Question three, (I'm on a roll)
When this particular transaction has been completed and Dutchess has purchased 300 million shares and thus owns 30% of the company. When DNAP (as their proxy) goes ahead and buys 51% of Biofrontera for $2.7 million (and a promise). Does the 30% stake in DNAP combined with the shares controlled by management enable Dutchess (and present management) to increase the share authorization whether the rest of the investors like it or not? Oh yes!
After they have issued more shares and Dutchess gains a controlling interest in DNAP and thus controlling interest in Biofrontera, how will they combine the assets of the two companies and how will the present investors be included?
Remember that at this point in time 51% of Biofrontera has a 'face value' of only $2.7 million, or a capitalized value of $5.3 million.[the rest of the advertised value is based on the 'promise'] Combined with the present value of DNAP about $15 million that is a total value of $20 million.
The combined company will be 'owned' by the present investors in DNAP and the present investors in Biofrontera. Assuming that the Biofrontera people maintain 49% of their share DNAP investors will own the rest. Of the 51% of the company owned by DNAP investors 26% will belong to Dutchess based on their half of DNAP. Present DNAP investors will own the other 25%.
Present shareholders (not including management) own probably half of DNAP (assuming mangement has maintained a controlling interest so far). Those same investors will own 12.5% of the combined company. [49%-Biofrontera investors, 26%-Dutchess, 12.5% DNAP management, 12.5% everybody else].
So current DNAP shareholders go from the current state of 50% ownership of a $15 million dollar enterprise to a 12.5% ownership of a $20 million dollar company.
Thoughts?
