LOL,
Ah .... wow ...... couldn't be an easier layup. See bolded admission from CEO in court failing to disclose material event to ECSL investors.
Not an easy mistake. Hmmmmmm ............... times like these I'm reminded of empty barrels and Mark Twain quotes.
Still think ECSL barrels won't be empty though. We'll see.
Amigo Mike
>>>>>>>>
EncounterCare CEO drops suit against fuel inventor
By Dan Lonkevich Updated 05:20 PM, Dec-10-2014 ET
EncounterCare Solutions Inc.(ECSL) CEO Ron Mills Sr. has withdrawn a lawsuit against the inventor of an additive used in the methanol-based flex fuel that the company plans to market.
In a motion filed Monday, Dec. 8, in a Delray Beach, Fla., court, Mills withdrew the action against Mathew Zuckerman without prejudice, meaning it could be refiled.
Mills originally filed the suit in October 2013, alleging breach of contract among other claims in connection with FuelTek Inc.'s purchase of patents from Zuckerman. FuelTek is a private company controlled by Mills. It assigned the patents to CyberFuels Inc., the fuel division of EncounterCare which is trying to develop the flex fuel product, EcoFlex 96.
The lawsuit claimed that Zuckerman formed a company called FuelTec Inc. to take back patents he agreed to sell to FuelTek, muddying CyberFuels' title to the patents and making it virtually impossible for it to arrange financing, blending or distribution of its product.
Despite the legal dispute over ownership of its technology, EncounterCare's stock more than tripled last month on optimism about EcoFlex 96. The Palm Beach, Fla.-based company has a market capitalization of $145 million at its recent stock prices.
Aside from Mills' accusations, Zuckerman is currently serving a two-year federal prison sentence for tax evasion.
Mills testified that he arranged to pay $55,000 to cover the costs of filing an extension of patent rights on Zuckerman's invention which was then called Singular 96. The payment was actually made by Building Blocks Pediatric Home Services, a unit of EncounterCare that offers home healthcare services.
Mills also claims that he agreed to loan $80,000 to Zuckerman; pay some of the legal bills related to his tax evasion case; and pay him $3,000 a week in consulting fees for helping CyberFuels test the product, raise money from investors and reach agreements with suppliers, fuel blenders and distributors. All told, CyberFuels paid Zuckerman about $193,000 in consulting fees, according to the lawsuit.
Zuckerman countered that he still owned the patents because he wasn't adequately compensated. He claimed that Mills promised him compensation of $1.45 million, plus a running royalty of 5% of the revenue from Singular 96, although he conceded that the agreement was never put in writing.
Zuckerman may be restricted in his business activities after he completes his prison term. Following his release, the inventor will serve three years of probation, FuelTek said in a legal filing.
During that time, Zuckerman can "not engage in any business activity unless the activity is approved by [his] probation officer" and "shall not register any new business entity, foreign or domestic, without the approval of the probation officer," FuelTek said in its Dec. 8 filing, quoting from the sentencing order against Zuckerman.
Mills and EncounterCare apparently believe that because Zuckerman is in prison, they don't need an injunction in place to stop him from developing the patents or selling them to someone who can make the flex fuel, according to Zuckerman's attorney Paul DeCailly.
"They think they are just going to use the technology because Mat is in jail. Wrong," DeCailly said in an e-mail. "The moment the injunction is lifted the technology is being sold to a group of oil industry people in Texas."
Mills and representatives of EncounterCare could not be reached for comment and an attorney representing Mills declined to comment.
Before Zuckerman went to prison, he set aside funds to allow DeCailly to continue the fight against Mills, FuelTek and EncounterCare, the Indian Shores, Fla., attorney said in an interview.
DeCailly said he was also authorized to arrange to sell the technology to a group of investors for what Zuckerman believed he was originally promised, which was $1.45 million plus a running 5% royalty.
"The second they lift the injunction, the technology belongs to Mat and he can sell it," DeCailly said. "We've had somebody lined up for a while."
The prospective buyers own unused Texas refineries capable of producing the fuel called Singular 96 in bulk, DeCailly said. He declined to identify the buyers.
"This was all available to Ron," DeCailly said. "He just thought he could take advantage of Mat because he was going to prison."
FuelTek, Mills and EncounterCare's CyberFuels unit have been trying to line up refineries to produce their version of the product, which they call EcoFlex 96.
In the litigation, DeCailly has raised questions about Mills' business practices and claims EncounterCare has made in press releases.
In testimony, Mills acknowledged that CyberFuels had sold no fuel despite a press release suggesting the company was selling the product to large-volume customers in the U.S. and Canada.
Mills also conceded that he failed to disclose to investors that a previously announced acquisition of assets from Alternafuels Inc., which included a $150 million contract for conversion of gas stations to offer the flex fuel, was no longer valid.
In November, EncounterCare shares rose to $3.15 from $1.05 after the company announced that EcoFlex 96 had been approved for sale in Florida and was close to being approved in California.
However, a Florida official has disputed EncounterCare's claim.
Erin Gillespie, press secretary for the Florida Department of Agriculture and Consumer Services, said a Nov. 13 letter the department sent to the company merely offered background information on the standards required to sell fuel in Florida.
"This was in no way an 'approval' letter but simply a letter acknowledging if the product were sold what requirements it must meet," she said in an e-mail to The Deal.
EncounterCare shares rose 2 cents to $2.95 in over-the-counter trading on Wednesday, Dec. 10.
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AI
