Frequency Holdings Inc (FRQN)

[Bud-Wiser]

UPDATED 4/6/23-GREAT-DD-From-a Few-of-SF-971’- Posts…”Kevin Harrington sat on the Board of Directors of Celsius Holdings.

When Harrington joined in March 2013, CELH traded at .21 on the OTC.

When Harrington left in August 2021, CELH traded at $66 on Nasdaq.”

$YCRM

This is about a legit company as we have seen merging into OTC.

CEO is a tech guy, impressive resume and track record and based on what we have seen so far he is hungry. He owns a legit cybersecurity company, is acquiring more and with everything going on around the world right now that is a hot sector to be in.

We are probably sitting on the ground floor of something big here. If you can get this under .01 you are likely sitting on what will be a massive company in a great sector. Mr. Rick Jordan was transparent about the shell peddler who brokered the deal (Everett Dickson) bringing in Trillium as a condition for giving up the pubco/shell.

Trillium is also an equityholder - they own a ton of Preferred Shares. They they want to see a high return on those Preferreds when they convert to Commons (at a high share price). They won't shoot themselves in the foot by converting and diluting too early IMO.

Most OTC companies have little to no revenues, no profits and no cash flow. Most OTC companies that take on toxic financing end up in a death spiral as they don't have sufficient free cash flow to repay the principal and interest on the convertible debt before they mature.

ReachOut is the rare unicorn OTC company that is a mature business, revenue generating, profitable, cash flow positive and growing.

ReachOut needs capital to fund their MSP acquisitions. They'll fund the acquisitions with cash upfront from the convertible notes (along with acquisition financing and shares). With "shares as currency" for acquisitions, Trillium can provide the liquidity for the acquired to liquidate.

Moreover, there should be sufficient accretive free cash flow resulting from the acquisitions over time to repay the notes before maturity.

Moral of the story - although most OTC unprofitable companies that take on convertible notes end up in a death spiral, it does not suggest that will translate here if Mr. Rick Jordan successfully executes his serial compounder MSP roll-up.
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