Kermy...Let's review:
- DNAPrint provides $2,000,000 +- to Biofrontera in exchange for 445,000 +- shares of the company. Biofrontera uses the capital infusion as part of a finance package enabling them to float a 20,000,000 euro bond, promising the investors 8% return on the bonds, with a fixed conversion option at 16.13 euros/share should Biofrontera successfully execute an IPO.
- Biofrontera, in turn, uses the bond proceeds to expand and support clinical development of their drug pipeline, which along with the capital from the bond, allows them to IPO the company to garner additional capital. After the IPO, DNAPrint's Biofrontera stock is worth $15 +- euro/share but is RESTRICTED for one year.
- DNAPrint attends December 2006 Venture Capital event seeking capital for DNAPrint Pharmaceuticals. At the end of the presentation Gomez and Gabriel tell the audience they are looking for $10,000,000 and believe that would appreciate to $86,000,000 in the next twelve months.
- February 2007, DNAPrint reopens Bookbinder's court mediated, signed and sealed agreement. The new agreement provides an unconditional release from ALL future claims, and further stipulates that the settlement is to complete by a date certain - February 20, 2007. In the SEC filing announcing the change to Bookbinder's settlement, DNAPrint documents that Sytkowski agrees to accept shares in lieu of the cash payments he was previously scheduled to receive and that they hired a securities attorney who also agrees to be compensated in shares of DNAPrint stock.
- Only one week after the date certain mentioned in Bookbinder's agreement, February 27, 2007, DNAPrint completes an agreement to sell 83% of the RESTRICTED Biofrontera shares for $5.9 million cash, with a call option to repurchase the shares at 16.13 euro/share (same as the bondholders conversion price) starting October 31, 2007.
OK, you're the CEO that just orchestrated this series of events. You clearly were about to have the cash to pay Bookbinder, Sytkowski and the attorney. Why did you change the agreements if you had the cash? Why did you sell the Biofrontera shares?
AND...what do you do next?
(BTW, as a side note, your 6% simple interest is much too low, even if you COULD get a loan using equity securities as collateral...margin interest rates, for instance, are about 12% right now...the Biofrontera bond itself pays 8%)
Later,
W2P
