Encompass Group Affiliates, Inc.(fka ECGA)

[pual]

Whatever happen, a PPS under 0.0003 is not very likely, considering that this is what is realy needed for the company to respect its obligation relative to its different shareholders.

Taking into account the obligation the company has toward the owners of its Preferred stock convertible into common stocks, a lower PPS would mean that 200,000,000,000 A/S would not be enough to respect SEC rules requiring the company to have enough A/S to cover its obligations toward all its shareholders (common and Preferred).

If the PPS was to be left at less than 0.0003, for the company to be in conformity, it would have to either pass a new resolution to increase this number of A/S or, much easier to do and much more likely, to implement an R/S (R/S does affect the number of O/S but not the number of A/S).