Replies to post #199545 on Kraig Biocraft Laboratories Inc (KBLB)

[igotthemojo]

"1. It will greatly reduce liquidity so they won’t have a market to sell their shares into."

at 1-40 there will only be 21 mil shares...at 1-50 there will be 17 mil shares...both are very low...and both provide low liquidity...but apparently kim is going to have to do it at around 1-40...and if he has to do it at 1-50, hes going to do that too...he wants 5 bucks a share...he going to do what he has to....thats all there is to it...

and heres a clue...it doesnt make any difference where the pps is when he decides to do the r/s...it will be priced at where Maxim feels they can reasonably sell a ton of kblb shares at...and that is not likely going to be at what the pps is on that day...

"2. It would show them that KT doesn’t really care about other shareholders(which they would be if they bought into this)"

thats penny stock thinking...kim has to do what he has to do...some will get it, some wont...oh well...

"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)?"

nasdaq wants to bring in companies that will do well and prosper...they dont want companies who only want to stay above one dollar...they cater to their institutional investors...they want to bring in companies that break out and engage their institutional investors...if kblb drops a couple bucks, they are just a higher level penny stock taking up space on nasdaq...

"4. It would make the initial share price higher so it will be less attractive to smaller investors."

so what?...again...thats just penny stock mentality...

"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...an offering at .13 with a 1-40 split would price the shares at $5.20...an offering at .10 would require a 1-50 split to keep the pps at $5.00...kim could just do the .10 at 1-40 but the pps would then be $4.00...one buck below where institutional investors need it to be...

"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...if you have $100k invested in kblb on the otc, the price may change and so will the amount of shares, but you will still have $100k invested in kblb...

as for getting a warrant along with a share, i dont think so...it seems kim tried to make this as confusing as possible...he called them units implying that they would be purchased together...but then he says the warrants can be immediately separated from the shares and that that they will be...then he stated that the shares would be sold and the warrants could be traded under the symbol "kblbw"

im not really 100% clear but that is how i read it...if so, i dont know why he spoke about them being a unit...

[DimesForShares]

Think about the fixed price for warrants in the S-1A.

There were several variables in the revised S-1A. But not the cost of exchanging a warrant for a share of stock. Those are priced at $5.25.

People who participate in the offering purchase units. Each unit includes one share and one warrant. The share price is variable, but the cost of exchanging a warrant for another share: $5.25. Suppose after the reverse split occurs the share price falls down to $5. How many people will exchange a warrant for a share when they could just buy shares on the market for a quarter less? Answer, none.

But if the share price goes to $7, cashing in the warrant makes sense. An immediate gain of $1.75. People will cash in those warrants and KBLB will realize income from those direct sales.

How will Maxim price these units? If the price of a share is $7 after the reverse split, Maxim can sell lots of units at the market price. 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.

This offering is structured so that the warrants must have value to both KBLB and investors. That happens when the share price after dilution lands above $5.25. Thus Thompson has an incentive to perform a high ratio split.