SOURCE: American Defense Systems, Inc.

American Defense Systems, Inc.

February 25, 2011 11:04 ET

American Defense Systems Reaches Agreement to Eliminate $16.5 Million Series A Preferred Stock Obligation

HICKSVILLE, NY--(Marketwire - February 25, 2011) - American Defense Systems, Inc. (ADSI or the "Company") (NYSE Amex: EAG), a leading provider of advanced transparent and opaque armor, architectural hardening and security products for Defense and Homeland Security, announced today that it has signed a letter of intent with its Series A Preferred Stockholders to cancel 100% of the Company's preferred stock obligations.

Under the terms of the agreement, the Company will sell its American Physical Security Group, LLC (APSG) subsidiary to West Coast Opportunity Fund, LLC (WCOF) and Centaur Value Fund, LP (CVF). In return, WCOF and CVF will surrender their shares of Series A Preferred Stock having an aggregate stated value of $15,000,000 and pay or cause ADSI to be paid $1,000,000 in cash. In addition, WCOF and CVF will convert their $1,500,000 redemption premium related to the Series A Preferred Stock into 3,000,000 shares of ADSI common stock based on a conversion price of $0.50 per share. ADSI will retain a six month option to repurchase APSG for cash in the amount equal to the sum of $15.5 million plus the amount of any net investment made in APSG concurrently with or following the close of the transactions outlined herein. In addition, WCOF will execute a restriction agreement related to open market sales of ADSI common stock. The letter of intent is non-binding and contingent upon due diligence, regulatory issues and corporate compliance.

The deal is expected to be completed by March 31, 2011.

ADSI CEO Anthony J. Piscitelli commented, "We are excited to have finally reached this agreement with our Series A preferred stockholders. The cancellation of our preferred stock obligations removes a large overhang that has, at times, been a hindrance to attracting new retail and institutional investors to ADSI. Although our top-line revenue numbers will be reduced with the departure of APSG, we are confident in our ability to secure new major contracts to more than make up for the lost APSG revenue. I know that our stockholders have been waiting for this for some time and we are certain that they share in our excitement regarding this announcement which could potentially represent a substantial gain for all of our stockholders." 

About American Defense Systems, Inc.
American Defense Systems, Inc. (ADSI) (NYSE Amex: EAG) offers advanced solutions in the design, fabrication, and installation of transparent and opaque armor, security doors, windows and curtain wall systems for use by military, law enforcement, homeland defense and corporate customers. ADSI engineers also specialize in developing innovative, functional and aesthetically pleasing security applications for the mobile and fixed infrastructure physical security industry. For more information about American Defense Systems, go to www.adsiarmor.com.

Contact Information

  • Company Contacts:
    Roger Ward
    V.P. of Marketing & Investor Relations
    American Defense Systems, Inc.
    Tel 516-390-5300, x326
    Email Contact