(EAG) American Defense Systems Chops Off APSG
A penny stock (EAG) American Defense Systems, which I have followed for 2+ years now, has just sold off APSG (their physical armor, armor barriers, business) to the West Coast Partners Fund.
This is because since EAG ever became a Stock to begin with they had never produced a profit and were stuck with millions of dollars of Debt Obligations.
They only reason EAG ever acquired APSG in the first place in order to transform into the IPO American Defense Systems, defense company, was sorta through what I called a "Loan Shark" deal....Not because there was anything wrong with WCPF ( absolutely not), but because the Deal was wrong to make in the first place.
Why would anyone want to put themselves into an immediate precarious position with WCPF to acquire APSG and form a Defense Company with 2 major lines of business?
ADSI does Crew Protection KIts..... Hugely Popular as these are Life Savers for Army / Marines.
APSG does the Barrier Armor, Vehicle Armor, etc.
In this case they leveraged themselves with a big time Debt in the form of Series A Preferred Shares.
The company never earned a profit despite landing millions of dollars in Contract Money from the Army + Marines and etc. Their expenditures were through the roof I guess....
So anyhow... The Company had no ability to make any kind of money much less pay off the LOAN SHARK style deal to cancel out the Series A shares so they can be a Stand-a-Lone Company with APSG and ADSI and so on as subsidiaries.
So.. Now the company they acquired goes away into the hands of the Loan Shark Style Deal as what happens when one Forecloses on their home.
The C.E.O. put out a super ROSY statement claiming they successfully got rid of the Series A share deal!!!! *woo hoo*
And they claim that inspite of losing one of their biggest money makers in APSG, they can still make enough money to equal what they are losing.
The C.E.O. now has to earn enough money to buy back APSG from the Loan Shark.
They claim they have moved the business towards Stockholder Growth.
The way I see it nothing has changed. EAG is in a worsening situation as it has to depend on
1 line of business to produce a Profit when it could not produce Profit when it had APSG.
Sorry Piscetelli but in my opinion I am in serious concern over the future of your company here....
Show us a Turn-A-Round Profit Creating Quarter and THEN you can create Stockholder Confidence in your latest move.