On December 20, 2012, Kevin J. Healy resigned his position Chief Operating Officer and General Counsel of American Defense Systems, Inc. On December 21, 2012, Alfred M. Gray resigned his position as interim Chief Executive Officer of the Company. On December 21, 2012, each of Pasquale J. D'Amuro, Gray, Healy, Stephen R. Seiter, and Victor F. Trizzino, resigned as members of the Board of Directors of the Company. At the time of the resignations, Mr. D'Amuro was a member of the company's Compensation Committee, Nominating and Corporate Governance Committee and Executive Committee; Mr. Gray was a member of the Company's Audit Committee, Compensation Committee, Nominating and Corporation Governance Committee and Executive Committee; Mr. Seiter was a member of the Company's Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Executive Committee; and Mr. Trizzino was a member of the Audit Committee, Nominating and Corporate Governance Committee and Executive Committee.

Immediately effective upon the resignations, Dale S. Scales and Joseph Van Hecke were appointed as the only two members of the Board of Directors of the Company as Class III directors; Mr. Scales was appointed as the President and Chief Executive Officer of the Company; and Mr. Van Hecke was appointed as the Secretary of the company. Scales and Van Hecke will serve as members of the company's Board of Directors for a term expiring at the annual meeting of the company's stockholders in 2014, at which time each person's continued service on the Board of Directors will be subject to renomination and stockholders approval. Mr. Scales, worked as a consultant specializing in private equity and venture capital investments, risk analysis, corporate finance strategies and operational management restructurings.

Mr. Scales previously served as a member of the board of directors of Active Data Services, a data capturing company, from 2005 to 2009. Mr. Van Hecke, is currently the Managing Member of the Grace Hall Companies. Grace Hall Capital is an asset management firm with over $30 million invested in hedge funds for its clients in various asset classes.

Grace Hall Trading is a proprietary trading firm that executes trades in numerous U.S. markets including equities, equity options, and futures.