Afton Foods ( AFF ) -Franchise Consolidator Message Board

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Microcap & Penny Stocks : Afton Foods ( AFF ) -Franchise Consolidator

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To: Brian Krenbrink who wrote (25)	3/17/1999 8:47:00 PM
From: David Michaud	of 60

The company's fourth quarter results were a so due to: 1. A $70,000 provision for unexpected corporate capital taxes 2. a $70,000 reserve set aside to cover some receivables from some U.S. franchises that have been slow in paying. 3. The Christmas season resulted in a delay of the closing of a few new franchise license agreements from Q4 1998 to Q1 1999. 4. The calculation of bonuses pursuant to the company's management incentive program for which no provisions had been made in prior quarters. Complete audited financial statements will be available early next week for a more comprehensive review. We are generally satisfied with the results. Management is confident that Q1 1999 will exceed the same quarter in 1998 in terms of revenues and earnings. The financial results have been submitted to the TSE together with final paper work. The company's lawyer does not expect any problem relating to the proposed stock exchange mergers/re-alignments. Listing committee could not form a quorum this week due to spring break, so they are getting a little behind. Keep you fingers crossed for the 25th or 1st for listing committee meeting. Note the addition to the board of directors today (requested by TSE). Everything has been taken care of now. The due diligence review by the major U.S. acquisition financier went extremely well. The CFO was told yesterday that the due diligence manager was giving AFTN and its project a positive recommendation to his superiors. Looks like the financing for the major acquisition is progressing nicely. Also working on a back-up to the major planned acquisition just in case it falls through (better safe than sorry). The back up acquisition generates about $1.8 million in EBITDA annually and can be acquired for preferred shares convertible to common shares at $0.60 (pre-consolidation)! - no dilution. It may even be possible to complete both acquisitions although given the size of the larger proposed acquisition, Afton may need some time to digest the new operations and create the appropriate synergies, etc. before moving on with more purchases. ________ repost BLSH

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