v3.25.2
ORGANIZATION AND BUSINESS
6 Months Ended
Jun. 30, 2025
Accounting Policies [Abstract]  
ORGANIZATION AND BUSINESS

NOTE 1 – ORGANIZATION AND BUSINESS

 

Frequency Holdings Inc. (“FRQN”, “Frequency”, the “Company”), (f/k/a Yuengling’s Ice Cream Corporation.) was incorporated in Nevada on April 19, 2013, under the name “Aureus Incorporated”. Effective December 15, 2017, the name was changed to “Hohme, Inc.,” and, effective February 7, 2019, the Company changed its name to “Aureus, Inc. and on September 14, 2021, the Company changed their name to Yuengling’s Ice Cream Corporation”. On May 9, 2025, the Company changed its name to Frequency Holdings, Inc., in the State of Nevada. The name change with FINRA to Frequency Holdings, Inc and symbol change to FRQN was finalized on July 25, 2025. The Company is currently active in the state of Nevada.

 

In November 2023, FRQN completed its acquisition of ReachOut Technology Corp. (“ReachOut”). ReachOut is a Managed Service Provider (MSP) that provides cybersecurity and IT services to Small to Medium Sized Businesses (SMBs). Management is highly experienced with business operation as well as acquisition and integration. After the closing of the ReachOut transaction, the Company agreed to assign the ice cream assets to Mid Penn Bank in return for the cancellation of the bank debt. The Company also ceased its Aureus Micro Markets operations at the time the ReachOut agreement was signed.

 

Reverse Merger/Acquisition of ReachOut Technology Corp.

 

On November 9, 2023, the Frequency Holdings Inc. closed the Share Exchange and Control Block Transfer Agreements with ReachOut Technology Corp. (“ReachOut”) whereby 100% of the membership interests of ReachOut were exchanged for Series C Preferred Stock which is convertible into 87.5% of the total issued and outstanding shares of common stock of the Company (fully diluted basis) as determined at the consummation of the acquisition.

 

The Share Exchange is intended to constitute a reorganization with the meaning of Section 368 of the Internal Revenue Code of 1986 (as amended).

 

As a result of the transaction, ReachOut became a subsidiary of the Company.

 

The Company evaluated the substance of the merger transaction and found it met the criteria for the accounting and reporting treatment of a reverse acquisition under ASC 805 (Business Combinations)-40-45 (Reverse Acquisition and Other Presentation Matters) and accordingly consolidated the operations of ReachOut and the Company and the financial condition from the closing date of the transaction. The historic results of operations reflected those of ReachOut. As such, ReachOut was treated as the acquirer while the Company was treated as the acquired entity for accounting and financial reporting purposes.

 

Under reverse merger accounting, the comparative historical financial statements of the Company, as the legal acquirer, are those of the accounting acquirer, ReachOut, the Company’s financial statements prior to the closing of the reverse acquisition; reflect only the business of ReachOut and its subsidiaries.

 

For accounting purposes, ReachOut was considered the acquirer of FRQN. based upon the terms of the Merger as well as other factors including; (i) RO former shareholders own approximately 87.5% of the combined Company’s outstanding common shares (giving effect to the conversion of the preferred Series C shares ReachOut stockholders received in exchange for the ReachOut stock) immediately following the closing of the Merger, and (ii ReachOut management hold key management positions of the combined Company. The Merger has therefore been recorded as a reverse acquisition. The figures described in the notes and financial statements are a continuation of the figures of the legal subsidiary or accounting acquirer (ReachOut). However, the equity reflects the legal acquirer, or accounting acquiree (FRQN) equity structure. The acquisition value is recorded to reflect the par value of the outstanding shares of the Company, including the number of shares issued in the reverse acquisition and has been recast to reflect the merger transactions as if it had occurred as of the earliest period presented. Any difference is recognized as an adjustment to the additional paid in capital to the extent available, and then as a retained earnings adjustment.

 

Under the terms of the Control Block Transfer Agreement, Everett Dickson (former CEO) sold all his remaining Series A Preferred Stock to Richard Jordan (new CEO) for $140,000.

 

Following the closing of the agreements, Robert Bohorad and Everett Dickson resigned their positions as CEO and Chairman of the Board of Directors, respectively and Richard Jordan was appointed to those positions.

 

The Company has authorized 8,750,000 Series C Preferred Shares of Stock, effective December 13, 2023. The shares have a stated value of $3.00 per share, earns a 2% dividend on the stated value, which is cumulative and payable solely upon redemption. The stock has voting rights equal to the number of common shares into which the preferred shares may be converted. At any time following 180 days from the date of issuance the preferred stock in aggregate can be converted into 87.5% of the outstanding common stock for a period of twenty-four months from the date of issuance of the Series C Preferred Stock.

 

Under the terms of the Share Exchange Agreement the Company issued 8,750,000 shares of Series C Preferred Stock to the owners of ReachOut. in exchange for 100% of the shares of ReachOut upon closing the aforementioned acquisition.

 

ReachOut Technology Corp.

 

Reachout Technology, Corp. (“ReachOut”) is a corporation formed on February 13, 2020 under the laws of the State of Delaware. ReachOut provides cybersecurity and IT management solutions to businesses to protect their complete operating landscape and data secrets. ReachOut is headquartered in Chicago, Illinois.

 

From formation until the acquisition of Innovative Design Networks, LLC (“IND”) on September 2, 2022, ReachOut had no principal operations or revenue. ReachOut’s activities during this period primarily consisted of formation activities, acquisition research and preparations to raise capital.

 

ReachOut Corp. Acquisition - Innovative Network Designs LLC

 

Innovative Network Designs LLC (“IND”) is a New Jersey limited liability company and ReachOut acquired 100% of the member’s interest of IND in exchange for cash, notes payable, commitment to purchase universal life insurance policies for the principals and 500,000 restricted shares of ReachOut’s common stock. The transactions were deemed to be a business combination and applied acquisition accounting under ASC 805.

 

Operations of Innovative Network Designs LLC - New Jersey

 

IND provides information technology services. IND offers cybersecurity, risk assessment, network security, cloud performance, remote management, migration support, and monitoring solutions for businesses, as well as provides consulting and maintenance services. IND serves clients in the States of New York, New Jersey, and Pennsylvania. IND can either manage and support a client’s entire technology infrastructure, or complement the existing internal IT personnel. IND’s unique service model is designed to reduce client costs, increase client profits and mitigate client’s business risks.

 

ReachOut Corp. Acquisition - Red Gear LLC

 

ReachOut entered into a Membership Interest Purchase Agreement on September 29, 2023 with RedGear, LLC, (“RedGear”) a Texas limited liability company and acquired 100% of the members’ interest of RedGear, in exchange for cash, a note payable and the assumption of certain liabilities of RedGear. The transaction was deemed to be a business combination and applied acquisition accounting under ASC 805. Upon closing October 2, 2023, the total value of the consideration given for the purchase was $3,025,249 The purchase price was allocated to net tangible assets of $54,006 with the balance of $2,510,0291 allocated to goodwill, which is not amortized to expense. ReachOut hired an independent accounting firm to validate the Adjusted EBITDA (as defined in the closing documents). The results of the validation resulted in a purchase price adjustment reducing goodwill to $2,117,502. During the three months ended March 31, 2024, the Company determined that the goodwill was fully impaired and charged to loss to operating expenses.

 

Operations of RedGear LLC – Texas and Arizona

 

RedGear provides professional technology services, structured cabling, equipment, and consulting in the Southwest US region. RedGear’s entire culture is built around supporting business infrastructures, while building relationships and delivering an exceptional customer service experience and always keeping customers’ best interest a top priority. RedGear has built its success by reputation, quality of work, professionalism, and always being there for clients every step of the way whenever needed. RedGear’s services, certifications, experience, and expertise cover the entire spectrum of Information Technology that no other regional technology service provider can match.

 

These were pre-acquisition descriptions. Post-acquisition, ReachOut Technology Corp. was to re-brand its subsidiaries to ReachOut, add any unique revenue streams to ReachOut’s portfolio and standardize program offerings.

 

On March 31, 2025, pursuant to an assignment agreement, YCRM and ReachOut Technology Corp. agreed to transfer ReachOut’s net assets to a third party for a nominal amount, resulting in the termination of ReachOut’s control as the accounting acquirer. As a result, the reverse acquisition, under which ReachOut Technology Corp. had previously been considered the accounting acquirer of YCRM in accordance with ASC 805-40, was effectively unwound. From this date, YCRM resumed its position as the accounting parent of the consolidated group, and all relationships and control previously exercised by ReachOut Technology Corp. over the consolidated group ceased. The presentation reflects the appropriate accounting treatment under the guidance for reverse mergers and loss of control.

 

ReachOut Digital Intelligence

 

ReachOut Digital Intelligence (“RDI”) was formed on March 4, 2025 under the laws of the State of Wyoming. RDI provides cybersecurity and IT management solutions to businesses. RDI is headquartered in Chicago, Illinois.

 

Since the reverse acquisition of ReachOut Technology Corp., its subsidiaries, RedGear and IND, had been the primary contributors to the Company’s revenues, although they also generated significant operating losses. During the quarter ended June 30, 2025, certain client service arrangements previously held by a related party were formally transferred to ReachOut Digital Intelligence (“RDI”). Management anticipates that these revenue streams will be more substantial and potentially more profitable than those contributed by ReachOut Technology Corp.’s subsidiaries.