Kraig Biocraft Laboratories Inc (KBLB)

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EXCERPT 1

1. Please advise as to how you determined that it was appropriate to register 110 million shares of your common stock. We note that your letter agreement does not appear to limit the number of shares issuable under the agreement, and as you note on page 12, to receive the full $7.5 million that Calm Seas is obligated to provide to you under your letter agreement while selling only 110 million shares you would need to maintain a market price for your stock which is more than double the current price. You are required to make a good-faith estimate of the maximum number of shares that you may put to the investor under the equity line agreement.

Response:

From the Company’s perspective, the question of an equity based financing is one of minimizing shareholder dilution while accessing the capital funds required to grow the enterprise. The Company has developed in the laboratory, a material, Monster Silk®, that it believes to have significant market potential. In the absence of the currently pending financing however, the Company does not have sufficient capital resources to commercially develop the product. The dollar size of the registration was determined by the Company on the basis of its good faith estimate of the capital requirements to move this product to early stage commercialization and to accelerate its research and development program on other more advanced materials. The number of shares registered in this offering, 110 million shares, was determined by the Company based upon its good faith belief that if it uses these capital recourses wisely and moves its product closer to commercialization, its enterprise value and share price will increase. Management believes that if it is able to move its product closer to commercialization and accelerate its research and development of more advanced materials that the increase in enterprise value and share price would allow the Company to access the full $7.5 million. The Company does not believe that the registration of more shares and its accompanying dilution to existing shareholders is necessary or warranted at this time.


http://www.sec.gov/Archives/edgar/data/1413119/000135448815000091/filename1.htm


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