Aero Performance Products Inc (fka AERP)

[Ineedmoreshares]

*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the Company’s common stock over a 45 day period prior to the share withdrawal multiplied by the number of shares being withdrawn. 400 million shares from the Escrow account were returned to the FCCN treasury and canceled as of October 4, 2007.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 $12,410,856 AT .022 PPS.


Thank you Mr. Peacock and Mr. Hunsaker, Andrew at Gemini and even GGI... You have certainly earned the respect of small investors everywhere. Thank you for looking out for us and for setting an example of how to conduct awesome business deals without screwing anybody.... except the naked shorts.

Shorts are about to get squeezed. Now please post this far and wide.

MOASS coming.... Aloha and WEEEEEEE!!!!!!!!