Applied Genetic Technologies Corporation (AGTC)

[RonZlats]

Thanks for your insights. From what I understand about private firms, it's very difficult to come up with a fair price to cash out existing shareholders. There would be a fair number of lawyers involved, and the the SEC and other state regulatory agencies scrutanize those deals very harshly.

So, there we are, trading on the Pinks. What they could do, however, is make an offer for some of those shares or just buy back some in the market place. That wouldn't cause any issues as it would be a tender, not a total cashing out, and would have the effect of increasing value for remaining shareholders.

I'm happy with any company that pays a decent dividend to its shareholders. I can live with that. The ones that don't give anything back to their shareholders I do have a problem with.

What I would like to know is how long of a life they figure the mine has? I don't know if another company would be interested in purchasing them or not, but who knows (I believe they were owned by Cheveron, and they do have info on americangilsonite.com, though I don't think they've updated the site for a long time).

Then comes the issue of getting value for shareholders. What I would propose that they do is list their financials once audited and post them. There is no reason they can't do that, and it would keep shareholders informed. Other profitable companies in this same postion (BONL and LKSC) either post it on their website, or if you go to the financials tab on pinksheets.com, you can find them there.

LKSC has earnings of almost 7 cents a share and you can buy it for 20 cents. Go figure. The problem is that no one knows about them. So, unless they decide to sell the company or relist, it's difficult to get noticed. However, if you are like me and can think in terms of years, they could give exceptional returns when either one happens.

Thanks for pointing out that other company. I'll take a look at it. So many opportunities.

Be patient and collect some dividends and if the opportunity presents itself, I may join you in buying more. What's not to like?

[veritas-twj]

Ron - Welcome! I am usually the only one here. AGTC is a true undiscovered gem! However, management has made clear to me they have no intention of uplisting to a higher exchange. Not now and not in the future. I struggled for a long time to figure out why. I think I finally succeeded.

The Company is consistently and significantly profitable and cash flow positive. The Company does not require a great deal of working capital, and as a mining firm with a scarce resource and virtually no competition worldwide, there is no reason to expand or open another mine. Management owns a large majority of the stock (I estimate at least 85%), and pays out a high portion of the profits each year in the form of cash dividends (regular quarterly dividends at 1 cent each plus an annual special dividend dependent upon the level of profitability for the prior year). TRULY "THE GOOSE THAT LAID THE GOLDEN EGG!"

Given that management has told me they have no intention to uplist in the future, why remain public at all on the Pink Sheets? I finally figured out the answer. Management awards a small number of options each year. And management also owns most of the Shares Outstanding. IMO, the only reason for remaining public is to have a public "market" for the stock so that management can exercise options from time to time and sell to receive cash for personal reasons (or to have a market to sell a portion of their personal stock holdings if necessary). Management could in theory sell their stock back to the Company when they desire to sell, but at what price? By remaining on the Pink Sheets, the Company can set a "market price" at which to repurchase stock from management only if there is in fact a "market" to "price" the stock.

I try to add to my investment holdings any time the stock trades in the 50's or lower (which surprisingly does happen from time to time), but have not yet been successful in building a large position. Maybe over the next 10 years...

Best of luck.

Tom

P.S. In the event you are interested in looking at another PROFITABLE Pink Sheets traded company, check out MKGP (although they do not pay a cash dividend). MKGP is one of my only favorite microcaps trading on the PS, and appears to be extremely undervalued. I just started buying in mid-January 2007, and have accumulated a position of 600K shares in the last six weeks. The stock trades around $0.08/shr, with a small float and virtually no dilution in the past year and longer. An excellent IHUB message board with a great deal of actual due diligence and mutually respectful participants. Check out the board and "Bookmark" if you find of interest:

http://www.investorshub.com/boards/board.asp?board_id=7629

[RonZlats]

I'm glad someone made this board. It appears to be one of the only penny stocks that have this sort of regular dividend. Haven't seen any announcement about the next dividend which usually comes in February (Bloomberg).

Very interesting tie in with oil and gas and road building. Not sure why it hasn't been discovered yet, it really should remove itself from the pinks though.

[veritas-twj]

Who was that tiptoeing in 2K shr at the Ask today?

[suddenly]

I emailed the company (AGTC),no response. I tried buying at .60, no bites.

[Will Lyons]

OK I just hope we don't have to burn up the furniture too! [gr]

[veritas-twj]

Will Lyons - I posted the response to your LLEG on the LLEG message board (I cannot PM with my membership). LLEG facility will use waste wood product and not corn or grains. Waste wood in continual excess supply from lumberyards, municipalites from cutting down trees and branches, etc. True green renewable biomass.

[veritas-twj]

Aiming4 -

The following is an excerpt from a second email on AGTC which I sent to another IHUB investor and which I thought you might find of interest.

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The Company has paid a regular quarterly dividend of 1 cent for many years, and in addition pays a special annual dividend most years according to a formula based on profits.

Management is reluctant to provide financial statements.

I puzzled for a long time over why they want to remain under the radar and yet still remain semi-public as a Pink Sheets company.

The only answer which I have come up with that makes sense is the following. Management and insiders own probably 85% of the Company and have an extremely high dividend payout. Virtually no dilution means they get to keep most of the payout among themselves. Management probably wants the availability of monetizing small amounts of stock options through exercise and sale of the resulting stock in the open market from time to time. I think this is what the occasional days of liquidity represent. The ideal scenario for management as owners would in theory be that the Company buys back any stock insiders wish to sell, but the Company would need to "validate" a "fair market price" in order to do so, and that means by definition that there needs to be a "market" price. I think this is the reason for the Pink Sheets listing.

Patience on the buy and try not to chase the price up. The rewards will be very attractive for LT holders.

[veritas-twj]

Will Lyons - I forgot that I created this message board a few days ago!

You asked whether AGTC has spun off the oil and gas operations, and the answer is Yes (Bonanza Royalties). Apparently these operations were quite small, did not account for a meaningful portion of the Company's revenues or profits, and were not a part of the "core" mining business.

Good luck and let me know after the fact if you are able to accumulate a position.

[veritas-twj]

Aiming4 - Thanks for your message on SOTK. Since my posting relating to AGTC on the LLEG message board was deleted at the request of Skunksyard, I sent the following information via email to another IHUB investor (so I am sharing the same information now with you below) -

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I will be requesting the AGTC 2006 Annual Financial Statements but they will not be ready for another 3 months. I can summarize my past findings as follows. The Company was spun off several years ago from a larger company, and management owns a large majority of the stock. There are only something like 10 or 12 mil shares outstanding and the float is really small, maybe 1 or 2 mil shares. I imagine nearly all of the float was from management's exercise of stock options over the years, and they then sold those few shares for cash. Management has rarely sold their core holdings and there is absolutely no dilution other than a few options. The Company has the extraordinary situation in that I think they are the only source of their product mined in the USA and maybe even in the world. The Company requires little working capital since there is only one mine and it is fully operational. Therefore, AGTC throws off so much excess cash that a majority is paid out in dividends each year to shareholders - and again most of the stock is owned by management so they get most of the dividends. A true Goose that lays Golden Eggs. Minimum cash dividends of 4 cents annually in bad years, and up to maybe 12 cents in good years. All for a price of $0.60-0.70/shr. No Catch-22. I intend to quietly try to increase my position this year to 100K shares from 25K currently if I can catch the timing right on the rare days when there is volume (a few days a year the trading volume is 10-50K shares, but usually zero). Recommend you do not chase the price higher but add slowly - buy and then pull back for a few weeks then buy again. Current Bid/Ask is $0.55-0.65, but no sales at the $0.55 bid. I purchased 2K shr last week at $0.61. You could buy up to 10K shr at $0.65 next week IMO, and then the market maker will move the offer up to $0.70 or $0.75. If that happens, just back off and wait a month or two, then go back when the Ask eases back down to $0.65.

[Will Lyons]

Found and bookmarked, thank you! Looking forward to being in at the beginning of something,

[Aiming4]

Veritas - great call on SOTK, we'll see where the price ends up.

If it does fall much, I hope it doesn't stay down long.

I'm interested in learning more about AGTC, I hope you get a chance to post your opinions for the benefit of investors unfamiliar with the company... Aiming4.

[veritas-twj]

Will Lyons - Welcome as well (if you manage to find this message board)!

[veritas-twj]

suddenly - Welcome (if you manage to find this message board)!

[veritas-twj]

WELCOME TO THE AMERICAN GILSONITE COMPANY MESSAGE BOARD
Createde 01/10/2007