spook...Response to your points:
1) Prior to implementing the Executive Compensation packages and the Performance Share Grant to Dr. Frudakis, the two largest shareholders in the company would have been Dr. Frudakis at approx. 35,000,000 shares and his father at approx. 30,000,000 shares, or a total of 65,000,000 shares. Given the above, would you consider it wise on their parts to implement a fundraising option that was about to place 157,000,000 shares in the hands of a few outside investors?
2) Your second point goes directly to the recognition of the difference between a Development Stage Company and a Commercial Enterprise. If we had been investing in a full-fledged commercial business these past three years, I would agree wholeheartedly with you. But DNAPrint has until very recently been strictly a Development Stage Company. It's products are complex in nature (meaning they have a long development cycle), and in the case of both forensics and pharmacogenetics they directly, and potentially severely, impact people's lives (that includes both positively if they are correct, or negatively if they are wrong). By their very nature, DNAPrint's products carry a heavy burden. The consequences of a wrong result are severe. This again would extend the development cycle.
You are free to look at this any way you'd like. I see it this way. My money, and the money of all of the other investors to this point has gone to fund the Development Stage. We, in essence, own the platform and the few existing early stage products. If we had all voted no last spring, the company might have gone belly up, in which case they would have sold the assets (including the intellectual property), and I may or may not have realized my initial investment. But that was an option. Alternatively, they may have severely trimmed expenses and managed to slowly but surely grow revenue to become self-sustaining. But that path would have retarded long term growth prospects. Either way, I wouldn't have gained much.
I voted to increase the authorization because that created the means to the capital required to take us to the commercial business stage. Am I sharing the pie with another group of investors? Absolutely. Does that make my piece of the existing pie smaller? Absolutely. But with proper management and proper funding I am betting that the growth of the pie will far outstrip the piece I'm giving up. And I recognize that I need the new investors at this point, as much as they needed my initial investment to get things through development.
I AM pleased to see that the initial conversion rate is at $0.061. I don't think it a coincidence that the rate is equivalent to the existing share price. It would be hard to argue that one group of investors is being favored, i.e. PIPE investors over existing investors. Of course this is predicated on the share price moving upward from where it is, but it is my observation and speculation that the company DOES have news to announce, and business in the pipeline that will move us up from here.
If that's the case, anyone buying off the open market can expect the same gain moving forward that the PIPE investors will realize. What did Dr. Frudakis say in the TWST article, "We need to change our share structure and we need to do that in a way that doesn't alienate our existing investors." In order to do that, I think the first thing you do is make certain that the PIPE investors are coming in on par with the early stage longs.
From where I sit, given current revenues, near term growth prospects, and $8M cash I don't foresee additional dilution. IMO, this is it...until, of course, we "graduate" to a pharmaceutical company.
3) This one is answered in (2) above.
4) OK, I've got my fingers crossed too! lol As far as Dr. Frudakis doing what he plans to do, I think Gabriel and Gomez have that under control.
Later,
W2P
Ihopeyoudidn'tburnthemtoobadly
