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ASCK filed a form 1-A this month, offering 2 billion shares for sale at $0.001 per share. 4 times in the past they have had their outstanding share count inflated, and each time they did a massive reverse split, getting the share count down to under 10 million, followed by issuing themselves about 50 million shares, making the shares remaining after the reverse split diluted into worthlessness. See the message I am replying to for the details on the history of these reverse splits and massive self payments they have made following the reverse splits.
This process of reverse splits and massive self payments they do takes away the company from the shareholders and gives them back about 90% ownership of the company.
So expect to see another huge reverse split after they do this 2 billion share offering, and then expect to see those shares remaining after the reverse split to be diluted down to nothing with another self payment to John and Co.
John, Auscrete has reported no revenue since 2020. Only $13k in revenue has ever been reported by Auscrete in SEC filings, for one tiny home, back in 2020. How do you reconcile that versus your claims that Auscrete has been operating over the past two years?
O/S updated to 56.8 million shares on the OTC markets page for ASCK.
It was under 4 million shares prior to that. So another massive self payment has been made to John and Co, probably a 50 million share payment to them, we should see that in the 10-Q due out this week.
Market cap of the company is now $3 million, based on 5.4 cents a share.
10-Q Summary
Here are the highlights of the just released 10-Q
"Revenue for the six and three months ended June 30, 2021 and March 31, 2021 was $0 and $0 respectively."
"We have had minimal operating activity since inception of the company in 2010. Our 2021 short-term obligations are being covered by funding received from convertible notes. with a total value of $135,000 issued in 2021."
"As of June 30, 2021, the Company had inadequate cash to operate its business at the current level for the next six months and to achieve its business goals. The success of our business plan during and beyond the next six months will be provided by additional loan financing of a minimum of $300,000."
No business, no sales, no revenue, more notes and loans and stock dilution on the way. Thats it, you're all caught up. A little different picture than that created by the press releases.
The press release says RB capital has been funding Auscrete's expansion and operation for about 3 years. Auscrete has made the materials for one small house, $13k revenue, over the last 3 years.
When they had a blog, they put up pictures of their empty lot, their equipment, their pickup truck, but after their first home was built, no pictures. That was a year ago. Since then, no revenue, and no new contracts signed, so, that first home did not go well.
Their press releases frequently mention how many inquiries they get about making materials for new homes. But they never announce new contracts. Here is how those inquiries go:
"Hello, yes I'm interested in your auscrete product, for the construction of some new homes"
"Of course, what would like to know?"
"Have you built any homes with your auscrete product yet?"
"Yes, there was one home built last year"
"Can I see it?"
"No."
"Why can't I see it? Do you have any pictures at least?"
"That is not public information"
"OK... have you built any other homes or buildings, since that one home last year?"
"No"
"So just the one home. That I can't see, that you have no pictures of"
"Thats right"
"Good bye"
We just passed the two year anniversary of this news release on a $1 million order for material for 8 homes:
"https://www.barchart.com/story/news/3389270/auscrete-corporation-asck-production-commenced-with-first-1-million-order-on-books"
But their financial reports over the last two years never reported this 1 million dollar order, never mentioned this eight home deal.
Their press releases say they are in production, but the only revenue they have ever reported in their financial reports is 13K from a demo home in the third quarter last year.
They have a financial report coming due in about two weeks. Their report for the first quarter 2021 showed no revenue, as did the fourth quarter of 2020, despite their press releases that claim they have been processing orders and are in production. How much revenue will they report for the second quarter with all this activity they claim is going on? Any guesses? My guess is zero.
If there is a buyout offer, that would prompt them to do the reverse split, so they can issue shares to themselves again and dilute out existing shareholders, and get most of the buyout money for themselves. That would be completely consistent with their past behavior in my opinion.
If they give themselves 50 million shares again, as they have after the past two reverse splits, that would make the post split OS about 54 million (about 4 million today, after the split, plus 50 million for John and Co.)
The enterprise value of this company is about 2.5 million, if they get a buyout offer of twice that, or $5 million, thats 10 cents a share.
1:40, 1:200, 1:1000, 1:100 reverse splits since 2017
That means if two people bought ASCK shares four years ago, one bought 800,000,000 shares, and one bought 1 share, on Monday morning they would both have 1 share.
That 10 million share transaction last Friday is just bizzare. How did a 10 million share transaction go through without budging the price? A 10 million share market sell was submitted at the same time as a 10 million share market buy? Today there were less than 4 million traded all day, and the price shifted all over the place.
Some people are under the impression there are only 10 million shares in the float in this stock, obviously not, that 10 mil transaction would have been the entire float traded in one transaction.
That was at about .007, per share, or $70 grand. And the next trading day it pops to .018 with no news. And thats not insider trading?
There is a Twitter account named "ask Warren HQ" that has made claims over the past week that the CEO of ASCK has been in buyout talks, first in Florida on Feb 11 and then in Los Angeles on Feb 15. No one else is backing this up though.
They applied for a reverse split of 1 to 40 last month.
They filed with the state of Wyoming, Jan 8 was the submit date, Jan 20 was the day it was posted in the Wyoming system. Its under the History section on their Wyoming web page
https://wyobiz.wyo.gov/Business/FilingDetails.aspx?eFNum=192197097221083239149058095160128130035211026112
They released an 8-k on the reverse split on Jan 25th, saying they expect the split to be executed in the next two to three weeks. But it hasn't happened yet, and the split is not on any split calendar that I can find.
They have followed the past two reverse splits with 50 million share payments to themselves, that took away 80 to 90% of the share ownership of the company from the stockholders and gave it back to themselves.
That is what I think they are planning to do again. They can still do it, even without a reverse split, but they will need to issue themselves about 700 million shares if they want to take back 80% ownership of the company, or about 1.4 billion shares if they want to take back 90%. There are about 150 million shares O/S right now.
Issuing themselves that much stock will be more obvious fraud, as opposed to just giving themselves 50 million shares. That is why they do the reverse splits first, to get the share count down under 10 million, so the 50 million they issue to themselves "for services rendered" doesn't look outrageous, and gives them back about 90% share ownership of the company, at the expense of existing stockholders
To summarize my previous post, here is the history of reverse splits and dilution through self payments
June 2018, reverse split down to 3.5 million shares, company issues 50 million shares to itself, reducing the intrinsic value of all outstanding shares by over 90%
Dec 2019, reverse split down to 11.7 million shares, company issues 50 million shares to itself, reducing the intrinsic value of all outstanding shares by 80%
Feb 2021, 40 to 1 reverse split will reduce shares down to less than 4 million shares….will they continue the pattern and issue another 50 million shares to themselves as they have before? If so, this will dilute the intrinsic value of all existing stock by over 90%.
If you have any doubt they are going to issue another 50 million shares to themselves, think about their 8-k statement on the reason for a 40 to 1 reverse split. They said it was to make the stock compliant with OTCBB requirements. The minimum price requirement for OTC stocks is 1 penny per share, to stay compliant. They could achieve that with a 4 to 1 reverse split, the current price of around 0.005 would go up to 2 cents. Why 40 to 1? Because after they dilute the stock with their 50 million share self payment, increasing the number of shares by more than a factor of 10, the ownership associated with each share will drop by 90%. So they have to do a 40 to 1 reverse split instead of 4 to 1 to account for the 50 million shares they are about to add.
Reverse splits followed by MASSIVE, instant stock dilution - ASCK history
The previous two reverse splits by ASCK over the last two years have been immediately followed by huge self payments of stock to ASCK insiders, causing instant, massive dilution of stock value.
In June of 2018, ASCK did a 1000 to 1 reverse stock split. Prior to the split there were about 3.5 billion shares. From the May 2018 10-Q:
"Indicate the number of shares outstanding of each of the issuer's classes of common stock. The number of shares outstanding as of May 21 st , 2018 of the Issuer's Common Stock is 3, 545,051,447 ."
From the Aug 2018 10-Q, the 1000 to 1 reverse split is reflected, shares down to 3.5 million
"Indicate the number of shares outstanding of each of the issuer's classes of common stock. The number of shares outstanding as of August 20, 2018 of the Issuer's Common Stock is 3,550,741."
Following the split, the company issued 50 million shares to John S and company, increasing the number of shares to over 50 million, and taking back over 90% of the company ownership that it had sold to the public in the form of shares of stock. From the Nov 2018 report:
"NOTE 7 - COMMON STOCK
On June 7, 2018, the Company effected a Reverse Split at 1,000 to 1. During the three months ended September 30, 2018, the Company issued, post-split 3,629,000 shares to note holders during conversion representing a total value of $ 21,310. As a result we recassified $354,149 from common stock to additional paid in capital.
In addition, the Company issued 50 million shares to management and associated parties for services rendered that was expensed in the Company’s Financial Statements, with a valuation of $2,540,000 valued on the date of the grant."
In May 2019, the quarterly report summarized the new, massively diluted share situation
"During the Period January 1, 2018 to December 31, 2018, the Company issued 56,456,751 shares based on post-split numbers Including, for services rendered, the following were issued on 8/17/2018:
35,000,000 shares to our Company CEO, John Sprovieri for Management Services.
5,500,000 shares to Kathleen Jett, wife of (deceased) Director, Clifford Jett for Director services
2,000,000 to Director (retired), William Beers. for Director Services.
2,500,000 to IR director, Lee Odom for IR services.
5,000,000 to Kimberly Grimm for Management Services."
They sold 3.5 billion shares of their company, then reverse split 1000 to 1, and then issued to themselves over 10 times the amount of shares existing after the reverse split (50 million issued compared to 3.5 million outstanding). So they sold shares in their company, and then just took ownership of the company back from those they sold it to. Seems illegal, I complained to the SEC, but they did nothing.
Then In Dec 2019 they announced another reverse split, 200 to 1. They would be reducing the outstanding share count down from about 2 billion to about 10 million. Seemed pretty obvious to me they were going to do the same thing, massive reverse split, then issue themselves 50 million shares again to take back the company from the people they had sold to, AGAIN. And again I complained to the SEC, before it happened, a blind man could see the pattern. The SEC did nothing, and again ASCK issued 50 million shares to themselves after the reverse split. From the Apr 2020 report:
"During the period January 1st, 2020 to April 7th, 2020, the Company issued a total of 62,433,402 shares from treasury. There were 12,433,402 shares issued to Noteholders through stock conversions and 50 million shares were issued to Management and Associates as compensation for services to the Company."
Now this 40 to 1 reverse split about to happen will reduced the share count down from about 150 million to about 3.75 million. Very close to the 3.55 million that were left after the 2018 reverse split, when they followed that up with the 50 million share self payment and taking away 93% of the company ownership from existing stock holders at the time.
In my opinion, it is clear as the nose on our faces they are doing the same thing again, a third time, and will be issuing 50 million shares to themselves again, after the reverse split, which will instantly dilute the value the all existing stock by over 90%.
OTC markets just updated the outstanding shares today, to 117 million from 114 million last updated on Oct 1.
Thats a pretty small increase in shares over 1 month, so that is encouraging.
No other news coming out on this company, the last thing we hear about production was on Sept 22, there is a mini-home being built with their panels that they said would be completed within two weeks. That was six weeks ago, not a word since.
According to the 10-Q they should be building their first home this week in the Columbia Gorge area. This is separate from the veterans housing project:
"The first home is a 360 sq. ft. small display home in Lyle, WA and materials production commenced on August 10th with construction due to commence on August 25. "
That website is the first evidence I have seen that supports a claim in one on their press releases of projects in the works at Auscrete.
And they have the realtor, Michael Nilson, in the Columbia Gorge area that their 10-Q says they are working with and are building a home for right now. That should be done by early September. And when it is they will probably show some pictures of it. Will it matter though?
They will need decent revenue to get rid of the note dilution cycle they are in. One house for the Nilson realtor isn't going to do it. And the Veteran's housing project sounds good but it looks like from the website they need donations to pay for it. Will they get enough to make that happen? How long will that take?
If this all happened three years ago before their reverse split cycles began this stock would likely be taking off now, because a market cap under $500k is insanely low for a company that projects to be profitable in their first year of operation.
June 10-Q is out. No blog post about it.
No revenue again, meaning they still have never reported any revenue in financial report, just in PRs.
However that streak of zero revenue should end with this 10-Q, because it says this under subsequent events:
"Auscrete entered into a sales agreement on July 30 with Real Estate Developer, Michael Nillson for supply of housing and structures throughout the Columbia Gorge Region of Washington and Oregon States. The renewable agreement is open ended and gives Mr. Nillson access to an array of housing structures to be constructed over each one year period.
The first home is a 360 sq. ft. small display home in Lyle, WA and materials production commenced on August 10th with construction due to commence on August 25. The agreement gives Mr. Nillson preferential supply dates and covers him for a 6% incentive on sales."
Is that true? There is a Michael Nilson (one L) who is a realtor who lives in the Columbia Gorge area.
Its not much but its a start.
The quarterly report for March, 2020 came out July 6, though they didn't post anything about it on their blog. They are probably hoping no one sees it.
They put out a PR in July 2019 about signing a $1 million contract to start production. It said this:
"With this $1 million, 8 housing unit order being produced right from day one, ASCK will begin putting up substantial revenues as has been expected"
The ability to take legal action against companies for putting out false PRs is very limited, but companies can be prosecuted for publishing false financials to the SEC.
I have seen many companies put out false PRs about orders recieved that never show up in their financials. Eventually you realize thats because they never happened. Maybe they were in discussions about a project and they posted a PR saying it was a done deal, trying to boost the stock price, or they are just plain lies, either way it happens all the time.
So most people only pay attention to what is filed to the SEC in annual reports or quarterly reports (10-Q). Here is what the ASCK report just released says:
"As of March 31, 2020, the Company had inadequate cash to operate its business at the current level for the next six months and to achieve its business goals. The success of our business plan during and beyond the next 6 months will be provided by additional loan financing of a minimum of $300,000"
What about the $1 million order they reported in a PR last July? No mention of it in the report. As for their operations, they are in the marketing stage, in discussions for projects, and they are building two tiny home display units. There are no signed contracts mentioned in the report, and no revenue reported. Here is the part about operations:
"Housing construction planning is currently in a number of project stages. The Company’s Marketing efforts have recently diversified to also include designs of small dwellings sometimes referred to as “Tiny Homes.” These structures are 80 – 500 square feet housing units built to fill the gap in urban multi-unit homeless transitional housing. This additional new venture in fabrication fits well with Auscrete’s overall model in concrete panel construction for housing and commercial structures.
"Auscrete has recently had considerable interest and meaningful conversations with associates of the Veterans Administration in Washington State discussing opportunities with the Company involving the “VA’s Homeless Providers Grant” program. This Governmental funding will finance the building of transitional housing to homeless Veterans of the State.
"Over the next few weeks, the Company will be manufacturing two current designs of “Tiny Homes” which will include a 324 sq. ft. and 420 sq. ft. home which will be used for a time as display units at two separate locations prior to delivery to their customers. The Company has also entered into recent discussions between its Marketing division and a builder to furnish panels for another traditional medium size home to be built 32 miles from Auscrete’s plant in Washington State."
The full March 2020 10-Q is available on the OTC markets page.
Anybody try to post a comment to their posts on the blog? I tried to post a comment to their last blog post, about starting production on a 10 unit project, but it was rejected with the message "Suspected bot". So somehow their blog thinks I'm a bot or does it say that to everyone who tries to post?
ASCK OS was just updated yesterday to 78 million on the OTC markets page. Since there was no update since the 71 million count on Feb 10, this is good news. More evidence the bulk of the 54 million share jump from Jan to Feb was a one time payment to John S and other insiders. Now the share growth is the converting of remaining notes. Next notes to be become convertible are in May, about another $38k I believe. If they had been able to start production those May notes would have been cleared.
There is a fairly long list of essential businesses linked in that article. If it was construction of additional medical facilities it would be essential, or construction supporting police, fire, or running the government, or getting people food and supplies, it would be.
It doesn't sound like from that list that construction materials for housing is considered essential. We will probably get a statement from the company soon about their status.
There is an outside chance they would use this time to get involved in helping to make extra facilities, storage or whatever, to help with the crisis. Not likely but not impossible.
Now its official. Stay at home ordered by the Washington state governor, only essential businesses will be allowed to stay open.
https://www.governor.wa.gov/news-media/inslee-announces-stay-home-stay-healthy%C2%A0order
For two weeks to start. Just a pothole in the road to success I hope.
My mistake. It's good to know things should be continuing without interruption from government mandates in WA. I read the news wrong.
I don't like people over reacting to news on the virus and here I was stating some restrictions that are not in place yet.
I'm hoping for a quick recovery from this whole mess.
Not yet, but the governor of washington is considering it.
"Inslee said it was possible that he could still issue a "shelter-in-place" order if health experts deemed it the right move."
CA is already doing it in parts of the state, and WA is being hit harder than CA by the virus.
Shelter in place for WA?
If the Goldendale area where the plant is, is under a shelter in place order, like much of Washington state is, then only essential businesses are left open.
I doubt the Auscrete plant would be considered essential. Which means nothing will be advancing at the plant for a while. Weeks, or maybe months.
Wonder if they will make a statement about what their status is.
Share update next week most likely on OTC markets page.
Last month the share update went from 16 million in Jan to 71 million in February. I believe 50 million of that was due to a one time payment to John and Co, and the other 5 million was note conversion.
If that is true then the March update next week should be about 75 million shares, with the growth due to remaining note conversion.
If they can convince the public that they really have started production and they have contracts signed and revenue coming in, then the the stability of the O/S will be the last issue holding this price down.
March! Three years plus to get to this point where they switch from talk and projections to contracts and production.
Will it happen? This is the month if it is.
Which is why the stock is where its at.
A company with under 100 million shares, projecting to be profitable in their first year, this year, with tremendous growth potential, and they are trading at 1 penny a share.
Because of their history, three reverse splits, years of talk but never producing anything.
I'm in because I think they are finally past their funding issues, I don't think there will be anymore reverse splits, and I think they really are going into production in the next month or so.
The growth potential for their business is huge, in my opinion. That deal they had going to build homes in Jamaica that fell through a few years back was because of funding problems, and I think that type of deal will come back once they can fund it on their own, and many more deals like that will follow.
The need for affordable, energy efficient housing, that is fire resistant and pest resistant is massive world wide. The potential for this business to explode with projects all over the world is massive. All in my opinion of course, at this point its all a matter of faith, and not many people have that in them right now.
I'm with you on that. The dilution has a very real path to ending with the shares under 100 million.
That assumes John and Co don't keep paying themselves with more stock, that the 50 million just added was for just as you said, to keep majority control of the company after the fiasco over the last year of note conversion, and from here on they pay themselves with revenue from operations.
That also assumes that this isn't all just a scam operation, and they WILL start operations soon as they say.
The outstanding notes that mature in May (about $40k) should be paid off if they do start operations soon.
Then the notes that mature in the last quarter ($160k I think) should be easily paid off if they go into production.
Then the share count stabilizes out not too far from 80 million.
Thats a best case scenario, and it would be great for us if it plays out like that.
market cap back around $500k.
I think fear of continued never ending dilution is the main thing holding this back.
Based on the remaining notes listed in the last quarterly report, and the assumption that they start generating production revenue by the end of April, the remaining dilution threat isn't that bad. They should stabilize under 100 million shares.
That last jump from 16 million to 71 million from Jan to Feb probably has a lot of people nervous about the dilution not being as much under control as the note debt reported would indicate. I am sure that was a one time self payment to their management, but they won't report that until their next financial report.
A company with a bad reputation for financing problems, combined with them saying nothing about the 50 million share jump in February, and a market correction going on, and you have a resulting market cap less than an average single family home.
Can't believe my buy order at 0.0075 got executed. Glad to get the shares at that price, but at the same time I'm concerned because this thing is not moving in the right direction.
I would have thought there would be a run up anticipating a big PR about confirming orders and setting a production start date. By what they are saying, that could come any day now. Not many believers it seems. Not even with pictures of their progress.
Or can I blame it all on Coronavirus?
Well if they say they are going to be firming and filling orders in February, I assume that means they will announce when that happens in February. Might be a bad assumption.
Things always take longer than you expect. This falling stock price is just making the dilution situation worse though, since it makes the note conversion rate a little worse, so I am impatient about getting some real solid news about actually starting production.
The last PR said they would be announcing order confirmations in February. That means this week. It will be interesting to see if a press release about order signings will move the stock much.
If they can give a plan for retiring their remaining debt with order signing revenue then that would be even better.
The stock price seems completely driven now by the risk of further, out of control dilution. That bump from 16 million shares to 71 million shares from Jan to Feb only fueled the perception that the dilution is still out of control.
They didn't file an 8-k on what happened, but I'm 99% certain that February jump was them adding 50 million shares again as payment to themselves, like they did last year after the last reverse split. Bad as that is for us, its better than out of control note conversion because it should be a one time hit, if they start production in the next few months. Because then they will be able to pay off the remaining notes and the share count should be stable at something under 100 million shares.
The stock price may not move much even with news of contracts signed and starting production, they will probably have to convince people the cycle of note conversion dilution is over, and show a quarterly report with revenue, not just a PR about signing a contract.
Nice to see some progress.
In three years of following this company they have never shown any progress on getting a plant ready before the last few months. They have always put out PRs with words about their potential, now we are finally seeing some physical progress.
The difference between now and 2018 when they were basically saying the same things about starting production is that now they really do have production facility. It is smaller than what they planned to build in 2018 but it is real as far as any of us can tell.
I never would have dreamed that everything would be de-railed in 2018 because their financier wouldn't give them the money they signed up for. I never even knew that could be a risk. Also in 2018 they announced a deal with a canadian investor to start a production plant in Canada. Never heard any more about that again.
Before that in 2017 they delayed a whole year because they thought changing their funding to be through PowerUp would end up with less stock creation through note conversion, which turned out to be a bad decision. Before that, in 2016, they had a $135 million deal ready to go to build homes in Jamaica that they backed out of because the lender for that kept changing the terms (that was the story I heard).
And just in July last year they said they had launched production with an 8 home, $1 million order on the books. What was that? They reported no revenue in their August and November reports. Was that a real deal or not?
So, with so many false starts it is easy to understand the lack of enthusiasm they have generated with this latest launch prep.
I think this is different though, I think this is for real. I think they actually start production in April, and before that they will announce a lot of contracts and new business deals in the works that may not be believed until they actually show some revenue in their reports, and not just in PRs.
Those added 50 million shares is bad, but not entirely unexpected, and based on the low price this stock continues to maintain, no one has any confidence that the dilution is near an end.
But based on what they are reporting as remaining note balances, there is not much more dilution that can come from that, maybe 4 million more shares. If they do get a revenue stream going in the next few months the longer term notes due later in the year will be paid off before they can be converted.
So really this stock is remaining low because no one believes anything they say. Because by the numbers they are publishing 2 cents a share is way too low.
The outstanding shares was updated on the OTC markets page yesterday. Was 16 million shares based on the Jan 10 data, the February 10 count is 71 million shares.
The OTC markets page share count updates have been correct for ASCK for the last 2 years at least, so I trust it.
The jump to 71 million can only mean that John and Co have given themselves a 50 million share payment, again, just like they did after the last reverse split.
Market cap now is 71 million x .02 cents = $1.4 million
Market cap jumped today from 250k to over 1 million with the news of the share growth, but still small if you believe the potential.
They had a deal Supposedly ready to go to start a plant in Canada back in 2018, wonder if that will revive if they get the Goldendale plant going. And there was a deal they were close to agreeing on to build homes in Jamaica before that. That fell through because it would have required a bad financing arrangement. If they get their own revenue stream going they could start that up again. Affordable, green housing has a need all over the world, so the potential business is there. And not just housing, they could make these structural walls for other types of buildings too. My opinion is they won’t have any trouble getting contracts to make their stuff, they just have to show the investing public they are for real.
Anyone else suspicious of this?
On July 24 last year they put out a press release with this statement about starting production:
"With this $1 million, 8 housing unit order being produced right from day one, ASCK will begin putting up substantial revenues as has been expected"
But their 10-Qs submitted in August and November said they had no revenue. And today they said they are transitioning to a revenue producing company. But... in July last year they supposedly had $1 million in revenue.
Just a flat out lie of a PR in July last year? I know some small companies do that, wouldn't be the first time.