Company History
New Apex Seals for Our Rotary Engine Technologies'
407cc Rotary Engine Have Arrived
August 1, 2008
Encompass Holdings' Rotary Engine Technologies, Inc. has finally received the apex seals for its 407cc rotary engine to be submitted for Environmental Protection Agency (EPA) and California Air Resources Board (CARB) engine testing and certification.
Several machining operations, engine assembly, and final adjustments will be made to our Electronic Fuel Injection (EFI) system before shipping the engine to Olsen Ecologic Laboratories for independent testing.
We expected our apex seals to arrive much sooner but due to their special material formulation; our vendor was delayed in getting his base material in the small quantity needed for our prototype seals. We’ve been assured that once the 407cc engine is ready for production the apex seals can be produced in quantity with normal delivery times to meet production schedules.
It is impossible to state a definite timeline for shipping our engine to Olsen Labs. Delays happen on a regular basis, especially when producing prototype parts. This R&D process would be much quicker if we could simply purchase existing parts off the shelf. Unfortunately, that is not the case. Our shareholders can be sure that nothing is more important to us than getting this engine into CARB and EPA testing and meeting the required standards for certification. Now that the all-important apex seals are here, everyone working on this project has promised us priority status to complete the new engine as quickly as possible.
We receive many questions from the public and our shareholders asking about company direction, share price, our technology and the time needed for research and development (R&D). Our direction and goals have always been the same; build a superior rotary engine and apply it to viable products for worldwide distribution.
Our focus has been to complete design changes and the fuel management system of our rotary engines to make their potential advantages over existing piston engines a reality. We have finally accomplished that goal with our 407cc engine, soon to be submitted for EPA and CARB approval. When our engine meets EPA and CARB standards (and there is every reason to believe that it will), these accomplishments will also go directly into our larger engines with various fuels and fuel combinations (hybrid fuels).
The company share price is a product of our technology and the public's perception of that technology’s viability. We are looking for steady share price gains by concentrating on proving our technology through the EPA and CARB certification process.
Of course, we feel our share price is undervalued and will continue to be until more investors know about our technology, see independent test results and we receive engine certification. Once we accomplish this, our company’s value will be more readily recognized. Then the share price will take care of itself. We all know that long-term value depends on us actually producing products and generating revenue. This is the outcome we are all striving for.
The time needed for our R&D has always been a product of funding. R&D is a very costly process especially in the combustion engine industry. Most people would be shocked to hear how much time and money has been spent to get us to where we are today. We know our investors would like things to move much faster. So would we! We are working hard to make that happen.
I’d like to give a special thanks to D-3 Technologies (an engineering firm) and its owner Bill Tomol. Bill has worked with us for many years, fueled by his belief in our technology. He has gone way beyond what you could expect from any vendor. Every Encompass Shareholder has been helped by the D-3 team’s efforts.
They are completing all of the most recent fuel management drawings for the 407cc engine and as soon as it is practical will spend needed time in our Florida facility to complete the 3D modeling package for the Xboard. This will enable us to isolate parts on the Xboard so we can quickly source vendors and make any future changes if needed. We will also synchronize our CAD drawing programs so the Xboard, new products and engine development can be done much faster. D-3 has already been working on the larger rotary engine drawings in order to get a head start as we finish the 407cc and move to larger engine development.
Additional updates on the testing and delivery of the 407cc to Olsen Labs will follow as soon as possible
Scott Webber
C.E.O. Encompass Holdings Inc
Rotary Engine Technologies' 407cc Rotary Engine
CARB and EPA Testing Update;
NACIO Systems Inc. Update
April 21, 2008
Rotary Engine Testing and Certification
California Air Resources Board (CARB) and Environmental Protection Agency (EPA) emissions testing of the 407cc rotary engine is expected to begin soon. We are told it could take 60 days of testing to acquire the necessary data for certification applications to CARB and EPA. Certification by these agencies will allow us to market the engine in the United States as well as most other countries. The actual certification process should take about 2 to 3 months after the applications are filed, barring any unforeseen problems.
The engine testing will take place at Olsen Ecologic Engine Testing Laboratories in California. Encompass already has a positive account balance with Olsen that will pay for most if not all of the testing costs.
After consulting with Olsen Labs, the following procedures were established as our best plan of action. We will apply for certification for marine applications first. This will expedite completion of our Xboard and other personal watercraft (PWC) development. Once we have that certification we will apply for off-road certification which includes applications such as ATV, compressors and generators.
We have hired an Environmental Regulations Consultant who has an extensive background working with EPA and CARB. He will help us prepare and submit the proper documentation and applications. Since we are testing a rotary engine, which is not the usual type of combustion engine tested, we are told they may require certain additional tests as they deem appropriate. While we wait for EPA and CARB instructions we will continue engine endurance testing.
Now that we have established that we are using the best possible apex seal material and design, we have placed an order with our vendor. We have not yet received a delivery date but expect them within 6 weeks. As soon as we receive these seals, we will build a new 407cc engine (as required) to submit to the independent testing lab. The new engine will go through a 10-hour break-in period at Olsen Labs prior to starting “official” exhaust emissions testing. We expect a minimum of 250 hours run time with periodic exhaust emissions analysis. This timing is our best estimate. EPA will establish the actual test protocol.
EPA testing will run concurrently with CARB testing as EPA accepts and will certify engines that meet the more stringent CARB requirements. Additional updates will be posted on our websites as information becomes available.
California Air Resources Board (CARB) testing of the 407cc rotary engine is expected to begin within 6 weeks and we are told it could take 60 days of testing to acquire the necessary data for application to both CARB and the Environmental Protection Agency (EPA). Certification by these agencies will allow us to market the engine in the United States as well as most other countries. The actual certification process should take about 2 months after applying, barring any unforeseen problems.
The engine testing will take place at Olsen Ecologic Engine Testing Laboratories in California. Encompass already has a positive account balance with Olsen that will pay for most if not all of the new testing costs. After consulting with Olsen Labs, the following procedures were established as our best plan of action. We will apply for certification for marine applications first. This will expedite completion of our Xboard and other personal watercraft (PWC) development. Once we have that certification we will apply for other uses such as off road vehicles and stationary applications such as power generators.
We have hired an Environmental Regulations Consultant who has an extensive background working with CARB. He will help us prepare and submit the proper documentation and applications to CARB and EPA. Since we are testing a rotary engine which is not the usual type of combustion engine tested, we are told they may require certain additional tests as they deem appropriate. While we wait for CARB instructions we will continue engine endurance testing.
Now that we have established that we are using the best possible seal material and design, we are placing an order with our manufacturer. We have not yet received a delivery date but expect them within 6 weeks. As soon as we receive these seals, we will build a new 407cc engine (as required) to submit to the testing lab. The new engine will go through a 10 hour break-in period at Olsen Labs prior to starting “official” testing. We expect a minimum of 250 hours run time with periodic emissions testing. This timing is our best estimate. CARB will establish the actual test protocol.
EPA testing will run concurrently with CARB testing as EPA accepts and will certify engines that meet the more stringent CARB requirements. Additional updates will be posted on our websites as we receive delivery dates and procedures from CARB.
NACIO Systems Inc.
The previous Encompass Board of Directors (B.O.D.) determined that it would be in the shareholders best interest to "spin-off" NACIO Systems Inc. as a separate public company. The logic behind the decision was that NACIO was not synergistic with the other Encompass companies. It also had liabilities that would require management to divert valuable time and energy away from present Encompass opportunities. Unfortunately, once the decision was made, very little progress towards that goal took place.
A change of the NACIO B.O.D. was needed and was completed when the present Encompass B.O.D. was elected in late 2007. The new directors of NACIO are Carey Daly and Randall Lanham. Carey had been hired by NACIO in Feb. 2007 and inherited problems that stemmed from decisions made prior to his involvement. He’s done an outstanding job and spent many hours developing solutions to these problems, while at the same time developing new business for NACIO. Randall is an attorney that specializes in securities law and corporate finance both domestic and international.
Randall and Carey have provided Encompass with a Letter of Interest from an investment group to purchase NACIO Systems. This group proposes to invest a substantial amount of money as part of NACIO’s “Plan of Re-Organization” being filed with the US District Court for Northern California. The proposed plan, when completed, will result in NACIO becoming a separate public company. The new investment group, Encompass and Encompass shareholders will receive an equity position in the new company in the form of common stock.
The proposed agreement is very good for all parties and all involved will have the same objective. Since the new investors will obviously want to build share value, NACIO will be funded to take care of its liabilities as well as build upon new business opportunities that Carey Daly has brought to the table. The Encompass shareholders will receive shares in a properly funded and well-managed public company. Encompass will receive shares that it can convert to cash to finance new operations and pay debt.
Both Carey and Randall will continue to work with Encompass on similar strategies that benefit all parties involved as well as seek joint venture, merger and acquisition opportunities for Encompass.
Scott Webber
C.E.O. Encompass Holdings Inc
Independent Engine Apex Seal Evaluation Completed
April 8, 2008
Today Encompass Holdings Inc received the evaluation of the 407cc rotary engine apex seal wear from our vendor. Microscopic examination confirmed there is relatively no wear, chipping, or seal degradation of any type that might lead to failure during extended warranty periods.
A 50-hour test on the engine's apex seals, preformed by Rotary Engine Technologies Inc staff, had shown less than one ten-thousandths of an inch of wear. Also, no measurable wear could be detected in the rotor housing's internal protective coating, another critical wear-factor to be considered.
This more sophisticated inspection method, by our vendor, was needed prior to sending the engine to the independent lab for exhaust emissions testing for Environmental Protection Agency (EPA) and California Air Resources Board (CARB) certification applications . Encompass will schedule that testing and will report on the time-line given by the testing laboratories.
We are confident that the 407cc rotary engine will pass exhaust emissions and endurance testing that is necessary for certification by CARB and EPA. Rotary Engine Technologies Inc. will continue additional endurance testing while waiting to send the engine to the independent test location.
We feel this news will be received positively by those who have funded this development as well as future funding sources. We thank all of our shareholders for their patience while this complicated development was taking place.
Meetings are taking place this week to select a fiberglass manufacturer close to our West Palm Beach facility to produce Xboard parts as well as additional products we are considering. Our goal is to localize acquisition of as many of our parts and materials as possible. This will minimize our quality control efforts and reduce shipping times and expenses.
Scott Webber
C.E.O. Encompass Holdings Inc
Rotary Engine Technologies, Inc.'s 407cc Rotary Engine Passes In-house
Exhaust Emissions Testing
March 28, 2008
This was a very big week for Encompass Holdings, Rotary Engine Technologies, Inc and each of the Encompass companies. Many of you know that we have been developing technologies that would enable the rotary engines to meet today's exhaust emissions standards and be able to out-perform piston engines with similar horsepower. Our primary focus for the past two years has been the 407cc rotary engine that powers our Aqua Xtremes' XBoard.
Previous management and consultants had correctly identified the 407cc engine as the best and possibly only engine that would enable the XBoard to perform to design expectations. Unfortunately their background was in piston engine development; engines which have very little in common with rotary engines.
In late 2005, the carbureted 407cc rotary engine was sent to an EPA approved test laboratory to get the needed certification to sell in the United States. In early 2006, Larry Cooper and I began our association with Encompass. We both have a long history with rotary engine development with extensive knowledge of the strengths and weaknesses inherent in the engines. We were very concerned knowing the 407cc was not ready and would not pass emission testing. We had no choice but to stop the EPA tests and have the engine sent to our West Palm Beach facility for further development to avoid failure.
After extensive testing with various carburetors and ignition timing, we determined the engine could not meet emissions standards. Our only choice was to convert the engine to electronic fuel injection. Since rotary engines are so different from piston engines, we needed an Engine Control Unit (ECU) that would efficiently manage rotary engine fuel consumption. This was a very long and involved process since there were none available that worked with the efficiencies we need. We had no choice but to have one developed.
Developing a rotary engine fuel injection system from scratch was a daunting and expensive task but with the help of some very capable design consultants, we have succeeded. Our fuel injection system has cut fuel consumption nearly in half and exhaust emissions are well within EPA and California Air Resources Board (CARB) limitations
Encompass Holdings' management then released positive test information prematurely. Without proper endurance testing, which is required by EPA and CARB, the engine could not be considered ready for submission to a lab.
Endurance testing is accomplished by running the engine in its application profile, over a predetermined time period. The goal was to warranty the engine for 300 hours, a marine standard. Unfortunately, testing showed apex seal wear that would cause the engine to fail prematurely. We determined, to be fully confident in the engine life cycle, we needed to significantly reduce apex seal wear. We tested different materials until the seal produced the results we needed. The results indicate longevity well beyond our desired warranty period with no reduction in engine performance.
Today, we completed the first 50-hour phase of our endurance test with apex seal ware results that have exceeded all our expectations. We have disassembled the test engine and found a minute measure of seal wear. We are sending the tested seals to our vendor for their inspection. This will be the second time they've examined this seal material and we expect our results to be confirmed within the next two weeks. Once we have confirmation, we will schedule our testing at the approved EPA/CARB test facility. We will issue a Press Release on all significant developments.
Scott Webber
CEO, Encompass Holdings Inc
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