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Translation = Don't trust a Peacock, LOL !!!
Javelin stocks appear...
To have a few things in common:
1.Gagged Transfer Agent
2.All offices listed at the same place, no matter how many different companies.
3.Javelin being in charge of pretty much everything the company does.
4.Figurehead CEO.
5.Horrid financials (if they file)
6.Frequent reverse mergers/acquisitions that blow up the sharecount.
7.An IR company that doesn't have the courage to have a person sign their name to the emails.
I think the iBox shows the "more than coincidences" that occur with Javelin stocks. Interestingly, another note is that Javelin usually controls a company prior to "handing off" to a figurehead CEO. But the directors that "give off" the company don't seem so sure about appreciation of value, because they keep a handy stash of "payroll due" for after the stock gets pummelled.
IMO/FWIW
Sounds good Dr.. I too am grateful to whomever created this Pro-Javelin board.. gives us yet another place to congregate and dicuss all the potential that exists!! Cheers!
You bet ... I would have tried to hide those Ugly Financials.
Those suck.
:o)
Absolutely, I'm glad someone created a pro-Javelin board to promote these stocks and bring in more investor interest. I'll be bringing the crew over from GRXI, and FCCN.
Dr. W. I just discovered this new Javelin board.. aint't it the greatest....!?!? We need to let the other investors in on this... I mean Why keep it to ourselves????
I see GRXI hitting .05 in December, FCCN probably back to .02 as well with Dr. Gas Def agreement. Great things coming for those who are 'Peacocks' !
And let's not forget one of my favorites GRXI...
Last Price
0.001
Change $
Change %
Tick
Bid
0.0009
Bid Size
5000
Ask
0.0011
Ask Size
5000
Open
0.001
High
0.0011
Low
0.001
Prev Close
0.001
Last Trade
10:29
Volume
140.0 k
52 Wk Hi
0.0059
52 Wk Low
0.0004
Market Cap
1.96 m
Ex-Div Date
N/A
Div Rate
N/A
Yield
N/A
Shares
1.96 b
EPS (TTM)
N/A
PE Ratio
N/A
close Exchange Information
Listed On
OTC Bulletin Board (OBB)Exchange
I can't wait to see what Javelin does tomorrow ...!!!! then I will really have somethinhg to post here..!!!
GS, OK, a guy comes to your door and says, "Hi, I'm Bob Peacock, I want to take your company public.".... What would you do?????(Assuming you had a company)...
GoldenStar, Thank you for your welcome...if this board is interested in the Javelin group, I may have a little bit of information.....thanks again for your warm welcome....glta!
Wick50
Everyone is welcome to contribute here as long as they stay within tou, if you are posting items in an attempt to disrupt the board which IMO it appears that you are then those posts will be removed and Investors Hub Admin will be notified of your activities.
Feel free to post whatever you think is relevant to all these javelin stocks but do it in a responsible manner, we welcome all information here.
Man, I can't wait until the opening bell....Javelin has a board....funny how things turn out..
FCCN Level II
http://66.201.236.134/export/level2.jsp?symbol=fccn
GRXI Level II
http://66.201.236.134/export/level2.jsp?symbol=grxi
This is the company that I think is manufacturing the Aero Muffler in China, the 8K states that FCCN is using a company in Ningbo China and this is the only muffler company I found in Ningbo China, they also produce everything from hotplates,poker chip holders,brake pads,apparell, all kinds of stuff.
Cixi Huaxu Scale Industrial Co., Ltd
Contact person: David Wu
Address: Rm. B, A-18/F, 166 - 168 Baizhang Road, Ningbo, Zhejiang Province. China
Phone: 86-574-87711759
Fax: 86-574-87707406
Website: http://Muffler.ec51.com
How to get in touch with Javelin:
Gemini Financial Communications
A. Beyer
951-677-8073
Franchise Capital Corporation Announces Successful Exhibit at SEMA Show and Reports Strong Interest in Dr. Gas Products From Automotive Supply Distributors
Company Also Files Quarterly Report for Period Ended September 30, 2007
Franchise Capital Corporation (PINKSHEETS: FCCN), which recently closed its acquisition of Aero Exhaust, Inc., a world leader in performance exhaust airflow technology and NASCAR Performance Partner, today announced the successful joint exhibit of Aero Exhaust and Dr. Gas., Inc. at the 2007 SEMA Show and reported strong interest in the piping and tubing products of Dr. Gas, Inc. from automotive aftermarket product distributors, including those that currently distribute Aero products.
The SEMA Show (http://www.semashow.com), which was held Tuesday, October 30 - Friday, November 2, 2007 at the Las Vegas Convention Center, is the premier automotive specialty performance products trade event in the world featuring performance, accessories, restoration and motorsports products.
Representatives from Aero Exhaust and Dr. Gas, Inc. attended the SEMA Show, including Dr. Gas, Inc. founder and CEO Boyd Butler. Members of Aero Exhaust's marketing department who attended the SEMA Show reported that regional warehouse distributors of automotive supply products articulated a strong interest in distributing Dr. Gas, Inc. products, specifically its piping and oval tubing products.
"At the SEMA Show, a number of regional warehouse distributors, including those with established relationships with Aero Exhaust to distribute our products, expressed a strong interest in carrying Dr. Gas products as soon as possible. It was apparent from the feedback we received at the show that there is widespread interest in the products of both Aero Exhaust and Dr. Gas in the automotive performance supply industry, and that the synergies between the two companies will provide significant opportunities for cross-marketing and promotion," stated Justin Andersen, warehouse sales manager for Aero Exhaust, Inc.
"The SEMA Show was a successful event, and we are now following up with the numerous distributors who visited the booth and look forward to entering into discussions with them related to the supply of Dr. Gas products, while we move forward with our expected acquisition of Dr. Gas and execute the integration strategy between the two companies. The automotive performance supply industry clearly understands the potential of Aero Exhaust and Dr. Gas working together, and we will take every opportunity to increase the profile of both companies under the banner of a single public company," commented Bryan Hunsaker, chief executive officer of Franchise Capital Corporation and Aero Exhaust, Inc.
To sign up to receive information by email directly from Franchise Capital Corporation, including notices when the company issues future investor newsletters, please visit http://www.franchisecapitalcorp.net.
About Dr. Gas, Inc.
Dr. Gas, Inc. is a producer of the finest racing performance exhaust systems for street and pro-race performance exhaust applications. Dr. Gas produces 90% of all exhaust systems used in NASCAR, Nextel Cup Series, Busch Grand Nationals, Craftsman Truck Series, and many more.
Dr. Gas Exhaust Systems produces performance exhaust Xscream® crossover, y-pipe, oval tubing performance exhaust, and h-pipe systems that have changed the performance exhaust sound of NASCAR, IROC, drag racing, and pro-street. Dr. Gas designed and patented the revolutionary Spin Tech racing mufflers. Many standard and custom sizes of mandrel bends and oval tubing are the absolute best for high performance exhaust and ground clearance applications. The company has performance exhaust parts for car, truck, RV, motorcycle, marine, aircraft and industrial applications. At its first NASCAR race, Dr. Gas shocked the sport with its new performance exhaust sound and added power on Sterling Marlin's winning 1995 Daytona 500 racecar. Many of its patented NASCAR performance exhaust systems can be used in street rod performance exhaust applications. For more information on Dr. Gas, Inc., please visit http://www.drgas.com.
About Aero Exhaust:
Aero Exhaust is a world leader in performance exhaust airflow technology, manufacturing and distributing the most technologically advanced muffler on the market. Its product lines are built to the highest industry standards and offer the consumer a lifetime warranty. Aero Exhaust has been issued U.S. and Australian patents on its innovations and development in the exhaust industry, and its mufflers are available worldwide through major retailers, mass merchant centers, automotive aftermarket supply stores and wholesalers. Aero Exhaust mufflers are an exclusive National Association for Stock Car Auto Racing (NASCAR) Performance product and carry the prestigious NASCAR brand on product, packaging and related media. NASCAR legend Rusty Wallace is the official spokesperson for Aero Exhaust products. Additional information on Aero Exhaust's products, race team, and motorsports ventures can be found on its corporate website, www.aeroexhaust.com.
Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including the lack of funding, inability to complete required SEC filings, and others set forth in the Company's report on Form 10-K for fiscal year 2007 filed with the Securities and Exchange Commission.
CONTACT:
Gemini Financial Communications, Inc.
A. Beyer
951-677-8073
Email Contact
Source: Marketwire (November 15, 2007 - 9:02 AM EST)
GTREX Capital Files Quarterly Report and Updates Shareholders on Execution of Acquisition Strategy
GTREX Capital, Inc. (OTCBB: GRXI), a holding company with subsidiary operations in the travel distribution industry, today filed its quarterly report on Form 10-QSB for the period ended September 30, 2007 and updated shareholders on the status of its expected acquisition of a company that will become the focus of its future operations.
A link to the quarterly report can be found on the company's corporate website, www.gtrexcapital.com.
In addition to reporting the filing of the 10-QSB, GTREX Capital announced that it is continuing the due diligence process related to the company it has targeted for acquisition. In mid-October, the company announced that it had identified a new acquisition candidate and expected to enter into a letter of intent shortly thereafter.
GTREX Capital is a fully reporting over-the-counter bulletin board company that has been positioned as a public vehicle for an operating company that will bring value for shareholders. Its existing subsidiary, Global Travel Exchange, is a travel distribution technology company that provides a more efficient and cost-effective connection between customers and travel suppliers. If the planned acquisition is not a company that does business in the travel industry, there may be a spin-out of Global Travel Exchange that would include a dividend of its shares to GTREX Capital shareholders.
GTREX Capital management is focused on acquisition candidates that possess the potential for significant long-term growth in their respective industry segments.
"As we continue with our due diligence process on the targeted acquisition, which has taken more time than was initially anticipated, we will concurrently consider additional acquisition and reverse merger opportunities that are presented to GTREX Capital," stated Steven R. Peacock, GTREX Capital consultant chief executive officer. "The additional acquisition candidates include companies both within and outside the travel field, and depending upon which company becomes the operating entity within GTREX Capital, there could possibly be a spin-out of Global Travel Exchange including a dividend of its shares to GTREX Capital shareholders."
"Shareholders should also be aware that Global Travel Exchange's travel distribution technology provides a number of attractive scenarios for synergistic acquisitions, and we are currently evaluating several of these as acquisition candidates," Mr. Peacock added.
To subscribe to the company's email alert system and receive information directly from GTREX Capital whenever new press releases, investor newsletters, SEC filings, or other information is disclosed, please visit http://www.gtrexcapital.com/investor.php.
About GTREX Capital, Inc.
GTREX Capital, Inc. (http://www.gtrexcapital.com) is a holding company with a subsidiary conducting business in the travel industry. Global Travel Exchange, Inc., a GTREX Capital subsidiary, has launched its Voyager Network travel distribution platform, which provides a service that enables direct access to reservation systems of major travel suppliers such as airlines, cruise lines, hotels, car rental companies and providers of other travel amenities. GTREX Capital is in the process of identifying synergistic and non-synergistic businesses as potential acquisition targets for the company.
Safe Harbor Statement
This release contains forward-looking statements with respect to the results of operations and business of GTREX Capital, Inc., which involves risks and uncertainties. The Company's actual future results could materially differ from those discussed. The Company intends that such statements about the Company's future expectations, including future revenues and earnings, and all other forward-looking statements be subject to the "Safe Harbors" provision of the Private Securities Litigation Reform Act of 1995.
Contact:
Gemini Financial Communications, Inc.
A. Beyer
951-677-8073
Email Contact
Source: Marketwire (November 15, 2007 - 9:08 AM EST)
News by QuoteMedia
www.quotemedia.com
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended
September 30, 2007
Commission File Number
000-26887
FRANCHISE CAPITAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Nevada
98-0353403
(State or other jurisdiction of
incorporation or organization)
(IRS Employer Identification Number)
10288 S. Jordan Gateway Suite F
South Jordan, Utah 84095
(Address of principal executive offices)
(801) 495-0882
Issuer's telephone number, including area code
29970 Technology Drive, Suite 203
Murrieta, California 92563
(Registrant's Former Name and Address)
Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 [ ] No[ X ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No[ X ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No[ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the last practicable date.
Class
Outstanding at November 8, 2007
Common Stock, $0.0001 par value
1,720,757,804 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No[ X ]
--------------------------------------------------------------------------------
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
FRANCHISE CAPITAL CORPORATION
FINANCIAL STATEMENTS
September 30, 2007
--------------------------------------------------------------------------------
Franchise Capital Corporation
Balance Sheet
September 30,
2007
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
1,390
Total Current Assets
1,390
OTHER ASSTS:
Prepaid expenses
37,427
Loan Receivable - Aero Exhaust
1,882,500
Total Other Assets
1,919,927
TOTAL ASSETS
$
1,921,317
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses
$
17,112
Total Current Liabilities
17,112
TOTAL LIABILITIES
17,112
STOCKHOLDERS' EQUITY
Preferred Stock, Authorized 30,000,000 Shares, $.0001 Par Value, 0 Shares Issued and Outstanding
-
Common Stock, Authorized 5,000,000,000 Shares, $.0001 Par Value, 964,129,838 Shares Issued and Outstanding
96,413
Stock payable
344,152
Paid-in capital
12,161,007
Accumulated deficit
(10,697,367)
Total Stockholders' Equity
1,904,205
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,921,317
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
Franchise Capital Corporation
Statements of Operations
(Unaudited)
For the Three Months Ended
September 30,
September 30,
2007
2006
EXPENSES:
Accounting fees
$
3,930
$
125
Administrative expense
47,500
-
Contracted labor
20,500
16,000
Investor relations
9,028
-
Legal and professional fees
21,514
10,158
Rent
-
-
Salaries
-
-
G&A expenses
3,381
6,969
Total Expenses
105,853
33,252
TOTAL LOSS
(105,853)
(33,252)
OTHER INCOME (EXPENSE):
Settlement costs
(143,505)
-
NET INCOME (LOSS)
$
(249,358)
$
(33,252)
WEIGHTED AVERAGE SHARES
944,704,809
72,062,852
NET LOSS PER SHARE
(0.0003)
(0.0005)
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
FRANCHISE CAPITAL CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended
September 30,
September 30,
2007
2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss
$ (249,359)
$ (33,252)
Adjustments to reconcile net loss to net cash used
by operating activities:
Stock issued for services
71,250
-
Settlement costs
143,505
-
Decrease in prepaid expenses
(37,427)
-
Increase (decrease) in accounts payable and accrued liabilities
33,335
33,292
Net Cash Used by Operating Activities
(38,696)
40
CASH FLOWS FROM INVESTING ACTIVITIES
Issuance of Loan Receivable
(7,500)
-
Net Cash Used by Investing Activities
(7,500)
-
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft
-
(16)
Net Cash Provided by Financing Activities
-
(16)
INCREASE IN CASH AND EQUIVALENTS
(46,196)
24
CASH AND EQUIVALENTS, BEGINNING OF PERIOD
47,586
-
CASH AND EQUIVALENTS, END OF PERIOD
$ 1,390
$ 24
Non-Cash Financing Activities:
Stock issued for extinguishment of debt
$ 302,048
$ -
The accompanying notes are an integral part of these financial statements.
--------------------------------------------------------------------------------
FRANCHISE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2007
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Franchise Capital Corporation (the “Company”) a Nevada corporation, was incorporated on July 6, 2001. The Company was formerly named Cortex Systems, Inc. In December of 2004 the Company changed its name to Franchise Capital Corporation, to more accurately reflect its business of developing and franchising casual dining restaurants. The Company acquired the rights to four franchise concepts. Effective December 24, 2004, the Company became as an internally managed, closed end investment company electing to be treated as a business development company under the Investment Company Act of 1940, as amended.
In August 2006, the Company abandoned its business model and liquidated all of its investment holdings. On March 13, 2007, the Company held a shareholder meeting at which the Company’s shareholders voted to withdraw the Company’s election to be a business development company as defined by the 1940 Act. On March 14, 2007, the Company filed for N-54C to formally withdraw the Company’s BDC status.
On October 4, 2007, the Company exchanged, pursuant to a Share Exchange Agreement with TTR-HR, Inc. (d/b/a Aero Exhaust, Inc.) (“Aero”) (the “Share Exchange Agreement”), an aggregate of 1,114,285,700 shares of its common stock for all of the issued and outstanding common stock of Aero.
In connection with the Share Exchange Agreement, the Company entered into a Commercial Revolving Line of Credit (the “Line of Credit”) under which it advanced a total of $1,875,000 to Aero. The terms of the Line of Credit called for any unpaid balance to be converted into shares of Aero common stock immediately prior to the Closing of the Share Exchange Agreement. Aero’s shareholders accepted the redemption of the Line of Credit payable to the Company as part of the Share Exchange Agreement, which resulted in the Company’s historic shareholders holding 600,000,000 shares of the Company’s issued and outstanding common stock.
Immediately following the closing, there were 1,714,285,700 shares of the Company’s common stock outstanding and Aero became a wholly-owned subsidiary of the Company.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred material operating losses, has continued operating cash flow deficiencies and has working capital deficit at September 30, 2007. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company believes that the share exchange with Aero Exhaust will result in the Company’s achieving profitability in the short term; however, there is no guarantee that Aero’s operations will prove profitable. The accompanying financial statements do not include any adjustments that might result from this uncertainty. These financial statements should be read in conjunction with the Company’s annual report for the year ended June 30, 2007 as filed on Form 10-KSB.
NOTE 2 – COMMON STOCK
In November 2006, the Company agreed to settle litigation with Golden Gate Investors on a past-due convertible debenture. Under the terms of the settlement, the Company placed 843,818,400 shares of its restricted common stock into an escrow account for satisfaction of the debenture. Golden Gate is allowed to withdraw the shares from escrow provided that their overall holdings in the Company do not exceed 4.9% of all issued and outstanding common stock. The debenture obligation is reduced by 80% of the average of the five lowest closing bid prices of the Company’s common stock over a 90-day period prior to the share withdrawal multiplied by the number of shares being withdrawn. Under the terms of this settlement, as of October 23, 2007, 455,333,490 shares have subsequently been released from escrow and the debenture balance has been satisfied in full. During the quarter ended September 30, 2007, 531,221 shares were issued.
In connection with the debenture settlement with Golden Gate, Golden Gate entered into a stock purchase agreement which required Golden Gate to purchase $100,000 of the Company’s restricted common stock for every $10,000 in debenture redeemed through the escrow. The Company previously received $2,206,501 from Golden Gate as an advance on future stock purchases under the agreement. As of September 30, 2007, the Company had sold 1,862,349 shares of restricted common stock to Golden Gate for $1,862,349 under the agreement, which was offset against the advance. The remaining advance of $344,152 has been recorded as Stock Payable in the accompanying financial statements.
--------------------------------------------------------------------------------
During the three months ended September 30, 2007, the Company satisfied back salaries amounting to $127,048 due to former employees and management through the issuance of 14,946,830 shares of common stock issued pursuant to a form S-8 registration. In addition, 7,058,824 shares were issued under Form S-8 to consultants for services valued at $60,000.
During the three months ended September 30, 2007, the Company issued 1,125,000 shares of restricted common stock as consideration for $11,250 in services rendered valued at $0.01 per share.
During the three months ended September 30, 2007, the Company issued a total of 17,500,000 shares of common stock to satisfy debt obligations of $31,495. The shares were issued under a settlement agreement filed with the 12th Circuit Court in Sarasota County, Florida, pursuant to Section 3(a)10 of the Securities Act of 1933.
NOTE 3 - SUBSEQUENT EVENTS
On October 4, 2007, the Company accepted the resignations of Steven Peacock as the Company’s Chief Executive Officer, Chief Financial Officer and Secretary, Robert McCoy as the Company’s Chairman of the Board of Directors, James Bickel as a member of the Board of Directors and Gary Nerison as a member of the Board of Directors. These resignations are in connection with the consummation of the Share Exchange Agreement with Aero and the appointment of new directors do not arise from any disagreement on any matter relating to the Company’s operations, policies or practices, nor regarding the general direction of the Company. None of these directors served on any subcommittees of the Board of Directors. Effective as of the same date the Company elected and appointed Bryan Hunsaker as Chairman and Chief Executive Officer of the Company, Shane Traveller as Interim Chief Financial Officer and Secretary, and Robert McMichael as a Director.
On October 4, 2007, the Company and Aero concluded the Share Exchange. As a result of the transaction, the Company agreed to issue a total of 1,114,285,700 new shares of restricted common stock, bringing the total number of shares of issued and outstanding common shares to 1,714,285,700. The shares are being issued in exchange for 6,745,456 shares of Aero common stock, representing 100% of the total issued and outstanding shares of Aero, and the satisfaction of Aero debt of $4,458,519. As of October 11, 2007, 1,977,814 shares of Aero (representing 15%) had not been tendered for exchange and continue to be held by minority shareholders. This resulted in 166,407,263 shares of the 1,114,285,700 new shares of the Company’s common stock being placed in an escrow for the future exchange of the remaining Aero stock. As a result of the Share Exchange Agreement, the shareholders of Aero presently control approximately 65% of the total issued and outstanding shares of the Company. Aero elected to become the successor issuer for reporting purposes for all periods subsequent to September 30, 2007.
The following consolidated pro-forma financial statements reflect the balance sheet and statement of operations as of September 30, 2007 for Franchise Capital and Aero Exhaust:
Consolidated Balance Sheet
As of September 30, 2007
Cash & Cash Equivalents
$ 27,083
Accounts Receivable
151,201
Other Current Assets
352,748
Total Current Assets
531,032
Fixed Assets, net of depreciation
110,875
Goodwill, net of impairment
12,859,605
Total Assets
$ 13,501,512
Current Liabilities
Accounts Payable
$ 363,163
Current Portion of Debt
944,063
Total Current Liabilities
1,307,226
Equity
12,194,286
Total Liabilities & Equity
$ 13,501,512
Consolidated Income Statement
For the Quarter Ended September 30,
2007
2006
Revenues
$ 170,461
$ 166,178
Cost of Goods Sold
(78,261)
(54,700)
Gross Profit
92,200
111,478
General & Administrative Expenses
449,329
299,797
Settlement Costs
143,505
-
Sales & Marketing Expenses
82,685
734,182
Total Expenses
532,014
1,033,979
Net Loss
$ (439,814)
$ (922,501)
--------------------------------------------------------------------------------
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K.
Item 2. Management’s Discussion and Analysis or Plan of Operation
General
Franchise Capital Corporation (the “Company”) was formed as a Nevada corporation on July 6, 2001 under the name Cortex Systems, Inc. They were originally a development stage company that intended to establish memory clinics in several different locations in North America. Unfortunately, the Company was unable to successfully execute its business plan. In July of 2003, the Company changed its name to BGR Corporation. Along with the name change came a new management and ownership team. The intention of management is to acquire new innovative fast-casual restaurant concepts, develop them into a profitable working design, and franchise them across the country. The Corporation's partner, American Restaurant Development Company, is a professional restaurant designer, franchiser, and restaurant management company where principles have extensive experience in the industry. In December of 2004 the Company changed its name to Franchise Capital Corporation. The names “Franchise Capital Corporation”, "we", "our" and "us" used in this report refer to Franchise Capital Corporation.
On December 23, 2004, the company elected to be regulated as a Business Development Company (BDC) as outlined in the Investment Company Act of 1940 by filing a Form N-54A. As a BDC, the Company focused on investing and developing restaurant franchise companies and made several investments (discussed below). During the fourth quarter of 2006, the Company abandoned its business model and liquidated all of its investment holdings. On March 13, 2007, the Company held a shareholder meeting at which the Company’s shareholders voted to withdraw the Company’s election to be a business development company as defined by the 1940 Act. On March 13, 2007, the Company filed for N-54C to formally withdraw the Company’s BDC status.
On October 4, 2007, the Company and Aero concluded the Share Exchange. As a result of the transaction, the Company agreed to issue a total of 1,114,285,700 new shares of restricted common stock, bringing the total number of shares of issued and outstanding common shares to 1,714,285,700. The shares are being issued in exchange for 6,745,456 shares of Aero common stock, representing 100% of the total issued and outstanding shares of Aero, and the satisfaction of Aero debt of $4,458,519. As of October 11, 2007, 1,977,814 shares of Aero (representing 15%) had not been tendered for exchange and continue to be held by minority shareholders. This resulted in 166,407,263 shares of the 1,114,285,700 new shares of the Company’s common stock being placed in an escrow for the future exchange of the remaining Aero stock.In connection with the Share Exchange Agreement, the Company entered into a Commercial Revolving Line of Credit (the “Line of Credit”) under which it advanced a total of $1,875,000 to Aero. The terms of the Line of Credit called for any unpaid balance to be converted into shares of Aero common stock immediately prior to the Closing of the Share Exchange Agreement. Aero’s shareholders accepted the redemption of the Line of Credit payable to the Company as part of the Share Exchange Agreement, which resulted in the Company’s historic shareholders holding 600,000,000 shares of the Company’s issued and outstanding common stock. As a result of the Share Exchange Agreement, the shareholders of Aero presently control approximately 65% of the total issued and outstanding shares of the Company.
--------------------------------------------------------------------------------
Immediately following the closing, there were 1,714,285,700 shares of the Company’s common stock outstanding and Aero became a wholly-owned subsidiary of the Company. For reporting purposes, Aero elected to become the successor issuer to Franchise Capital for all periods subsequent to September 30, 2007.
On October 4, 2007, the Company accepted the resignations of Steven Peacock as the Company’s Chief Executive Officer, Chief Financial Officer and Secretary, Robert McCoy as the Company’s Chairman of the Board of Directors, James Bickel as a member of the Board of Directors and Gary Nerison as a member of the Board of Directors. These resignations are in connection with the consummation of the Share Exchange Agreement with Aero and the appointment of new directors do not arise from any disagreement on any matter relating to the Company’s operations, policies or practices, nor regarding the general direction of the Company. None of these directors served on any subcommittees of the Board of Directors. Effective as of the same date the Company elected and appointed Bryan Hunsaker as Chairman and Chief Executive Officer of the Company, Shane Traveller as Interim Chief Financial Officer and Secretary, and Robert McMichael as a Director.
RESULTS OF OPERATIONS
Three months ended September 30, 2007 compared to three months ended September 30, 2006
During the quarter ended September 30, 2007, the Company experienced a net loss of $249,358 compared to a net loss of $33,252 for the same period in 2006. The current period loss is primarily due to settlement costs of $143,505 related to debt reduction of $31,495 and $47,500 in administrative expenses.
The Company generated no revenues for the three month period ended September 30, 2007 and September 30, 2006.
Liquidity and Capital Resources
The Company’s financial statements present an impairment in terms of liquidity. As of September 30, 2007 the Company had $17,112 in current liabilities and $1,390 in current assets. The Company has accumulated $10,697,367 of net operating losses through September 30, 2007 which may be used to reduce taxes in future years through 2027. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carry forwards. The potential tax benefit of the net operating loss carry forwards have been offset by a valuation allowance of the same amount. The Company has not yet established revenues to cover its operating costs. Management believes that the share exchange with Aero Exhaust will result in the Company’s achieving profitability in the short term; however, there is no guarantee that Aero’s operations will prove profitable. In the event the Company is unable to generate profits and if suitable financing is unavailable, there is substantial doubt about the Company’s ability to continue as a going concern.
Item 3. Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, Bryan Hunsaker, our chief executive officer and Shane Traveller, our chief financial officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Mr. Hunsaker and Mr. Traveller concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings. There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
It should be noted, however, that no matter how well designed and operated, a control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems (including faulty judgments in decision making or breakdowns resulting from simple errors or mistakes), there can be no assurance that any design will succeed in achieving its stated goals under all potential conditions. Additionally, controls can be circumvented by individual acts, collusion or by management override of the controls in place.
--------------------------------------------------------------------------------
PART II. Other Information
Item 1. Legal Proceedings
None
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In November 2006, the Company agreed to settle litigation with Golden Gate Investors on a past-due convertible debenture. Under the terms of the settlement, the Company placed 843,818,400 shares of its restricted common stock into an escrow account for satisfaction of the debenture. Golden Gate is allowed to withdraw the shares from escrow provided that their overall holdings in the Company do not exceed 4.9% of all issued and outstanding common stock. The debenture obligation is reduced by 80% of the average of the five lowest closing bid prices of the Company’s common stock over a 90-day period prior to the share withdrawal multiplied by the number of shares being withdrawn. Under the terms of this settlement, as of October 23, 2007, 455,333,490 shares have subsequently been released from escrow and the debenture balance has been satisfied in full. During the quarter ended September 30, 2007, 531,221 shares were issued.
In connection with the debenture settlement with Golden Gate, Golden Gate entered into a stock purchase agreement which required Golden Gate to purchase $100,000 of the Company’s restricted common stock for every $10,000 in debenture redeemed through the escrow. As of September 30, 2007, the Company had sold 1,862,349 shares of restricted common stock to Golden Gate for $1,862,349 under the agreement. In addition, the Company received $2,206,501 from Golden Gate as an advance on future stock purchases under the agreement. The advance has been recorded as Stock Payable in the accompanying financial statements.
During the three months ended September 30, 2007, the Company satisfied back salaries amounting to $127,048 due to former employees and management through the issuance of 14,946,830 shares of common stock issued pursuant to a form S-8 registration. In addition, 7,058,824 shares were issued under Form S-8 to consultants for services valued at $60,000.
During the three months ended September 30, 2007, the Company issued 1,125,000 shares of restricted common stock as consideration for $11,250 in services rendered valued at $0.01 per share.
During the three months ended September 30, 2007, the Company issued a total of 17,500,000 shares of common stock to satisfy debt obligations of $31,495. The shares were issued under a settlement agreement filed with the 12th Circuit Court in Sarasota County, Florida, pursuant to Section 3(a)10 of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits
The exhibits listed below are required by Item 601 of Regulation S-B.
Exhibit No.
Description
Location
3.1
Articles of Incorporation
*
3.2
Bylaws
*
14
Code of Ethics adopted December 23,2004
**
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
***
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
***
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
***
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
***
99(i)
Audit Committee Charter adopted December 23, 2004
**
* Incorporated by reference from Franchise Capital Corporation's Registration Statement on Form SB-2 filed on October 29, 2001.
** Incorporated by reference from Franchise Capital Corporation’s Annual Report on Form 10-K for the Fiscal Year Ended June 30, 2005 filed on September 30, 2005.
*** Filed herewith.
--------------------------------------------------------------------------------
SIGNATURE PAGE
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.
Dated: November 13, 2007
/s/ Bryan Hunsaker
Bryan Hunsaker
Chief Executive Officer
--------------------------------------------------------------------------------
EXHIBIT 31.1
SECTION 302
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Bryan Hunsaker, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Franchise Capital Corporation;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 13, 2007
By: /s/ Bryan Hunsaker
Bryan Hunsaker, Chief Executive Officer
--------------------------------------------------------------------------------
EXHIBIT 31.2
SECTION 302
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Shane Traveller, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Franchise Capital Corporation;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 13, 2007
By: /s/ Shane Traveller
Shane Traveller, Chief Financial Officer
--------------------------------------------------------------------------------
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Franchise Capital Corporation (the "Company") on Form 10-QSB for the period ending September 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Bryan Hunsaker, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operation of the Company.
/s/ Bryan Hunsaker
Bryan Hunsaker
Chief Executive Officer
November 13, 2007
--------------------------------------------------------------------------------
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Franchise Capital Corporation (the "Company") on Form 10-QSB for the period ending September 30, 2007, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Shane Traveller, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of the operation of the Company.
/s/ Shane Traveller
Shane Traveller
Chief Financial Officer
November 13, 2007
Thanks for proving that most of these Javelin plays deserve to be sub sub penny. LOL
GTREX What a truly sad set of financials.
some companies just should NOT be public.
GTREX CAPITAL, INC.: 10QSB, Sub-Doc 1
UNITED STATES
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 SEPTEMBER 30, 2007
Commission file number 000-27487
GTREX CAPITAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-4171971
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
29970 Technology Drive, Suite 203, Murrieta, CA 92563
(Address of principal executive offices)
(951) 677-6735
(Registrant’s telephone number, including area code)
N/A
(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 Securities Exchange Act of 1934 during the preceding 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 [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]
Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the last practicable date.
Class
November 13, 2007
Common Stock, $0.001 par value
1,979,695,655 shares
Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
--------------------------------------------------------------------------------
ITEM 1-FINANCIAL STATEMENTS
GTREX Capital, Inc
Consolidated Balance Sheet
(Unaudited)
September 30,
2007
ASSETS
Current Assets
Cash
$
-
Deposits
3,750
Total Current Assets
3,750
Property and equipment, net of depreciation
24,926
Other Assets
Licenses, net of amortization
222,739
Total Other Assets
222,739
Total Assets
$
251,415
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Bank overdraft
1,851
Accounts Payable
292,631
Credit Line
100,500
Total Current Liabilities
394,982
Total Liabilities
394,982
Stockholders' Equity
Preferred Stock, Authorized 30,000,000 Shares, $0.0001 Par Value, 0 Shares Issued and Outstanding
-
Common Stock, Authorized 5,000,000,000 Shares, $0.0001 Par Value,1,966,862,322 Shares Issued and Outstanding
196,686
Additional Paid in Capital
8,046,473
Retained Deficit
(8,386,726)
Total Stockholders' Deficit
(143,567)
Total Liabilities and Stockholders' Equity
$
251,415
The accompanying notes are an integral part of these consolidated financial statements
--------------------------------------------------------------------------------
GTREX Capital, Inc.
Consolidated Statements of Operations
(Unaudited)
For the Nine
Months Ended
September 30,
For the Nine
Months Ended
September 30,
For the Three
Months Ended
September 30,
For the Three
Months Ended
September 30,
2007
2006
2007
2006
Revenues
Payment from agencies
$
2,000
$
44,261
$
-
$
5,000
Total Revenues
2,000
44,261
-
5,000
Operating Expenses
Administrative fees
112,500
102,500
37,500
37,500
Amortization expense
40,998
40,998
13,666
13,666
Consulting
22,500
39,825
6,000
9,500
Depreciation expense
7,721
6,801
2,574
2,267
Investor relations
16,937
23,356
7,242
9,052
Licenses expense
3,600
28,967
-
4,001
Payroll expense
59,000
-
18,000
-
Professional fees
209,738
169,510
55,763
92,770
Rent or Lease expense
11,186
49,288
4,419
11,168
Travel and entertainment expense
-
38,140
-
2,333
General & Administrative expenses
25,451
55,831
8,928
11,662
Total Operating Expenses
509,631
555,216
154,092
193,919
Net Operating Loss
(507,631)
(510,955)
(154,092)
(188,919)
Other Income (Loss)
Interest expense
(187)
(9,196)
(153)
(780)
Unrealized loss on investment
-
(2,510,460)
-
(117,115)
Minority interest
10,000
-
-
-
Settlements costs
(686,594)
-
-
-
Total Other Loss
(676,781)
(2,519,656)
(153)
(117,895)
Loss from Continuing Operations
(1,184,412)
(3,030,611)
(154,245)
(306,814)
Income Tax Expense
-
-
-
-
Net Loss
$
(1,184,412)
$
(3,030,611)
$
(154,245)
$
(306,814)
Net Loss Per Share
$
(0.0007)
$
(0.0058)
$
(0.0001)
$
(0.0006)
Weighted Average Shares Outstanding
1,741,079,573
519,753,397
1,964,987,542
519,753,397
The accompanying notes are an integral part of these consolidated financial statements.
--------------------------------------------------------------------------------
GTREX Capital, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
September 30,
2007
2006
Cash Flows from Operating Activities:
Net Loss
$
(1,184,412)
$
(3,030,610)
Adjustments to Reconcile Net Loss to Net Cash Used by Operations:
Unrealized Loss on Investment
-
2,510,460
Deposits
-
1,850
Amortization
40,998
40,998
Depreciation
7,721
6,801
Stock issued for services
18,000
-
Settlement costs on conversion of debt
686,594
-
Other current liabilities
-
1,595
Prepaid expense
19,779
-
Increase in accounts payable
70,852
228,586
Net Cash Used by Operating Activities
(340,468)
(240,320)
Cash Flows Used by Investing Activities:
Purchase of equipment
(6,137)
-
Net Cash Used by Investing Activities
(6,137)
-
Cash Flows from Financing Activities:
Bank overdraft
1,850
-
Proceeds from issuance of common stock
244,206
216,800
Proceeds from credit line
100,500
10,241
Net Cash from Financing Activities
346,556
227,041
Increase (Decrease) in Cash
(49)
(13,279)
Cash and Cash Equivalents at Beginning of Period
49
17,224
Cash and Cash Equivalents at End of Period
$
-
$
3,945
Non-Cash Investing and Financing Activities:
Stock issued on extinguishment of debt
$
190,000
$
-
Stock issued for note payable
$
-
$
9,060
Acquisition
$
-
$
1,800,000
The accompanying notes are an integral part of these consolidated financial statements.
--------------------------------------------------------------------------------
GTREX CAPITAL, INC.
Notes to the Consolidated Financial Statements
September 30, 2007
NOTE 1 - NATURE OF ORGANIZATION
This summary of significant accounting policies of GTREX Capital, Inc. and its wholly owned subsidiary company is presented to assist in understanding the Company's financial statements. The consolidated financial statements and notes are representations of the Company's management who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its December 31, 2006 Annual Report on Form 10-KSB. Operating results for the nine months ended September 30, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.
Organization and Business Activities
On January 25, 2005 the Company's Board of Directors elected to be regulated as a business investment company under the Investment Company Act of 1940. As a business development company ("BDC"), the Company was required to maintain at least 70% of its assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded on a major US Exchange or that has assets less than $4 million. On February 1, 2005 the Company changed its name to GTREX Capital, Inc to properly reflect the nature if its business.
On November 16, 2006, the Company’s shareholders voted to withdraw the Company’s BDC election and cease operating as an investment company. The decision to withdraw the BDC election was prompted principally to allow the Company to focus its operations and finances on bringing the Global Travel Exchange product to market. On November 16, 2006, the Company filed Form N-54C to formally withdraw its BDC election. As a result, the accompanying consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practices for an operating company.
At September 30, 2007, the Company had one operating subsidiary, Global Travel Exchange, Inc., a Nevada corporation (“GTE”). GTE is an alternative Global Distribution System (GDS) providing direct access to reservation systems of major travel suppliers - airlines, cruise lines, hotels, car rental companies and providers of other travel amenities worldwide. The company searches for availability and price for the itinerary suggested by the buyer over all direct connected suppliers and global distribution systems and presents the aggregated result in the format preferred by the buyer. Besides improved brand and revenue management, suppliers save distribution costs while providing efficient service to major customers through direct connection. The Company will provide integrated and seamless web-based linkage from the supplier's reservation systems direct to the systems of their selected buyers and serve as a reservation service between them.
Dissolution of the Global Travel Partners Acquisition
On March 5, 2006, the Company acquired a 100% ownership interest in Global Travel Partners (“GTP”), a holding company with travel related business operations located in Vancouver, British Columbia, by issuing 800 million shares of restricted common stock and notes payable of $800,000. Of the total purchase price, 200 million shares and all of the notes payable were placed in escrow pending the attainment by GTP of certain financial results during 2006. The transaction contemplated the additional acquisition of affiliated companies; however, such follow-on acquisitions did not take place and the GTP operations failed to generate any significant revenues. Effective December 31, 2006, the Company agreed to dissolve the previous acquisition of Global Travel Partners, Inc. Under the terms of the dissolution, the Company agreed to return ownership of GTP to the prior owners in exchange for the cancellation of all shares and notes in escrow and the return of 400 million shares of GTREX stock. The Company intends to cancel all shares issued in connection with the GTP acquisition. Accordingly, the balance sheets and results of operations for GTP have been omitted from the accompanying financial statements and the shares of stock issued by GTREX in the transaction have been excluded from the total issued and outstanding shares disclosure. The Company recorded a loss on the transaction of $1,200,000 which represented the fair value of the 200 million shares issued in the transaction that are not being returned. This loss was recorded as of December 31, 2006.
--------------------------------------------------------------------------------
Principles of Consolidation
The consolidated financial statements include the accounts of GTREX Capital, Inc., and Global Travel Exchange, Inc. All material intercompany accounts and transactions have been eliminated in the consolidation.
NOTE 2 – GOING CONCERN
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has incurred losses from its inception through September 30, 2007. It has not established any revenues with which to cover its operating costs and to allow it to continue as a going concern. The Company’s auditors have expressed a going concern opinion associated with the Company’s consolidated financial statements for the year ended December 31, 2006. The Company will be required to raise addition capital through the issuance of either debt or equity securities in order to sustain operations for the coming year.
NOTE 3 – PROPERTY AND EQUIPMENT
The Company’s property and equipment at September 30, 2007 consist of the following:
2007
Office furniture and Equipment
$
51,475
Less accumulated depreciation
(26,549)
Equipment, net
$
24,926
Office furniture and equipment are depreciated on straight-line basis over the estimated useful life of 5 to 7 years. Total recorded depreciation expense of $2,574 and $2,267 for the quarters ended September 30, 2007 and 2006, respectively.
NOTE 4 – SOFTWARE LICENSES
The Company has purchased several software licenses which are used as part of the Global Travel Exchange program. The licenses are amortized over the anticipated useful life of the software which is seven years. Licenses and accumulated amortization at September 30, 2007 are as follows:
2007
Software Licenses
$
354,750
Less accumulated amortization
(132,011)
Licenses, net
$
222,739
Amortization expense was $13,666 and $13,666 for the quarters ended September 30, 2007 and 2006, respectively.
--------------------------------------------------------------------------------
NOTE 5 – SETTLEMENT COSTS
On March 23, 2005, GTREX Capital’s wholly owned subsidiary Global Travel Exchange issued a note payable to Elleipsis, Inc. in the amount of $243,000 as consideration for a license agreement on certain software necessary for the Global Travel Exchange product. The note was due and payable on March 1, 2007. During the year ended December 31, 2005, the Company paid $53,000 against the liability, of which $15,000 was paid through the issuance of 3,000,000 shares of the Company’s common stock. The Company was unable to pay the debt when it became due on March 1, 2007. On March 2, 2007 the remaining principal and interest was paid in full by the issuance of 934,000,000 shares of the Company’s common stock under a court-ordered settlement. The note holder agreed that half of any surplus proceeds from liquidating the stock over and above the balance due on the note plus accrued interest will be repaid to the Company as a reduction in settlement costs. As a result of this transaction, the Company recorded settlement costs of $828,800 in the quarter ended March 31, 2007 which represented the value of the shares issued, less the principle and interest owed. During the nine months ended September 30, 2007, the Company received $244,206 from the note holder resulting from a surplus of cash after liquidating a portion of the shares. The cash received has been recorded as a reduction in settlement costs.
NOTE 6 – CREDIT LINE
As of September 30, 2007, the Company owed $100,500 under a credit line payable to Sequoia International. The credit line bears interest at the rate of 8% per annum and is due July 1, 2008.
NOTE 7 – STOCK TRANSACTIONS
On March 2, 2007, the Company entered into a Settlement Agreement with Sequoia International, Inc., which had purchased the note payable from Elleipsis, Inc. on March 1, 2007. Under the terms of the Elleipsis note payable, the Company was required to pay remaining principal of $190,000 plus accrued interest on March 1, 2007 to satisfy the note. The Company defaulted on this payment and Sequoia filed an action against the Company in the 12th Judicial Circuit Court. The settlement agreement provided for the Company to issue a total of 934,000,000 shares of common stock for full satisfaction and release of the obligation. The Company and Sequoia agreed that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow is the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 9.9% of the Company’s common stock. Further, all shares is escrow are voted by the Company’s chairman of the Board of Directors. As of September 30, 2007, a total of 100,000,000 shares had been released from escrow. The Company received $244,206 resulting from the surplus of the liquidation of the shares over and above that to which Sequoia was entitled to receive.
During the three months ended September 30, 2007, the Company issued 3,000,000 shares of restricted common stock as consideration for $3,000 in services rendered valued at $0.001 per share.
During the three months ended September 30, 2007, the Company cancelled 457,400 shares of restricted common stock previously issued to Christopher Berlandier in connection with the Mutual Release and Hold Harmless Agreement entered into on August 3, 2006.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-Looking Information
The statements contained in this Quarterly Report on Form 10-QSB that are not historical facts may contain forward-looking statements that involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, among other factors, general business conditions, government regulations governing approvals and manufacturing practices, competitive market conditions, success of the Company's business strategy, delay of orders, changes in the mix of products sold, availability of suppliers, concentration of sales in markets and to certain customers, changes in manufacturing efficiencies, development and introduction of new products, fluctuations in margins, timing of significant orders, and other risks and uncertainties currently unknown to management.
General
GTREX Capital, Inc. was incorporated under the laws of the state of Delaware under the name of Apollo Holdings, Inc. and was originally engaged in the business of creating anti-piracy software. The Company abandoned the original business plan due to difficulties faced by the Company in creating sustainable business in both our business models relating to anti-piracy software services that was offered to corporations with digital assets and the competition in web-based business-to-business intellectual property exchanges. The Company sought other business opportunities and in March of 2004 completed a merger with GTREX, Inc. a privately held Delaware Corporation that was incorporated on June 14, 1999 to engage in the travel and tourism business. The Company, in anticipation of the merger, changed its name from Apollo Holdings, Inc. to GTREX, Inc. on February 24, 2004. The Company exchanged 8,819,400 shares of newly issued common stock for 8,819,400 shares of the private company of which 7,942,068 shares have been issued. The reorganization was recorded as a reverse acquisition using the purchase method of business combination. In a reverse acquisition all accounting history becomes, that of the accounting acquirer, therefore all historical information prior to the acquisition is that of GTREX, Inc. The shares issued to the shareholders of Global Travel Exchange, Inc have been stated retroactively, as though a 3 for 1 stock split occurred. The reverse merger adjustment is therefore all the shares held by the GTREX Inc. shareholders prior to the acquisition.
On January 25, 2005 the Company's Board of Directors elected to be regulated as a business investment company under the Investment Company Act of 1940. As a business development company ("BDC"), the Company is required to maintain at least 70% of its assets invested in "eligible portfolio companies", which are loosely defined as any domestic company which is not publicly traded on a major US Exchange or that has assets less than $4 million. On February 1, 2005 the Company changed its name to GTREX Capital, Inc to properly reflect the nature if its business.
On November 16, 2006, the Company filed Form N-54C to formally withdraw its BDC election. Historically, the Company intended to seek out investment securities as its core business. The Company has determined, however, that in the current environment it would be better served to focus its efforts on the operation of its existing businesses rather than act as a passive investor.
At present, the only subsidiary company is Global Travel Exchange, Inc., a Nevada corporation. Global Travel Exchange, Inc. (“GTE”) is an alternative Global Distribution System (GDS) providing direct access to reservation systems of major travel suppliers - airlines, cruise lines, hotels, car rental companies and providers of other travel amenities worldwide. The company searches for availability and price for the itinerary suggested by the buyer over all direct connected suppliers and global distribution systems and presents the aggregated result in the format preferred by the buyer. Besides improved brand and revenue management, suppliers save distribution costs while providing efficient service to major customers through direct connection. The Company will provide integrated and seamless web-based linkage from the supplier's reservation systems direct to the systems of their selected buyers and serve as a reservation service between them, obviating the need and cost of the traditional Global Distribution Systems (GDS).
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CRITICAL ACCOUNTING POLICIES
The Company's financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States of America ("GAAP"). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in the external disclosures of the Company including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. Valuations based on estimates are reviewed by us for reasonableness and conservatism on a consistent basis throughout the Company. Primary areas where financial information of the Company is subject to the use of estimates, assumptions and the application of judgment include acquisitions, valuation of long-lived and intangible assets, and the realizability of deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions.
Valuation Of Long-Lived And Intangible Assets
The recoverability of long lived assets requires considerable judgment and is evaluated on an annual basis or more frequently if events or circumstances indicate that the assets may be impaired. As it relates to definite life intangible assets, we apply the impairment rules as required by SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Assets to Be Disposed Of" as amended by SFAS No. 144, which also requires significant judgment and assumptions related to the expected future cash flows attributable to the intangible asset. The impact of modifying any of these assumptions can have a significant impact on the estimate of fair value and, thus, the recoverability of the asset.
Income Taxes
We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities. We regularly review our deferred tax assets for recoverability and establish a valuation allowance based upon historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences. As of September 30, 2007, we estimated the allowance on net deferred tax assets to be one hundred percent of the net deferred tax assets.
RESULTS OF OPERATIONS
Three months ended September 30, 2007 compared to three months ended September 30, 2006.
Revenues
The Company reported no revenues for the three months ended September 30, 2007compared to $5,000 for the three months ended September 30, 2006. The revenues were generated by our wholly-own subsidiary, Global Travel Exchange, for direct connecting to the Voyager Network travel distribution platform, which provides a service that enables direct access to reservation systems of major travel suppliers.
The Company has not yet established revenues to cover its operating costs. The Company's strategy over the next twelve months consists of remaining focused on acquiring technology companies, staying updated on distribution technology, acquiring new clients.
Operating Expenses
Operating expenses were $154,092 for the three months ended September 30, 2007 compared to operating expenses of $193,919 for the three months ended September 30, 2006. Current period operating expenses consisted principally of $93,263 in administrative and professional fees and $18,000 in payroll expense.
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Other Income/(Loss)
Other income/(Loss) for the three months ended September 30, 2007 was ($153) as compared to ($117,895) for the three months ended September 30, 2006. Current period loss consisted of $153 in interest expense.
Net Loss
The Company incurred a net loss of $154,245 or $(0.0001) per share for the three months ended September 30, 2007, compared to a loss of $306,814 or $(0.0006) for the three months ended September 30, 2006.
Nine months ended September 30, 2007 compared to nine months ended September 30, 2006.
Revenues
Revenues for the nine months ended September 30, 2007 were $2,000, compared to $44,261 revenues for the nine months ended September 30, 2006. All of our revenue was generated by our wholly-own subsidiary, Global Travel Exchange, for direct connecting to the Voyager Network travel distribution platform, which provides a service that enables direct access to reservation systems of major travel suppliers.
Operating Expenses
Operating expenses were $509,931 for the nine months ended September 30, 2007 compared to operating expenses of $555,216 for the nine months ended September 30, 2006. Current period operating expenses consisted principally of $322,238 in administrative and professional fees and $59,000 in payroll expense.
Other Income/(Loss)
Other income/(loss) for the nine months ended September 30, 2007 was ($676,781) as compared to ($2,519,656) for the nine months ended September 30, 2006. Current period other expense consisted principally of $686,594 in settlement costs related to the debt reduction of $190,000
Net Loss
The Company incurred a net loss of $1,184,412 or $(0.0007) for the nine months ended September 30, 2007, compared to a loss of $3,030,611 or $(0.0058) for the nine months ended September 30, 2006.
Liquidity and Capital Resources
The Company’s financial statements present an impairment in terms of liquidity. As of September 30, 2007 the Company had $394,982 in current liabilities which exceeded current assets by $391,232. The Company has accumulated $8,386,726 of net operating losses through September 30, 2007 which may be used to reduce taxes in future years through 2027. The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carry forwards. The potential tax benefit of the net operating loss carry forwards have been offset by a valuation allowance of the same amount. The Company has not yet established revenues to cover its operating costs. The Company's strategy over the next twelve months consists of remaining focused on acquiring technology companies, staying updated on distribution technology, acquiring new clients and to raise additional debt and/or equity financing to allow the Company to continue in operation and satisfy its financial obligations.
In order to implement the above strategy, the Company will be required to raise additional capital in the coming twelve months since cash flows from operations are insufficient to sustain the current level of operations. Management is exploring multiple sources for raising such capital including the use of both debt and equity financing, joint ventures, partnerships and licensing contracts. However, there are currently no definite plans or commitment for raising adequate capital to both sustain operations and implement the business plan. If the Company is unable to obtain sufficient capital on favorable terms, there is substantial doubt about the Company’s ability to continue as a going concern.
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ITEM 3. CONTROLS AND PROCEDURES
Under the supervision and with the participation of management, acting as our principal executive officer and principal financial officer, Ronald Lindsay and Gary Nerison evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of September 30, 2007. Based on this evaluation, our principal executive officer and our principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed to ensure that the information required to be disclosed by us in the reports we submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communication to our chief executive officer and chief financial officer, in a manner that allowed for timely decisions regarding required disclosure.
During the last fiscal quarter ended September 30, 2007, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.
PART II.
Other Information
Item 1.
Legal Proceedings
GTREX, Inc was named a defendant in a case entitled Mark Aronson V. GTREX, Inc. which was filed August 2004-2006 in Civil court. The plaintiff sued GTREX along with thousands of other companies for sending email or fax spam. Although the Company does not arrange or send out any mass mailing, faxes or email, it chose not to defend itself because the legal cost of such defense was projected to that of the potential judgment. Judgment was awarded to the plaintiff on in the amount of $9,300.00, which has been recorded as a liability in the accompanying financial statements. In June 2006, the Company settled for $5,000. As of April 10, 2007, the Company has made payments totaling $3,000, leaving a balance due of $2,000 to Mark Aronson.
On November 6, 2007, the Company received notice of claim for $46,850 from Christopher Berlandier, its former Chief Executive Officer and Chairman of the Board of Directors, regarding alleged past wages due for salary and consulting services. The Company disputes the claim, considers it to be without merit and plans to defend itself against this claim.
Other than listed above, GTREX Capital, Inc. or any of its officers or directors is not a party to any material legal proceedings.
The Company’s property is not subject to any material pending legal proceedings and to the best our knowledge, no governmental authority or other party has threatened or is contemplating the filing of any material legal proceedings against the Company.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
On March 2, 2007, the Company entered into a Settlement Agreement with Sequoia International, Inc., which had purchased the note payable from Elleipsis, Inc. on March 1, 2007. Under the terms of the Elleipsis note payable, the Company was required to pay remaining principal of $190,000 plus accrued interest on March 1, 2007 to satisfy the note. The Company defaulted on this payment and Sequoia filed an action against the Company in the 12th Judicial Circuit Court. The settlement agreement provided for the Company to issue a total of 934,000,000 shares of common stock for full satisfaction and release of the obligation. The Company and Sequoia agreed that the shares would be issued into an escrow account to prevent their immediate resale into the market. Under the terms of the escrow, Sequoia may not obtain any shares from escrow is the release of such escrow shares would result in Sequoia becoming the beneficial owner of more than 9.9% of the Company’s common stock. Further, all shares is escrow are voted by the Company’s chairman of the Board of Directors. As of September 30, 2007, a total of 100,000,000 shares had been released from escrow. The Company received $244,206 resulting from the surplus of the liquidation of the shares over and above that to which Sequoia was entitled to receive.
During the three months ended September 30, 2007, the Company issued 3,000,000 shares of restricted common stock as consideration for $3,000 in services rendered valued at $0.001 per share.
During the three months ended September 30, 2007, the Company cancelled 457,400 shares of restricted common stock previously issued to Christopher Berlandier in connection with the Mutual Release and Hold Harmless Agreement entered into on August 3, 2006.
Item 3.
Defaults Upon Senior Securities
None
Item 4.
Submission of Matters to Vote of Security Holders
None
Item 5.
Other Information
None
Item 6.
Exhibits
The exhibits listed below are required by Item 601 of Regulation S-B.
Exhibit No.
Description
Location
3.1
Articles of Incorporation
Incorporated by reference from GTREX Capital’s Registration Statement on Form SB-2 filed on April 12, 2001.
3.2
Bylaws
Incorporated by reference from GTREX Capital’s Registration Statement on Form SB-2 filed on April 12, 2001.
14
Code of Ethics adopted March 27, 2007
Incorporated by reference from GTREX Capital’s Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2006 filed on May 9, 2007.
31.1
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
31.2
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Filed herewith
99(i)
Audit Committee Charter adopted February 9, 2005
Incorporated by reference from GTREX Capital’s Annual Report on Form 10-KSB for the Fiscal Year Ended December 31, 2005 filed on April 27, 2006.
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SIGNATURES
In accordance with Section 13 or 15 (d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GTREX Capital, Inc.
By: /s/ Ronald Lindsay
Ronald Lindsay
President
Dated: November 13, 2007
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EXHIBIT 31.1
GTREX Capital, Inc.
a Delaware Corporation
SECTION 302
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Ronald Lindsay, President (Principal Executive Officer) certify that:
(1) I have reviewed this Quarterly report on Form 10-QSB of GTREX Capital, Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Date: November 13, 2007
/s/ Ronald Lindsay
Ronald Lindsay
President (Principal Executive Officer)
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EXHIBIT 31.2
GTREX Capital, Inc.
a Delaware Corporation
SECTION 302
CERTIFICATION OF PRINCIPLE ACCOUNTING OFFICER
I, Gary Nerison, certify that:
(1) I have reviewed this Quarterly report on Form 10-QSB of GTREX Capital, Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
(4) The small business issuer's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
(5) The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Date: November 13, 2007
/s/ Gary Nerison
Gary Nerison
Treasurer (Principle Accounting Officer)
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Corporate Fraud Accountability Act of 2002 (18 U.S.C. Section 1350, as adopted), Ronald Lindsay, President (Principal Executive Officer) of GTREX Capital, Inc. (the "Company"), hereby certifies that, to the best of his knowledge:
1.
the Quarterly Report on Form 10-QSB of the Company for the quarter ended September 30, 2007 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2.
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 13, 2007
/s/ Ronald Lindsay
Ronald Lindsay
President (Principal Executive Officer)
--------------------------------------------------------------------------------
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Corporate Fraud Accountability Act of 2002 (18 U.S.C. Section 1350, as adopted), Gary Nerison, Treasurer (Principle Accounting Officer) of GTREX Capital, Inc. (the "Company"), hereby certifies that, to the best of his knowledge:
1.
the Quarterly Report on Form 10-QSB of the Company for the quarter ended September 30, 2007 (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
2.
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: November 13, 2007
/s/ Gary Nerison
Gary Nerison
Treasurer (Principle Accounting Officer
This is the sentence I really find interesting in that PR.
4) through our access to public capital, Dr. Gas will have the ability to invest in more capacity and infrastructure
What access to public capital does FCCN have???
More deals with GGI???????
Good news posters ..we are going to post everything we can regarding Javelin Stock Plays...ohhh the magnitude...
DWP, so what's your point??? Are you saying I can't make money at this, or you just can't???
Gtrex (GRXI) has 1,979,695,655 shares. It has a book value of negative 143,567 dollars.
For every 14,000 shares you buy you spend 14 dollars and in exchange you get one dollar of debt.
For a million shares you'd spend a thousand dollars and get 70 dollars of debt in exchange.
A typical Javelin play with horrible financials.
Good news..I have decided to post the pps of all the javelin plays on this board as they occur...that way you will know exactly where those plays stand...best regards...
Last Price
0.0008
Change $
Change %
Tick
Bid
0.0007
Bid Size
5000
Ask
0.0008
Ask Size
5000
Open
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High
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Low
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Prev Close
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Last Trade
11/15/07
Volume
71.51 m
52 Wk Hi
0.081
52 Wk Low
0.0006
Market Cap
2.33 m
Ex-Div Date
N/A
Div Rate
N/A
Yield Last Price
0.0008
Change $
Change %
Tick
Bid
0.0007
Bid Size
5000
Ask
0.0008
Ask Size
5000
Open
0.0008
High
0.0008
Low
0.0006
Prev Close
0.0008
Last Trade
11/15/07
Volume
71.51 m
52 Wk Hi
0.081
52 Wk Low
0.0006
Market Cap
2.33 m
Ex-Div Date
N/A
Div Rate
N/A
Yield
N/A
Shares
2.92 b
EPS (TTM)
0.06
PE Ratio
N/A
close Exchange Information
Listed On
OTC Bulletin Board (OBB)Exchange
OBB
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Shares
2.92 b
EPS (TTM)
0.06
PE Ratio
N/A
close Exchange Information
Listed On
OTC Bulletin Board (OBB)Exchange
OBB
GTREX Capital Files Quarterly Report and Updates Shareholders on Execution of Acquisition Strategy
MURRIETA, CA, Nov 15, 2007 (MARKET WIRE via COMTEX) -- GTREX Capital, Inc. (OTCBB: GRXI), a holding company with subsidiary operations in the travel distribution industry, today filed its quarterly report on Form 10-QSB for the period ended September 30, 2007 and updated shareholders on the status of its expected acquisition of a company that will become the focus of its future operations.
A link to the quarterly report can be found on the company's corporate website, www.gtrexcapital.com.
In addition to reporting the filing of the 10-QSB, GTREX Capital announced that it is continuing the due diligence process related to the company it has targeted for acquisition. In mid-October, the company announced that it had identified a new acquisition candidate and expected to enter into a letter of intent shortly thereafter.
GTREX Capital is a fully reporting over-the-counter bulletin board company that has been positioned as a public vehicle for an operating company that will bring value for shareholders. Its existing subsidiary, Global Travel Exchange, is a travel distribution technology company that provides a more efficient and cost-effective connection between customers and travel suppliers. If the planned acquisition is not a company that does business in the travel industry, there may be a spin-out of Global Travel Exchange that would include a dividend of its shares to GTREX Capital shareholders.
GTREX Capital management is focused on acquisition candidates that possess the potential for significant long-term growth in their respective industry segments.
"As we continue with our due diligence process on the targeted acquisition, which has taken more time than was initially anticipated, we will concurrently consider additional acquisition and reverse merger opportunities that are presented to GTREX Capital," stated Steven R. Peacock, GTREX Capital consultant chief executive officer. "The additional acquisition candidates include companies both within and outside the travel field, and depending upon which company becomes the operating entity within GTREX Capital, there could possibly be a spin-out of Global Travel Exchange including a dividend of its shares to GTREX Capital shareholders."
"Shareholders should also be aware that Global Travel Exchange's travel distribution technology provides a number of attractive scenarios for synergistic acquisitions, and we are currently evaluating several of these as acquisition candidates," Mr. Peacock added.
To subscribe to the company's email alert system and receive information directly from GTREX Capital whenever new press releases, investor newsletters, SEC filings, or other information is disclosed, please visit http://www.gtrexcapital.com/investor.php.
About GTREX Capital, Inc.
GTREX Capital, Inc. (http://www.gtrexcapital.com) is a holding company with a subsidiary conducting business in the travel industry. Global Travel Exchange, Inc., a GTREX Capital subsidiary, has launched its Voyager Network travel distribution platform, which provides a service that enables direct access to reservation systems of major travel suppliers such as airlines, cruise lines, hotels, car rental companies and providers of other travel amenities. GTREX Capital is in the process of identifying synergistic and non-synergistic businesses as potential acquisition targets for the company.
Safe Harbor Statement
This release contains forward-looking statements with respect to the results of operations and business of GTREX Capital, Inc., which involves risks and uncertainties. The Company's actual future results could materially differ from those discussed. The Company intends that such statements about the Company's future expectations, including future revenues and earnings, and all other forward-looking statements be subject to the "Safe Harbors" provision of the Private Securities Litigation Reform Act of 1995.
Contact:
Gemini Financial Communications, Inc.
A. Beyer
951-677-8073
Email Contact
SOURCE: GTREX Capital, Inc.
CONTACT: http://www2.marketwire.com/mw/emailprcntct?id=88A7EDB0982BFBEE
It may be considered that some try to manipulate stocks associated with Javelin stock plays....JMO
That might be a concern for some but most are fully reporting companies and their horrible financial state is clearly visible in their SEC filings. While FCCN was clearly drastically overpriced for a long period of time it's not clear manipulation was at fault but merely irrational exuberance. Aero's financial condition was clear from the lawsuit against it, and from published D&B reports.
Franchise Capital Corporation Releases November 2007 Edition of Investor Newsletter With Detailed CEO Statement
CEO Addresses Operational Synergies Between Aero Exhaust and Dr. Gas, Inc. and Specifics of the Automotive Aftermarket Supply Industry
Franchise Capital Corporation (PINKSHEETS: FCCN), which recently closed its acquisition of Aero Exhaust, Inc., a world leader in performance exhaust airflow technology and NASCAR Performance Partner, today announced the release of its October 2007 investor newsletter, which includes a detailed statement by Chief Executive Officer Bryan Hunsaker. In Mr. Hunsaker's "CEO Greeting," he discusses various aspects of the automotive aftermarket supply industry and the expected advantages afforded by the planned acquisition of Dr. Gas, Inc. through its operational synergies with Aero Exhaust.
A PDF version of the newsletter is posted in the media archive of the company's website, http://www.franchisecapitalcorp.net, under the "Newsletters" tab, and a notice has been distributed through Franchise Capital's website-based mailing list.
Franchise Capital has entered into an initial agreement to acquire 100% of the common stock of Dr. Gas, Inc., in part to make use of Dr. Gas' manufacturing, design and engineering capabilities to increase the availability of Aero's product lines. Dr. Gas, Inc. is a producer of racing performance exhaust systems for street and pro-race performance exhaust applications and produces 90% of all exhaust systems used in NASCAR, Nextel Cup Series, Busch Grand Nationals, and Craftsman Truck Series.
In his greeting to shareholders, Mr. Hunsaker states, "The recent announcement of a merger between Dr. Gas and Franchise Capital Corporation is a key step of our roll-up strategy. By merging Dr. Gas with Aero Exhaust, we accomplish several important goals, including: 1) Dr. Gas can immediately start producing Aero Exhaust product allowing us to ramp up our sales and become more competitive in the marketplace; 2) we can immediately start applying our sales and marketing skills to the Dr. Gas Product line; 3) we can apply our operational background to Dr. Gas to help them achieve manufacturing efficiencies; and 4) through our access to public capital, Dr. Gas will have the ability to invest in more capacity and infrastructure to better serve our growing client base."
Mr. Hunsaker also addresses specific aspects of the automotive aftermarket supply industry, "We have charted a course and are committed to building a company that will be a long-term, significant player in the automotive aftermarket supply industry. The automotive aftermarket is a fragmented market, with numerous automotive enthusiasts that have innovative products and ideas but lack the size to effectively market and distribute products. The major distribution channels within the automotive aftermarket prefer vendors who can supply a wide array of products to leverage buying power and simplify the supply chain. Since these two dynamics are divergent, our strategy is to establish our company as a recognizable brand that can supply our distribution partners with a comprehensive line of innovative products. Our approach is to leverage our existing strengths and assets and to combine our strengths with others in the market through a roll-up of companies in the early to mid stages of growth that provide varying assets to the company. Much like the manufacturing, product and R&D assets of Dr. Gas, we are looking for others with varying distribution channels, complimentary products and effective sales assets.
"From a revenue perspective, it is important to realize that the exhaust market is a cyclical market with the more robust sales numbers in early to mid spring and early summer. This plays very well into our plans to facilitate increased manufacturing of Aero's products so we can supply our distribution partners. We are working to capture as much of the early 2008 growth as possible and carry that momentum throughout the year. We look forward to showing the initial results of our ongoing efforts in the first and second calendar quarters of 2008."
Mr. Hunsaker concludes his greeting by stating, "We have not taken a short-term view, and we believe that we are building a company that will be a long-term, significant player in the automotive supply industry. We are optimistic about the growth that is ahead for the company and are excited to see the benefit of that growth come to those shareholders that are genuinely interested in the future of Aero Exhaust, Dr. Gas and other companies that are included in our roll-up strategy."
In addition to Mr. Hunsaker's comments, the newsletter reviews the events that were issued as press releases by Franchise Capital during the previous month, including the initial agreement for Franchise Capital to acquire Dr. Gas, Inc.
To sign up to receive information by email directly from Franchise Capital Corporation, including notices when the company issues future investor newsletters, please visit http://www.franchisecapitalcorp.net.
About Dr. Gas, Inc.
Dr. Gas, Inc. is a producer of the finest racing performance exhaust systems for street and pro-race performance exhaust applications. Dr. Gas produces 90% of all exhaust systems used in NASCAR, Nextel Cup Series, Busch Grand Nationals, Craftsman Truck Series, and many more. Dr. Gas Exhaust Systems produces performance exhaust Xscream® crossover, y-pipe, oval tubing performance exhaust, and h-pipe systems that have changed the performance exhaust sound of NASCAR, IROC, drag racing, and pro-street. Dr. Gas designed and patented the revolutionary Spin Tech racing mufflers. Many standard and custom sizes of mandrel bends and oval tubing are the absolute best for high performance exhaust and ground clearance applications. The company has performance exhaust parts for car, truck, RV, motorcycle, marine, aircraft and industrial applications.
At its first NASCAR race, Dr. Gas shocked the sport with its new performance exhaust sound and added power on Sterling Marlin's winning 1995 Daytona 500 racecar. Many of its patented NASCAR performance exhaust systems can be used in street rod performance exhaust applications. For more information on Dr. Gas, Inc., please visit http://www.drgas.com.
About Aero Exhaust:
Aero Exhaust is a world leader in performance exhaust airflow technology, manufacturing and distributing the most technologically advanced muffler on the market. Its product lines are built to the highest industry standards and offer the consumer a lifetime warranty. Aero Exhaust has been issued U.S. and Australian patents on its innovations and development in the exhaust industry, and its mufflers are available worldwide through major retailers, mass merchant centers, automotive aftermarket supply stores and wholesalers. Aero Exhaust mufflers are an exclusive National Association for Stock Car Auto Racing (NASCAR) Performance product and carry the prestigious NASCAR brand on product, packaging and related media. NASCAR legend Rusty Wallace is the official spokesperson for Aero Exhaust products. Additional information on Aero Exhaust's products, race team, and motorsports ventures can be found on its corporate website, www.aeroexhaust.com.
Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including the lack of funding, inability to complete required SEC filings, and others set forth in the Company's report on Form 10-K/A for fiscal year 2006 filed with the Securities and Exchange Commission.
CONTACT:
Gemini Financial Communications, Inc.
A. Beyer
951-677-8073
Email Contact
Source: Marketwire (November 13, 2007 - 9:06 AM EST)
News by QuoteMedia
www.quotemedia.com
EDIT/Message for downwithpumpers as well at the bottom of this post.
Thank you for posting the updates on PPS for GRXI and FCCN wick50, it continues to show a downward spiral for FCCN when most of the longs were expecting to be at much higher levels at this point in time.
What happened? Why has the stock Tanked?
Because it was not as advertised wick, Peacock is still in control of FCCN and Brian Hunsaker is just a figure head, the Aero acquisition was just a tool for peacock so he could sell shares in this company, no name change to Aero has happened and even on the nevada sos site it still shows Peacock as the President of the company and a month has passed since that acquisition.
So why won't Peacock or Hunsaker update the state of Nevada showing who the CEO is? Why is Peacock's name plastered all over this tanking stock? He Resigned as CEO and everyone said we are NOW AERO! But the 8-k shows that it is still FCCN and Peacock large and in charge.
My guess is that Aero was a struggling company on the verge of going under and Javelin stepped in promising riches and now Hunsaker and Aero are just along for the ride, to bad people like Rusty Wallace and the other Aero folks will have their reputations harmed due to the business practices of Javelin Advisory group and Mr.Peacock.
I have been studying all the companies javelin Advisory group is involved with and it looks as shady as shady gets in my opinion and I would caution anyone before investing in these issues.
Downwithpumpers would you like to be an assistant moderator here? I may have asked you once already but I like your contributions to the board and would like you on board.
EarnestDD, I agree...enjoy...
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That is why the boards are here .... for posters to express their opinions while staying within the TOU's as set down by Ihub.
EarnestDD, Yes, I am entitled to my opinion...and you are going to see it...
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You are entitled to your opinion.
Do you have anything you can post to support that opinion?
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Posters manipulating a stocks price?
Highly unlikely, most people are too intelligent to be manipulated so quickly.
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Last Price FCCN
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OTO
Can some one explain to me why most of the discussion here is about how Javelin numbers are different from the numbers presented on this board???
Some investors may think that some Canadians are trying to depress Javelin stock plays, but that is JMHO
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Scam Plays and DTC "Chilled" Stock - Beware of Both
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Since DTC is starting to "chill" or global lock quite a few stocks I thought it might be interesting to start gathering information on the various "chilled" stocks here. I'll be adding a list of the ones I know about in the near future. Please post information on any stocks you know of that have a DTC "chill" on them.
Not all DTC "chilled" stocks are scams, but, the end results to the long term shareholders appear to be the same.
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Here's some interesting reading for those with any concerns about speaking out freely with information about scams:
From IH Geek [Dave]
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=53187425
An excerpt:
"This is an important day for freedom, and a fatal blow to those who would attempt to silence our collective rights using foreign laws as their sword.
It is our great pleasure to announce today's enactment of the SPEECH ACT, otherwise known as the "Securing the Protection of our Enduring and Established Constitutional Heritage" Act. This is important legislation, not only for websites such as as iHub but also for individuals who wish to exercise their constitutionally protected right to express their views.
The new legislation, which was signed into law today, is based on the similar laws passed by New York, Florida and other states. It prohibits enforcement of foreign libel judgments in all U.S. courts of law when the foreign laws are not as protective as American law or do not comport with U.S. principles of due process. It also requires US courts to apply the immunity provided by 47 USC 230 with regard to foreign judgments against interactive websites like iHub. And perhaps most importantly, it provides the jurisdictional authority for US courts to issue declaratory judgments in favor of the US defendants in such foreign judgments, and provides for recovery of legal costs in incurred in doing so. No longer will US citizens and business be held hostage to libel judgments obtained in countries with archaic libel laws that do not respect the constitutional and statutory protections provided by US law.
It should also be noted that this bipartisan legislation passed both the House and the Senate unanimously. That speaks strongly to the will of Congress and the American people; in this age there are scant few matters before the Congress that would garner unanimous support.
Our thanks and congratulations go to Congressman Steve Cohen for originally proposing this legislation, and to Dr. Rachel Ehrenfeld who spearheaded support for the legislation. We also acknowledge the members of both parties in the Judiciary Committees of the House and Senate for getting the legislation right and getting it enacted without opposition.
We recognize and congratulate those of you who have held your ground in the face of intimidation from foreign operators."
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Here's an example of the type of scam stock I'd like to see listed here:
OTC BB | Medical - Healthcare | EYI Industries (EYII)
http://investorshub.advfn.com/boards/board.aspx?board_id=4264
Dirty shell is an understatement here:
If you go to the State of Nevada you will see their corporate status has been revoked:
http://nvsos.gov/sosentitysearch/CorpDetails.aspx?lx8nvq=OBGnrqpH6oP8sHIelJilxA%253d%253d&nt7=0
Pinksheets has them as Caveat Emptor
EYII closed it's doors on April 2, 2009. Website came down and nobody heard from the company again. A number of reps are now trying to file a class action lawsuit against the company. They stopped paying reps after this point. In the weeks and months leading up to April 2009, they had begun putting caps on distributor checks. After this time, the patent holder/inventor of Calorad took his product to ASANTAE, inc to allow them to distribute. EYII never owned Calorad or the rights to distribute it. Try googling for EYII distributors, and you will not find a single one that is active. There are a few that have moved onto other MLM companies, and have maintained their old telephone numbers, but they will tell you that EYII went out of business last year. Evidently, the story is that 2 people embezzeled or defrauded the company of all their cash and they went belly up. They left all their reps high and dry and even wiped out their downlines of customers, because they took down the website and they were not able to access their downlines.
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This Forum used to be for the discussion of Javelin Advisory Group Stock Plays, however, the company no longer exists. Please feel free to use this board for any scams you find. Just provide links to prove your assertion.
Website
http://www.javelinadvisory.com/ (JAVELIN out of business) email addressed to site is returned undeliverable and last blog entry on the site is from 2008. There are no current Javelin plays.
Incorporated
http://nvsos.gov/sosentitysearch/
http://nvsos.gov/sosentitysearch/CorpDetails.aspx?lx8nvq=hzBwHZy%252bH0oxx8dilMyxDg%253d%253d&nt7=0 shows that JAVELIN is in default status with the State of Nevada.
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All messages, including iBox content, are the opinion of the posters, are no substitute for your own research, and should not be relied upon for stock trading or any other purpose.
Rules of the board according to IHUB:
http://www.investorshub.com/boards/complex_terms.asp
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