gunnabe,
I was just expanding on the theme. We have discussed the seemingly unavoidable transfer of control from present management to Dutchess as they purchase millions of dollars worth of shares. As we have agreed such a takeover 'at a discount' could not occur without the agreement and consent of our BOD.
The next step in the premise therefore is that the BOD 'are' aware and have consented to such an arrangement. If such is the case, it is not hard to see that such an arrangement would not necessarily be embraced by the present shareholders. In most takeovers, shares are purchased at a premium, not a discount. Shareholders would likely be upset. To avoid such a turmoil it would have to be presented to the current investors very carefully.
If the funding transaction from Dutchess is really a negotiated takeover, then perhaps it has been masked. Dutchess was presented as a funding source in much the same way as LaJolla, an investor that was merely trading cash for discounted shares. La Jolla provided money in agreed amounts at DNAP's request, much like the Dutchess deal, they seem to be remarkably alike.
Dutchess was presented as part of the Biofrontera arrangement, the 4% discount seemed too good to be true as the going rate through LaJolla was 20%. (Many asked why not switch over to Dutchess completely.)
Interestingly enough, the Biofrontera deal seems to have gone away yet Dutchess remains. They remain, but so also does LaJolla. If Dutchess is just an innocent investor, willing to fund the company's operation at only a 4% discount, then why are we dealing with LaJolla? If they aren't interested in taking over LaJolla's side of the funding then why are they sticking around?
As you have pointed out, providing $35 Million to an $8 Million dollar company in exchange for shares doesn't make sense.
regards,
frog
