SOURCE: Franchise Capital Corporation

October 19, 2007 17:01 ET

Franchise Capital Corporation Files 8-K With Details of Aero Exhaust Acquisition

Franchise Capital Shareholders Retain Approximately 35% of Issued and Outstanding Common Stock in Share Exchange With Aero Exhaust

MURRIETA, CA--(Marketwire - October 19, 2007) - Franchise Capital Corporation (PINKSHEETS: FCCN) has filed the Current Report on Form 8-K that includes details of its acquisition of Aero Exhaust, Inc., a world leader in performance exhaust airflow technology and NASCAR Performance Partner.

The Form 8-K can be viewed through a link on the main page of the company's website, www.franchisecapitalcorp.net and at the Securities and Exchange Commission website, www.sec.gov.

The Form 8-K reports that on October 4, 2007, Franchise Capital, a Nevada corporation, exchanged, pursuant to a share exchange agreement with TTR-HR, Inc., which does business as Aero Exhaust, Inc., an aggregate of 1,114,285,700 shares of its common stock for all of the issued and outstanding common stock of Aero. As a result of the share exchange, historic Franchise Capital shareholders have retained approximately 35% of the issued and outstanding common stock of the public company.

In connection with the share exchange agreement entered into by the companies, Franchise Capital provided to Aero a commercial revolving line of credit under which it advanced a total of $1,875,000. The terms of the line of credit called for any unpaid balance to be converted into shares of Aero common stock immediately prior to the closing of the share exchange agreement. Aero's shareholders accepted the redemption of the line of credit payable to Franchise Capital as part of the share exchange agreement, which resulted in Franchise Capital historic shareholders holding 600,000,000 shares of its issued and outstanding common stock.

Immediately following the closing, there were 1,714,285,700 shares of the Franchise Capital common stock outstanding, and Aero became a wholly owned subsidiary of the Franchise Capital.

In addition to the details of the share exchange, the Form 8-K includes information on Aero's product lines, including recently launched diesel exhaust kits; the company's marketing strategy, which utilizes high profile relationships with NASCAR and company spokesperson Rusty Wallace; information regarding the automotive market segments in which Aero does business, including statistics from an independent market research firm; and a description of Aero's current manufacturing relationships.

The two-year audited financials of Aero as well as its unaudited financials for the interim period up to June 30, 2007 were filed as exhibits to the Form 8-K. Pro forma consolidated financial statements for Franchise Capital up to June 30, 2007 will be filed in a subsequent Form 8-K by the company no later than October 26, 2007. All of the financial information that will be included in the pro forma consolidated financial statements for Franchise Capital up to June 30, 2007 has now been publicly disclosed.

Bryan Hunsaker, chief executive officer of Franchise Capital and Aero Exhaust, commented, "We are pleased to have filed the Form 8-K that details the acquisition of Aero Exhaust by Franchise Capital Corporation. We are extremely excited to have completed the transaction and believe that this is a tremendous opportunity for all of the Aero shareholders.

"I would like to use this forum to briefly touch on several factors that impacted the June 30, 2007 financials, and how we are addressing areas that are expected to significantly impact Aero's future financial results. We believe the company is in a remarkable phase of expansion with tremendous upside for those who are now involved.

"The NASCAR and Morgan McClure Motorsports #4 car sponsorships have been tremendous opportunities for Aero and have allowed the company to develop a degree of name recognition with the large NASCAR audience. We believe this exposure will continue to contribute to the company's future growth. These relationships did, at times, divert our efforts from the company's core focus to managing these relationships. As a result, we have made several adjustments to our advertising and marketing plans, including scaling back our NASCAR team involvement and refocusing our resources on expanding the awareness of our products in the performance automotive supply market segments through print and multimedia venues. We do intend to continue to maintain a presence in the NASCAR community and utilize the profile this platform provides to increase awareness of Aero and its product lines.

"We have also made several significant changes to our distribution channels as a result of the opportunities presented by our NASCAR relationships. These distribution changes have brought many new opportunities as well as new product demands. The new products have taken time to develop and implement, but our customers are assisting us in creating the best overall offering, and we believe we are now well on our way to achieving our desired revenue growth.

"One significant reason for the lower than desired sales numbers is that our suppliers are not able to keep up with demand. This is a compliment to the demand and desirability of the Aero products. This also presents a challenge that had to be addressed to facilitate future growth. A major element of our strategy will be addressed with an expected future acquisition that we plan to announce very shortly. We believe the changes related to supply will provide phenomenal opportunities to expand our product offerings and that these changes will result in dramatic changes to the revenue outlook and national presence of our company.

"The ongoing business activities of Aero and the future direction of the company, including its goals as a public company, will begin to be articulated in the coming weeks. The topics that will be addressed are expected to include the relationships that Aero is developing with distributors and suppliers, as well as the execution of our roll-up strategy that was introduced last week. We look forward to discussing each of these topics in much greater detail as part of our ongoing market communications program. We believe that our merger with Franchise Capital finds Aero at a solid starting point as a public company, and we appreciate the positive comments we receive from our customers and shareholders about the future of our company."

To sign up to receive information by email directly from Franchise Capital Corporation, including notices when the company issues future investor newsletters, please visit http://www.franchisecapitalcorp.net.

About Aero Exhaust:

Aero Exhaust is a world leader in performance exhaust airflow technology, manufacturing and distributing the most technologically advanced muffler on the market. Its product lines are built to the highest industry standards and offer the consumer a lifetime warranty. Aero Exhaust has been issued U.S. and Australian patents on its innovations and development in the exhaust industry, and its mufflers are available worldwide through major retailers, mass merchant centers, automotive aftermarket supply stores and wholesalers. Aero Exhaust mufflers are an exclusive National Association for Stock Car Auto Racing (NASCAR) Performance product and carry the prestigious NASCAR brand on product, packaging and related media. NASCAR legend Rusty Wallace is the official spokesperson for Aero Exhaust products. Additional information on Aero Exhaust's products, race team, and motorsports ventures can be found on its corporate website, www.aeroexhaust.com.

Safe Harbor Statement: The statements in this release that relate to future plans, expectations, events, performance and the like are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Actual results or events could differ materially from those described in the forward-looking statements due to a variety of factors, including the lack of funding, inability to complete required SEC filings, and others set forth in the Company's report on Form 10-K/A for fiscal year 2006 filed with the Securities and Exchange Commission.

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