The Boston Globe has a fascinating article about Global Digital Solutions Inc. (GDSI), a mysterious company that named Scott Brown to their board of advisers last year and gave him more than a million dollars in stock options in the company. But the company doesn’t actually seem to do anything.
An obscure company in West Palm Beach that markets itself as a firearms manufacturer made a splashy announcement last summer: It was appointing Scott Brown, the former Massachusetts senator, to its advisory board.
Not revealed at the time was what Brown received in exchange for lending his name to the venture. But a report the company made to the Securities and Exchange Commission last month, which has not been previously made public, shows that Brown received stock that was worth $1.3 million at the time. Its value has declined considerably since then, as the stock price has fallen by half.
Global Digital Solutions Inc. does not yet sell or make guns. It has no revenue, no patents, no trademarks, no manufacturing facilities, and no experience developing weapons, according to its most recent corporate filings.
It was founded as a beauty supply company in New Jersey — selling hair spray, conditioners, and shampoos, before reinventing itself as a wireless data firm from California and then again last year as a South Florida-based firearms maker and gun technology innovator.
It is the kind of company, with scant assets and a shifting business model, that some financial professionals warn investors to steer away from.
The company, instead of selling firearms, has churned out press releases to attract small investors, including the one about Brown joining the firm, and issued millions of shares of stock to fund its operations. Shares closed at 46 cents on the OTCQB Marketplace on Friday.
After those questions were raised, Brown decided to resign from the board of GDSI and give back the stock options. But seriously, what did this company actually do? And the Globe had a follow-up article with more red flags:
When former Massachusetts senator Scott Brown was named last September as an adviser to an obscure Florida company, Global Digital Solutions Inc., the chief executive announced that Brown would offer “invaluable advice and guidance” on its upcoming merger with a small firearms company.
A month later, the news got even bigger. Global Digital announced that its pending new partner, the struggling firearms company, had an agreement worth an estimated $95 million to sell grenade launchers to an unnamed client.
But the head of that arms company, Airtronic USA Inc., later declared in a court document that there was no $95 million order. The value of all of Airtronic’s pending orders was $1.3 million, she swore in a court statement. And she said the press release quote saying she was “thrilled” about the deal was made up.
Neither the company nor the Brown campaign has responded to these latest revelations, but there’s something seriously fishy here.