President's Letter - October 20, 2005
Greetings to the family of shareholders in American Commerce Solutions, Inc. I appreciate each of you, whether you have been with us for ten years or ten days; whether you own millions of shares or hundreds of shares; whether you contribute positively or negatively to the ‘chat’ about our past, present or future. Why? If you only own one share of stock, you are family. No matter what you have to say, it is important because it represents at least one perspective and unless something changes, you will be guided by that perspective, right or wrong. Someone brilliant once said, “ Perception is the reality of the ignorant.” Without proof to the contrary, we are led by our perceptions.
ACS has been perceived in many ways over the years, but I won’t waste your time with histrionics. We cannot change our history. I have been involved since mid 2000 and have been integrally involved in virtually all major decisions, so I can’t talk about things that ‘they’ might have done, because I am ‘they’. I will instead take responsibility for and ownership of our current condition and the plans that exist. We are in exciting times at ACS.
For over three months we have endured and suffered through a primarily, self-imposed black out of any news related to our on-going negotiations and plans. There were several reasons for not disclosing the details. The most significant was the fear of being accused of ‘hyping’ so that the stock price would rise. Although I am more typically accused of being too conservative rather than exaggerating the details, Sarbanes-Oxley has added a new dimension of concern for those of us in corporate leadership. The penalties can be stiff and defense of a position can be costly to individuals, company and shareholders. I choose to err on the side of caution. That being said, I will attempt to disclose enough information that will strike a delicate balance until specifics can be revealed.
American Commerce Solutions, Inc. has two, wholly owned, subsidiaries; International Machine and Welding, Inc. (IMW) and Chariot Manufacturing Company, Inc.(Chariot). Most investors in ACS consistently express their enthusiasm for Chariot because of what is viewed as their explosive potential in motorcycle trailer sales. IMW has been recognized primarily for its strong asset base and as the means to an end: support Chariot until it has a breakthrough. However, those of us in management do not share that perception. You see, although IMW was incorporated in 2000, these assets and employees have been together for almost 30 years in this market! Assets, revenue, experienced employees and solid management are present at IMW. This is a solid, worthy company on its own. Chariot is not ultimately a motorcycle trailer company, only.
Chariot has been and is morphing every day into the ultimate, premier fiberglass leisure products company. Although Chariot is also approaching 30 years as a premier trademarked company, it is constantly adding and/or modifying its tooling and product lines to achieve the right combination to efficiently and profitably produce and market. Hundreds of thousands of dollars have been spent over the past twenty-four months in order achieve this objective. The second quarter and the first month of the third quarter (September) were used to orchestrate specific changes, while new sales were halted to focus on production improvement. In the last three weeks, proposals/quotes for over $300K in trailers alone have been submitted! Boats, cars and van tops are in constant demand and could eclipse trailers in dollar volume sales. The specific details of ‘what’s happening at Chariot’ are being left for a Letter to The Shareholders on the Chariot website at the end of this month, as noted in our last press release.
Approximately four months ago, I entered into negotiations with two other publicly traded companies with the expressed purpose of exploring mutual opportunities. These unnamed companies operate in the energy field, currently the area of choice with the escalated prices of gas, oil and coal. Negotiations are ongoing. Although preliminary understandings exist, they are contingent upon several factors outside the control of ACS.
One of the companies is primarily an asset company. It is proposed to exchange an energy-based asset/commodity to ACS for equity. This commodity would be sold in the commodities market to generate cash, as needed, for on-going operations, eliminate debt or to expand by acquisition. The exchange would cause ACS to no longer be a ‘designated’ security. This would give brokers the freedom to actively offer ACS stock without the encumbrance of designation.
The second publicly traded company is also in the energy and recycling business. They have multiple subsidiaries and are currently expanding their influence on a worldwide basis. The current consideration is for a business combination in some form to occur between the two companies. This company is a ‘pink sheet’ company. However, based upon its share price, assets, revenues, technology and market opportunity, it is poised to move to another exchange, whether NASDAQ or AMERICAN is to be determined. This process can be expedited by combination with ACS and with our longevity as a reporting public company, institutional funding should follow. Much of the groundwork has been laid and should fall into place as the pieces are assembled. Negotiations are ongoing. Although preliminary understandings exist, they are contingent upon several factors outside the control of ACS.
Although each of the proposals above are exciting and progressing, they are not completed. Whether they are finalized as proposed will be several weeks away. In the mean time, the patented technology possessed by the second company is scheduled for final field testing under laboratory supervision for the purpose of proving the technology for tens of millions of dollars in funding. Once tested and proven, it is anticipated that IMW will receive a multi-year, multi-million dollar contract for the production of these machines. Whether IMW is a subsidiary of the business combination or simply a contractor for the owner company, IMW will be cast in a whole new light. The negotiations provide for full funding and guaranteed margins. Negotiations are ongoing. Although preliminary understandings exist, they are contingent upon several factors outside the control of ACS.
The testing of the technology will take place at the Bartow, Florida home of American Commerce Solutions, Inc. and IMW. Materials have been delivered to the site, the laboratories are prepared to supervise and the machinery is being prepared for delivery at this writing. The testing is projected to be concluded by the end of next week, if Hurricane Wilma does not interfere. Success of the testing is anticipated, since similar tests have been successful in the past.
The structure of any final agreements between the companies referenced is still in flux. However, all negotiations are independent of each other. In other words, it’s not an all or nothing arrangement, unless that is our choice. All negotiations are being conducted with sights set upon a win for ACS shareholders. What can we win?
1) Become part of a hot market segment……the energy segment
2) Broaden the base of assets and revenue
3) Work on an exclusive basis with proprietary technology
4) Move to a more Issuer friendly exchange
5) Production funding
6) Availability of institutional funding/buyers
7) Profitability
Where or when these negotiations will end is still somewhat nebulous. Communications take place multiple times daily. We are making progress and our expectations are high. The potential is great. Time will tell whether our plan will succeed, for someone once wrote, “ The best laid plans of mice and men often go awry…”
The last several months have seen the ACS share price drifting slowly downward. However, this will be short-lived, since it has always responded favorably to even a modicum of upward buying pressure. As more specific information is released we will see shareholders from the other companies take advantage of the ACS bargain that exists today. I believe that some of our recent dropouts may also be waiting to buy back into the new opportunity and are keeping tabs on our activity. I know that new investors are waiting in the wings for the right announcements. I want ACS shareholders to reap the harvest for the patience they have exhibited.
I trust that each shareholder will make someone else aware that it is time to grab hold, just in case these best laid plans’… do not go awry!
Dan Hefner
President
