DealerAdvance Inc. (DLAD)

[Bulldog2002]

On DLAV.. READ IT! DO NOT DELETE IT!!!

The Bankruptcy for Stronghold was declared on January 25th 2007
http://www.sec.gov/Archives/edgar/data/1133598/000114420407006000/v065012_8k.htm

That solves the bankruptcy argument. Anyone stating that the notes issued recently to AJW Partners went away with the Bankruptcy are clearly wrong. The Bankruptcy happened BEFORE the notes were issued.

On May 25th 2007 the Company entered into a financing agreement with AJW Partners
http://www.sec.gov/Archives/edgar/data/1133598/000114420407029897/v077360_8k.htm

That financing agreement is toxic..

Please read..

ITEM 1.01

ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On May 25, 2007, we entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with New Millennium Capital Partners II, LLC, AJW Qualified Partners, LLC, AJW Offshore, Ltd. and AJW Partners, LLC (collectively, the "Investors"). Under the terms of the Securities Purchase Agreement, the Investors purchased an aggregate of (i) $900,000 in callable convertible secured notes (the "Notes") and (ii) warrants to purchase 5,000,0000 shares of our common stock (the "Warrants").

Pursuant to the Securities Purchase Agreement, the Investors will purchase the Notes and Warrants in six tranches as set forth below:

1.
On May 31, 2007, the Investors purchased Notes aggregating $150,000.

2.
On the final business day of each of the five (5) months beginning in June 2007 and ending in October 2007, the Investors shall purchase Notes aggregating $150,000 each.

The Notes carry an interest rate of 8% and a maturity date of May 25, 2010. The notes are convertible into our common shares at the Variable Conversion Price (as defined hereafter). The Variable Conversion Price shall be equal to the Applicable Percentage multiplied by the average of the lowest three (3) trading prices for our shares of common stock during the twenty (20) trading day period prior to conversion. The Applicable Percentage is between 50% and 60% depending upon the status of the registration statement to be filed by the Company.

At our option, 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 Notes and the Common Stock is trading below the Initial Market Price as adjusted. In addition, in the event that the average daily price of the common stock, as reported by the reporting service, for each day of the month ending on a determination date is below the Initial Market Price as adjusted, we may prepay a portion of the outstanding principal amount of the Notes equal to 104% of the principal amount hereof divided by thirty-six (36) plus one month’s interest. Exercise of this option will stay all conversions for the following month. The full principal amount of the Notes is due upon default under the terms of Notes. In addition, the Company has granted the investors a security interest in substantially all of its assets and intellectual property, excluding Camelot Studio Group and Camelot Film Group, as well as demand registration rights.

We simultaneously issued to the Investors seven year warrants to purchase 5,000,000 shares of our common stock at an exercise price of $.05.

The Investors have contractually agreed to restrict their ability to convert the Notes and exercise the Warrants and receive shares of the Company's common stock such that the number of shares of the Company's common stock held by them and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of the Company's common stock.

We are committed to registering the shares of common stock underlying the Notes. We have agreed to file the registration statement within thirty (30) days from the closing date of our agreement with the Investors otherwise we may be subject to penalty provisions. There are penalty provisions if the Company does not use its best efforts and respond to comments from the SEC regarding its Registration Statement in a timely manner, or after the Registration Statement has been declared effective by the SEC, sales of all of the Registrable Securities cannot be made pursuant to the Registration Statement due to the fault of the Company.

Now, since the agreement was made 24,000,000 shares have been registered on form S-8.
http://www.sec.gov/Archives/edgar/data/1133598/000114420407064825/0001144204-07-064825-index.htm
http://www.sec.gov/Archives/edgar/data/1133598/000114420407048281/0001144204-07-048281-index.htm

That means that since the Company issued the notes to AJW Partner on June 1st 2007, 24,000,000 shares have been issued to date. If that is not dilution I do not know what is.