DNAprint Genomics (DNAG)

[dejavu]

Phone call with Craig Hall regarding new offering: I finally reached Craig this afternoon. The main points he made in our 15 minute conversation are:
- time is of the essence: in order to stay ahead of the competition they need to invest in faster equipment and new employees now. They are planning to purchase a faster SNP machine (100 x faster than the Orchid SNP Stream 25K) and they also want to hire three to four more scientists (mathematicians and bioinformatics specialists). Craig mentioned several times "a window of opportunity".
- DNAP wants to complete two more research projects in the next few months in order to show the relevance of their research model and attract more researchers, investors and collaborators.In order to complete these projects they need the above mentioned investment.
- they have enough cash to stay operable until August/September
- they are still several larger companies interested in DNAP. Nothing has been finalized. They don't want to wait for those negotiatians to be finalized - they want to invest now.
- the 0.10 share price will go up if DNAP should go up after possible listing or other announcements.
- DNAP is in talks with IBM Life Science representatives. IBM will be at the SF March conference.(He didn't want to mention anything more regarding IBM)
- other companies will send representatives to the SF March conference to hear the representation of Dr. Frudakis.
- $ 1 Million investment is still in place to be invested when the necessary milestones are achieved such as software developed, platform operable etc.

I raised my reservations with Craig regarding dilution, slow performance of laywers in the case of Bulletin Board listing and low share price in this offering round. He said that they thought long and hard how to structure this deal but could not come up with a faster way to get the financing. He is also disappointed about the performance of the laywers. They will crank up the share price if DNAP will go higher in the coming months, which they expect. As you know of the total of 269 million outstanding shares 135 million are still restricted for another 1 1/2 years. That means that the newly issued restricted shares for 1 year will be unlocked before the 135 million shares can be sold.

My opinion: I think DNAP really wants to invest the 5 million and it will not be used to cover a higher burn rate then acknowledged. The completion of 2 new projects (in the vein of Statins and Breast cancer research) seems to be crucial for the overall validation of their approach. There is an IBM contact: what it means - we don't know.

This is all my aging midnight brain can remember.
Regards
dejavu