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Thanks Olddog. You would think with 500 patents they would be signing more companies and making more money than that. Probably paid the lawyers more than that just to spin off the trust. Been highly disappointed with management for a long time. Glad I got called out on a lot of my options recently. Hope you and all the other long timers are doing well.
Doesn’t IDCC have a separate division with base station patents that isn’t making any money?
“As a small fully reporting company, we take the quiet period during the registration process very serious, but understand that the silence can be frustrating for our shareholders. However, by ensuring full compliance with the quiet period, which is required by federal securities laws, the Company and our shareholders are more fully protected during the registration process. As the registration statement is now effective, the quiet period is over and we can once again communicate more regularly with our shareholders and the investing public at large.”
This is from the letter KBLB sent to shareholders after previous extended ‘Quiet Period’.
The financing in 2015 took 7 months from initial S-1 and they were only dealing with the underwriter. They now have to also deal with the NASDAQ to make this work. I’m sure KT will do whatever is necessary to make this work so until I see an S-1a with all the blanks filled in I’m not going to get too excited about this happening soon.
There also was an 8k issued right after the 2015 financing with company updates. Hope you don’t wait until the 8k comes out after the uplist. You will have missed the boat.
It would also mean that KBLB has plenty of cash, which we know they don’t. They would have to dilute 10 million shares just so they could buy 8 million back. Why would anyone even think this was true unless they have been secretly producing somewhere........hmmmm?
Makes one wonder why someone with SO much power is messing with a 13 cent stock. Smh
He has to talk this up to $.20 first.
Investors in this stock really need to learn how warrants work and figure out how valuable the warrants KT is offering with these units really are and why they are being immediately separable from the stock. Google works wonders.
“Those warrants will never get exercised”
No smart investor would exercise a tradable warrant when he could trade it instead. A whole lot less paperwork and would also make more money. So you’re not totally wrong, they shouldn’t get exercised unless they are getting ready to expire in the money. That will be at least five years from now.
I don’t know why they would need to do that. FedEx is currently shipping to Vietnam. Just don’t put all your eggs in the same basket this time. Should have been the first procedure he implemented.
Yes, I’m serious. He wasn’t giving a presentation to a bunch of stodgy scholars, it was to announce a new high tech accomplishment to the world. A huge part of the value of this company’s products is new high tech, high fashion textiles. Looked like he was trying to sell tighty whities.
You would also think that by now they would know each other well enough to be on a first name basis.
Really need to hire this woman. Let her do the press conferences.
“I don't see how having dept on the books would be acceptable to the NASDAQ”
Every company has debt. What does that have to do with anything? KBLB would have plenty of equity to pay the debt, meet NASDAQ equity requirements, and then some with this offering.
Also from the S-1:
“your interest will be diluted immediately to the extent of the difference between the public offering price per share of common stock that is part of the Unit you will pay in this offering”
Key words there being “part of”. Sorry I don’t know how to bold on an iPad. Page 31 under Dilution.
I would say that is a poorly worded statement(the S-1’s, not yours) and is referring to the Unit price of the offering and not the share price of the stock, which are 2 different things. I know you don’t agree with this so I guess we’ll have to see who’s correct if they ever pull this off.
I will bet you everything you got though that when the warrants are initially listed on an exchange they will have a monetary value even if the stock price is lower than the strike price.
Yes, and the the stock doesn’t have a market on the NASDAQ currently either. Things change.
“It seems that the share price of the stock and the exercise price of the warrants will be the same. “
That is incorrect. In the S-1, their example uses $5.25 for the UNIT(a share and a warrant) price and also a warrant exercise price of $5.25 which makes it seem that way. The exercise price could’ve been $10 and the warrants would still have value on an open market just like a call option would.
“So it seems that an investor can buy shares & warrants apart from each
Yes, you get a piece of paper for a warrant. But that piece of paper is worthless unless the warrant is exercised.”
You contradict yourself. How can you buy a warrant separately and it be worthless at the same time? It is my understanding that the warrants will be traded on an exchange just like the stock. Symbol: KBLBW
“Even though the value is the same immediately after the split people will most likely think twice about paying $5 a share for possibilities.”
Then they can trade the warrants which will be selling for a fraction of that for even greater returns if they think it is going up in next 5 years. Go to “common stock warrants.com” and use their calculator to figure the possibilities.
“Who said anything about getting free warrants?”
That is what I have been trying to say. The warrants aren’t free, they are included in the unit price. A unit consists of a stock and a warrant. So you can have a unit price of $5.25 with the stock price at $4. You only need to RS to get to $4 and get to NASDAQ minimum entry point. It has nothing to do with investors that can’t buy under $5 stocks. Why would they give an initial unit price range of $4.25-$6.25 if that was the case.
How much would you pay for a 5 year option on a $4 stock you thought was going to the moon in the near future? More than $.25 I’m sure, maybe even $1.25.
“$5 is the price point some must abide.”
That is incorrect. The current range stated in the S-1 is $4.25-$6.25. They just used $5.25 as their example because it was the middle of that range.
I was trying to get an answer from Webslinger on what reasons there would be to go above the minimum needed to get on NASDAQ. The amount of dilution will be the same no matter what ratio they use. Webslinger has debunked the issue that KBLB would do it to discount the warrants. A lower RS ratio would keep the number of shares up to provide more liquidity which is good for current and Maxim investors.
I don’t know why a new investor would need a discount on the share price either if they are getting a free warrant and a share for whatever the current share price is. I’ll take that deal any day.
KBLB has moved beyond being strictly a R&D company now and even though they weren’t able to get any product sold before their little disaster they should have gotten plenty of data from their initial expansion group of silkworms that they should know costs and how many pounds of silk cocoon they are capable of producing to give new investors an idea of how profitable the production phase could be. That and the current low share price is what should get Maxim investors excited.
“So it looks like the exercise price of the warrants will be equal to the share price of the offering.”
So can you give me a reason why KBLB would need to do a RS at any ratio greater than what will get the stock price to $4?
I see what your saying, but I’m thinking the warrants are the discount. If KBLB does a RS to get the share price to $4 and the big investors are able to get a share plus a 5 year warrant for $4 they could turn right around and sell the share for $4 and either keep the free warrant and hope the price share price goes above $5.25 sometime in the next 5 years or they can sell it to someone else for whatever a five year option is worth($1.50?).
I think the share price is more likely to rise after a 27:1 RS to $4 than it is after a 40:1 to $6 or higher split. Also, the current share price is lower now than it was when the first S-1 was filed mainly due to this ‘quiet period’ which has caused a lot of shareholder confusion and uncertainty. That should factor into the discount also. But it doesn’t matter what you or I think, KT is the one doing the negotiating. Hopefully he is on our side.
“If the price of shares only hits $5, Maxim will have to discount the shares because the warrants are worthless.”
Wouldn’t a warrant have a time value to it the same way a call option does? The warrants would only be worthless if they have expired.
“I think they may need more money by the time these vest. “
This is more than enough money to get them to full production in current facility which would be highly profitable. Converting the facility over to an egg production facility while contracting silk production out to farmers could increase that 100 fold along with the current share price. This doesn’t include all the apparel licensing deals and whatever other ideas Col has come up with. These things should not need more financing. Do your own math and see what you come up with.
This is the information that needs to be given to potential new (Maxim) investors to get them to invest instead of giving away current shareholder value.
“What makes it a lousy finance deal?”
I don’t know if it’s a lousy deal. Don’t know the exact terms yet.
Terms such as > 40:1 RS and making warrants immediately worth $1.80 more than $5.25 would make this a lousy deal for current shareholders and KT. It would be a great deal for Maxim and their investors.
I'm thinking there are too many moving parts when you are trying to do a reverse split at the same time your diluting to get financing and trying to uplist. Would make more sense to dilute and finance first, get production running, then see if you need a reverse split to get on NASDAQ.
If the reason KT wants to get on NASDAQ is for better financing, why do a lousy financing deal (where Maxim probably has all the leverage) to accomplish it.
“ If the price of shares only hits $5, Maxim will have to discount the shares because the warrants are worthless. They start selling the shares at $4.50. The price on NASDAQ drops to $4.5. They mark them down to $4. The price on the board drops again. “
So you’re saying that either the dollar amount that KBLB gets($11.5 million) or the number of shares dilution(1.9 million) could change depending on what the market does after the shares are offered?
“"6. What will make this attractive to new investors is a low IPO price in relation to what the post split price will be, keeping in mind that they get a warrant to go along with a share."
not sure what you are say here...first of all, there is no IPO involved...whatever the price is on the otc, has to translate exactly to what the pps will be on nasdaq..”
Where is the $11.5 million that KBLB will get coming from? (Hint: Maxim)
The IPO(I know it’s not an IPO but it’s shorter than typing out Maxim offering) price is the price Maxim is paying for the 1.9 million shares. It is Maxim’s job to get that price or better from their investors. That price is negotiated between KBLB(KT) and Maxim(not Maxim investors) and will not change when the share price changes. Maxim is also getting warrants with these shares so this price does not have to equal the current share price times the split multiple(30:1 x .15=$4.50, Maxim still pays negotiated price(currently somewhere between $4.20 and $6.20)
“"5. If a 40-1 split is going to drop the price, what would they think a 50-1 split would do?"
a 40-1 split will raise the price as a 1-50 will do”
What happened to the stock price when the stock split was originally announced?(Hint: it didn’t go up)
“He may feel constrained by the vote last year, but a 50-to-1 reverse split would make the terms of the public offering more attractive to investors. “
I don’t see how .
1. It will greatly reduce liquidity so they won’t have a market to sell their shares into.
2. It would show them that KT doesn’t really care about other shareholders(which they would be if they bought into this)
3. Why would Nasdaq care what direction the stock went or if it stays above $5(it’s only required to stay above $1 after initial $4 minimum)?
4. It would make the initial share price higher so it will be less attractive to smaller investors.
5. If a 40-1 split is going to drop the price, what would they think a 50-1 split would do?
6. What will make this attractive to new investors is a low IPO price in relation to what the post split price will be, keeping in mind that they get a warrant to go along with a share.
I could go on but I’m getting tired of typing.
I have noticed that somebody is trying to keep the price around $.143 since the S1-a was announced. I think Maxim has the ability to do this. According to the S-1 they are being given shares to keep the price in a certain range. I imagine the RS ratio and offer price has already been agreed upon between KT and Maxim so now we’re just waiting on NASDAQ approval. Was hoping for a 10-1 split, but it’s looking closer to 30-1.
From the current S-1a:
“Prior to the consummation of this offering, we will adopt a new code of ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our Board (or the appropriate committee of our board) or as disclosed in our public filings with the SEC. Under our code of ethics, conflict of interest situations will include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the company. A form of the code of ethics that we plan to adopt prior to the consummation of this offering is filed as an exhibit to the registration statement of which this prospectus is a part.”
Problem solved! Let it go.
“kblb gave calm seas capital a 20% discount to sell shares for them...
but this new "loaning" scheme is just bs... “
So you would rather pay 20% up front than 3% interest later?
Instead of Kim loaning KBLB money this way KBLB could have hired a third party to do the same thing. The third party would take the diluted shares and sell them for KBLB and then charge KBLB a fee for doing this. I know a company doing it that way and their shareholders bitch about it all the time.
Doing this Kim’s way seems inappropriate but I can let it go because it kept the company afloat.
“ How will this news effect the short sellers? “
I am no expert on this, but I would think that Maxim would be shorting this now to try and get a higher reverse split ratio. Right now we could do a 30-1 reverse split and satisfy the Nasdaq requirements. I don’t see any reason for Kim to want a 40-1 split. He should be on the current shareholders side of this now that he is giving up his majority vote. Why would he want to make Maxim investors rich at his cost?
Maxim investors get to buy shares ($4.20-6.20 maybe) and get a warrant to buy more for the same price some time in the future. Sounds to me like enough incentive for them to invest.
“It would sure be great to get to .60, 'jealmc79,' but we would need some pretty substantial news.”
Well we know now that there won’t be any news until this uplist is completed due to Quiet Period so that won’t work.
I saw nothing but good news and everything this company needed in this S-1(except for a flight to Vietnam).
-shareholder equity to get up listed and provide for company expansion
-Kim’s power being reigned in
-new board members getting seated
-better financing than the give Kim shares and have him loan money back to company scheme(this was causing dilution and debt for those of you complaining about dilution of this new offering)
What is not to like? This stock is easily worth $.60/share once production is up and running.
“I fear we may see a slightly higher reverse split, perhaps a 50-to-1 split. (Note to my many fans: when I say ‘I fear...’ that does not mean it will happen. Only that the probability is substantially above zero but also perhaps substantially below 100% as well.) “
You might want to read page 62 of the S-1 where it reins in Kim’s ability to self deal like that. Also, you would be getting your share count so low that there wouldn’t be enough float for large investors to be interested in the stock.
Where does it say it will be a 1 for 40 split? Quit selling the stock and get the price to $.60 and a 1 for 10 gives you $6 a share post split. Makes paying $5.20 a share for offering look like a great deal and less dilution for current shareholders.
It also doesn’t say that the offering is $5.20 per share. It gave a range of $4.20-6.20 and used $5.20 to show what effect that would cause.