DNA Brands Inc (DNAX)

[Ed the Trader]

"Adrian told me that he will not issue any more shares, and that I will continue to hold the same percentage of the company after the split. So it doesn't matter what the PPS is, the value of the stock will remain the same"

If that is what Adrian told you, he just plain simply lied to you.

In the latest PR, Adrian clearly states that part of the motivation for the reverse split is so "Long time PPM investors can now deposit their stock certificates." These are privately held shares of corporate stock which were not DNA common stock and therefore, not publicly registered.

However, they are about to become publicly registered to allow those holders of private corporate stock to deposit their (now public) shares into their brokerage accounts to make them available for trading (ie: selling).

Also per the PR, "DNA Brands will be commencing a Reg A (Tier 2) offering..."

That offering will be for the sale of yet more new shares.

The PR also stated that the number one reason for executing the reverse split is so "The company can now attract adequate equity financing as opposed to debt funding." If you don't understand what this means, a corporation sells stock (ie: equity in the corporation) to raise funding. This means selling many more new shares of DNAX common stock. This is instead of the earlier practice of obtaining loans which were convertible for the holder of loan note into new shares of stock. Either way, Adrian gets cash and you lose value in the company as the value of your shares is further diluted.