DNAprint Genomics (DNAG)

[frogdreaming]

retired investor, With all due respect, I think there is a significant factor missing from your analysis.

if i am understanding this properly, we now have 1.5b sh authorized. after the r/s as i read it in the proxy, all current shareholders will have 10 or 20 times fewer sh, but total authorized sh will still be 1.5b. this sounds better to me than having the 1.5b now, and asking us to authorize the issuance of 1.5b more, for a total authorized share amount of 3 billion.

The choice appears to be relatively even, as either way we end up with an extra 1.5 Billion shares for future endeavors. However the difference is in the eventual share fraction that is owned by current investors.

In the scenario with the additional 1.5 Billion shares authorized, current shareholders would see their ownership share diluted by about half if all shares were issued.

In the R/S scenario, shareholders would see a dilutive effect that would be much greater.

For the sake of argument, lets assume that just one shareholder exists and he owns 1 Billion shares. The company still has 500 million shares to issue and they authorize another 1.5 Billion. If all shares are eventually issued, our shareholder still owns one third (33%) of the company (down from two thirds before the authorization).

In the second scenario, our stockholder has his share count reduced by a factor of twenty to 50 Million shares and the company retains the ability to issue a total of 1.5 Billion shares. After they have been issued our shareholder now owns only 3.3 percent of the company (50 million shares of 1.5 Billion).

The difference is dramatic, don't you think?

regards,
frog