EGBT –All things to all people?
For those not already familiar, Eagle Building Technologies has been in the news quite a bit lately with all sorts of amazing press releases, almost all of which somehow are directly related to assisting in the prevention of terrorist acts. In fact, since the September 11th attacks, EGBT has issued four separate releases, which curiously seems to address almost every angle of terrorism. Such aspects include announcing bomb detection equipment, irradiation technologies, and software, which detects and tracks money launderers.
While at first glance some people would applaud such announcements, it appears to be extremely unusual to have a company that’s supposedly can handle so many diverse anti-terrorist measures to be engaged primarily in the building industry. In fact, by the company’s own description it acknowledges it was created to develop cost-effective and energy efficient housing. So how does an acknowledged building company enter in the anti-terrorism business? In actuality it doesn’t directly. But it wants to make a potential investor infer it is, through press releases, which in reality announce relatively hollow strategic alliances with private companies, which could make such releases themselves if they felt any compelling need to do so, and as of this date have not.
As mentioned, EGBT's primary business consists the distribution and application of building products through a series of licensing agreements with a company called Integrated Masonry Systems International, which EGBT owns a thirty-eight percent interest. These licensing agreements are only for certain countries and the significant portion of EGBT’s sales appear to be a result of such agreements with IMSI, as many of the company’s other subsidiaries appear related in some way to IMSI technology. Some of these companies, most of which were acquired (mostly in exchange for stock in EGBT) are; Master Door, an eighty-five percent owned subsidiary, which manufactures armored doors in Italy, Business Dimensions, a company whose main asset is the license to distribute products under the Master Door name, Great Wall New Building System, a residential construction joint venture China utilizing the IMSI block, Eagle Building Technologies, an Indian division to distribute the IMSI block in India, Eagle-Fuller International, Bullhide Corporation (pinks; BULH), a manufacturer of polyurethane material used as a coating sealant, and Aquila Sqaured Building Corporation, a joint venture for low cost housing in Mexico also using the IMSI building system.
So what do any of these companies have to do with anti-terrorism? Well, nothing. The companies relating to the press releases put out are not owned at all by EGBT. The press release relating to bomb detection equipment and irradiation abilities for safeguarding the mail against anthrax involves a private company called Biosterile. None of the SEC filings even suggests EGBT has any type of agreements to sell anything on Biosterile’s behalf. That’s probably because there is no reason to prevent Biosterile from selling anything directly. Something curious, a review of their website www.biosterile.com does not mention anything relating to an alliance with EGBT and even more curious, nothing relating to anthrax radiation. The nexus between Biosterile and EGBT is a board member of EGBT by the name of Meyer Berman. Mr. Berman and his wife, happens to own almost 25% of EGBT as of November’s latest 13D filing, and is also the Chairman of Biosterile. He was also instrumental in having investors he represented, loan EGBT five million dollars, which is convertible into stock at ten dollars a share. Perhaps it was thought a press release and some form of alliance, however meaningless in reality, would help their investment.
The second company, Actionable Intelligence Technologies inc. which supposedly manufacturers some type of money laundering software, also is not owned at all by EGBT. A review of Actionable Intelligence’s website at www.e-aitinc.com was not clear about specifics of the software mentioned and curiously the main number on the website is disconnected. . This company should not be confused for a much bigger called AIT inc. that can be found at www.ait.com. The 800 number for Actionable Intelligence just seems have voicemail, but no live employees could be reached and the news page was last updated on March of 2000. For a company in the hot area of money laundering, one might think they would have some recent news to announce on their own. It should also be noted that the nexus between EGBT and Actionable is not known for certain, but the PR firm for EGBT, Malkus Communications Group mentioned a previous employee worked at EGBT at some point and that Actionable Intelligence could be an acquisition candidate down the road.
Adding to the suspect nature of the latest press releases with a history of other releases that never seemed to amount to anything and several other small details and one has to wonder if there are just too many red flags. For instance, in October 1999 it was announced that Motasem Khashogi invested two million dollars in EGBT and as a result of this investment received two board seats. There is no mention of this investment in any SEC filings suggesting the actual investment never took place. Other details such as Anthony D’amato’s (The president and CEO of EGBT until October ) dealings as a director with other public companies that have shown less than stellar performances such as SSLU –which markets Lady Ole cosmetics for Hispanic women, now trading at ten cents may raise a red flag. Add to that, the fact that EGBT has changed auditors twice in the last year and does not currently use a big six auditor despite the complexity of their many overseas subsidiaries, and Gerry Christensen who is now the comptroller of EGBT, used to be the auditor through his accounting firm Christensen and Duncan. I guess EGBT’s prospects better than auditing companies for a living? Add to that, EGBT has a history of filing late with the SEC and as recently as 11/13 filed a NT10Q because they were not able to prepare their 10Q on time again. Even further, add the recent appointment of Hornblower and Weeks as EGBT’s investment bankers, whose reputation is far from stellar and companies represented in the past are riddled with financial failure and one just has to wonder about EGBT and its true prospects.
When reviewing all of these aspects relating to EGBT, one can only wonder if there is a lot more than meets the eye with respect to the viability of this company. To be fair, it does have actual revenues and actual operating subsidiaries. It just seems that it also has many questions unanswered and perhaps way too many suspect alliances and partnerships. Upon further inspection, one just has to ask themselves whether EGBT can truly be everything to everyone?
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