Reverse Mergers & Low Float Plays

[Potse]

LFLS...adjusting legacy count up to 11.3M shares......

Picked up some pretty nice blocks of shares recently to add to my positions in the TCRI shell and the LFLS quasi-shell. Along with ADMG, I have a great deal of optimism for these shells or reverse merger situations in 2023. What I particularly like about all three of these is the possibility they are significantly more attractive on a shell/RM valuation basis then they may initially appear to most investors. Depending on what the final legacy share counts turn out to be, each of them could be currently priced at legacy share valuations under $700K.

I picked up another 60K shares of LFLS under the 10-cent level during the last couple/few weeks. Currently holding a 534K position at a cost basis under 7.1 cents.

The company increased the outstanding by another 2M shares a couple of weeks ago (1.8M issued to the CEO for debt reduction, and there was another 200K issued but no specific information on those shares was provided). I am assuming/guessing that might be the final share issuance prior to any reverse merger here. I have my fingers crossed on that. Most (if not all) of the remaining debt should get transferred to Union Discount Mortgage when that entity gets spun out from LFLS (as per the November press release).

I'm not sure to what extent these additional 2M shares might affect the original plan to sell 84% control to a RM target. I don't know if the CEO will include those new shares in with the control block that will be transferred to the RM target, or if he intends to keep them to increase his exposure to the post-RM company. Just to take a more conservative stance on LFLS I have decided to include those 2M shares into the legacy share count. That would bring the legacy shares up to around 11.3M shares.

As with any reverse merger, the nature/structure of the RM here (and most definitely luck) will play a large role in the success/failure of this investment. Despite the challenging environment in the OTC Markets, we are still seeing some pretty nice legacy share valuations of over $5M on shell/RMs from time to time.

If this LFLS reverse merger turns out to be reasonably interesting and structured reasonably well, I will be extremely disappointed if LFLS doesn't at some point achieve a minimum of a $3-5M valuation on those legacy shares (roughly 26-44 cents).