BOUNCE

[Sportsjunkie]

SINCE I LEARNED FCCN IS AN OTC STOCK,the reason for the fall might have to do with a default in the convertible payment and the need for them to recoup their money with no worry of price of stock,just the need for someone at any price to buy...


8. CONVERTIBLE DEBENTURE

During the year ended June 30, 2004, the Company issued a 2-year 7.5% convertible debenture amounting to $85,000 with interest payable monthly and due June 9, 2006. The debenture also included non-detachable warrants for 2,500,000 shares of common stock.

The debenture may be converted at the option of the holder into common shares of the Company. The conversion price is the lesser of $0.25 or 80% of the average of the five lowest volume weighted average price during the 20 trading days prior to the election to convert. Upon conversion, the holder must simultaneously purchase shares of the Company's common stock in a dollar amount equal to 10 times the dollar amount of the debenture converted. The purchase price for such shares shall be the same as the debenture conversion price. The value of the beneficial conversion feature of $21,212 was recorded as a discount to the principal balance of the debenture and amortized immediately as interest expense because the debenture is convertible at any time at the option of the holder.

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The Company defaulted on the interest payment provisions in the debenture. Consequently, the principal amount due under the debenture of $85,000 became immediately due and payable in cash plus a default penalty of $42,500 (150% of the principal amount) resulting in a total obligation of $127,500 plus any and all accrued interest. The per diem interest is $26.04. The default penalty of $42,500 was expensed as interest and financing costs in the financial statements for the year ended June 30, 2004. The effective annual interest rate on the debenture is approximately 24% when the beneficial conversion feature is considered and approximately 48% when the beneficial conversion feature and the penalty interest are considered. On October 14, 2004 a lawsuit was filed by the debenture holder against the Company. The debenture holder seeks to recover $130,026.04 ($127,500 plus accrued interest of $2,526.04) plus interest at the rate of $26.04 per day for each day after September 30, 2004 and additional damages of $15,000 through October 23, 2004 and an additional $15,000 for each 30 day period after October 23, 2004 that the amount due under the debenture is not paid. Subsequent to December 23, 2004 the amount increases to $20,000 for each 30 day period plus attorney and court costs