Kraig Biocraft Laboratories Inc (KBLB)

[first mike]

Appropriate # of shares, Buyouts, and OTC vs NASDAQ? markets.

Hi Silkmaster

The current Mrk cap is 60M$ | Shares: 601M | PPS:0.099

Do you think a reverse split say 1:10 is in order?
There is a huge amount of shares out there (half owned by kim imo).
If so what effect would it make if any?

A)Yes, there are ~600M shares in the market.
B)Yes, approximately 1/2+ are owned by Kim Thompson.
Class A Common Stock
Beneficial Owner Kim Thompson
Amount 302,170,187 51.4% (based upon ~6 mo old data)
C)NO! I do not think that a reverse split would be a good thing!
Reverse splits are the mark of a failing company trying to keep the value of its stock from falling too near to zero.
KBLB is the opposite of that, its PPS is rising strongly.
Aside from the stigma attached by market perception, there is no reason for a reverse split.
The only excuse would be to move from the OTC market to one of the big boards such as NASDAQ.
While I think that this would be a good thing in the longer term, I think that it is premature at this time.

To qualify for NASDAQ et al and no longer be labeled a "penny stock" KBLB will need to sustain a PPS over $5/share for 3 months to a year.
This would require a reverse split of 1:100.
This would seriously impact the liquidity of the KBLB stock.

In my opinion, increasing shareholder value (market cap) is by far the better way to make the transition to the bigger boards.

KBLB did a Forward split of 10:1 in May of 2009.
The reason for this was to increase liquidity, as the stock was very thinly traded before the split. It worked.

Splits, both reverse and forward, do nothing mathematically to change the market cap or the value of your ownership.
If you owned 1 million shares before a 10:1 reverse split you own 100K share after the split.
But if you owned $100K of the stock before, you STILL own $100K after.
Splits Do however have some psychological effects.
People do not like to trade less than 100 shares of stock.
The forward split brought in many new small owners and helped to increase the number of trades per day and therefore reduce the margins.
This made the stock more liquid, easier to trade.

What is the appropriate # of shares for a small company? (opinion)
First, market cap has Nothing to do with the number of shares authorized and outstanding.
Market cap is very simply the # of shares * the PPS.
Once a market valuation is established after an IPO splits either way do nothing to change it.
I believe that a company should have a number of outstanding shares such that the share price falls between $.01 and $100.
Or more ideally between $0.1 and $10 if it is a small company that wishes to encourage a wider spread of ownership (more share holders) and between $10 and $100 if it is a larger company that wishes to limit its total number of share holders.
These numbers have to do with corporate communications and meetings.
If a company's PPS is shrinking it is better to be at the upper end of their range, and if a company's PPS is growing it is better to be at the lower end of the appropriate range.
Therefore, I would say that KBLB's number of about 1/2 a billion shares is just about right.

And last Q...(-: Do you still do not belive in a buyout by a huge company in Textile?

I still believe that Kim T. wants to see this through to a full success and will not allow a buyout.
I personally as a share holder do NOT want to see a buyout because it would tremendously dilute my future profits.

Mike L.