Kraig Biocraft Laboratories Inc (KBLB)

[DimesForShares]

Jetow, the language Thompson used was misleading. I'm going to include a lengthy quote to provide full context for his statements:

When Kraig Labs filed its application for listing on a national exchange, we addressed each stated listing requirement. We were prepared to raise the capital needed to sustain more than 3 years of operations through our partnership with an investment bank. This capital was also set to exceed the shareholder equity requirement by nearly 100%. As part of that package, I as CEO, was prepared to forgive significant debt which I was owed. Our shareholder count was nearly 11,000 more than necessary. Having met all listing requirements ...

The italics are mine, included for emphasis. The first statement that Thompson made was accurate. Their application addressed each stated listing requirement. But the second statement is false. KBLB has never met all listing requirements.

What KBLB submitted to NASDAQ was a plan to meet all of the listing requirements. Listing requirements include: a share price of at least $5/share (if memory serves), a Board of Directors with standing committees and responsibilities, and $4 or $5 million in positive shareholder equity being the principal issues. KBLB submitted a plan to seat a BoD, hold a Public Offering, and perform a reverse split. Once the plan occurred, KBLB would meet all listing requirements.

There are potential issues in the plan. Reverse splits are not popular with investors, even though on paper nothing changes. The reverse split could have moved the share price up to the required minimum at the moment the split happened, but the share price might have fallen below the minimum once trading occurred. Having a plan for a BoD and a plan for standing committees is not the same as having a functioning board.

At the time, KBLB did not even have permission from Vietnam to raise silkworms there. They were still in the review process and the silkworms were in quarantine. Prodigy had never produced commercial quantities of silk, nor had KBLB made any shares.

If KBLB had pulled off its plan, only to have things come crashing down in late 2019, then the issues caused by Covid in 2020, I find it hard to imagine the share price would still have remained above $2. Below that, the company goes on probation and can be delisted.

I'm not sure we are hearing all of the story. Thompson's plan was to raise $10 million from his public offering. With $5 million in loans, KBLB would be at the minimum threshold for uplisting. Combined, all of these factors suggest that KBLB was not truly ready for uplisting to NASDAQ. I'm not surprised that NASDAQ was skeptical about his plan.

It seems likely that NASDAQ suggested that Thompson forgive his debt as a way to improve KBLB's balance sheet. He responded by agreeing to do that only if KBLB was successful at uplisting.

Another NASDAQ requirement is that companies must hold an annual shareholders meeting. KBLB has not had an annual shareholder meeting since 2019.

KBLB is not acting like a NASDAQ company. Thompson has a plan for the company to act like one, but until KBLB looks and acts more like a NASDAQ company, I'm guessing their application will generate a skeptical response.

Like you, I believe that NASDAQ focusing Thompson on production and sales is a very good thing. I understand the struggles in Vietnam and his frustration, but KBLB has often seemed more interested in research and development than in production and sales. We both seem to feel that NASDAQ is helping Thompson out, even though he may not like what he hears.