Encompass Group Affiliates, Inc.(fka ECGA)

[Ecostate]

Shareholders get .
Nothing
"Will any such proceeds be distributed to the shareholders?

We currently intend to retain the net cash proceeds and use them to repay our outstanding liabilities and accrued expenses (including amounts due in legal, accounting and other professional fees incurred in connection with the Sale Transaction) subject to applicable law. As described herein, in connection with the closing of the Sale Transaction, we will receive preferred stock of the Parent but immediately transfer the Parent preferred stock to certain holders of our debt in exchange for that debt. In addition, because the liquidation preference and accrued dividends of our preferred stock exceeds $11,000,000, we will distribute the Parent’s common stock that we will receive in connection with the Sale Transaction to the holders of our preferred stock as soon as possible following the Sale Transaction consistent with Florida corporation law. Therefore, our common shareholders will at no time have any economic interest in the Parent’s preferred stock or common stock and should not consider the preferred stock or common stock in determining whether to vote in favor of the Sale Transaction. We do not anticipate a material amount of cash will remain after payment of expenses and non-assumed liabilities. The Sale Transaction will not result in any distribution to common shareholders. "