ADCF – Making a Bet on Diversification

Advanced Defense Technologies - Making a Bet on Diversification

By: Jim Bloom
Source: InsiderFinancial
Posted: October 25, 2017

Since inception, ADVANCED DEFENSE T COM STK USD0.01 (OTCMKTS:ADCF) has been a player in the defense industry, building on its brand to obtain contracts to develop technologies for the ‘big boys’: the military, Homeland Security, SATCOM among others for over 10 years.

Over this term, they went on to build on their name and become synonymous with breakthrough and success in their field, winning accolades and awards throughout their run as they carried out their duties. Their technology, hailed throughout the industry as revolutionary, served as a reminder of the great strides ADCF had made at ensuring they were lead in this field.

Despite this, their financials replicated little to nothing of such promise with the company trading at a near zero figure. As at the end of August, their share price was just shy of hitting the $0-mark, trading at between $0.0012 and $0.0016 with trading volumes being conspicuously absent from the picture.

Such poor stock performance must have necessitated their bid to venture out and diversify their portfolio into new industries with the hope of obtaining higher valuations from the market. Their industry of choice: the airline industry.

True to this, since this major announcement in September, there has been an uptick in the share price as well as trading volume with their most recent closing price standing at $0.0043, over three times their closing price in August as the chart below further shows:

ADCF Daily Chart

ADCF, based on the information above, seems to have benefited greatly from this strategic move. As such, let us dive into the issue and review how matters have been unfolding for them.

ADCF: From humble beginnings to big moves

ADCF was founded in 1998 as “June Project 1 Corp”. In April 2007 they rebranded changing their name to “Medcore Holdings Inc”.

It wasn’t until January 2010 that the name Advanced Defense Technologies Inc came up. During this period, ADCF made a strategic move to venture into the defense space. They therefore purchased the patents, technology, contracts, ongoing relationships, research projects, research and development funded by the government contracts and exclusive rights to use its patentsfrom “RST Scientific Research Inc”. Following this purchase came the final name change and the beginning of their research into the breakthrough technologies earlier mentioned.

These were the hay-days of the company.

Back then, their shares traded at highs of up to $2.6 per share. However, their share price began its downward trend not long into 2011 and never came back up, well, until now.

The year 2017 has come with a new outlook from the management of ADCF who have made a drastic move to venture into the airline industry. This strategic drift comes in the wake of financial difficulty faced by the company who have not been able to generate any revenues from their systems. According to management, the systems which haven’t been tested on large scale were not foreseen to have the capacity to generate amicable revenues nor could management judge their acceptance by the market.

This move was therefore a welcome relief for investors who had initially deserted the stock almost fully. In addition to this, the second part of the good news is their company of choice: Start Jets International, LLC.

Star Jets International is a major player in the airline industry, specifically in the field of private jets and trips. They offer their customers all the advantages of owning a corporate jet, without the burdens associated with ownership through a model they define as shared ownership. Their investment in this sector makes them a force not to be reckoned with with a fleet of over 15,000 private jets worldwide.

Analysts have praised the move as beneficial to ADCF given the value creation that will arise to the shareholders.

These sentiments were also held by the CEO of ADCF, Anne Tahim, who during the announcement of the letter of intent to acquire Star Jets International said:

“We are pleased to enter into this LOI to combine with Star Jets International. We believe that the proposed transaction will create significant future value for our shareholders and other stakeholders.”

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Since then, Star Jets has made headlines with news that rocked the airline industry. In a move seen by many as one meant to rattle the industry, the company recently announced that it will be accepting Bitcoin as a payment mechanism for its private jet services.

The wholly-owned subsidiary made this move in a bid to affirm its position in the ever-growing digital space and cryptocurrency system. Moreover, they are working at ensuring that their clients have enough leeway to make choices regarding their preferred method of payment given the nature of their clients.

The company’s CEO, Ricky Sitomer, who commented on the matter was quoted saying:

“Bitcoin is becoming an increasingly accepted method of payment and we want our customers to have the flexibility to pay via that medium of exchange.”

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Such breakthroughs both for ADCF and its subsidiary have been pivotal to the appreciation in the company’s valuation as per the market and thus its share price. However, this isn’t necessarily the whole story as ADCF has fought to mitigate its strenuous financial position in the recent past.

Over the period till December 2016, their loss position seceded from $487,859 in December 2025 to $88,800. This was as a result of deliberate move to cut costs across board.

Moreover, they decreased their intangible assets by over $4.7 million therefore cutting down on the impairment during the period. This also points to their need to exit from their current market and venture into the new sector they have opted for.

In our view, their financial position, despite being weak in recent years, is about to get revamped and in future will be a great force within the industry. To conclude this, the future outlook of ADCF is more promising than ever was before and will be a great asset for any investor as they move into the future.

Conclusion

ACDF is a story of a great turnaround in the industry. Its achievements and strides are fascinating and so is its growth trajectory. Better days for ADCF are ahead.

 

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