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With their XBoards in
production in Germany, distributors spread
throughout the U.S. and the E.P.A. ready to
give their approval, Encompass Holdings has everything in place to bring their motorized
surfboard to the marketplace
Services
Management Services
(ECMH-OTC: BB)
Encompass Holdings, Inc.
1005 Terminal Way – Suite 110
Reno, NV 89502-2179
Phone: 775-324-8531
Arthur N. Robins
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
July 7, 2006
CEOCFO: Mr. Robins, will
you tell us about Encompass and your background with the company?
Mr. Robins: “I am pleased to say that Encompass Holdings
acquires ownership and interest in developing companies that show rapid market growth and
what we feel is a potential return. Encompass has five subsidiaries representing
manufacturing, marketing, consumer products and professional services. We feel that our
executive management supports and can accelerate the business success for our investments.
We have attempted to have vertical and horizontal diversification working into innovative
product development and overall market penetration. Our goal is long-term value created
for nice attractive return for our shareholders. We have within our group, Nacio Systems,
Inc., which is professional services in the sense that it is a centralized IT solution for
the eCommerce content for management, software auditing and customer relation management
solutions. We maintain a large support system, so that when we are hosting for various
companies, that we have the infrastructure that is highly secure and falls well within
tier-one networking data, operating centers. This way, we can reduce cost, reduce risk,
and save valuable time and energy when a company’s IT system has found a problem. We
also have been approved through the SAS70 certification, which gives us compliance with
the Sarbanes-Oxley Act, which is not that easy for most companies and we have the IT
solution for them. Our next company would be Aqua Xtremes; they are an innovative power
sports company. Its main anchor is the Xboard, which is probably the most advanced, high
performance personal watercraft, which will allow people with all levels of skills to
experience the acceleration, and exhilaration of surfing anytime any place. The person in Topeka,
Kansas can feel the same feelings as the person on the California or Hawaiian
beaches.”
CEOCFO: How is that possible?
Mr. Robins: “Our XBoard has been designed to look like a
surfboard but it actually can be controlled by moving a handle or weighing from one side
to the other, shifting weight as if you were actually surfing. The motor that we are
utilizing is a 47cc engine, which will produce anywhere from 30-70 horsepower and weighs
over 48 pounds. We have integrated our engine within the board, which gives you high
performance that the rider can regulate. It can run in ocean, rivers, lakes or ponds and
is designed specifically for the non-athletic person to ride it and it is good for all
ages. At this point, the oldest rider has been 74 years of age and took approximately six
minutes to be able to stand and enjoy the riding of the board. The speeds are upward of 45
miles per hour because we are governing the amount of power going into the board. We are
redefining the water sport industry with this product.”
CEOCFO: Where are you in
the process of getting that out for sale?
Mr. Robins: “As it is now we have a group of
distributors spread throughout the United States from the west coast to the east coast. We
are in the process of setting up on our website a locator, which would allow someone to
put in their zip code and it will find the closest distributor or dealer in their area so
they can purchase a board. At the time, we are projecting that we will have boards in some
of our distributor’s hands before this summer in 2006. We are left with one
governmental agency and that would be the EPA, which we are working closely with at this
time, and anticipate having our certificate for approval sometime towards the end of April
or mid May. We have boards that are in production at this time in China. We have engines
in productions in Germany and we are marrying everything up as we move along.”
CEOCFO: What are your
target demographics, and how are you encouraging interest in your product?
Mr. Robins: “The demographics that we have aimed for is
the XY generation. It will be the group from 18-35, however what we have found thus far
with the limited amount of demonstrations that we have made open to the public, is that we
have had people as young as 12 years old ride the board and people as old as 74 riding the
board. We have a waiting list of people in their 50’s that enjoy the
exhilaration of riding it and some of the comments have been as weird as saying “this
is better than going to a gym” because it gives you a full body workout while
enjoying yourself. The marketers have indicated that we are targeting the 18-35 year-olds;
in practicality, most of the people on the waiting list are in their late 40’s and
50’s.”
CEOCFO: So the baby
boomers are going to do it for you!
Mr. Robins: “The baby boomers love it! The baby boomers
grew up with Gidget and all the different surf movies from Elvis to Troy Donahue and it
was a mystique. We have found that within three to six minutes regardless of skill level,
they have been able to stand up on the board and ride it. The only person to my knowledge
that could not stand up felt that if he had more time he could do it, was a gentleman that
weighed in excess of 350 pounds. He was on his knees on the board and enjoyed it to no
end. The X board will be to water sports as the snowboard is to winter sports.”
CEOCFO: Have you been
approved in Europe for this?
Mr. Robins: “We have been approved, following the
regulations for our CE Mark (meets safety and health regulations for European markets); we
have gone through all the testing, supplied information required to the European Councils,
and we have received their approval to market in Europe. The only thing they want to see
at this point, are the results from our EPA testing, which is going to occur toward the
end of April or the beginning of May.”
CEOCFO: What else are
you working on at Encompass?
Mr. Robins: “Encompass has two engine divisions; one
engine division is our small engine division, which represents our 407cc and our 814cc
engine. This engine has already had OEM sales at this point, which we will be announcing
very shortly in the marine industry. We also have rotary engine technologies which are
larger engines starting at the 40 cubic inch going up to the 1400 cubic inch engine, which
will translate in horsepower from 250 horsepower up to 3000 horsepower. These engines will
be used in conjunction with power generation, and probably fill the stock gap where
conventional engines are no longer viable. The rotary engine that we are developing
between the extreme engines group and the rotary engine technology is the multi-fuel
economy engine; it can run on gasoline, natural gas, L&G, which is liquefied natural
gas or propane, which most people refer to it as; diesel, or bio-deisel. We have begun our
studies on hydrogen. We are doing our research and completing our research on what we call
off-speck gas, which is gas that comes up through oil wells or gas wells that we the
consumers cannot use in our homes. This engine doesn’t recognize that and will
operate with it and we can set up many generating stations to add power to the electric
power grids in areas where wells have been capped off and that are no longer in use, will
become productive. We are working on some joint venture developments in the areas of
landfill capturing of gas and piping that methane into gas lines as well as power
generation. We are working on off-road vehicles with these engines as well as on-road
vehicles. The Mazda engine is probably the best-known transportation engine available in
the world for their sports car. We are developing our engine to be the replacement not
only for rotaries but also for the standard, reciprocal combustion system engine.”
CEOCFO: How have you
chosen these particular areas for Encompass?
Mr. Robins: “When I as a private person started
developing Aqua Xtremes, I needed to find the perfect power plant for my dream of the
XBoard. In the process, I explored every type of reciprocal engine available and then I
looked at the RX8, which Mazda puts out, and realized that I had not considered the rotary
engine. I came across rotary engines that were approximately 30 years old, put them in
shape and starting testing with them. As I have gotten into it, I realized that not only
is our technology at a place where the rotary engine of 30 years ago was not practical;
however, it is now one of the finest engines that could be developed. Since then, we have
established an agreement with Wankel Engines (Wankel AG) of Germany who is in full
corroboration with Encompass or Aqua Xtremes on the engines and developments and future
developments. When we purchased REI and changed the name to Rotary Engine Technologies, we
have taken 45 years of technology that was developed by Curtis Wright and John Deere, from
that place to today’s technology, materials, electronics and utilizing the CAD
programs to refine the engine so that it is at peak performance. Then we developed our own
fuel jet system as well as fuel and ignition management system. We can now give you a
thousand hours of history on an engine as to when it had a bad tank of fuel, a good tank
of fuel where there is deficiency, over heating, as well as controlling the amount of fuel
that goes into the engine. The major difference of rotary engine over the piston engine is
that the rotary engine has two moving parts; the shaft and the rotar, so there is no
vibration with a rotary engine, whereas in a conventional piston engine, you have in
excess of 100 parts. You also have a constant vibration with a reciprocal engine.”
CEOCFO: Will you tell us
about the financial picture?
Mr. Robins: “We are looking for investors and to develop
private placement. We have been funded on the market through a company out of New York,
which has been very generous on a funding package of $2.5 million dollars so far. We are
going to require a lot more, but the return from that will come back in a very short time
because we are accepting engine sales today.”
CEOCFO: Are you looking
to add new companies?
Mr. Robins: “We are looking to acquire other companies
that will horizontally or vertically integrate into our systems. If we can acquire them
and if it is a good fit, we want to set up joint ventures with them. We have a host of
technologies that span across several industries. Our group of key people has the
experience and the knowledge to step into recreational vehicles, automotive, power, OEM,
heavy equipment, aerospace and military. We are looking to develop our technology company,
which is Nacio, because we have been able to take our engineering product, place it in a
location and share it with the various companies that have been working on the export as
well as the engines. It seems to be an excellent fit and we are presently looking for
companies to do joint ventures or to acquire. As to the question of whether or not we
would spin-off the company, if the price was right I would.”
CEOCFO: Why should
investors have the confidence in your management?
Mr. Robins: “The management starting with myself is all
driven for different reasons. I have personally retired twice and find that retirement at
age 48-52 just wasn’t my thing. I needed to be active, believe in what I was doing
and what I was creating. The management team is made up of different individuals from
different walks of life who have come from a variety of industries and not just micro
aspects of any given one. What makes us dynamic is that we are following a vision. What we
are doing has not been laid down in stone, but rather we are taking each day and moving
with the obstacles to resolve those obstacles without losing focus as to what we are
doing. Our management team has all been working on average of 14-18 hours a day to
accomplish our goals. Each one of us has a specific project that they are working on and
then we integrate it into the overall package.”
CEOCFO: Sounds like
there are exciting times ahead; do you have any final comments!
Mr. Robins: “One of my associates out in California,
Scott Webber, former owner of REI, is taking five trips to our new facility in West Palm
Beach where we are doing all of our research design. I have spoken to him as early as seven
o’clock central time in the morning, which is five o’clock in California and he
has spoken to me as late as ten o’clock his time just going over things. One of the
key points that we have strived to do is one, we have a research and development now
housed in Riviera Beach Florida, which is part of West Palm Beach. We are doing our
manufacturing under contract where we own the tooling, but we are having others actually
do it and we are paying per unit price. What this accomplishes is it reduces our cost of
goods, we know exactly what our cost of goods is going to be and we have a very tight
control on only 100% solid products. We do not have to deal with unions, labor contracts,
bad product, only with the good aspects, which puts limits on our exposure to un-necessary
expenses, which come in under workman’s comp, social security, Medicaid, Medicare
deductions; it is just very clean. By working over-seas, we are able to reduce our cost to
give us a better bottom line and a tight control on our course.”
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