buy now, page-25

FRE management are not letting on what is going on over there. Common sense dictates that the future is somewhat predictable if you can see signs of customer and revenue growth but there appears to be none of that.

From a retail perspective Freshtel is nowhere to be seen on the horizon, a quick check with the industry ISP/VOIP forum Whirlpool shows little or no subscriber activity or special offers being made. There is no advertising that I can see and I suspect the only active party are the Yipii christian people. There is talk about something to do with calling cards, Tesco etc but who really knows? Would Tesco have any confidence left in Freshtel? I doubt it. Remember they dropped $20M into this baby.

The short term appears to be steady as she goes and $300K loss per month. Given that they have just moved into their largest shareholders building, it would be interesting to see where all the Freshtel expenses are going now.

Cynically, I rather suspect Freshtel expenses will increasingly be spent with it's largest shareholder at well above mates rates. Certainly we know rent is going there and there would no doubt be a lot of other shared expenses being paid in.

A good way for Custodial to get their $1M investment back. And if they keep it up and take out the $1M loan with $150K in fees over draw down that will most likely be a round robin and leave Freshtel with some hefty debt to it's largest shareholder by spending the $1M on over inflated expenses & "management fees".

But fear not, I am certain that Custodial will come charging in and do a last minute debt for equity swap and end up owning 100% of Freshtel and all it's assets. Freshtel assets will always be worth about $1-2M with the public company shell, trading name, client base and backend system so I rather suspect Custodial will pocket a nice profit from this excercise and have a lot of their shared expenses funded by whatever capital is left in Freshtel.

In short, I see a total loss for all FRE shreholders here but it will be drawn out unfortunately. Happy to be proven wrong, I hate to see retail shareholders stripped of their capital.