DealerAdvance Inc. (DLAD)

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I cant read? Please go read the filing it is crystal clear>?

Commission file number: 333-54822
DealerAdvance, Inc.
(f/k/a Stronghold Technologies, Inc.)
16801 Addison Road, Suite 310, Addison, TX 75001
(Address of principal executive offices)
FORM 10-QSB
for the quarterly period ended September 30, 2007.
FILED ON 11/16/20007

http://www.sec.gov/Archives/edgar/data/1133598/000114420407062754/v094299_10qsb.htm

REGISTERED SHARES >
as of November 1, 2007, 100,415,389 shares

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds PAGE 25

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


To obtain funding for its ongoing operations, we entered into a Securities Purchase Agreement (the “Agreement”) with the investors on December 15, 2006 for the sale of (i) $900,000 in callable secured convertible notes (the “Notes”) and (ii) stock purchase warrants (the “Warrants”) to buy 5,000,000 shares of our common stock.


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The following closings have occurred under the Agreement:

o On December 15, 2006, the Investors purchased $250,000 in December 2006 Notes and received December 2006 Warrants to purchase 1,388,500 shares of the Company’s common stock

o On January 16, 2007 the Investors purchased $150,000 in December 2006 Notes and received December 2006 Warrants to purchase 850,000 shares of the Company’s common stock

o On February 12, 2007 the Investors purchased $150,000 in December 2006 Notes and received December 2006 Warrants to purchase 850,000 shares of the Company’s common stock

o On March 15, 2007 the Investors purchased $150,000 in December 2006 Notes and received December 2006 Warrants to purchase 850,000 shares of the Company’s common stock

o On April 13, 2007 the Investors purchased $150,000 in December 2006 Notes and received December 2006 Warrants to purchase 850,000 shares of the Company’s common stock

o On May 11, 2007 the Investors purchased $50,000 in December 2006 Notes and received December 2006 Warrants to purchase 283,333 shares of the Company’s common stock



To obtain funding for its ongoing operations, we entered into a Securities Purchase Agreement (the “Agreement”) with the investors on May 25, 2006 for the sale of (i) $900,000 in callable secured convertible notes (the “Notes”) and (ii) stock purchase warrants (the “Warrants”) to buy 5,000,000 shares of our common stock.


The following closings have occurred under the Agreement:


o On May 30. 2007 the Investors purchased $150,000 in May 2007 Notes and received May 2007 Warrants to purchase 850,000 shares of the Company’s common stock

o On June 20. 2007 the Investors purchased $150,000 in May 2007 Notes and received May 2007 Warrants to purchase 850,000 shares of the Company’s common stock

o On July 25. 2007 the Investors purchased $150,000 in May 2007 Notes and received May 2007 Warrants to purchase 850,000 shares of the Company’s common stock

o On August 31. 2007 the Investors purchased $150,000 in May 2007 Notes and received May 2007 Warrants to purchase 850,000 shares of the Company’s common stock

o On September 21. 2007 the Investors purchased $150,000 in May 2007 Notes and received May 2007 Warrants to purchase 850,000 shares of the Company’s common stock

o On October 11. 2007 the Investors purchased $150,000 in May 2007 Notes and received May 2007 Warrants to purchase 850,000 shares of the Company’s common stock



In addition, provided that all of the conditions in the Securities Purchase Agreement are satisfied, on the final business day of each month until the full amount under the Agreement has been purchased, the Company will issue to the Investors and the Investors will purchase $125,000 in Notes and related Warrants. The Company or a majority in interest of the Investors may terminate the obligation to issue additional Notes and Warrants upon 30 days notice.


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The Notes bear interest at 8%, mature two years from the date of issuance, and are convertible into our common stock, at the Investors' option, at a conversion price, equal to the lower of (i) $0.05 or (ii) 25% of the average of the three lowest intraday trading prices for our common stock during the 20 trading days before, but not including, the conversion date. As of September 21, 2007, the average of the three lowest intraday trading prices for our common stock during the preceding 20 trading days as reported on the Over-The-Counter Bulletin Board was $.001 and, therefore, the conversion price for the secured convertible notes was $.00017. Based on this conversion price, the Notes in the amount of $150,000 issued on September 21, 2007 were convertible into approximately 882,353,000 shares of our common stock.


Also, as of October 11, 2007, the average of the three lowest intraday trading prices for our common stock during the preceding 20 trading days as reported on the Over-The-Counter Bulletin Board was $.001 and, therefore, the conversion price for the secured convertible notes was $.00013. Based on this conversion price, the Notes in the amount of $150,000 issued on October 11, 2007 were convertible into approximately 1,153,846,000 shares of our common stock.


We may prepay the Notes in the event that no event of default exists, there are a sufficient number of shares available for conversion of the callable secured convertible. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, we have granted the Investors a security interest in substantially all of our assets and intellectual property as well as registration rights.


The Warrants are exercisable until five years from the date of issuance at a purchase price of $0.05 per share. In addition, the exercise price of the Warrants is adjusted in the event we issue common stock at a price below market.