could have many more options to accelerate profits, expansion and increase the share price.
I'm sure he was aware of the debt HydroPhi had on its books and has a plan to take care of it. That's the only reasonable assumption to make.
We will know a lot more when we read the 10-k. But the report I am really looking forward to reading is the 10-Q, which is due in less than two weeks. I am hoping that both the overdue 10-k & the current 10-Q will be filed by May 15th.
I expect to see Q1 2016 generated $7,000,000 or more in revenues as well as an operating profit and perhaps even a small net profit.
Here's my final post to you:
http://ih.advfn.com/p.php?pid=nmona&article=70817447
Pro Star Freight Systems Inc. and Pro Star Truck Center Inc.
COMBINED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
2015 2014
REVENUES
Freight revenue $ 25,571,337 $ 25,762,106
Service revenue 1,142,182 361,409
TOTAL REVENUES 26,713,519 26,123,515
OPERATING EXPENSES
Selling, general and administrative 26,648,608 24,931,565
Depreciation and amortization 58,094 36,760
TOTAL OPERATING EXPENSES 26,706,702 24,968,325
OPERATING INCOME 6,817 1,155,190
OTHER EXPENSE
Interest expense (32,205) (6,652)
TOTAL OTHER EXPENSE (32,205) (6,652)
NET INCOME (LOSS) $ (25,388) $ 1,148,538
NET INCOME (LOSS) PER COMMON SHARE
Basic $ (126.94) $ 5,742.69
Diluted $ (126.94) $ 5,742.69
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic 200 200
Diluted 200 20
The fact is Pro Star has over $1,100,000 in (audited) net profits over the past two years. (HydroPlant financials are old news as you must know)
The company achieved an operating profit in both 2014 & 2015.
In 2016, they are most likely generating $600,000 in revenues per week and
have made decisions (like purchasing equipment vs. leasing, moving to tax friendlier Indiana, etc.) that will likely help profitability.
Some minimal DD will confirm all this...
So, let's talk profits.
The fact is Pro Star has over $1,100,000 in net profits over the past two years.
The company achieved an operating profit in both 2014 & 2015.
Don't believe it? Just check the audited financials in last month's 8k-a
You're right they are still in the grace period and we should get the 10-k today.
Some of the items I will be looking for in the 10-k:
--Any changes to the previously reported (unaudited) Dec 31 combined income statement and balance sheet
--Details on remaining debt
--Any mention of the future of the HydroPlant
--Our ownership in Empower Medical S.A.
--Explaination of the increased insurance costs from 2014 to 2015
and much more...Should be interesting reading today.
Great DD again MONQUE2
If it is part of our company, it points to further expansion of the business.
Maybe we will hear more details from the company?
The nice thing about HPTG is we "can" focus on the operations and the facts.
This is a fully reporting company so we get quarterly SEC updates. They do press releases when something significant develops along the way. (No Fluff).
They are in a heavily regulated industry. We get to see updates on their mileage, insurance, accidents, fines etc. (even if there aren't any official PR's) There's a lot of transparency to keep us well informed--all we need is to Google search... (or call for the current share structure)
Additionally, there's the great DD done on this board which helps a great deal.
You may be right but I think revenues were flat mostly because any surcharge (revenue) for diesel costs were either very low or totally eliminated in 2015 vs. 2014.
The $32.5 million revenue in my est for 2016 does not include anything for Service Revenues. We know they are expanding that this year. 2015 service revenues were $1.14 million vs. $361k in 2014.
We could see $1.5+ mill in service revenues for 2016 giving us a total of $34,000,000 revenues for 2016.
I am still leaving out any potential trailer advertising revenues just to be conservative.
Just speculating here, but if the mileage increases a similar amount (+39%) for 2016. Revenues would grow to ~$32,500,000
13,200,000 X 1.39= 18,348,000 miles 2016
Ave truck rate per mile Chicago area: $1.77
http://www.dat.com/resources/trendlines/van/national-rates
18,348,000 X $1.77= $32,475,960 revenues 2016
Not too shabby for a stock that you can buy 2 shares for a penny...
FMSCA website has updated information for Pro Star in 2015.
13,200,037 miles driven in 2015 compared to 9,490,000 in 2014.
That's an impressive 39% increase.
http://safer.fmcsa.dot.gov/query.asp?query_type=queryCarrierSnapshot&query_param=USDOT&query_string=1848543
Thanks. I guess we will have to wait until next week to see how much of these 2 notes remain on the books. Here is what leads me to believe that the original cash portion (The 2 notes covered the cash portion of the deal) is down to $440,000 ($747,500-$307,000 paid) The recent 8k/a showed a breakdown of the $3,514,383 total purchase price as:
2.
Purchase Price
For accounting purposes, Hydrophi considers the closing of Pro Star acquisition on March 1, 2016 when Pro Star conveyed control of activities to Hydrophi. The purchase price included the following:
Payable in cash to Pro Star Shareholders (i)
$
747,500
Payable in Convertible Promissory Note convertible into 4.9% of Hydrophi (ii)
2,500,000
Payable in Preferred Stock convertible into 80% of Hydrophi (iii)
266,883
(i)
As of December 31, 2015, a total of $307,500 cash has been paid.
(ii)
As of December 31, 2015, the Convertible Promissory Note has not been issued.
(iii)
As of December 31, 2015, the Preferred Stock has not been issued. Shares were valued using Hydrophi's stock price of $0.001 with 333,603,366 shares issued and outstanding on November 23, 2015
I agree we should be using the maximum 625 million for valuation purposes.
I look forward to your take on the amount that is potentially convertible.
The remaining cash portion due on the purchase price of Pro Star is $440,000 (classified on combined balance sheet 12/31/15 as short term debt for HydroPhi) if I am interpreting the 8K/a correctly.
Isn't this the amount that is potentially dilutive if the note holder elects to convert the debt to shares?
If so, the worst case would be 20 million shares a month ($100,000/$.005) for ~4 months totalling 80 million new shares. That puts us at ~484 million shares outstanding at the end of the ~4 months.
Best case is that the $100,000 is paid in cash monthly until the $440,000 is paid off and there is no dilution.
Nice move by Pro Star.
https://ai.fmcsa.dot.gov/SMS/Carrier/1848543/Overview.aspx
"a high score which, in turn, will lead to new business opportunities with larger customers and serve to limit penal fees, fines and tickets. Pro Star is growing quickly and we are balancing this progress through the strengthening of our management team.”
Would hope this will also lead to lower insurance costs.
We'll all be reading HPTG's audited 10-K by next Friday. Meanwhile I gleam what I can from the March 18th 8-k/a. And I'm fine with what I've read there.
What I am really looking forward to is the Q1 for 2016. That report will tell us how the year is shaping up. Based on my DD, I believe the report will show $6,000,000-$7,000,000 in revenues and between $250,000-$300,000 profit for the quarter.
I am also hoping that the company will use some of their Q1 cash-flow to pay down the remaining toxic debt. That's a reasonable expectation IMO.
We only have a little more than a month before we see the Q1 "Audited" financials. I've waited quite a while to see a reasonable valuation for this stock (~$.03-$.05)--what's another month or so?
Pro Star's net profit margin was 4.4% in 2014 which is ABOVE the Trucking Industry average net margin of 4.19%.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
2015 was ~break-even but as I mentioned in my last post 2016 should return to 2014's level of profit margin.
This is my opinion but it's based on the $250,000 cost savings the company mentioned in their PR associated with the leasing costs saved when they purchased the trailers.
Also, the recent move of their operations center from Chicago, Illinois to Hammond, Indiana will save significant tax and or insurance expenses. Insurance costs put a drag on earnings in 2015.
Let's assume for a minute you are right about the stock being diluted.
Let's assume 200+ million additional shares takes us up to the authorized limit of 625 mill shares. Let's place an average value on the stock at that level:
The average trucking company trades at .73X annual revenues.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/psdata.html
If 2016 HPTG revenues stay FLAT compared to 2015 revenues they have approximately $27 mill revenues.
27,000,000 x .73= 19,710,000
19,710,000 / 625,000,000= $.0315 per share
Keep in mind, I don't believe the shares will be diluted to the maximum authorized. I think management will or already has worked out a way to repay the remaining toxic debt to avoid this kind of dilution. It's my opinion but that makes the most sense to me.
Keep in mind, the company already said (On March 22) that their purchase of new trucks will add an additional $3 million to revenues so my $27 mill is probably low.
Keep in mind that Pro Star had earnings $1.15 million in 2014 and broke even in 2015. They have made moves to help improve profits in 2016. (i.e. moving operations to tax friendly Indiana & saving $250,000 annually on leasing fees by "buying" new trailers)
The last filing for HydroPhi Europe (back in Feb 2016 I think) showed that:
HPTG owned approximately 16.97% of HydroPhi Europe. (HTE on Warsaw exchange)
I believe there were approximately 51 million shares outstanding then. At today's price of .17 Zlotys that is a market cap of 8.67 million Zlotys.
Since $1=3.71 Zlotys that gives HydroPhi Europe a market cap of roughly $2.3 million US. (8.67 mill/3.71)
If HPTG still owns 16.97% of the $2.3 million US equivalent market cap, that places the value of this ownership at approximately $400,000.
HPTG's entire market cap is $1.86 million. If indeed, our investment in HTE is valued at $400,000 then our Pro Star is currently being valued at just $1.46 million or roughly 1X our 2014 earnings of $1.15 million. A PE of 1.
Feel free to double check my numbers. All this is available by doing Google searches.
Astoria increases stake in HydroPhi Europe to 52.23%.
http://www.reuters.com/article/idUSFWN17409G
It will be interesting to see what HPTG does with their stake in HydroPhi Europe now known as Empower Medical SA.
Astoria Capital S.A. is a private equity firm specializing in growth capital and pre-IPO investments. It invests in companies operating across all sectors. The firm focuses on companies based in Poland. It typically invests up to 1 million PLN ($0.35 million) per portfolio company. It exits its investments within three years through an IPO or trade sale. The firm seeks to invest through its own balance sheet. It is based in Wroclaw, Poland.
Excellent news Fortrav!
And you'll soon be riding in style...
Right.
The recent 8-k/a shows the following on HydroPhi balance sheet (unaudited)
Derivative Liabilities $1,346,475
Convertible Debt $1,382,091
I'm not an accountant but these numbers represent a large decrease from the last 10-Q (Nov 2015)
We'll have to wait for the audited numbers. The 10-K is due any day.
But again, management will not be shooting themselves or us in the foot by allowing significant dilution. They will solve the debt IMO.
Exactly, why would the company buy new assets and jeopardize the share price by ignoring convertible debt. They surely have their own interests in mind as well as ours.
But even if the debt converts and we max out the shares to 625 mill this company is still worth $.03-$.05 a share based on .7X-1.0X Price/Sales ratio average of the trucking industry.
Remember, Authorized shares need to be enough to cover conversions. So the 625 mill is enough to cover all the convertible debt. Right???
IMO there is no way management will buy equipment and land for $2+ mill at the expense of letting all this debt convert. They will take care of the debt.
We will see what's really going on by the end of next week in the 10-K.
I'm really starting to like the word "Parabolic". lol
this bounce back could be parabolic
Yes they mentioned "purchases" in the sub headline of the PR
HydroPhi Subsidiary Purchases 19 Trucks to Serve Southeastern U.S.
19 Volvo? trucks (seems to be their brand of choice from the photos)
would probably cost between $1-2 million if they are a few years old.
http://www.commercialtrucktrader.com/Used-Volvo-Trucks-For-Sale/search-results?condition=U&sort=year:desc&make=VOLVO|2314540&type=heavy&page=2
I'm impressed with the company's ability to fund expansion.
Adding $3+ million revenues will most likely take us over $30 mill in revenues for 2016.
I've noticed too that $.15 is mentioned in several of the SEC filings. That may very well be an internal long term price target.
I' ve been in this stock since Feb 2015 and the roller coaster ride has been dizzying at times. But now, IMO, a lot of the risk has been removed.
We now know what we own. It's not just hope and dreams of the HydroPlant (although it's still alive). Rather, we own a company that generates over $500,000 a week in (audited) revenues. Plus, we have a good management team leading the way in an industry that's growing.
I have to hand it to Roger Slotkin. He has delivered to us loyal shareholders a company that does not look like a typical pink sheet investment.
For me, there is no good reason to sell shares until they are fairly priced. Even when I do sell shares at a nice profit, I'll still hold a core amount.
HPTG is worth $.05 per share right now. I believe it's just a matter of time before the market becomes efficent and prices the shares appropriately.
It's worth mentioning that HPTG spent $375,000 on R&D for the HydroPlant in 2015.
8k/a said that:
"Hydrophi’s existing management, business plan and its operations will remain the same after this acquisition."
ProStar is touting that they are the "sole licensee of HydroPhi Technologies Group, Inc.'s intellectual property and technology portfolio."
It will be interesting to see the R&D expenditures for Q1-16 soon.