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Re: sorc92 post# 14873

Saturday, 07/29/2017 11:54:39 PM

Saturday, July 29, 2017 11:54:39 PM

Post# of 99715
Definitely flying blind here. Ever since this potential deal was prematurely publicly discussed, all parties have been on thin ice as they attempt to walk that back while at the same time trying to save the arrangement without getting suspended. A less charitable interpretation would be that the selective disclosure was an intentional act to begin fleecing retail speculators ahead of going public in order to finance multiple franchising opportunities. In either case the devil is in the details and at this point the details aren't even set yet, so there remains sufficient risk here commensurate with a sub-penny stock.

Just because there may be no reverse split doesn't mean there won't be significant dilution. The owners of Charlie Graingers/Emerging Franchises aren't going to give all their equity away to UHLN shareholders. More sophisticated traders are waiting to learn the terms of the merger, especially the price at which the former UHLN board relinquished control of their debt-carrying, tax-suspended, reporting-delinquent, pinksheet listing.

The current share structure of a 296,012,513 float with 315,661,186 outstanding and 500,000,000 authorized gives UHLN a current market cap of $2.4M. That does seem low for the whole supposed company but there are still over 184M more common and additional preferred classes of shares available to be issued, not to mention nothing preventing increases in any of those amounts. If current shareholders only end up with a 2%-5% stake after dilution, the current valuation of the new public company jumps to $48-$120M. Compare that to the $20M market cap of RAVE, a loosely similar QSR with roughly 310 mostly-franchised stores, each averaging approximately $575,000 in annual sales. By that measure UHLN looks overvalued.

As noted, knowledgeable individuals apparently are not purchasing stock. Although the share-price has more than doubled since taking off one month ago, the surge in volume should have pushed it much higher. The heavy selling into demand suggests a backdoor funding is underway, though again a less charitable interpretation would see a pump and dump.

New UHLN President and CEO Everett M. Dickson -- and his sponsor Union Capital LLC -- seem to be waiting on the sidelines as well. Both are pretty shady with records of such toxic financing and failed companies. In fact, Sal Rincione and Greg George also have left bankruptcies in their past, including very recently, but that can be expected from serial entrepreneurs and should be taken in context with their successes.

While only four years old so without any real track record to speak of, the Charlie Graingers concept does seem to be successful. If the franchising plan comes anywhere close to opening two new stores per month for the foreseeable future, UHLN could continue to be a nice steady growth story for many years to come. All in all, though, at this point I see exactly what one would expect in a $0.00757 stock.