Frelii, Inc. (FRLI)

[mcmike]

Due Diligence #6: Excerpts from conversation with Dave Kittrell, XPNG president

David said there were exciting developments coming in a voice mail to me over the weekend...I spoke with him today for a half hour or so. He was very cognizant of not disclosing non-public information....he told me to watch for a filing in next couple of days...that was the only piece of nonpublic noninformation?? i heard during the conversation

Xpention is not responsible for any of the email, fax blasts or direct mail campaigns. Dave has confirmed certain corporate facts for the mailers' factual nature. He stated that he does not watch the stock price, but concentrates on fulfilling the company's mission and business plan. He did not care that I represented potentially hundreds of investors.

Dr. Z. Walaszek is one of 2 employees at present and is not a current shareholder.

The fiscal year just ended and a 10-K can be expected within the normal timeframe (90 days).

David was not a part of the group headed by theRegencyGroup which purchased the controlling interest via the Bayview Management LLC in Bayview Corp for 1.05 million shares.

He characterized the Bayview transaction as a reverse merger. Xpention became a wholly owned subsidiary of Bayview Corp. (see 8K on 2/17/05) in exchange for 1.1 million shares of Bayview.

Following the 13:1 forward split David owned 14.3 million shares of the renamed Xpention Genetics.
The other 13,650,000 restricted shares were the 1.05 presplit shares belonging to theRegencyGroup acting as the Bayview Management LLC which purchased those shares for for 725K (8K on 1/19/05)

A 13D was filed on on 5/11 stating that the Bayview Management LLC no longer held a voting interest. David stated that he had not filed a 13D and therefore could be presumed to not have "purchased" the Bayview Management LLC interest.

(It's a little curious that noone seems to have enough of the restricted shares to need to file. I guess there were a number of Regency prinicipals and angel investors in the LLC. I've asked Aaron to give me a call)

I am not going to quibble with "The Superstock Investor" glossy, but am pretty sure that the company needs working capital. In 10 Reasons to Buy Now (see Olico's scanned pg.10, post #164 it sez that company insiders own half the shares. they would not invest millionsof dollars of their own money in Xpention unless they were fairly certain a big pay-off was assured". In point of fact, $725K purchased the shell, and 1.1 million shares of Bayview was given in exchange for 100% of Xpention. The value of insider holdings is worth millions, but it is not clear that "millions of dollars of their own money" was invested.

David referred me to "the filings" regarding current capital needs: anyone still reading this SHOULD read the 8-K12G3 from 3/18/05. Do a word search for budget on this one, but take some time to read about the patents, business plan, license agreement etc.

I asked if Regency was helping with financing and David stated that they were one of several consultants in this regard. (I sure hope that if financing news is coming that it is benign).

I asked about the cost to the company for patent enforcement. He told me to review the techn. and license agreement....implication is that the U. of Texas owns the patent and will expend resources to enforce it (again pls. review the agreement in the 8-K12G3 if you are so inclined).

Early on in the thread there were some concerns raised about the timeliness of bringing the company public at this point. I closed with the question: why XPNG now...when the major work on p65 tumor marker was published nearly a decade ago.

He said he did not care to comment on any previous non-public efforts re. the technology (I don't anything about that):
"we have the formula in place to successfully commercialize the technology"
we have the correct focus..have identified the partners... to generate revenues.
"we have a sharp focus on the business side


Other items of note:

Geoff told me Friday that 1 mill mailers left the printer Thursday and Friday...they go out "last class" bulk and take days to reach the targeted audience
Geoff said he thought "the run" would start this week and last for about 3 weeks

I received an email today from theRegencyGroup titled: XPNG now starting. A broker network receives these.

......

I have not succeeded in identifying possible promoters. The 2.22 million shares of the former Bayview have traded publicly since April at a significant premium to their non-liquid value.
I have no clue who owns 'em, and I don't think the stock has even traded it's public float once over since a public market existed. (I have not added up every day's volume...it's just a guess)