DNAprint Genomics (DNAG)

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880...Been a long time fan of coffee myself...lol

This is JMHO, of course, but I'll be watching with interest. The possibilities are numerous. The bottom line is that we really only know a few of the details concerning the offering so everything we post is speculative. I will offer the following based on what I've read in recent news items and caution you to consider it in the context it deserves.

But here's what we know:

DNAPrint owns approximately 455,000 shares of Biofrontera or an 18.3% stake. From that information we can estimate the total existing privately held shares of Biofrontera at approximately 455,000/.183 = 2,486,338 shares (call it 2,500,000 shares for simplicity sake)

According to the article stockholder101 posted the other day, here's the link (http://investorshub.com/boards/read_msg.asp?message_id=11570904), Biofrontera intends to offer a total of 2,185,000 shares in the IPO. But only 1,900,000 of those shares are new shares. 285,000 existing shares are part of a secondary offering by existing shareholders. Private shareholders in an IPO will often do that to recoup a portion of their earlier investment.

Also, the article tells us that the remaining shares of the existing shareholders (those not participating or only partially participating in the secondary offering) will be subject to a 12 month lockup period. This is done so that existing shareholders can't sell into the IPO and place immediate downward pressure on the share price.

Anyway, it looks as if there will be about 4,400,000 shares outstanding after the IPO.

So what are the possibilities:

If everything were to remain status quo, DNAPrint's overall share of the company would be something like 10.3% (455,000/4,400,000) after the IPO. DNAPrint's equity stake would, therefore, be worth 10% of the total IPO value, but the shares would not be saleable on the open market. Depending on the success of the IPO, the value of their shares could likely range IMO from 5,000,000 to 10,000,000 euros. The current exchange rate is around 1.25 so we could conceivably show $6,250,000 to $12,500,000 in current assets on our next balance sheet.

Of course this assumes status quo and assumes a 50,000,000 to 100,000,000 euro range for the IPO. The value could be up or down from either end of the range.

It is also possible that existing shareholders shares will be restructured as part of the offering. Often, shares are made convertible at some multiple to limit the dilutive effect of the offering on the voting power of their shares. We don't know what the share structure will look like, but it is possible that the current structure would change.

A third possibility, which I would find pleasant would be a scenario where DNAPrint is participating in the secondary offering. Frankly, if I were running the company I would be offering half of my shares in that offering. I would probably still retain a 5% stake in Biofrontera (a significant ownership position), but by selling 225,000 of my shares in the IPO itself I could bring approximately 10% of the IPO to MY company in cash. If the IPO goes for 50,000,000 euros, DNAPrint would generate $6,250,000 in immediate cash, and still retain a balance sheet asset of $3,125,000 for their remaining investment in Biofrontera. This strategy would bring a total of $9,375,000 to the balance sheet assuming an IPO value of 50,000,000 euros. You could double those numbers at the higher end if you like to speculate. On the other hand, DNAPrint may not be offering ANY of their shares in the secondary offering, which would IMO be foolish.

Anyway, according to the article there is expected to be a Biofrontera press conference on June 26th regarding the IPO. They could also be releasing clinical trial data to generate interest in the offering.

Let's hope that DNAPrint managment is able to share additional information with the shareholders at the meeting on Thursday. Otherwise we, unfortunately, have to just sit back and trust that management has a plan. Either way, I see enhanced intrinsic value for my shares.

How will the market react? Who knows...that's what happens in a market.

Later,
W2P