SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended March 31, 2006
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
for the transition period from __________ to __________.
Commission File Number: 000-31451
---------
ENCOMPASS HOLDINGS, INC.
------------------------
(Exact name of small business issuer as specified in its charter)
NEVADA 95-4756822
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1005 Terminal Way, Suite 110, Reno, Nevada 89502
--------------------------------------------------
(Address of principal executive office) (Zip Code)
(775) 324-8531
----------------
(Issuer's telephone number)
NOVA COMMUNICATIONS LTD.
--------------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
-------- --------
As of April 4, 2006, the number of outstanding shares of the issuer's common
stock, $0.001 par value, was 18,842,459 shares.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: Yes [ ] No [X]
1
TABLE OF CONTENTS
ITEM 1. FINANCIAL STATEMENTS ............................................... 3
Consolidated Unaudited Balance Sheets as of March 31, 2006
and June 30, 2005............................................. 3
Consolidated Unaudited Statements of Operations for the Quarters
March 31, 2006 and June 30, 2005........................... 4
Consolidated Unaudited Statement of Cash Flows for the
Quarters ended March 31, 2006 and June 30, 2005............ 5
Notes to Consolidated Financial Statements.......................... 7
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS .............................................. 12
ITEM 3. CONTROLS AND PROCEDURES............................................. 14
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS................... 14
ITEM 6. EXHIBITS............................................................ 14
SIGNATURES................................................................... 14
2
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Condensed Consolidated Balance Sheets
March 31, June 30,
2006 2005
------------------ ------------------
Assets
Current assets:
Cash $ 502,276 $ 46,296
Accounts receivable,
less allowance for uncollectible accounts 423,063 401,415
Receivable from related party - 67,603
Prepaid expenses 509,734 326,344
Other current assets - 82,509
------------------ ------------------
Total current assets 1,435,073 924,167
Equipment, net 9,597,891 10,107,551
Other assets:
Note receivable 85,240 147,036
Deposits & other 324,596 325,075
Other assets 83,709 3,000
------------------ ------------------
Total other assets 493,545 475,111
------------------ ------------------
$ 11,526,509 $ 11,506,829
================== ==================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 1,337,679 $ 1,185,731
Accrued liabilities & other 1,243,138 899,569
Unearned revenue 536,609 521,027
Long-term debt due within one year 2,463,780 1,858,257
Notes payable and accrued interest subject to conversion
Into an indeterminable number of shares of common stock 90,436 163,459
Derivative liabilities 118,623 117,749
------------------ ------------------
Total current liabilities 5,790,265 4,745,792
Long-term debt to related parties 106,756 241,152
Long-term debt 3,358,177 2,369,694
Net capital deficiency:
Preferred stock; $.001 par value; authorized 200,000
shares; outstanding 200,000 shares 200 200
Common stock; $.001 par value; authorized 500,000,000 shares;
issued and outstanding 18,842,459 shares
(6,001,332 shares at June 30, 2005) 18,843 6,001
Common stock to be issued 703,927 8,703,927
Convertible promissory note and accrued interest 107,140 101,140
Additional paid in capital 31,867,133 22,809,499
Retained deficit (30,425,932) (27,470,576)
------------------ ------------------
Total stockholders' equity 2,271,311 4,150,191
------------------ ------------------
$ 11,526,509 $ 11,506,829
================== ==================
See accompanying notes.
3
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Condensed Consolidated Statements of Operations
Three months ended Nine months ended
March 31 March 31
----------------------------------- -----------------------------------
2006 2005 2006 2005
---------------- ----------------- ----------------- ----------------
Revenues $ 1,175,582 $ 145,000 $ 3,491,956 $ 145,000
Cost of goods sold 296,381 - 838,565 -
---------------- ----------------- ----------------- ----------------
Gross profit 879,201 145,000 2,653,391 145,000
Operating expenses:
Selling, General & administrative 1,680,356 341,564 4,953,900 1,360,769
Research & development 41,480 3,254 500,053 1,212,959
---------------- ----------------- ----------------- ----------------
1,721,836 (344,818) 5,453,953 (2,573,728)
---------------- ----------------- ----------------- ----------------
Net loss from operations (842,635) (199,818) (2,800,562) (2,428,728)
Other expenses:
Change in fair value of
derivative liabilities (21,352) (16,314) (54,334) 34,985
Interest expense, net (22,837) (10,410) (87,183) (35,969)
Loss on disposal of
equipment - - (1,277) -
---------------- ----------------- ----------------- ----------------
(44,189) (26,724) (142,794) (984)
---------------- ----------------- ----------------- ----------------
Net income from operations
before provision for income
taxes (886,824) (226,542) (2,943,356) (2,429,712)
Provision for income taxes - 800 12,000 800
---------------- ----------------- ----------------- ----------------
Net loss from continuing operations (886,824) (227,342) (2,955,356) (2,430,512)
Net gain on disposal of
discontinued operations, net
of provision for income taxes - - - 139,517
---------------- ----------------- ----------------- ----------------
Net loss $ (886,824) $ (227,342) $ (2,955,356) $ (2,290,995)
================ ================= ================= ================
Net loss per common share $ (.058) $ (.046) $ (.235) $ (.524)
================ ================= ================= ================
See accompanying notes.
4
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Condensed Consolidated Statements of Cash Flows
Three months ended Nine months ended
March 31 March 31
----------------------------------- -----------------------------------
2006 2005 2006 2005
---------------- ----------------- ----------------- ----------------
Cash flows from operating activities:
Net loss from continuing
operations $ (886,824) $ (227,342) $ (2,955,356) $ (2,430,512)
Adjustment to reconcile net
loss to net cash provided by
(used in) operating
activities:
Provision for uncollectible
accounts 6,744 - 42,453 723,506
Depreciation &
amortization 346,278 - 892,756 -
Unearned revenue 24,403 - 15,582 -
Shares issued in exchange
for services - - 909,162 1,255,283
Loss on disposal of
equipment 1,277 - 1,277 -
Provisions for income taxes - 800 13,000 800
Changes in fair value of
Derivative liabilities 21,352 16,314 54,334 (34,985)
Changes in assets and
liabilities:
Receivables 90,959 - (36,532) -
Other assets (356,432) - (212,403) (5,000)
Accounts payable (6,092) 134,060 151,946 175,302
Accrued liabilities 419,479 193,099 351,455 347,466
---------------- ----------------- ----------------- ----------------
(338,856) 116,931 (772,326) 31,860
Cash flow from discontinued
operations - - - (203,032)
Cash flows from investing activities:
Capital expenditures (179,987) (112,448) (384,371) (213,066)
Advances received from
(paid to) related parties 34,125 (24,559) 140,318 (64,346)
Discontinued operations - - - 203,032
Change in other assets (7,197) 18,000 (7,197) -
---------------- ----------------- ----------------- ----------------
(153,059) (119,007) (251,250) (74,380)
Cash flows from financing activities:
Proceeds from long-term
debt 700,000 - 1,740,000 -
Principal payments on long-
term debt - - (105,994) -
Proceeds from convertible
Notes payable - - - 250,000
Borrowings (principal payments) on long-
term debt to related parties (17,269) 57,000 (154,450) 52,278
---------------- ----------------- ----------------- ----------------
682,731 57,000 1,479,556 302,278
---------------- ----------------- ----------------- ----------------
Net change in cash $ 190,816 $ 54,924 $ 455,980 $ 56,726
================ ================= ================= ================
Continued on next page.
5
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Condensed Consolidated Statements of Cash Flows (continued)
Three months ended Nine months ended
March 31 March 31
----------------------------------- -----------------------------------
2006 2005 2006 2005
---------------- ----------------- ----------------- ----------------
Cash at beginning of period $ 311,460 $ 4,057 $ 46,296 $ 2,255
Net change in cash 190,816 54,924 455,980 56,726
---------------- ----------------- ----------------- ----------------
Cash at end of period $ 502,276 $ 58,981 $ 502,276 $ 58,981
================ ================= ================= ================
Supplemental disclosure of non-cash investing and financing activities:
Notes receivable exchanged
for equipment $ 137,500 $ - $ 137,500 $ -
================ ================= ================= ================
Notes payable & accrued interest
converted to common stock $ - $ - $ 373,269 $ 325,132
================ ================= ================= ================
See accompanying notes.
6
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Notes to Condensed Consolidated Financial Statements
March 31, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COMPANY: Effective January 27, 2006, Nova Communications Ltd. changed
its name to Encompass Holdings, Inc. ("Encompass" or "the Company").
BUSINESS COMBINATIONS AND BASIS OF CONSOLIDATION: The consolidated
condensed financial statements include the accounts of Encompass, Aqua
Xtremes, Inc., Xtreme Engines, Inc., Rotary Engine Technologies, Inc.,
NACIO Systems, Inc., and Interactive Holding Group, Inc. since their
acquisitions. All intercompany accounts and transactions have been
eliminated.
On August 30, 2004, the Company acquired 51% of Realized Development,
Inc. Realized Development, Inc. changed its name to Aqua Xtremes, Inc.
("Aqua") in December 2004. On May 9, 2005, the Company acquired the
remaining 49% of Aqua.
In December 2004, Aqua formed Xtreme Engines, Inc. ("Engines") and owns
100% of its common stock.
Effective April 1, 2005, the Company acquired 100% of NACIO Systems,
Inc. ("NACIO"). NACIO owns 100% of Interactive Holding Group, Inc.
("IHG").
Effective December 2, 2005, Engines acquired 100% of Mailibu
Construction, a dormant entity. Mailibu Construction changed its name
to Rotary Engine Technologies, Inc ("Rotary").
INTERIM REPORTING: The Company's year-end for accounting purposes is
June 30. In the opinion of Management, the accompanying consolidated
condensed financial statements as of March 31, 2006 and 2005 and for
the three and nine months then ended, consisting of only normal
recurring adjustments, except as noted elsewhere in the notes to the
condensed consolidated financial statements, necessary to present
fairly its financial position, results of its operations and cash
flows. The results of operations for the three and nine months ended
March 31, 2006 and 2005 are not necessarily indicative of the results
to be expected for the full year.
Restatement of consolidated financial statements to reflect derivative
accounting: The Company has restated its previously issued interim
financial statements to reflect additional non-operating gains related
to the classification of and accounting for certain financial
instruments with embedded derivative features.
The Company determined that it had not accounted for the embedded
conversion feature of its convertible notes payable as a derivative
instrument pursuant to SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," as amended, and Financial
Accounting Standards Board's Emerging Issues Task Force ("EITF") Issue
No. 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in A Company's Own Stock".
Derivative Instruments: In connection with the issuance of convertible
notes payable, the terms of certain notes payable provide for principal
and interest to be converted into an indeterminable number of shares of
the Company's common stock. This variable conversion feature is
determined to be an embedded derivative instrument and the Company has
accounted for these derivatives pursuant to SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities," as amended and
Financial Accounting Standards Board's Emerging Issues Task Force
("EITF") Issue No. 00-19, "Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in A Company's Own
Stock". Under EITF No. 00-19, the estimated fair value of the embedded
derivative instrument is reported separate from the notes payable on
the date of issuance as derivative liabilities.
Derivative liabilities are reported at fair value as of the balance
sheet date and any change in fair value during the period is reported
as other income or expense in the statement of operations.
Continued on next page.
7
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Notes to Condensed Consolidated Financial Statements (continued)
March 31, 2006
REVENUE RECOGNITION: Revenues for NACIO consist of dedicated Internet
access fees; hosting, co-location and other fees; sales of third party
hardware and software; fees for systems and technical integration and
administration; fees for power and server connection and connectivity
services.
Monthly service revenue related to Internet access, hosting,
co-location and other is recognized over the period services are
provided. Service and equipment installation revenue is recognized at
completion of installation and upon commencement of
8
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Notes to Condensed Consolidated Financial Statements
March 31, 2006
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REVENUE RECOGNITION (CONTINUED): services. Payments received in advance
of providing services are deferred until the period such services are
provided, except in the case of non-refundable payments. Equipment
sales and installation revenue are recognized when installation is
completed.
Revenues for computer software compliance monitoring services and
products are generally billed annually and recognized ratably over the
period services are provided. Software product sales are recognized
when software is provided.
Revenues for Aqua consist of the sale of dealerships and are recognized
when dealership agreements are signed.
NET LOSS PER COMMON SHARE: Net loss per common share is computed by
dividing net loss by the weighted average number of common shares
outstanding during the period. The weighted average number of common
shares outstanding was 15,394,183 for the three months ended March 31,
2006 and 12,600,370 for the nine months ended March 31, 2006. The
weighted average number of common shares outstanding was 4,985,999 for
the three months ended March 31, 2005 and 4,371,335 for the nine months
ended March 31, 2005. Common stock to be issued is not considered to be
a common stock equivalent as the effect on net loss per common share
would be dilutive.
2. OPERATIONS
The Company's operating strategies focus on the development of
recreational water sports products and operating and managing its high
speed Internet access and enterprise server facilities.
The Company has begun selling distributorships for its recreational
water sports products and expects to begin manufacturing and selling
those products in 2006.
Management of the Company believes that operations from the sale of
these products will be profitable by the fourth quarter of 2006 and
that the Company will recover its development costs within five years.
The Company also purchased NACIO effective April 1, 2005. Since its
acquisition, management has pursued aggressive cost cutting programs
and eliminated unprofitable products. Management believes these actions
will enable NACIO to achieve profitable operations.
Also, the Company entered into an agreement for up to $2,500,000 of
additional financing for the development of its recreational water
sports products. The Company
9
ENCOMPASS HOLDINGS, INC.
(Formerly known as Nova Communications Ltd.)
Notes to Condensed Consolidated Financial Statements
March 31, 2006
2. OPERATIONS (CONTINUED)
received $1,000,000 in November 2005 and $700,000 in January 2006 under
the agreement.
The Company is dependent upon its ability to obtain additional capital
and debt financing until it ultimately achieves profitability, if ever.
The consolidated financial statements do not reflect adjustments
relating to the recorded asset amounts, or the amounts of liabilities
that would be necessary should the Company not be able to continue in
existence.
3. CONVERTIBLE NOTES PAYABLE
On November 29, 2005, the Company entered into a Security Purchase
Agreement whereby the Company obtained financing for up to $2,500,000.
The borrowings are secured by the Company's common stock and bear
interest at 8%. The notes are convertible into shares of the Company's
common stock at the option of the Company. This Agreement is repayable
in 36 (thirty six) equal monthly installments and in Management's
opinion, does not include the debt conversion features which would
cause the company to treat as an inbeded drivitive, as long as the
regular monthly payments are not in default. Under the terms of the
Security Purchase Agreement, the Company also agreed to issue warrants
for the purchase of up to 3,500,000 shares of its common stock.
The Company was required to reserve 59,055,556 shares of its common
stock for issuance upon conversion of the notes and warrants, in the
event that the Company should default on its regular monthly payments.
During November 2005, the Company borrowed $1,000,000 under the
Security Purchase agreement and issued warrants for the purchase of
1,400,000 shares of its common stock. In January 2006, the Company
borrowed an additional $700,000 under the Security Purchase agreement
and issued warrants for the purchase of 979,380 shares of its common
stock. The warrants are exercisable at $.50 per share in whole or in
part and are subject to other exercise restrictions.
The notes payable are due one year from the date of borrowings plus
interest at rates ranging from 8% to 20% per annum and are unsecured.
The notes and any unpaid interest may be convertible into shares of
common stock of the Company at rates of 70% and 85% of the closing bid
price of the Company's common stock on the date of conversion. The
notes may be converted at the option of the Company, but not before six
months, and at the option of the holder, but not before one year, from
the date of the notes and only if certain events have occurred.
4. COMMON STOCK
In October 2005, the Board of Directors authorized the issuance of
163,100 shares of common stock of the Company in exchange for legal
services. Management of the Company valued the shares issued at $.19
per share, the closing bid price of the Company's common stock on the
date of issuance.
In November 2005, the Board of Directors authorized the issuance of an
aggregate of 2,000,000 shares of common stock of the Company in
exchange for consulting services. Management of the Company valued the
shares issued at the closing bid price of the Company's common stock on
the date of issuance. The shares issued were valued at an average price
of $.245 per share.
10
4. COMMON STOCK (CONTINUED)
Also in November 2005, the Board of Directors authorized the issuance
of 500,000 shares of common stock of the Company in exchange for
accrued management fees. Management of the Company valued the shares
issued at $.26 per share, the closing bid price of the Company's common
stock on the date of issuance.
In December 2005, the Board of Directors authorized the issuance of
200,000 shares of common stock of the Company in exchange for legal
services. Management of the Company valued the shares issued at $.20
per share, the closing bid price of the Company's common stock on the
date of issuance.
During the nine month ending March 31, 2006, holders of notes payable
converted $373,269 of their notes and accrued interest into 1,270,714
shares of common stock of the Company.
In July, 2005, the Board of Directors authorized the issuance of an
aggregate of 2,160,700 shares of common stock of the Company in
exchange for accrued legal fees, management & consulting services.
Management of the Company valued the shares issued at $.28 per share,
the closing bid price of the Company's common stock on the date of
issuance.
5. SUBSEQUENT EVENTS
Rotary has acquired certain equipment, inventory and intellecturl
property to be used for the manufacture of rotary engines to be used in
the Company's recreational water sports and other products. Rotary
issued 49% of its common stock for equipment, inventory and
intellectual property with an anticipated value of a minimum of
$2,960,000.
11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Management's discussion and analysis contains various forward-looking statements
within the meaning of the Securities and Exchange Act of 1934. These statements
consist of any statement other than a recitation of historical fact and can be
identified by the use of forward looking terminology such as "may", "expect",
"anticipate", "estimates", or "continue" or use of negative or other variations
of comparable terminology. We caution that these statements are further
qualified by important factors that could cause actual results to differ
materially from those contained in our forward looking statements, that these
forward looking statements are necessarily speculative, and there are certain
risks and uncertainties that could cause actual events or results to differ
materially from those referred to in our forward looking statements.
Management's discussion and analysis should be read in conjunction with the
financial statements and the notes thereto.
RESULTS OF OPERATIONS
NINE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE NINE MONTHS ENDED MARCH 31,
2005 AND THREE MONTHS ENDED MARCH 31, 2006 COMPARED TO THE THREE MONTHS ENDED
MARCH 31, 2005:
Nine months ended March 31 Increase
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Revenue $ 3,491,956 $ 145,000 $ 3,491,956 3,346,956
================== ================== ================== ==================
Three months ended March 31 Increase
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Revenue $ 1,175,582 $ 145,000 $ 1,175,582 1,030,582
================== ================== ================== ==================
Revenue for the nine and three months ended March 31, 2006 results relates
entirely to the Company's acquisition of NACIO Systems, Inc. effective April 1,
2005.
Nine months ended March 31 Increase
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Cost of goods sold $ 838,565 $ - $ 838,565 -
================== ================== ================== ==================
Three months ended March 31 Increase
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Cost of goods sold $ 296,381 $ - $ 296,381 -
================== ================== ================== ==================
Cost of goods sold for the nine and three months ended March 31, 2005 results
relates entirely to the Company's acquisition of NACIO Systems, Inc. effective
April 1, 2005.
Nine months ended March 31 Increase
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Selling, General &
administrative $ 4,953,900 $ 1,360,769 $ 3,934,695 $ 3,593,131
================== ================== ================== ==================
12
Three months ended March 31 Increase
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Selling, General &
Administration $ 1,680,356 $ 341,564 $ 1,338,792
================== ================== ================== ==================
Selling, general & administrative expenses for the nine and three months ended
March 31, 2006 resulted relates entirely to the Company's acquisition of NACIO
Systems, Inc. effective April 1, 2005.
Nine months ended March 31 Decrease
-------------------------------------- --------------------------------------
2006 2005 Amount %
------------------ ------------------ ------------------ ------------------
Research & development $ 500,053 $ 1,212,959 $ (712,906) ()
================== ================== ================== ==================
Research & development expense related to the Company's recreational water
sports equipment. That research & development is funded entirely from debt and
equity financing. During the nine months ended December 31, 2006 the Company was
unable to continue its research & development efforts until additional debt &
equity financing was obtained. On November 29, 2005, the Company entered into a
Security Purchase Agreement where by it obtained financing for up to $2,500,000.
Also on that date, they received $1,000,000 under the agreement to continue its
research and development activities.
FINANCIAL POSITION & LIQUIDITY AND CAPITAL RESOURCES
AS OF MARCH 31, 2006 COMPARED TO JUNE 30, 2005:
Increase
March 31, June 30, -----------------------------
2006 2005 Amount %
-------------------- ------------------ ------------- --------------
Cash $ 502,276 $ 46,296 $ 455,980
==================== ================== ============= ==============
The increase in cash results from the receipt of $1,000,000 on November 29, 2005
under the Security Purchase Agreement.
Increase
March 31, June 30, -----------------------------
2006 2005 Amount %
-------------------- ------------------ ------------- --------------
Long-term debt:
Current portion $ 2,463,780 $ 1,858,257
Long-term debt 3,358,177 2,369,694
-------------------- ------------------
$ 5,821,957 $ 4,227,951 $ 1,594,006 27.4%
==================== ================== ============= ==============
The increase in long-term debt is a result of the receipt of $1,700,000 under
the Security Purchase Agreement.
13
ITEM 3. CONTROLS AND PROCEDURES
As of the date of this report, an evaluation was performed under the supervision
and with the participation of the Company's management, including the Chief
Executive Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on that evaluation, the
Company's management, including the Chief Executive Officer concluded that the
Company's disclosure controls and procedures were effective as of the date of
this report. There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of this report.
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.
Effective January 27, 2006, the Company changed its name to Encompass Holdings,
Inc. from Nova Communications Ltd. On January 23, 2006, shareholder approval for
the change of name and the corresponding amendment to its Articles of
Incorporation was obtained by the consent action of the holder of the majority
voting power of the Company. An Information Statement pursuant Regulation 14C
under the Securities Exchange Act of 1934. was furnished to all of the Company's
shareholders in connection with the consent action taken.
ITEM 6. EXHIBITS
(a) Exhibits.
--------
Exhibit
Number Description of Document
3.1 Articles of Incorporation as Amended *
3.2 By laws *
31.1 Rule 13a-14(a)/15d-14(a) Certification
31.2 Rule 13a-14(a)/15d-14(a) Certification
32.1 Section 1350 Certification
32.2 Section 1350 Certification
* Filed by reference to a prior filing of the Registrant.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 12, 2006 ENCOMPASS HOLDINGS, INC.
By: /s/ ARTHUR N. ROBINS
----------------------------
Arthur N. Robins
Chief Executive Officer
By: /s/ LESLIE I. HANDLER
--------------------------
Leslie I. Handler, President and
Acting Chief Financial Officer
Rev 5/12/2006
14