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I pray AERO has this problem...
"once you install an exhaust, you will not have a repeat customer,... AERO will run out of customers in short order."
If we could only sell so many mufflers that all potential customers buy one... Oh, please let that happen. Hopefully AERO will tell us a day before they sell the last muffler to the last customer on Earth.
Yes, MMs can hold PPS down. Not forever though.
I know people don't want to hear this, but I truly believe the MMs are going to sit on FCCN pps no matter what the 8K says tomorrow.
The MMs only have two choices
1. Sit on the PPS, and hope for another bear raid
2. Let PPS run, sell the small amount of shares they got today, then drop PPS and flip to cover their part of their huge short position, then repeat the process a few times.
If they let it run, it could run away. So, I think they will try to use tomorrow's expectations against us andwill attack as viciously as they can.
I believe today and yesterday we witnessed two attempts at basher bear raids. We had 1,525,000 shares exchanged over the course of 40 straight buys at the ASK today without the pps moving up one single tick.
I'll post the L2 in a few minutes.
When there wasn't buying there was long gaps, 10, 12, 14 minutes with no trades.
In the long run, the MMs cannot hold the PPS down forever. AERO is not playing games. This is a group of people trying like hell to RACE to the finish.
I think AERO will see the checkered flag.
Whether they see it fast due to a short squeeze is up to FCCN longs and the new AERO shareholders who come to the table after the 8K. After the 8K insiders are allowed to buy shares, until the 8K they cannot.
We have the possibility of a massive PPS run up, but if the MMs
scare people, the pps is heading down in the short term.
I am long and holding. Will buy more with any funds that come available. I am not worried about the short term PPS, but would love to be a part of a short squeeze and stick it to the bad guys. I don't like liars and I don't like it when really smart bashers who have done their DD, twist that DD into a distorted image of truth.
It appears to me that MMs/Shorts would rather see a piece of crap pinky stinker fake company get a huge PPS than to have a genuine American company actually make it through honest means.
The MM/Short ideology is all about the FAST money. The game they play is to short stocks, take that borrowed money and then proceed to BASH small companies until they die or go to sub-penny hell so that they NEVER have to cover.
If a small company dies, shorts don't have to cover.
Make no mistake about it, AERO is under attack. I believe they will not be killed off and that the checkered flag will be ours.
But I'm not going to tell you that's gonna happen after this 8K or even this year. I feel very safe with my investment, but for those who don't, there is always EBAY.
I play alot of tournament poker, and I feel like I'm holding a set, pocket aces with an ace and rags on the flop. I haven't seen the turn or the river, but I like the odds.
Peace
I don't understand your motivation.
Hey Golden. I must admit you have me totally scratching my head.
It appears you are afraid for your investment. Of course, I understand fear as do all of us. But when I think a stock will fall, I sell. You've got to trust your DD and your instinct.
All of your posts are saying you think the stock will fall. I understand you bought in at .025, but if you honestly think the stock will fall, shouldn't you cut and run? Do you honestly think the PPS is heading south? If so, why the hell are you not selling? Are you masochistic?
If you are right and the price falls you can buy in later at a cheaper price or, in the alternative, you can move onto a stock you truly believe you can make money with.
You seem like a smart guy. My question to you is why are you staying here arguing with people and putting a bad vibe on your own portfolio. Wouldn't it be wiser to quietly sell your stock instead of using your creativity to increase the likelihood that the stock will fall?
Surely, a guy as smart as you must know that if you are indeed persuasive in your bearishness, then people will be influenced to sell or not buy at all if sitting on the fence.
I just don't understand your motivation if you do actualy hold stock in FCCN. Please discuss.
Peace
Thanks for posting that.
Nice post, man. Awesome DD!
The post Im responding to makes me very happy.
How can anybody not see what's going on here...
1,525,000 shares traded over the course of 40 buys at the ask.
no shares traded for the last 13 minutes
NO UPTICK.
listen to that exhaust MMs.... hear it revving up
**1,525,000 shares over 40 buys at ASK***
AND NO UPTICK
short squeeze is so very possible
no trades for the last 10 minutes.
37 BUYS at the ASK, no uptick!
wow.
Uplisting will be sooner than later....
"564,000,000 O/S, I am gonna hold you to this estimate since I have seen it like three dozen times when the final deal is announced. My interest is where do you think the valuation and pps are heading from here and when ?"
You can hold me to that O/S. My calculator is working, and that's the only thing necessary to figure it all out.
As to valuation and PPS, I won't venture to say. I've been posting factual analysis and I do not want to start guessing.
With an O/S of 564,000,000 at .019 pps market cap is 10.7 mil
You do the PE and tell me what you think it's worth based on the O/S and market cap right now.
EXCELLENT POINT! Tax break...
yup. Nice one.
28 buys at the ASK and no uptick!
And people don't believe the MMs are short.
What will it take, 100 buys at the ASK?
200
5000
MOASS
It's all about the escrow account....
Aero needed money. They were allowed to draw down shares from the escrow account against the loan. Everybody believed the escrow was only for the benefit of GGI. It was for AERO as well.
The "so called" loan to AERO was only a loan "on the books", in reality they got cash + majority ownership of FCCN.
THE FOLLOWING IS JUST AN ESTIMATE
If they drew down, for example, 350,000,000 shares from the escrow account at sub penny, then sold 75,000,000 shares at a recent high of .033
75,000,000 x .033 = $2,475,000
Plus 300,000,000 shares still in their possession of a 564,000,000 O/S
so what if they only own 55%, that's a pretty good deal if they don't have amazing financials which is exactly what I expect the 8K to show.
This is a growth situation.
Good post! I dont care about the 8K...
Very good points made. I am investing in growth.
"The 8K is coming, the 8K is coming" mantra is detrimental to the short term PPS.
I expect, no matter what the 8K says, there will be a bear raid for shares.
The MMs are short, and they are caught. The scenario unfolding is the result of a very creative deal designed by Peacock to enhance FCCN shareholder value while also getting AERO serious financing for its needs.
The MMs placed their bets that major dilution would take place, but they were wrong. O/S is 564,000,000. No dilution for this merger. But it took a very clandestine imagination to disguise AERO's involvement in the GGI escrow account.
Peacock wasn't kidding around when he said the following in the Sept. 11, PR:
"Our focus from the beginning of our involvement with Franchise Capital was to deliver long-term value for our shareholders, and after confirming the final details of the acquisition, we believe that this transaction will do just that," added Mr. Peacock."
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=fccn#getNews
Don is cool. AERO escrow draw down fooled many.
Don already apologized for that post.
The light went on and he got "it". Can't blame people for not understanding what I was saying, the math confuses and most people reading this board are skimming.
You need to read those posts with a calculator and a cup of coffee to understand them.
Don is cool.
The 8K doesn't matter to me....
I already know the most important part, share structure and O/S.
I'm not concerned about AERO's financials. I see
"AERO"
on auto in NEXTEL cup.
I see hundreds of auto enthusiasts posting how much they love this product.
I see many of the same people testifying that they are saving 2-5 miles per gallon. I know gas is $3 a gallon. This product pays for itself. How many luxuries do that?
I see Rusty Wallace and Two Guys TV.
I see many web videos featuring AERO.
I see AERO has an acquisition lined up and I know they followed through on this one with FCCN.
I see that Hunsaker and Peacock faked out the entire MM community and are visionary deal makers.
I see $$$$$$$.
I can wait. I expect the MMs to pull every trick in the book out to save their butss and I know if people hold, we will have the mother of all short squeezes.
Do I expect everybody to hold? No. Many will be shaken. That what happens when some try to ride bulls and can't hold on.
Take the 8K and stick it, I know what I own without it.
RECENT L2 ANALYSIS... shares are scarce
Between 1:00PM and 1:30 only 110,000 shares traded... $2000 traded in a half hour period with an 8K coming tomorrow, recent merger completed, and a new acquisition targetted.
Let me break it down for you.
MMs are scraping for shares. They are desperate for shares because the 564,000,000 O/S reality has hit them. and the IMPLIED FLOAT is only 285,000,000 since AERO won't be selling.
The last board count showed this board as owning 345,000,000 shares.
Add the rest of the world of FCCN shareholders not reporting here.
After the 8K, people related to AERO can buy shares for the first time in their public company.
MMs are sucking shares, but there is not nearly enough coming their way to cover their immense Short position. Soon they will have to let the price go so they can flip what little shares they have and then try to get more on the rebound.
FLIPPING IS THE ONLY WAY THEY CAN GET ENOUGH SHARES TO COVER.
so expect volatility very soon.
A BETTER HINT.
The O/S is 564,000,000 and AERO converted the loan to shares already included in the O/ from the GGI escrow.
FACT: 400,000,000 shares were just cancelled and retired.
It's not often you see the OPPOSITE of dilution in pinkyland. But then again, FCCN/AERO isn't gonna be at this area code for long.
INSIDERS CANT BUY UNTIL 8K is out....
"One of the reasons why we are not seeing a ton of buying is simply insider trading rules. No employee of Aero, family member, close friend, business partner or anyone related to the company who might have knowledge of the 8K and financials can buy until after the 8K is out.
That means from the dock worker at the distribution center to Hunsaker himself. Even the dock worker's buddy who got a 'tip'. Sure a few have probably bought and taken the chance - but the majority if they bought now with any inkling of what's in that 8K could be in trouble for insider trading.
Once the 8K is out, well then it's public knowledge so the buying can begin."
I USED THE CORRECT CONVERSION FORMULA.
The most recent conversion formula provides the lowest pps multiple of any formula previously used. I used for my calculations ".0008" price per share converted. That is the absolute lowest pps which could have been used in the draw down as to GGI. But the market data for any five day average since the escrow agreement was first tapped, leads to a multiple higher than ".0008"
The higher the multiple, the less amount of shares used to draw down the GGI debt.
The original formula didn't call for the average of the five closing bids to then be multiplyed by 80% thereby lowering that average by 20 %. Without reducing that average, as per the old formula, leads to a HIGHER pps for the conversion.
A higher PPS in the conversion makes the amount of the debt redeemed go UP which would leave more shares remaining for the second beneficiary, AERO.
So, the only possibility of the old formula effecting my math is that AERO would have received even more shares from the ESCROW, not less.
Once again, since AERO's shares came from the 564,000,000 O/S the percent AERO owns vs what FCCN shareholders own, as to the market cap value per share, is irrelevant.
Furthermore, here is the formula used in the 10K filed on June 7, 2007:
"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 May 23, 2007, 227,267,345 shares have subsequently been released from escrow and the debenture balance has been reduced to $92,854.
http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5234047
I don't think it's fair of you to not provide MATH as I have done. I see many people trying to rattle my MATH with short messages that have NO MATH.
If you have a problem with my math, than show me your math.
I showed you mine, you show me yours.
You have access to Andrew, why dont you just ask him?
MUST USE most recent PRs, not ancient history.
DWP, you raise a legitimate question, but unfortunately you've cited only an ancient PR written before the share exchange terms were finalized.
As the pre-historic PR you quoted from points out:
"The specific share amounts will be determined at closing..."
The most recent PRs tell us the exact nature of the FINAL agreement.
DWP wrote:
"Capital stock refers to shares that are authorized which in FCCN's case is 5 billion...
That is almost correct. There are 4.25 billion authorized shares, not 5 billion. But the O/S is only 564,000,000.
Then DownWithPumpers cited the following:
"According to the proxy statement that FCCN filed with the SEC Under the terms of the definitive agreement, the Company can exchange up to 95% of its total capital stock for up to 100% of the total capital stock of Aero Exhaust, Inc. The specific share amounts will be determined at closing...
The key phrases are
"can exchange" and...
"specific share amounts will be determined at closing"
"can exchange" DOES NOT EQUAL "will exchange".
At that time, the deal was still fluid. But the most recent October 4, 2007 PR about the closing of the deal says the following:
"Franchise Capital announced that it expected to exchange up to 95% of its total issued and outstanding capital stock"
As you correctly pointed out, the definition of "capital stock" means all of the stock a company is authorized to issue.
AUTHORIZED STOCK = capital stock which has not been issued.
OUTSTANDING STOCK = capital stock which has been issued.
It's all capital stock, but to detrmine whether that capital stock is "AUTHORIZED" or, in the alternative, "ISSUED and OUTSTANDING", you need to examine the language used on the October 4, 2007 PR which announced the final terms of the merger's closing:
"Franchise Capital announced that it expected to exchange up to 95% of its total issued and outstanding capital stock"
Any other stock which may have been tendered, was, according to the September 17, 2007 PR, "RESTRICTED", which means it was already in the O/S.
Once again, Peacock's choice of wording has certain elements scratching their heads. I love it.
No disrespect Todd, but you are wrong.
"I have done that math on this.. and IMO your assumptions are incorrect.
Todd, thanks for joining the discussion.
The math is not wrong. You need to do the math using the formula for the GGI escrow conversion. The simplest way to explain it is to assume that GGI was able to draw the entire 443,000,000 shares from escrow at .0008 per share which is 80 percent of .001
Understand that it was impossible, using the lowest bid prices for any five day period since the escrow agreement was made back in Nov 2006 for GGI to get their shares this cheap, ".0008".
However, just for the sake of argument, assume GGI drew down the entire 443,000,000 converted shares from escrow at ".0008" per share
443,000,000 x .0008 = 354,400
$354,400 would have been the amount credited to the debt owed by FCCN to GGI under the stated formula.
But GGI was only owed $220,000
The math don't add up Todd. When you consider that the ".0008" price per share used above in this example MUST have been alot higher than .0008, it becomes very clear that there was a second beneficiary of the escrow agreement.
Now go back and read the following:
From the January 30, 2007 PR:
"The escrow agreement was designed to allow Franchise Capital to set aside a sufficient number of shares to cover both the settlement of debt and to allow access to capital as the company moves forward with its acquisition of Aero Exhaust..."
http://www.franchisecapitalcorp.net/upload/FCCN_PR_01-30-07_8-K.pdf
And from the March 14, 2007 PR which discussed the annual shareholder's meeting, please pay close attention to the language employed as to the nature of AERO's loan:
"Among the topics addressed was the amount of capital currently drawn down by Aero as part of the $1.5 million loan made available by Franchise Capital. Mr Peacock estimated the total amount drawn down to be approximately $1.2 million thus far."
Is anybody else having trouble accessing the PRs from the FCCN website today?
AERO already received their shares...
AERO is one of us.
That's the part you're not comprehending.
Mr. Bojangles wrote:
"FCCN shareholders hold 564 million shares at this current time. How in the hell do you think that number will be lower?"
I'm not saying it will be lower. It will be the same.
You're dismissing the fact that the merger has already been completed. All of the PRs and SEC filings tell the true story.
FCCN shareholders own 564,000,000 shares. After the GGI escrow was completed, there were 964,000,000 shares in the O/S and then 400,000,000 were retired.
The trick or treat of the merger was the fact that AERO received the bulk of their shares from the GGI escrow, but this fact was cleverly disguised by Peacock's deliciously deceptive PR wordings.
The incredible genius of the deal is that AERO was given the bulk of their shares via the loan arrangement which called for the loan to be paid via a "draw down" from the escrow account.
So AERO got hundreds of millions of shares from the escrow account at far below market prices and those shares are not restricted.
The 564,000,000 share O/S includes:
- all of our shares and your shares
- all of the shares converted from escrow
- all restricted shares of FCCN
You need to understand that GGI was not the only beneficiary of the 443,000,000 shares converted from RESTRICTED to common stock via the escrow agreement. AERO was also drawing down shares from escrow.
The funny part, is that Peacock told us that, but he was very sneaky about it. Still, it's all there out in the open for everybody to see.
FCCN didn't dilute from the 4.25 billion "authorized" shares at its disposal. The PRs tell us that ALL of the shares tendered to AERO in the deal came from the escrow AND were supplemeted by "RESTRICTED" shares.
It's important to note that RESTRICTED SHARES, by definition, are "issued and outstanding shares" NOT "Authorized Shares".
Authorized shares are, by definition, NOT "issued and outstanding.
Once the light goes on, you will be blown away like the rest of us.
The coolest way to describe this deal is to think of it as one of those psychedelic magic eye 3D things. It looks like gibberish until you crosss your eyes and see the promised land.
With only 564,000,000 O/S, a serious PPS increase will lead to a much faster uplisting. If AERO was looking to uplist, than they certainly didn't want to see any dilution. The lower the O/S the better chance for uplisting.
The deal these guys did was pure genius.
Bravo, Mr, Peacock, Mr. Hunsaker, Andrew and Gemini.
BRAVO!!!!
564,000,000 O/S is PROVED by the math
Mr. Bojangles,
Thank you for taking the time to contribute to this fascinating topic. But you are wrong. The numbers I have posted are
not speculation, they are proved by facts and math.
The 09.17.07 PR states clearly and unequivocally that AERO shareholders were to receive "Restricted" stock at the closing of the merger.
RESTRICTED STOCK = issued and outstanding stock
The Oct. 1, 2007 "10 K" listed the O/S at 964,000,000.
400,000,000 shares were cancelled and retired on October 4, 2007... leaving 564,000,000 in the current O/S.
Mr. Bojangles wrote:
"564 million will be the float (free trading) not the OS. Aero shares will be restricted, but still part of the OS. Please stop spreading false hope.
You also alleged that the O/S would be 1 billion shares.
The math proves your analysis to be way off.
Just do the math and you will be psyched like the rest of us:
This is the formula:
FLOAT = "O/S" - "RESTRICTED" shares
O/S = 564,000,000
The FLOAT is reduced by the amount of RESTRICTED shares currently registered in the O/S.
We do not know how many shares in the O/S are "RESTRICTED" so all we can say about the FLOAT with certainty is that it will be less than 564,000,000 shares.
However, the "IMPLIED FLOAT" will probably be less than 285,000,000 shares since we expect AERO to be the majority shareholder and to be long FCCN.
In other words, if AERO is not selling at this time, the IMPLIED FLOAT is probably no more than 285,000,000.
Regardless, the actual FLOAT is certainly less than the proven O/S of 564,000,000.
DONT BE CONFUSED by percentages, people...
The O/S has been PROVED to be 564,000,000 shares post-merger.
It is irrelevant as to how much of that O/S is owned by AERO and how much is owned by FCCN shareholders.
What determines the value per share is the size of the O/S and the PPS.
People are getting caught up in 47% vs 35%, yadda yadda
IT DOESN'T MATTER WHAT PERCENT WE OWN.
The O/S has been stabilized. The only reason the percent would have mattered was if there was to be further dilution to pay off AERO shareholders. There is not.
So the percent we own of FCCN is totally irrelevant.
With a stabilized O/S, AERO should be seen as just another FCCN long. Just as it does not matter, per valuation of our shares, how many shares are owned by Pietro, Nello or any other diamond club members.
With a stabilized O/S the percent we own is a red herring.
Peacock 09.17.07 PR CONFIRMS 564mil post-merger O/S.
"Current Franchise Capital shareholders are not expected to be required to tender shares as part of the close of the transaction. Aero Exhaust shareholders will, as part of the close, tender their shares of Aero Exhaust and will be issued restricted common stock of the public company..."
Understanding investment vocabulary is necessary for proper DD.
"RESTRICTED STOCK" and "AUTHORIZED STOCK" are terms of art.
RESTRICTED = stock that has already been issued and is outstanding, already part of the current O/S.
AUTHORIZED = not issued and outstanding, not part of the O/S.
The PR quoted above further confirms that AERO shareholders received all of the stock due to them directly from the pre-closing O/S.
There was no further dilution of the O/S at the closing of the merger.
The OCT 1, 2007 10K states that the O/S was 964,129,838.
400,000,000 shares were retired and cancelled.
The current O/S is 564,129,838.
The reason some of us believe there will be a short squeeze relates to the fact that Peacock "anticipated" that AERO would be the majority shareholder of FCCN post-merger. So AERO probably holds more than half of the O/S which leaves less than 285,000,000 shares to be publicly traded.
If the share count at this board was even relatively close to being accurate, then SOMEBODY HAS BEEN NAKED SHORTING AND IS NOW CAUGHT WITH NO CLOTHES AND NO SHARES.
Hence, yesterday, just after DD of this nature was posted to this board, trading stopped with no shares publicly exchanged for 29 minutes.
IMPORTANT FOLLOW UP DD COMING!
[my next post will confirm the O/S]
BINGO, Pietro! Andrew was laughing...
Somebody posted yesterday that they spoke to Andrew and he laughed when the caller suggested we might get 15% of the deal. Andrew said he knew the number but could not tell, but that we would be very happy.
I didn't know about that 1/6 comment. That just cements the deal.
IMPORTANT FOLLOW UP DD COMING!
HERES THE FACTS RE: AERO ESCROW DRAW DOWN
I'm reposting below the analysis I hit the board with yesterday. The only part of the following DD which is speculative relates to the percent we own vs the percent AERO owns, the rest of this DD is PROVED by the math, SEC filings and official PRs.
Since the O/S has not changed, the percent of ownership issue is virtually irrelevant. Our value per share is based on the O/S, not what percent of FCCN shareholders own post merger. AERO is just another FCCN long, like Pietro or ToddWho, etc.
843,818,400 shares of restricted common stock were placed in an escrow account for two purposes:
Purpose #1: to satisfy the GGI debt
Purpose #2: to fund the AERO acquisition
The debenture obligation was reduced by 80% of the average of the five lowest closing bid prices of the Company’s common stock over a 45 day period prior to the share withdrawal multiplied by the number of shares being withdrawn. 400 million shares from the Escrow account were returned to the FCCN treasury and canceled as of October 4, 2007.
443,818,400 were drawn from the Escrow account and converted into FCCN common stock. The formula used as to GGI's share conversion was as follows:
Step 1: Determine the lowest five closing bids over the 45 day period prior to any GGI escrow share conversion
Step 2: Add those five closing bids and divide by 5
Step 3: Multiply that number by ".8"
Step 4: Multiply the average determined in "Step 3" times the amount of shares requested.
The product of the STEP 4 multiplication equals the dollar amount the debt owed from FCCN to GGI is reduced by after each GGI draw down. (Please keep the term - "draw down" - in mind. It plays big later in this analysis.)
The debenture agreement was entered into by FCCN and GGI in November, 2006. The lowest possible closing bid average for any five days, according to the formula used, is greater than .001 according to market history of FCCN's public trading activity using the LOW OF THE DAY for all trading days between November 2006 and October 4, 2007.
For the sake of argument, even though certified market data proves that this number must be higher than .001, we will use .001 for the following analysis:
5 x .001 = .005
.005 divided by 5 = .001
.001 x .8 = .0008
.0008 x 443,818,400 = $355,054.72
In November 2006, the Company agreed to settle litigation with Golden Gate Investors on a past-due convertible debenture having a principle balance due of $220,927. The numbers cannot possibly add up
CLEARLY, GGI was not the only beneficiary of the ESCROW account.
Furthermore, the figure of of $355,054.72, as determined by the formula, is too low. GGI was not allowed to draw down all of the debenture at once so that it never held more than 4.9% of FCCN. The five day averages of the lowest closing bids, according to market history, was certainly greater than .001.
In other words, at the end of the debenture, the dollar amount credited for the 443,818,400 shares drawn from escrow was much greater than $355,054.72
SO WHO WAS THE OTHER BENEFICIARY OF THE ESCROW?
It was AERO. And herein lies the genius of the terms for the 1.9 million dollar loan from FCCN to AERO.
FCCN never spent a dime of our money to acquire AERO.
Instead, they allowed AERO to draw down their loan according to a similar formula as was used by GGI. The PRs provided clues and the MATH confirms this.
From the January 30, 2007 PR:
"The escrow agreement was designed to allow Franchise Capital to set aside a sufficient number of shares to cover both the settlement of debt and to allow access to capital as the company moves forward with its acquisition of Aero Exhaust..."
http://www.franchisecapitalcorp.net/upload/FCCN_PR_01-30-07_8-K.pdf
And from the March 14, 2007 PR which discussed the annual shareholder's meeting, please pay close attention to the language employed as to the nature of AERO's loan:
"Among the topics addressed was the amount of capital currently drawn down by Aero as part of the $1.5 million loan made available by Franchise Capital. Mr Peacock estimated the total amount drawn down to be approximately $1.2 million thus far."
Aero's loan was paid via shares from the escrow account. It was not a cash payment. The 8K will bear this out.
The total amount of shares owned by AERO is equal to the number of shares converted from escrow + the number of restricted shares tendered to AERO by FCCN.
NOW HERES THE GOOD NEWS FOR FCCN LONGS
According to the January 19, 2007 PRE 14A form, filed with the SEC, the FLOAT was no greater than 77,000,000 shares at that time.
http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=4890193
The POST MERGER O/S = 564,129,838
PRIOR TO THE ESCROW AGRREMENT, A MAXIMUM OF 77,000,000 SHARES WERE BEING PUBLICLY TRADED IN THE FLOAT.
443,818,400 were converted to "issued and outstanding" FCCN stock from the escrow account. Assuming half of that went to GGI and the other half went to AERO, then AERO already owned approximately 222 million shares prior to the merger closing.
According to the October 1, 2007 10K, "The Registrant had 964,129,838 shares of common stock" and we know that 400,000,000 shares were canceled leaving the O/S at 564,129,838.
SEC filings and PR's do not reflect that any shares have been "issued" from the 4.25 Billion "authorized" shares of FCCN.
The 10.04.07 PR states that "issued and outstanding" FCCN shares would be "exchanged" for 100% of AERO's stock.
*DD:BULK OF AERO SHARES PAID VIA GGI ESCROW*
Headline #1: BULK OF AERO SHAREHOLDERS' FCCN SHARES WERE DRAWN FROM THE GGI ESCROW ACCOUNT.
Headline #2: AERO owns approximately 53% of FCCN while FCCN shareholders own approximately 47%.
Headline #3:POST MERGER O/S = 564,129,838.
Headline #4: NO PART OF THE 4.25 BILLION "AUTHORIZED" (but not issued) FCCN SHARES WERE CONVERTED OR EXCHANGED IN THE AERO MERGER.
Headline #5: 10.09.07 PRE OPEN FCCN MARKET CAP = $12,410,856
843,818,400 shares of restricted common stock were placed in an escrow account for two purposes:
Purpose #1: to satisfy the GGI debt
Purpose #2: to fund the AERO acquisition
FACTUAL ANALYSIS
The debenture obligation was reduced by 80% of the average of the five lowest closing bid prices of the Company’s common stock over a 45 day period prior to the share withdrawal multiplied by the number of shares being withdrawn. 400 million shares from the Escrow account were returned to the FCCN treasury and canceled as of October 4, 2007.
443,818,400 were drawn from the Escrow account and converted into FCCN common stock. The formula used as to GGI's share conversion was as follows:
Step 1: Determine the lowest five closing bids over the 45 day period prior to any GGI escrow share conversion
Step 2: Add those five closing bids and divide by 5
Step 3: Multiply that number by ".8"
Step 4: Multiply the average determined in "Step 3" times the amount of shares requested.
The product of the STEP 4 multiplication equals the dollar amount the debt owed from FCCN to GGI is reduced by after each GGI draw down. (Please keep the term - "draw down" - in mind. It plays big later in this analysis.)
The debenture agreement was entered into by FCCN and GGI in November, 2006. The lowest possible closing bid average for any five days, according to the formula used, is greater than .001 according to market history of FCCN's public trading activity using the LOW OF THE DAY for all trading days between November 2006 and October 4, 2007.
For the sake of argument, even though certified market data proves that this number must be higher than .001, we will use .001 for the following analysis:
5 x .001 = .005
.005 divided by 5 = .001
.001 x .8 = .0008
.0008 x 443,818,400 = $355,054.72
In November 2006, the Company agreed to settle litigation with Golden Gate Investors on a past-due convertible debenture having a principle balance due of $220,927. The numbers cannot possibly add up
CLEARLY, GGI was not the only beneficiary of the ESCROW account.
Furthermore, the figure of of $355,054.72, as determined by the formula, is too low. GGI was not allowed to draw down all of the debenture at once so that it never held more than 4.9% of FCCN. The five day averages of the lowest closing bids, according to market history, was certainly greater than .001.
In other words, at the end of the debenture, the dollar amount credited for the 443,818,400 shares drawn from escrow was much greater than $355,054.72
SO WHO WAS THE OTHER BENEFICIARY OF THE ESCROW?
It was AERO. And herein lies the genius of the terms for the 1.9 million dollar loan from FCCN to AERO.
FCCN never spent a dime of our money to acquire AERO.
Instead, they allowed AERO to draw down their loan according to a similar formula as was used by GGI. The PRs provided clues and the MATH confirms this.
From the January 30, 2007 PR:
"The escrow agreement was designed to allow Franchise Capital to set aside a sufficient number of shares to cover both the settlement of debt and to allow access to capital as the company moves forward with its acquisition of Aero Exhaust..."
http://www.franchisecapitalcorp.net/upload/FCCN_PR_01-30-07_8-K.pdf
And from the March 14, 2007 PR which discussed the annual shareholder's meeting, please pay close attention to the language employed as to the nature of AERO's loan:
"Among the topics addressed was the amount of capital currently drawn down by Aero as part of the $1.5 million loan made available by Franchise Capital. Mr Peacock estimated the total amount drawn down to be approximately $1.2 million thus far."
Aero's loan was paid via shares from the escrow account. It was not a cash payment. The 8K should bear this out.
The total amount of shares owned by AERO is equal to the number of shares converted from escrow + the number of restricted shares tendered to AERO by FCCN.
NOW HERES THE GOOD NEWS FOR FCCN LONGS
According to the January 19, 2007 PRE 14A form, filed with the SEC, the FLOAT was no greater than 77,000,000 shares at that time.
http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=4890193
The POST MERGER O/S = 564,129,838
PRIOR TO THE ESCROW AGREEMENT, A MAXIMUM OF 77,000,000 SHARES WERE BEING PUBLICLY TRADED IN THE FLOAT.
443,818,400 were converted to "issued and outstanding" FCCN stock from the escrow account. Assuming half of that went to GGI and the other half went to AERO, then AERO already owned approximately 222 million shares prior to the merger closing.
According to the October 1, 2007 10K, "The Registrant had 964,129,838 shares of common stock" and we know that 400,000,000 shares were canceled leaving the O/S at 564,129,838.
SEC filings and PR's do not reflect that any shares have been "issued" from the 4.25 Billion "authorized" shares of FCCN.
The 10.04.07 PR states that "issued and outstanding" FCCN shares would be "exchanged" for 100% of AERO's stock.
The word "Authorized" is not used in the PR announcing the close of the merger. "Authorized" is a legal term of art.
Add the total number of shares converted from the escrow account to the pre-escrow O/S:
443,818,400 + 77,000,000 = 520,818,400
Subtract that from the the O/S as of 10.04.07:
564,129,838 - 520,818,400 = 43,311,438
This number equals the difference between the "post debenture escrow O/S" and the "pre debenture O/S" and most likely represents the number of "restricted shares" tendered to AERO for the closing of the merger.
Assume GGI got half of the shares converted from the escrow, approximately 222,000,000, and that AERO received the same amount.
222,000,000 + 43,311,438 = 265,311,438
AERO also controls another 31,660,000 shares according to the FORM 8Q filed on 10.03.07
http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=5461240
265,311,438 + 31,660,000 = 297,971,438
With the current O/S at 564,129,838, AERO must own approximately 53% of FCCN.
FCCN shareholders own approximately 47%.
FCCN SHAREHOLDERS OWN APPROXIMATELY 47% OF FCCN WITH A CURRENT MARKET CAP OF $11,280,000 AT .02 PPS.
FINALLY RECOGNITION! Thank you Pietro.
I think I can relax now and stop wondering if I've lost my mind.
Yes, Peacock, Hunsaker and Gemini have accomplished something here which is rather rare. They structured the deal in such a way that the BULLISH factor was hidden in plain site so as to protect FCCN shareholder interests and to snooker shorts, bashers and MMs.
Usually, in pinkyland, it's the small shareholders who get squashed when the deal turns out to be bad for them and good for management via sick dilution. That is the norm and that is what the fear bashers/shorts/MMs play upon.
So in a true stroke of visionary genius, Peacock and company went the other way and tricked the bad guys into thinking the O/S would be heavily diluted to pay off AERO.
The exact oppoite happened, but it was hidden by the clever language used in the PRs whch ONLY mention GGI as to the draw down figured.
Seriously, I was laughing my azz off trying to figure out what the meaning of "and" was....
Peacock has managed to use the word "and" in the most creative and deceptively delicious way possible.
AERO SHARES CAME FROM GGI ESCROW NOT SPECULATION
I'm sorry, Don. But you've got your facts wrong. I did not post speculation on this topic. I posted FACTS.
Just do the math.
FACT #1: AERO WAS THE SECOND BENEFICIARY OF THE GGI ESCROW ACCOUNT.
FACT #2: 400,000,00 SHARES WERE RETIRED AND CANCELLED.
FACT #3: IF FCCN INTENDED TO DILUTE THE O/S FURTHER, THEY WOULD NOT HAVE RETIRED AND CANCELLED 400,000,000 SHARES.
FACT #4: USING THE GGI ESCROW CONVERSION FORMULA, THE NUMBER OF SHARES DRAWN DOWN CONVERTS TO ALOT MORE MONEY THAT GGI WAS OWED.
Seriously, Don. Just get on a calculator and work it out. It will make you happy. And I would appreciate it if you apologized and retracted your allegations about my intent.
My posts are very clear. I am long FCCN.
"Reported" Short interest is irrelevant...
NAKED shorts are not included in that list.
MMs have been holding the price down with naked shorting, but yesterday's action indicates that they were scared to short yesterday.
There were no sales for 1/2 hour after important DD which took shorts by surprise was posted on this board. MMs are still not playing fair, because before that 1/2 hour tradeless period, there were about 20 consecutive buys as the ask but it did not move up.
Then all trading stopped for half an hour.
I believe yesterday marked the first time MMs became afraid to naked short this stock, so instead of moving the ASK up, they just halted trading.
This post is conjecture, but until somebody comes up with a better reason for 0 shares traded middle of the day after NEWS came out about an acquisition for AERO, I'll continue to believe this analysis is correct.
PEACOCK has DUPED all shorts...
1. THE AERO 1.9 MILLION LOAN WAS NOT PAID IN CASH BUT RATHER SHARES SOLD TO THEM WELL BELOW MARKET VALUE DIRECTLY FROM THE GGI ESCROW ACCOUNT.
2.THE POST MERGER O/S IS 564,000,000.
Peacock has tricked the entire market by issuing AERO its shares WITHOUT dilution. The 4.25 billion "authorized" (but not issued and outstanding) shares have not been tapped for this merger.
The merger was a work of deceptive genius and was done with the best interests of FCCN shareholders. Peacock/Hunsaker/Gemini IR deserve a huge round of applause for the artistic deal done here. It suckered the MMs and now they are running scared without shares.
The GGI escrow account was converted to 443,000,000 issued and outstanding shares for TWO BENEFICIARIES...
GGI was paid off
AERO was paid off...
Peacock snookered the MMs by hiding that FACT that AERO was also a beneficiary of the escrow account. Peacock hid this fact in plain site. If you know what to look for, however, the true picture of this merger comes into focus.
It's like one of those magic eye 3d illusions. You need to cross your eyes and let the image emerge.
Forget irrelevant questions as to what percent of FCCN we will own.
DOESN'T MATTER.
Does it matter to you how many shares Pietro owns?
Does it matter to you how many shares Nello owns?
No, it doesn't.
What matters is the current O/S.
Since the O/S has not been diluted by the 4.25 billion authorized shares, AERO is just another FCCN long.
The recent 10K and October 4 PR PROVES that the current O/S is 564,000,000. If they were going to dilute to complete the exchange of shares with AERO, THEY WOULD NOT HAVE RETIRED AND CANCELLED 400,000,000 SHARES.
Let's say that again class,
IF THEY WERE GOING TO DILUTE THE O/S TO COMPLETE THE EXCHANGE OF SHARES WITH AERO ...THEY WOULD NOT HAVE RETIRED AND CANCELLED 400,000,000 SHARES.
The O/S is 564,000,000. A small portion of that number are restricted shares and the rest = the FLOAT.
With a PPS of .02 today, the market cap is $11,280,000
In determining the accurate post merger valuation/PE these are the numbers you should be using.
THE PERCENT FCCN LONGS OWN IS VIRTUALLY IRRELEVANT
Bashers are twisting stupid facts and people are allowing those threads to build and therefore the board is distracted from discussing important FACT BASED issues like this.
Can we please discuss the good news now?
Discussion of the issues revealed in this post ARE SURE to drive bashers crazy. The only people paying attention to what I posted yesterday were the MMs and the bashers.
Bashers didn't come near my DD because they know, as far as FCCN shorts are concerned, the less said about what I'm writing the better. And the MMs didn't sell ANY shares yesterday for 1/2 hour just after this DD was posted. FACT.
C'mon, let's start moving this PPS up as a team.
GO TEAM!
Don,
I'm sorry, Godfather. But you seem confused. The information I have posted is the MOST BULLISH thing ever.
I am long FCCN and the DD I posted is excellent news for FCCN shareholders, the best news.
I am very interested in having a debate about the DD, but could you please quote exactly what part of the DD I posted which you take issue with.
You've got my intent backwards. My post is all positive about FCCN which is a tremendous play.
I am so impressed with the deal Peacock and Hunsaker put together in our best interests.
FCCN Ihub longs are failing the team.....
Disappointed with this board yesterday.
The most explosive, fact based and important DD relevant to the value of our shares and short term PPS was posted here yesterday and not one FCCN long discussed it.
Except for Nello, who asked me to stop posting this stuff so he could have more time to load the boat before people caught on to what I was saying.
LET ME REPEAT THE CONCLUSIONS FOR ANYBODY WHO MISSED IT.
1. THE AERO 1.9 MILLION LOAN WAS NOT PAID IN CASH BUT RATHER SHARES SOLD TO THEM WELL BELOW MARKET VALUE DIRECTLY FROM THE GGI ESCROW ACCOUNT.
2.THE POST MERGER O/S IS 564,000,000.
Peacock has tricked the entire market by issuing AERO its shares WITHOUT dilution. The 4.25 billion "authorized" (but not issued and outstanding) shares have not been tapped for this merger.
The merger was a work of deceptive genius and was done with the best interests of FCCN shareholders. Peacock/Hunsaker/Gemini IR deserve a huge round of applause for the artistic deal done here. It suckered the MMs and now they are running scared without shares.
The GGI escrow account was converted to 443,000,000 issued and outstanding shares for TWO BENEFICIARIES...
GGI was paid off
AERO was paid off...
Peacock snookered the MMs by hiding that FACT that AERO was also a beneficiary of the escrow account. Peacock hid this fact in plain site. If you know what to look for, however, the true picture of this merger comes into focus.
It's like one of those magic eye 3d illusions. You need to cross your eyes and let the image emerge.
Forget irrelevant questions as to what percent of FCCN we will own.
DOESN'T MATTER.
Does it matter to you how many shares Pietro owns?
Does it matter to you how many shares Nello owns?
No, it doesn't.
What matters is the current O/S.
Since the O/S has not been diluted by the 4.25 billion authorized shares, AERO is just another FCCN long.
The recent 10K and October 4 PR PROVES that the current O/S is 564,000,000. If they were going to dilute to complete the exchange of shares with AERO, THEY WOULD NOT HAVE RETIRED AND CANCELLED 400,000,000 SHARES.
Let's say that again class,
IF THEY WERE GOING TO DILUTE THE O/S TO COMPLETE THE EXCHANGE OF SHARES WITH AERO ...THEY WOULD NOT HAVE RETIRED AND CANCELLED 400,000,000 SHARES.
The O/S is 564,000,000. A small portion of that number are restricted shares and the rest = the FLOAT.
With a PPS of .02 today, the market cap is $11,280,000
In determining the accurate post merger valuation/PE these are the numbers you should be using.
THE PERCENT FCCN LONGS OWN IS VIRTUALLY IRRELEVANT
Bashers are twisting stupid facts and people are allowing those threads to build and therefore the board is distracted from discussing important FACT BASED issues like this.
Can we please discuss the good news now?
Discussion of the issues revealed in this post ARE SURE to drive bashers crazy. The only people paying attention to what I posted yesterday were the MMs and the bashers.
Bashers didn't come near my DD because they know, as far as FCCN shorts are concerned, the less said about what I'm writing the better. And the MMs didn't sell ANY shares yesterday for 1/2 hour just after this DD was posted. FACT.
C'mon, let's start moving this PPS up as a team.
GO TEAM!
IMPERIAL WHAZOO...I love your posts.
Man, you have provided me with some food for thought now quite a few times. I am consistently blown away by the clarity of your thoughts and the insightful manner in which you communicate them.
I hope you will read the following post I made today on the FCCN board:
http://investorshub.advfn.com/boards/read_msg.asp?message_id=23530821
I also noticed how you once drew attention to one post of yours and asked to have it removed because it had 666 in the post number. On this too, we are of one mind. The Lamb has that number covered, it's just a matter of time.
*AERO SHARES CAME FROM GGI ESCROW = NO DILUTION*
Share value is based on O/S NOT percentage.
The percent we own of FCCN post merger is virtually irrelevant compared to the O/S.
It doesn't matter at all.
The O/S is 564,000,000 since the 400,000,000 escrow shares were cancelled.
As long as the O/S wasn't diluted by the 4.25 Billion "authorized" shares of FCCN, then the actual percent FCCN shareholders own of FCCN post merger is irrelevant to PPS, MARKET CAP and value.
The only question that really matters from the 8K, other than AERO financials, is where did the shares that AERO now owns of FCCN come from.
That question was answered today with certainty on this board.
The bulk of AERO's FCCN shares came from the GGI escrow account which are already factored into the O/S.
I don't give a crap what percent of the O/S is owned by AERO vs us because it's not going to change the O/S. Just like it doesn't make any difference to me what other FCCN longs own.
As long as the O/S wasn't diluted, AERO is just another FCCN long as far as PPS and value are concerned.
The true genius of this merger was the clandestine manner in which PEACOCK hid the fact that AERO was a beneficiary of the ESCROW.
Peacock hid this in plain site right in front of our eyes and the Market Maker's eyes as well.
Seriuosly, people. When you see what happened here, when it starts to dawn on you, Peacock will be like the Chris Angel of
mergers and acquisitions.
I was laughing last night at all the hidden clues and clever use of wording in the PRs. They kept this thing secret while showing it off to the entire investment world. It kills me how awesome this is.
The way they did this leaves so many sitting on the outside looking in.
This was a work of true artistry.
EXCELLENT question, DUTCH...
"hey ineedmore, interesting to read your calculations, but it was stated in previous PR's that the loan to Aero would be used by Aero to finance the new product line and product roll-out, how could Aero do that with FCCN shares??"
The formula used to convert GGI debt to shares was very favorable to GGI, enabling them to acquire shares well below market value and then sell them at market highs. Assume the debt to conversion ratio was the same or better for AERO.
GGI was only owed just over $220,000 while the AERO loan was valued at 1.9 million dollars. If AERO got shares at sub penny, they could sell some of those shares at some of the recent highs for operating costs while retaining a great portion of them for ownership.
I did say "approximately" as to what we will own vs what AERO will own, but I really don't think it's all that important since the major revelation is that the O/S will be the same and has not changed. We own today what we own and without dilution, it doesn't really matter as far as PPS is concerned.
THAT IS THE MAJOR REVELATION. The O/S hasn't changed and it's the O/S that determines PPS, NOT the percent we own of FCCN.
If AERO got 225 million shares from escrow, and who knows, maybe they got more, but being conservative, imagine they got 225,000,000 shares from escrow at .008
225,000,000 x .008 = $1.8 million
Now, if they sold 75 million shares to the public at .026 average over the last month that would give them 1.9 million dollars and they would still hold 150,000,000 shares
75,000,000 x .026 = $1,950,000
DD = AERO WAS MAJOR BENEFICIARY OF GGI ESCROW
I apologize if you are confused by what I am calling DD. I agree, my post about L2 is conjecture, but my REVELATION about AERO being the second beneficiary of the GGI escrow account has been proved with 100% accuracy.
See previous posts today for the math.
As you said,
DD ="1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale."
It has been proven and will be confirmed by the 8K, that the $1.9 Million loan to AERO was not paid in cash, but instead was in the form of stock converted from the GGI escrow account.
I did an audit of the escrow account based upon SEC filings and PRs and these material facts were confirmed.
My DD is ROCK SOLID...
I would love to discuss any of it with you. But you didn't quote anything directly.
I expect not many will be able to understand the math. I am here to explain it if you have a question about the facts and math.
I have published a major revelation of the coming 8K for those who know how to analyze facts.
Specifically, all of the DD I posted today comes from the FACT that the GGI escrow account was not created just for GGI, but rather to shift shares of FCCN to AERO for the merger.
That is a 100% accurate revelation which would have otherwise not been revealed until the 8K.
**SIGNIFICANT L2 DEVELOPMENT IN PROGRESS!**
A stock that did 59,000,000 volume last Friday goes 29 minutes with no shares traded and the ASK doesn't move up?
There are no shares available.
MMs have spies and know the DD posted on this board is accurate.
They clearly are not selling any shares but refuse to move the ASK up.
SHORT SQUEEZE IS IMMINENT.
MMs in damage control.
THERE ARE NO "REAL" SHARES AVAILABLE AT THESE PRICES AND THE MM'S HAVE BEEN SCARED AND ARE AFRAID TO SHORT SELL ANYMORE.
Furthermore, all short sells are now required to be legit as opposed to "short sell exempt"....
47%: It's not a guess. Just do the math.
Read post # 86184
I know I'm kidding myself to think that most people will actually do the math. The debenture formula is tricky, to say the least.
But if you read post # 86184 slowly and use a calculator, you will see that 47% for FCCN shareholders and 53% for AERO is based on SEC filings and official PRs.
For these numbers to be wrong, there would have to have been some hidden dilution, but the O/S hasn't changed since the October 1st 10K.
The 47% is based on the mathematical equations listed in various SEC filings as to the escrow account.
The true revelation here is not the 47% but that AERO was as much of a beneficiary of the escrow account as was GGI.
Anybody notice how the ASK is getting slammed for like 20 straight hits since this info came out and the MMs are sitting there freaking out holding it down.
weeeeeeeeeeeeeeeeeeeeee
The true revelation here is not the 47% but that AERO was as much of a beneficiary of the escrow account as was GGI.