ENCOUNTER DEVELOPMENT TECHNOLOGIES INC.
ROCHESTER, NEW YORK, January 13, 2014 (OTC Disclosure and News Service). The control shareholders of Encounter Development Technologies Inc., a Colorado corporation ("ENTI") (US.ENTI.PK), namely, Electronic Merchant Systems Rochester, Inc., a New York corporation ("EMS") and First Hudson Trust of New York, a Massachusetts trust operating under the laws of the State of Oklahoma("First Hudson"), are pleased to announce that ENTI's administrative development, following their acquisition of ENTI on December 15, 2013, is proceeding as scheduled.
Randolph S. Hudson, the Managing Administrative Trustee of First Hudson and ENTI's Chairman, President, and CEO,said "Mike [Grande] and I are grateful to Carrie [Cosner] for her vision by making the decision and confidence to go along with our plan. In my opinion, the company's shareholders have been very patient and are looking to ENTI's new senior executive management to resurrect ENTI and to provide value to the holders of ENTI's common stock". Michael P. Grande,the Chairman, President, and CEO of EMS and ENTI's Vice-Chairman continued by saying "Randy [Hudson] and I, and our respective teams, made a commitment to clean up ENTI, and the other companies under our control, however, these matters are complicated and take time to repair. The only thing that Randy and I can do is take this company's development'one step at a time' until it and the other companies' foundations are in place; then, we can begin to commit [our] existing and newly-acquired assets to ENTI and to the other companies under the umbrella of our collective ownership". Mr. Hudson added,"There's a lot to be done. The senior executive management of ENTI is tasked with reconstructing the company's day-to-day records, financials, and track corporate acts and activities from June 19, 2009 through June 5, 2013. Mrs. Cosner did a great job of maintaining the company's current records and books-of-account from the date she took charge of the company's affairs on June 5; however, we have to piece together the company's records before that date,as those records were not remanded to Mrs. Cosner's custody by the company's former management. I will address these issues as part of management's discussion in tour upcoming OTC report.".
Mr.Hudson and Mr. Grande have devised a comprehensive program to quickly position the company so that it can continue in business and benefit its shareholders,investors, employees, officers, and directors.
From the date EMS and First Hudson assumed control of ENTI, the company's senior executive management has been and continues: to review the [limited] general records and books-of-account of the company; to compile and prepare ENTI's financial reports; (c) to contact the company's creditors and former banks to obtain history on those company accounts; and (d)to obtain the remaining information the company needs to prepare certain reports, notifications, and other filings to submit to various regulatory and self-regulatory agencies. Mr. Hudson said, "There are substantial sums of money, and the expenditures associated therewith, that cannot be accounted for on the company's books-of-account prior to June 5, 2013. Moreover, there are questionable financial transactions between Encounter and, what appears to be,an affiliated company with insider knowledge, to the measure of hundreds of thousands of dollars throughout 2011 and 2012. I'm trying to reconstruct the history of these transactions so that I can form logical conclusions and identify my findings to Encounter's shareholders and investors in [Encounter's] annual report."
The general order of events that are scheduled to occur are as follows:
- ENTI is scheduled to file its annual report with OTC Markets Group, Inc. on or about 17 January. This report will cover the company's activities and provide financial information to its shareholders and investors for the past two years (or for longer periods, as required, to provide shareholders and investors with a material understanding of the company's business acts and activities). That report will also provide the company's shareholders and investors with the status of the company's use and the feasibility of its [limited] current assets, a detailed description of ENTI's plan of operations for the remainder of calendar year 2014, and biographies of and compensation tables applicable to the company's current officers, directors, advisors, and professionals.
- ENTI will publish its new website between 17 January and 24 January, to provide its shareholders, investors, and the public with up-to-date information on the company, its business, officers, directors,and development. The website will also include links and/or interact with the company's new Facebook, Twitter, Newsle, Tumblr, VK, and YouTube sites and channels, respectively.
- For a number of internal, administrative reasons,ENTI will be redomiciled from Colorado to Delaware by the end of January, where it will reorganize itself as National Properties Trust. ENTI will be filing its preliminary notification with the Financial Industry Regulatory Authority("FINRA") on or about 20 January. As a part of its redomestication and reorganization, the company's board of directors and principal shareholders will authorize a split down of the company's common stock. The holders of the company's common stock will receive one share of common stock for every 1,000 shares of common stock they own as at the record date following the effect of the capital reversal.
In regard to this specific action,Mr. Hudson said, "Reverse Splits are highly unpopular with shareholders, particularly with short-term investors; however, ENTI's management prior to June 5 [2013], saw fit to continually increase the company's authorized capital beginning with an amendment to increase its authorized [common stock] capital to 500 million shares in December 2009 to 30 billion shares in October 2011. I am not directly suggesting that this is the case with Encounter, but, historically, based on my experience with small OTC Pink Tier and Bulletin Board companies is that are constantly in need of capital. The senior executive officers of these companies will participate in a deleterious scheme; whereby, the company will periodically increase its authorized capital so that it can issue'bulk' shares to unscrupulous persons or entities whom or which will 'advance'the company money, generally, in amounts ranging between $5,000 and $50,000, in exchange for certificates for common stock in amounts per certificate ranging upwards from 100 million shares. Then, these'lenders' will obtain an opinion letter from an attorney of questionable repute, who will remove the restrictive legends on the certificates, thereby,allowing the lenders to "dump" the stock in the open market. The company's senior executive officers will then 'hype' the company to get its stock prices back up, only to start the entire process over again until there is no more 'hype' to benefit from, in which most cases, the principals altogether abandon the company after they've pulled out all the money they can as the result of this series of transactions. Clearly, the results of this scheme are disastrous to shareholders who have invested hard-earned money to buy stock, as this causes the company's stock price to fall dramatically (in most cases,below one cent). However, at some point,under responsible senior executive management, a company must come to terms with the effects of this over-capitalization. This, now, for whatever reason, is the case with Encounter. Encounter will never realize any respectable price per share for its common stock while it has 14,740,350,085 shares issued and outstanding. Mike[Grande] an I don't own any common stock in Encounter, nor do any of our officers, directors, advisors, or affiliated companies; however, we must act for the benefit of the company and its near-term and long-term shareholders. By reducing the total issued and outstanding shares of Encounter's common stock to 14,740,350 shares,the shares may have the chance to maintain a good price per share as the company, after the hysteria and anticipated sell-offs wane following the reverse split, and as the company continues to develop. More significantly, once the reverse split has become effective, the company does not intend to dilute the common stock beyond the issuance of additional shares, which would bring the total number of issued and outstanding shares to approximately 25 million. Any of the company's financings and other reasons to use its common stock in future will be limited to the issuance of[what will be] newly authorized non-voting Class B Common Stock or by the use of debt securities and instruments that will have no effect on the company's common stock. If the company were to offer shares of its common stock for sale under a private offering, the price per share would not be less than $0.25 per share, therefore minimizing dilution to the existing shareholders. I empathize with Encounter's shareholders as to their apparent ongoing financial loss by their ownership of Encounter's common stock, but Mike and I were not a part or party to the company's past management decisions. Our principal concern - today - is to rebuild value in Encounter so that our 1,200+ common stockholders can realize some value in their stock, which they haven't realized during the past couple of years. In any event, the immediate total stock value wouldn't change at the time of the reversal: if a shareholder were to own 100,000 shares worth 10 cents prior to the reversal, it would be no different than for that shareholder to own 1 share worth 10 cents following the reversal."
- In due course, following its redomestication to Delaware and subsequent (non-bankruptcy) reorganization as National Properties Trust, Mr.Hudson and Mr. Grande will begin to transfer new and existing commercial and residential real estate assets located in Western New York to the company. In addition to it owning and operating real estate that is not associated with the company's affiliates, Mr. Grande and Mr.Hudson intend to use National Properties Trust to own all of the real estate that is owned or that will be acquired by the company's affiliates. Thereafter, the company will aggressively begin to evaluate commercial and residential real estate portfolios for acquisition by the company in Nevada, Florida, Utah, Delaware, Maryland, South Carolina, Illinois, Ohio, Connecticut, and Iowa.
- As soon as is practicable following the transfer to and/or acquisition of the initial real estate portfolios by National Properties Trust,the company will either file a registration statement on Form S-1 under the Securities Act of 1933 (with a subsequent registration statement on Form 8-A(12-B) under the Securities Exchange Act of 1934 together with a notice of election on Form N54-A under the Investment Company Act of 1940) or on Form N-2 under the Investment Company Act of 1940, to register all of its then authorized debt and equity securities. The company's ultimate goal is to conduct itself as a real estate investment trust. Mr. Hudson indicated that the company will undertake the registration of its securities during the third or fourth calendar quarter of 2014.
- Following the effectiveness of its registration statement(s) and after acquiring a certain number of real estate assets, the company intends to apply for a listing on the NYSE Alternext Tier (formerly the American Stock Exchange). Mr. Hudson indicated this would not occur prior to the end of the first calendar quarter of 2015.
EMS and First Hudson intend to complete ENTI's integration into their system of companies by the end of calendar year 2014. EMS and First Hudson are acting to posture ENTI to do business with their affiliated companies now. ENTI will announce its relationship to the EMS and First Hudson affiliates in a separate announcement prior to 17 January.
Mr. Hudson added, "This is a difficult, yet exciting time for Encounter. On the one hand, management must address and sort out the company's past mistakes and miscalculations; on the other hand, from this day forward, the company can look toward a new stage in its development and prosperity by organizing itself, accordingly, for the benefit of its shareholders and others having business with it. Mike [Grande]and I respect and appreciate the patience demonstrated by the company's existing shareholders and we look forward to welcoming new shareholders who will benefit throughout the course of Encounter's future development."
Mr. Grande added, "I have learned that it is best for me to gather all of the facts before I draw a conclusion on any subject. I understand the shareholders' frustrations and I am confident they will not jump to any conclusions as to what Randy [Hudson] and I have planned for Encounter;particularly, before the shareholders learn of the nature and extent of the company's prior operations and dealings during the time Randy and I had nothing to do with the company, its officers, directors, and affiliates. I, too, am excited by Encounter's development,and, I look forward to Encounter benefiting from its interaction with the other public companies that Randy and I own. Only time will tell. Randy and I are, quite literally, working around-the-clock to make certain all of the companies'issues are addressed and remedied, so that we can put the companies undesirable pasts behind us."
[The issuer and its senior executive management seek safe harbor for its forward-looking statements as permitted under the Private Securities Litigation Reform Act of 1995.]