ECGI Holdings Inc (ECGI)

[Potse]

ECGI...reply to private message.....

To the person who inquired about my current thoughts on ECGI.....

I still hold my position in ECGI, as I think the possibility of substantial upside from this price range still exists. But obviously the risk factor has significantly increased as a result of the disputes between ECGI, Life Medical and Medpac Asia Pacific.

The negative developments surrounding the BreastCare DTS division of the company over the last month or so have been extremely disappointing, to say the least. Unless there is a very reasonable/amicable resolution to all of the disputes here, the entire BreastCare DTS part of the business could end up being an extremely expensive waste of ECGI's corporate time/resources.

In my opinion, most of the current problems/mess could have been avoided if CEO John Bentivoglio and ECGI's legal counsel would have done a better job of protecting the company when the licensing agreement for BreastCare DTS was crafted/signed. At a minimum, there should have been clauses placed in that agreement that would have pushed back the timeline on any financial obligations until after the full-scale production/manufacturing line for BreastCare DTS was actually completed.

The latest 8-K (12/17/2015) about Medpac withdrawing its default notice is a potentially encouraging sign. It would have been helpful if ECGI could have provided a little more clarification on whether the withdrawl means the two parties have completely resolved their particular dispute, or whether the disagreement still exists and Medpac is just temporarily withdrawing its default/demand......

As reported in our Form 8-K filed on December 4, 2015, we received a notice from Medpac Asia Pacific Pty Ltd. (“Medpac”) alleging that we were in default of certain representations and covenants contained in the Subscription Agreement dated April 27, 2015, whereby Medpac purchased our $500,000 Convertible Note (the “Note”). The notice requested payment of the monies due on December 30, 2015.

On December 15, 2015, Medpac revoked its notice of default and withdrew its demand for payment of the Note.

http://www.sec.gov/Archives/edgar/data/1394130/000072174815000894/ecgi8k121715.htm

Regarding the dispute with Life Medical: I do find one statement from ECGI in its December 4 8-K to be more than a little interesting/intriguing, especially in light of one claim for money Life Medical is attempting to make against ECGI.

Unless there are undisclosed/subsequent changes to the licensing agreement that ECGI and Medpac signed, Life Medical's claim that the $500K convertible loan ECGI received constitutes an advance royalty seems borderline ridiculous to me. It almost makes me wonder if that could be a contributing factor as to why ECGI has not yet secured the larger financing it was/is seeking......

On November 30, 2015, the Company received a notice from Life Medical Technologies, Inc., alleging that it is in default of its obligations under the License Agreement between the Company and Life Medical. Specifically, Life Medical alleges that the $500,000 received from Medpac in consideration of the Convertible Promissory Note issued to Medpac in April 2015 constitutes an advance royalty and that a portion of the funds were to be paid to Life Medical. In addition, Life Medical alleges that the Company or its licensee has failed to expend the requisite amounts necessary to maintain exclusivity in certain of the countries which are the subject of the agreements between the Company and Medpac and therefore, the Company is no longer entitled to retain these territories and is obligated to pay Life Medical amounts provided for in the License between Life Medical and the Company.

The Company believes Life Medical’s claim regarding the monies received from Medpac has no merit and that, among other things, it is entitled to offset against any amounts that may be due Life Medical amounts that it has paid to creditors of Life Medical. Further, the Company believes that it and Medpac have paid the amounts necessary to maintain the rights to distribute BreastCare® in Australia and that, among other reasons, the failure of the parties to due to develop a manufacturing line to produce the BreastCare® device has extended the Company’s and Medpac’s obligations to expend funds in furtherance of the marketing of the device in Australia. If Life Medical pursues its claims, the Company will defend them vigorously and pursue any counterclaims it may have against Life Medical for actions which it believes were intentionally intended to interfere with the Company’s attempts to raise the financing necessary to advance its products.

http://www.sec.gov/Archives/edgar/data/1394130/000072174815000880/ecgi8k120415.htm