AUGUSTA INDUSTRIES (AAO:TSXV) LOCK-UP AGREEMENT IS A WINNING STRATEGY
On September 29, 2016, Major Shareholders and Directors of dynaCERT announced a Lock-Up of more than 55,000,000 shares for 180 days, representing ~ 23% of the Company’s shares. The purpose of the Lock-Up was stated as follows:
“Given the significant progress that has been achieved in recent months, we felt a Voluntary Lock-Up Agreement would demonstrate to shareholders and potential investors the commitment and confidence that management, directors and certain major shareholders have in the future of dynaCERT.â€
The Company proceeded to make significant progress and its stock achieved the following performance over the next 12 months.
Augusta Industries Announces Lock-Up Agreement
On November 9th, Augusta Industries announced a Lock-Up Agreement for Directors and Officers holding 83.4 Million shares, representing 32% of the Company’s outstanding share amount. One major term of the Agreement is the agreement to vote the shares in support of the Augusta Spin-Off of Fox-Tek Canada Inc.
Allen Lone, President and CEO of Augusta stated:
“The company continues to work with its advisers to ensure the success of the proposed spinoff of Fox-Tek and to ensure that it is done it a manner that is beneficial to its shareholdersâ€
In both scenarios, management and major shareholders agreed to act in unison for the long-term benefit of each respective company and its shareholders. Though a Lock-Up on it’s own does not create the kind of share price appreciation experienced by dynaCERT, both the underlying fundamental strengths and the shareholder unison can’t be denied as harbingers of a bright future.
HIGHLIGHTS:
- Augusta revenues for 2016 / $4.6M
- Augusta market cap is ~ $10,000,000 as of November 9, 2017
- The proposed Spin-Off of FOX-TEK is expected to return up to $25,000,000 of stock to existing shareholders of Augusta.
- Though terms of the Spin-Off are yet to be finalized, the proposed $2.5:$1 benefit to shareholders is now one step closer with the announcement of the Lock-Up Agreement.
For more information about Augusta and the proposed Spin-Off, watch this interview with Allen Lone on AGORACOM.