From the filing I can not see how you can possibly have a full understanding when the amount of shares has not been determined yet in the exchange of shares to Aero. Saying there is no dilution is misleading when this number is not available and apparently won't be available until the audit is completed. Do you know what the conversion rate of shares will be for that loan to Aero from the revolving credit loan - They already drew down more than half of it?
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On January 12, 2007, Franchise Capital Corporation (the “Company”) executed a definitive agreement with TTR HP, Inc. d.b.a. Aero Exhaust, Inc. (“Aero”) which calls for a share exchange of common stock between the Company and Aero. 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. The specific share amounts will be determined at closing, which is anticipated to take place once the Company is current with its financial statement filings and Aero has completed an audit of its historical financial statements, presently anticipated for the second quarter of 2007.
In conjunction with executing the definitive agreement, the Company agreed to a revolving commercial loan to Aero in the amount of $1,500,000, of which $850,000 was drawn down on January 12, 2007. The loan bears interest at the prime rate and is due and payable in 18 months. Notwithstanding the payment terms, the loan and any accrued interest are convertible into Aero common stock at the time the share exchange closes.
AI
