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Dear Shareholders,
You will probably note that we issued a news release and filed an 8k with the SEC stating that we have
entered into a stock purchase agreement to acquire an 18% interest in Biofrontera. This transaction
includes a possible ‘put’ purchase agreement with Heidelberg Innovations, a venture capital firm out of
Heidelberg, Germany. You may also recall that we had a previous arrangement with Biofrontera that
failed to materialize. However, since that time, conditions at Biofrontera have changed, and they are in
the midst of placing on the German Bond Market a high risk, convertible debenture instrument that would
require all the shareholders of Biofrontera to convert into a single class of common stock.
We were presented the opportunity to purchase a package, consisting of part debt and part equity, from a
German government agency known as tbg, which early on in the development of Biofrontera constructed
a complicated but beneficial financing package for Biofrontera’s start-up. We purchased that package for
1.5 million Euros with an additional package due later at 387K Euros. The instrument allowed us to
convert the debt portion of the package, cleaning up Biofrontera’s balance sheet and making a future bond
placement and hopefully a public offering possible. This effort by DNAPrint has removed substantial debt
from the Biofrontera balance sheet and has created a future equity value for us if the bond placement is
successful.
Why did we undertake this investment? First, we believe Biofrontera has a substantial potential market
valuation. We also believe, despite the earlier failure of the larger acquisition, that we should maintain a
relationship and pursue any and all opportunities to participate with Biofrontera and its shareholders in
the growth of that company. Second, we will continue to expand our relationship with Biofrontera
because they have two Phase 2 drugs that we can help develop, plus additional discovery compounds that
we might partner and/or license. Third, both Biofrontera and DNAPrint would like to have corresponding
facilities in each of their respective markets – DNAPrint would like to have a presence in Europe, and
Biofrontera would like to have a presence in the U.S. Finally, Biofrontera and DNAPrint believe that
their technologies are synergistic for the development of drugs for personalized medicine. Biofrontera has
the ability to isolate, identify and clone novel receptor pathways, and DNAPrint has the ability to identify
and isolate unique genetic markers expressed by individuals whereby these unique pathways may be
identified.
So over the coming months you may see additional investment in technologies between Biofrontera and
DNAPrint, some licensing, joint partnering as well as joint development and mutually beneficial
operations in each others’ home markets. We will also be sharing board members; currently Hector
Gomez, M.D., Ph.D., DNAPrint’s Chairman and Chief Medical Officer, and I are members of
Biofrontera’s supervisory board. The next objective for Biofrontera and the new supervisory board
members will be to assist Biofrontera in going public. If it can achieve that goal, you as DNAPrint
shareholders will be owners in Biofrontera through DNAPrint.
Richard Gabriel,
CEO and President
Company Contact:
Richard Gabriel
CEO and President
941 336-3400
-or-
Ron Stabiner
The Wall Street Group, Inc.
212-888-4848
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