FONU2 Inc (FONU)

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$FONU Extensive DD Post with Screencaps and Links

I went deep on the research, folks. Here’s everything I could find and reasonably surmise—sorry if I missed anything. Preview: custodianship is in the late stages, though LYSN (Live Youth Sports Network) already has majority stake in the company, so it's not a "shell" per se in the usual sense imo. FONU & LYSN both have executives/officers (Edward Spade & Shane Jones) in common with UAP*, which appointed pro wrestling legend Rob Van Dam as Chairman of the Board. There are many connections between FONU and UAP* beyond Spade and Jones: LYSN’s Senior Advisor teaches at Full Sail University, which advises WWE (World Wrestling Entertainment, RVD’s former employer) and was the broadcaster of WWE “NXT” from March to October 2020. Here’s everything I found in my attempt to gather information about FONU and connect the dots between FONU/LYSN and UAP*—it’s a long read, and some of this has been addressed to a degree by other traders; just trying to assemble all the info in one place.

FONU Company Description
FONU2 is a holding company for various companies that specialize in youth sports, live streaming, fundraising, app development, along with other new and emerging technologies. Our goal is to build shareholder confidence and value as we proceed with our mission to become a national company.

Sectors: sports/live streaming/entertainment/app development/new & emerging tech
FONU CEO: Shane Jones (who’s also a Director at UAP*)
FONU Secretary: Edward Spade (who’s also CEO of UAP*, which appointed pro wrestling superstar and cannabis entrepreneur/advocate Rob Van Dam as Chairman of the Board
Majority Stakeholder: Live Youth Sports Network dba LYSN – which is run by Shane Jones and Edward Spade

FONU2 security details from OTC Markets
Market Cap: $809,067 as of 01/13/2021
Outstanding Shares: 1,155,809,888 as of 12/16/2020 (unchanged since 9/30/20 if not longer)
Authorized Shares: 5,000,000,000 as of 12/16/2020
Restricted: 32,516,624 as of 12/16/2020
Unrestricted: 1,123,293,264 as of 12/16/2020

Links
FONU2 Website: https://fonu2inc.com
New Live Youth Sports Network (LYSN) Website (under construction): https://liveyouthsports.com
Old Website for LYSN (not updated since 2015): http://liveyouthsports.artzfolks.com




06/11/2020 Press Release: Fonu2 Inc. of Orlando, FL. announces it has chosen Dr. Steven Burhoe to head its LYSN Sports Advisory Board
https://www.globenewswire.com/news-release/2020/06/11/2046839/0/en/Fonu2-Inc-of-Orlando-FL-announces-it-has-chosen-Dr-Steven-Burhoe-to-head-its-LYSN-Sports-Advisory-Board.html
“Fonu2 Inc. (FONU) is excited to announce that it has chosen Steven Burhoe to head up its sports advisory board for LYSN Inc. dba Live Youth Sports Network….Dr. Burhoe is a course director in the Entertainment Business Masters Program at Full Sail University (fullsail.edu)…an internationally known teaching institution for the ‘behind the scenes’ professionals that create your music, movies, tv shows, live shows, video games (including a 500 seat gaming competition center), and now artificial intelligence tools for the entire entertainment industry. We are also the southern broadcast facility for the NXT wrestling channel and consultants to the WWE. Steve started teaching at Full Sail in 2008 after a long career as an independent consultant developing and executing business plans throughout the world…
Dr. Burhoe commented, ‘LYSN offers schools across the country a unique method of fundraising using their sports programs without putting additional pressure on local budgets, a major concern of many school systems. LYSN’s innovative video system and sponsorship monetization model will add significant revenue to the schools, improve local business visibility and contribute to the community as a whole. Over time, using this model which I assisted in planning, could be a significant financial winner for investors in LYSN/FONU.’ FONU2 Inc. is completing its accounting next week and will file with OTC markets to get current immediately after.”



06/08/2020 Press Release: FONU2 Inc. of Orlando, FL. announces LYSN Inc./Live Youth Sports Network has acquired a majority interest of FONU2 Inc. https://www.globenewswire.com/news-release/2020/06/08/2044881/0/en/FONU2-Inc-of-Orlando-FL-announces-LYSN-Inc-Live-Youth-Sports-Network-has-acquired-a-majority-interest-of-FONU2-Inc-FONU.html
“Live Youth Sports Network / LiveYouthSports.com …announces its plan to launch its fundraising system to high schools nationwide this fall. LYSN is engaged in the business of automatically live streaming high school sports by installing AI and HD webcams in all of the school's team sports venues.…
The monetization model leverages both local advertising/sponsorships and pay per view viewerships at individual streamed and archived events. We will participate in a revenue sharing model with the schools to assist in their fundraising efforts. As FONU rolls out and expands LYSN's live streaming/fundraising system, we plan to be throughout the US market by 2021.
Shane Jones/CEO commented ‘We have aligned ourselves with hundreds of high schools. The goal is to wire all team sports venues at no cost to the school. Our plan is to roll out the initial schools this fall, with many areas around the country already approved.’ LYSN Inc. projects approx $10 million in revenues its first full year in operation, and could easily exceed $100 million in the next several years. FONU2 Inc. will lead in the live streaming and fundraising concepts by introducing various revenue streams to schools to bring much needed funds that are lacking due to budget restraints. The youth sports market represents one of the fastest growing niche sectors in the world. Analysts are predicting a boom over the next several years that could be as much as $50 billion in global spending on youth sports and related goods and services, taking annual total spending to $76.5 billion by 2026.”

LYSN and FONU
I can’t fault Jones for failing to launch Live Youth Sports Network nationwide through the covid crisis while most schools/colleges/universities were shut down and not playing sports. We could have used an update to this effect of course.

Given the lapse in communication, I’ve seen some back and forth on ihub and twitter about whether there’s really a connection between LYSN and FONU. The confusion is partly owing to a now-terminated deal LYSN had to be acquired by BTHR (Sports Ventures of Florida). According to Open Corporates, all LYSN officer positions are currently filled by none other than FONU CEO Shane Jones and FONU Secretary Edward Spade, so I think that settles it. LYSN also owns preferred FONU voting-rights stock for additional ironclad evidence, and there’s even this letter FONU/LYSN posted showing the BTHR agreement was terminated: https://www.dropbox.com/s/le291mys1ki3vco/LYSN_BTHR_TERMINATION%20LETTER.pdf?dl=0.



Custodianship Process at Clark County Courts and NVSOS Filings
There’s been some trader impatience related to the lack of communication from FONU since those June 2020 press releases, which suggested OTC Markets updates would be immediately forthcoming, so the impatience is certainly understandable. Looking at NVSOS filings and Clark County Courts progress, however, it’s clear FONU is moving forward at a steady clip. There were NVSOS updates on 9/21/20, 10/05/20, 10/07/20, and 11/27/20. So it’s only been around a month and a half since the last NVSOS doc was submitted.



At Clark County Courts, there have been consistent updates in the court docket all along, most recently on January 2nd of this year.



Yes, FONU should have communicated about the OTC Markets delay and/or not stated such an aggressive timeline last summer, but progress is being made where it counts imo: at NVSOS and Clark County Courts, and hopefully sooner than later at OTC Markets.

Custodianship progress: Proof of Claims/Motion to Bar Unasserted Claims

>>Notice Requiring Proof of Claims mailed to all potential claimants 10/06/2020
>>Order Barring Unasserted Claims –11/16/2020
>>Amended Order Barring Unasserted Claims 12/10/2020

Unasserted Claims have been barred (more on that later). The notice requiring proof of claims was sent to 18 potential claimants, and the sole potentially valid claim response I can find in the court record was from Auctus Fund (submitted to the courts 9/25/2020 for approximately $240K for an outstanding note + interest + legal fees). It’s possibly relevant that Auctus Fund’s note in question was issued in August 2015. Fact to file away for Nevada custodianships: the statute of limitations on such claims is six years in Nevada, so it’s possible FONU might run out the clock on that note if the custodianship goes on a little longer. However, I’m not positive how a court would identify *day 1* to count the aforementioned six years for the statute of limitations timeframe to kick in (that is, Day 1 could be the issue date, or possibly the maturity date - I have no way of determining this and am not a legal expert).

At any rate, the only potentially valid claim is for around $240K all inclusive, so even if it’s valid and needs to be settled, it’s hardly a deal breaker to have $240K in liabilities, especially compared to the liabilities that were wiped clean from the FONU shell via the Order Barring Unasserted Claims. As of its last SEC-filed Annual Report for 2015, FONU had over $9M in total liabilities. Per the Order Barring Unasserted Claims, since there seem to have been no claimants other than Auctus, as far as I can tell the company’s liabilities have been reduced from $9.2M to at most $240K (that’s *if* the Auctus claim is valid for the full amount). It’s possible the $240K liability, assuming it’s valid, could be settled for a lesser amount, or it’s possible the statute of limitations could expire along the way. Speculation: I wouldn’t be surprised if FONU and Auctus come to a reasonable settlement to be done with it. Since the statute of limitations on the note may expire in August, if Auctus doesn’t get something from FONU’s management, they may never see a dime for that note. The notion that it might be settled for less than $240K is pure speculation and opinion on my part—I’m just opining about how I might think about it were I in the respective positions of Auctus and FONU. Time will tell. Anyway, worst case scenario seems to be around $240K in liabilities—not bad in the big picture.

Importantly, according to FONU’s attorney in one of the Clark County Court docs, the Order to Bar Unasserted claims should entail a return to the treasury of shares that have been held in reserve by the transfer agent to accommodate conversion of now-defunct convertibles. That’s a huge win for FONU imo.

(Disclaimer: I ordered some, not all, documents related to the custodianship at Clark County Courts. My assessment is NOT a legal opinion, I have no background in law, and there may be something on another document that I missed. This is my best guess as to the status of the Proof of Claims process as of this writing. Don’t take my word for it on this or anything else: do your own DD please.)

Putting It All Together:
Any way you slice it, from updates at NVSOS and Clark County Courts, it’s clear imo that FONU is moving forward, and that the vast majority of old debt appears to have been wiped clean via the Order to Bar Unasserted Claims, again imho. I finally decided to jump in on FONU when thinking about the potential synergy and JVs between FONU and UAP* (of which I also have shares). UAP* likewise needs to catch up at OTC Markets, but the potential connection is undeniable: pro wrestling legend Rob Van Dam, UAP*’s Chairman of the Board, is a great match for FONU/LYSN’s livestreamed sports—especially with FONU’s connection via FYSN’s Senior Advisor Dr. Steven Burhoe from Full Sail University, which in turn advises WWE and which broadcasted WWE’s “NXT” from March to October 2020. Notably, Shane Jones is the founder of LYSN, a company that’s been around for many years. He was brought in as a Director of UAP* last year. Why? It’s reasonable to speculate that it’s precisely because of his expertise in live-streamed sports and LYSN’s connections to WWE, which make FONU/LYSN a perfect match for UAP*/Rob Van Dam. Imo this does not seem like it could be a coincidence: so many pieces of the puzzle are there pointing to a synergistic relationship between the two companies via having the same company officers and the tie-in for both companies with professional wrestling.

Back to UAP* for a moment: bringing in pro wrestling legend Rob Van Dam as UAP*’s Chairman of the Board is an incredibly savvy business move by Spade that will bring A LOT of attention to the stock assuming they catch up with OTC Markets. RVD has 1 Million Twitter followers and is a world-renowned celebrity athlete, entrepreneur, and CBD businessman & advocate. When can we expect a UAP* update? Traders of that ticker have been getting just as impatient as FONU traders. Well, we got a pretty strong indication from Spade via his comment on his Rob Van Dam’s r/t a few days ago:



It’s worth noting that FONU is on RVD’s radar as well—this, from last year:



I think that of the two companies, it makes sense that UAP* has been the priority due to RVD's reputation being on the line, and because the custodianship process has concluded for that company. Imo, once they're done getting UAP* current, it's more likely we'll see progress made with FONU.

Most importantly, and this is speculative, but since UAP* appointed Rob Van Dam as Chairman of the Board, I don’t think it’s a stretch to think that Spade and Jones will bring in an equally famous sports celebrity for FONU’s board: the possibilities are endless for a business-savvy sports superstar for FONU’s board given the company focus on livestreamed sports. Speculative, yes, but also kind of a no-brainer imo. It's been a bit of a wait here, but from a business perspective, they can hardly launch the company while most of the country is locked down due to covid without any sports to stream. It makes sense to roll this out when the time is right...

I see a ton of potential for FONU personally. The market cap seems very low right now for a company with this kind of potential imo. I have the same thoughts about UAP* (I’m working on a write-up about UAP* that I’ll post on its board later).

Anyway, that’s my thinking on this ticker – all my opinion only, including a fair bit of speculation (some from Twitter), and not financial advice.