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Friday, October 30, 2020

What’s Driving the Move in AUSCRETE CORP COM USD0.03 (OTCMKTS:ASCK)?

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AUSCRETE CORP COM USD0.03 (OTCMKTS:ASCK) has been starting to get a lot of attention of late from traders as the stock ramps off deep sub-penny lows in August, working now all the way back above the penny benchmark on tremendous volume. That’s better than 400% piled onto share values in the past month on massive new participation.

The catalyst? The Company appears to be closing in on what could be a hugely legitimizing deal bringing them closer to operations on a project potentially worth as much as $135 mln in implied asset growth and forward sales.

AUSCRETE CORP COM USD0.03 (OTCMKTS:ASCK) promulgates itself as a company that focuses on operating in the affordable housing market. It intends to manufacture construction products for commercial and residential structures.

ASCK was formed as an enterprise to take advantage of technologies developed for the construction of affordable, thermally efficient and structurally superior housing. This “GREEN” product is the culmination of design and development since the early 1980’s.

The current technology is the amalgamation of various material stages of Company development, taking an idea to a product and further developing that product to address an ongoing problem in the world’s largest marketplace, the quest for affordable, efficient and enduring housing.

Auscrete’s structures are monetarily very competitive. A turnkey house, ready to move in sells for around $95-100 per square foot. That is very competitive in today’s market but is brought about by Auscrete’s ability to manufacture large panels in mass production format. The house is very quickly constructed on site to produce an attractive and functional site built home, a home that will stay where it is put through all kinds of adverse weather and age conditions. It will not burn, is not affected by insect infestation or rot, it saves extensively on energy costs and has very low maintenance needs.

The company was incorporated in 2009 and is based in Rufus, Oregon.

Auscrete Corporation CEO, John Sprovieri held meetings with investors in Milan recently to finalize details of a $16 million funding package that will enable their 1,500 home residential construction development in Jamaica to proceed.

Acquisition of the financing will be on a long term interest only basis with the principal repayable at the end of the term. Mr. Sprovieri said that the interest rate is very competitive in today’s market for international finance and there is no dilution of the company’s shares.

If completed, the company could conceivably operationalize the package on a forward basis for a value of $135 mln, given the estimated $90k/unit value of each structure.

The stock has been plowing higher as a result in a move that comes on increased average trading volume of a bit less than 360% above the longer-term average. This is particularly important due to the limited float size in the stock (roughly 12M shares). One is wise to respect the dynamic this may create — a restricted trading float and a jump in trading volume can crimp supply and push share prices higher in a squeeze.

If there is a cautionary note to strike here, the company has essentially no other cash on the books and the deal is not final yet. If the financing were to fall through, shareholders would be holding the bag in a Company with nothing but net losses so far in its history and no other clear route to top line growth. In addition, if the deal closes, it will leverage the equation on a small base, which means the project itself will have to be executed without any major hick-ups.

Earning a current market cap value of $1.1M, ASCK has almost no cash on the books as noted above, alongside total assets of $83K, which is balanced by about $200k in total liabilities. The tape appears to be loading up with new interest and the stock is pushing higher in anticipation of what could be a legitimizing deal. Traders should keep a close eye on this one. We will. To get the full story on ASCK subscribe below to Oracle Dispatch right now.

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