You know, I've always been curious about that 'less than 1% each' value offered by Gabriel and Tambori to dampen out the concern about a conflict of interest.
As we all know, from the truffle hunting performed on these boards under the guise of DD, Tambori and Gabriel have been listed on the Biofrontera web page as two of about six investors for months before the deal was announced. As soon as the announcement occured there was a significant reaction from some investors questioning the ethical nature of such a deal where the CEO of one company buys up another company in which he is a major investor. The questions were put to bed fairly early with the 'less than 1% each' statement.
My question is, One percent of what?
After the deal is reported the 'announced' value of the company (based on the $25 Million dollar investment by DNAP) is said to be over $50 million dollars. If we apply the 'less than 1% each' value to this $50 Million dollar apparent value of the company we see that any investment up to $500,000.00 each would fall below the threshold. So they could easily own collectively a million dollars worth of Biofrontera and still meet the terms of the 'less than 1% each'.
However, before the deal is announced the value of the company is actually significantly lower. Lets assume for arguments sake $5 Million dollars. (Based on the reported price of $2.7 Million being paid by DNAP for voting control of 51% of the stock). Now that $1 Million dollar investment of Gabriel and Tambori looks like 20% of Biofrontera, and would appear to offer evidence of a potential conflict of interest.
So which is it? Less than one percent of the $50 Million 'after' the announced deal, or less than one percent of the actual stock of Biofrontera before the announced deal?
And before anyone has a fit about the values offered here, they are clearly indicated to be 'for argument sake'. I am just pointing out the possible interpretations of the statements. I have always found it interesting that the share of Biofrontera owned by Gabriel and Tambori was disclosed in such a vague manner. 'Less than one percent', as a stand alone statement, is meaningless. A more meaningful value would be percentage of shares or dollar value of the investment. Neither would be subject to interpretation, and neither would give the appearance of sleight of hand.
regards,
frog
