What are the ways to increase shareholder equity?
Little G, it's a great question. First, we must understand that a loan of any kind does not increase shareholder equity. The promissory note owed on the loan cancels out the money that was loaned. So it can't be a loan.
A gift would work just fine, but who would simply gift that kind of money to KBLB? No one.
Next we have a cash payment for an exclusive relationship. UA (for example) agrees to pay KBLB $5 million for an exclusive license to use KBLB silk for five years in the sporting goods area. This is unlikely because the exclusive agreement implies that UA could earn their money back in additional sales and we won't be making that many kilos of silk to justify such a heavy license fee. UA would want thousands of metric tons of KBLB silk, not a few hundred tons. I'm pretty sure a company would want better proof-of-production-ability than we have now. Give us 5 million and maybe we can make a shipment or two? No thanks.
That pretty much eliminates license agreements or joint ventureships as a source of capital. What is left?
Dilution. Selling shares of KBLB and getting money for them. To earn 5 million at today's prices (say .15/share) requires selling an additional 33.3 million shares. That would drop the price of our shares, so a larger block would have to be sold.
But the problem is even worse than this. We have a deficit of around $6 million. Some of this is in the forms of loans that Thompson could forgive, but if he wanted to pay off those loans, we would need to raise $11 million or so. That's a lot of dilution.
As I mentioned earlier, I cannot figure out how we could raise that much cash in the next 60 to 90 days, no matter how hard I try.
News 
Market Data 
Discover 
AI
