We believe that a combination of business, market and personal factors may ultimately cause Union Dental and Drinkable Air to enter into transactions to accomplish the following goals:
ccording to its amended disclosure statement filed on September 9, 2014, Dr. Green is 56 years old.
We anticipate Dr. Green considering an exit plan that involves the sale spinoff, or privatization of Union Dental’s dental practice. We previously announced within this report that we believe this dental practice is currently worth between approximately $6.0 and $7.5 million. Union Dental has not issued any stock, debt or accessed the capital markets to finance its general operations and any growth plans since 2012.
We don’t believe Union Dental’s dental practice itself is a high growth business. A proposal to sell, spinoff or take the dental practice private is entirely reasonable and could actually serve Dr. Green’s interests in many ways. Considering that he is the majority shareholder of Union Dental and controls Union Dental through his preferred stock holdings, his interests are significant in any decision to modify the organization, operations or capitalization of Union Dental.
Dr. Green may be best served to take his dental practice private and have Union Dental move forward with a product-based business model. The Green Ozonator could serve as its initial product offering. An additional transaction, licensing agreement, or joint venture agreement could allow Union Dental to not only continue selling Drinkable Air products but also expand its ability to do so, and possibly expand its right under its exclusive arrangement with Drinkable Air.
Dr. Green may also consider selling Union Dental’s dental practice to Birner (BMDS on the NAS at $15.70 a share) or could seek out other possible suitors that are private companies. The list of possible suitors would likely include along list of larger dental companies such as Gentle Dental, Heartland Dental, Coast Dental or Aspen Dental, among others.
Union Dental may also determine its best opportunity could be to complete a reverse merger with Drinkable Air whereby the public entity Dr. Green currently controls, Union Dental, would acquire Drinkable Air and leave Drinkable Air as the continuing business entity. We confirmed with Mr. Kairis and Dr. Green that this type of transaction has been discussed.
The dental practice could then be spun out of the public company to Dr. Green, therefore leaving a fully products-based company that could immediately access the capital markets to further capitalize the product-based company and allow it to expand its operations in a more aggressive manner than it is doing so now. We note that Drinkable Air is currently preparing for an audit of its financial statements. This was also referenced in the October 15, 2014 press release. Transactions Appear Likely 5 http://www.otcmarkets.com/financialReportViewer?symbol=UDHI&id=126316 6 http://www.otcmarkets.com/financialReportViewer?symbol=UDHI&id=124749
We believe there is a possibility that if this scenario were to play out, that Drinkable Air could successfully apply for a listing on a senior exchange such as the NYSE MKT during 2015. We considered the listing criteria outlined by the NYSE MKT.
We believe this option is perhaps the best opportunity for both Union Dental and Drinkable Air and Union Dental to both achieve their goals.
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