So if I read the 8-K and the PR correctly, Dutchess is taking 2,000,000 warrants in exchange for the $2,000,000 in "incentive debentures" attached to the DNAPrint Notes Payable. Granted the exercise price is $.01, but so was the exercise price of the Convertible Debentures. In other words, it appears that Dutchess is accepting 2,000,000 shares of DNAPrint Pharma (shares that don't even exist yet in a company that doesn't even exist yet) rather than the 200,000,000 shares of DNAPrint the original debentures would have converted to. Unless my math is wrong, if DNAPrint eliminated $2,000,000 of debentures for 2,000,000 shares of Pharma, that's a buck a share for Pharma vs. $0.01/share in DNAP. Not bad.
Dutchess, whose Notes payable included a lien on all of DNAPrint's assets agreed as part of this deal to release their claim on the assets. So now the DNAPrint Pharma shares that Dutchess is accepting in lieu of virtually all of DNAPrint's debt are both "virtual" and "unsecured". That IS what it says, although that looks to be a pretty big leap of faith on the part of Dutchess.
Dutchess agreed to take "up to" 2,000,000 shares of DNAPrint Pharma (shares that don't exist yet in a company that doesn't exist yet) to discharge the other $4,000,000 in debt. That means if DNAPrint didn't pay them another nickel, Dutchess is willing to value (the non-existent) shares at $2.00/share and accept them as payment on DNAPrint's debt? I mean, that's what I see folks, unless someone can show me differently.
DNAPrint has to pay them 4% of quarterly revenues (about $20,000 based on the last Q), and Pharma has to pay them 80% of "Royalty" (royalty income, not Kit Revenues or Service Revenues, or IPO proceeds, or a portion of additonal financing proceeds) income until the debt is paid.
I honestly don't know what the rest of you are smokin', but I don't understand the objections being flung around the board. They virtually eliminated the debt of the parent, eliminated 200,000,000 shares of certain dilution in the parent, eliminated the lien on the company assets, and accomplished it using "virtual" shares in a "virtual" company. Someone would have to explain the problem because I don't see it.
Who gives up $6,000,000 (that they already loaned and DNAPrint already spent) AND their secured interest (for WHATEVER it's worth) in exchange for "virtual" shares in a "virtual" company?
As always, this is just my humble opinion. Please do your own due diligence and make your own investment decisions.
Later,
W2P
