Kraig Biocraft Laboratories Inc (KBLB)

[Cee-It]

How does he shift the risk to shareholders when he is the largest one?

That's a simple formula used by hundreds of CEO on the penny stock market. As your shares held increase you are retaining control. Then you also keep the debt of the company to you rising; and, as the controlling insider you control the timing and the BK reorganization plans. Using this approach you are the very last one to be in a losing position and the public shareholder is kept at the leading edge of the loser list whenever reorganization, dilution, or even a sell-out of the company occurs.

Controlling insiders (KIM) always have multiple ways to recover and profit from their positions, while shareholders have only the equity held position. The CEO can receive shares from a buy-out for his "supposed value" as CEO even though he was the cause of the entire failure. He has leverage on the deal and that always results in the insider winning even when the shareholder loses everything.