Replies to post #217587 on Kraig Biocraft Laboratories Inc (KBLB)

[WebSlinger]

<< You can see here that when using a 40:1 r/s, there will be 8.92% of share dilution. >>

It gets even worse...

Those numbers would be doubled once one include the warrants, since the warrants are exercisable immediately. So 8.92% dilution would become 17.84% dilution at a 40:1 reverse split.

"...each Purchase Warrant providing the right to purchase 1 share of our Common stock. Each Purchase Warrant will have an exercise price per share of $5.25 per share, the midpoint of the price range set forth on the cover page of this prospectus, will be exercisable on the original issuance date, and will expire on the fifth anniversary of the original issuance date."

[jealmc79]

“So if they sell $11.5 million of shares at $4.25 each, after a 100:1 r/s”

After a 100:1 RS the stock price would immediately be 100 times current price, or $16.25 at the current price of the stock. Why in the world would KBLB set an offering price at $4.25 if the stock price is $16.25? You also need to figure the value of the $10-23 million that is received for the dilution and what that adds to the market cap. So yes, your math is using incorrect assumptions.

[Blitzed]

I think this is a solid thought exercise, but I believe the assumption that the offering will be in the previously mentioned range of $4.25 to $6.25, no matter what the R/S ratio turns out to be, is incorrect.

At the current share price of 0.17 with a R/S of 100/1, the share price would be $17. Even if the share price took a 50% drop from that point (which I think would be very unlikely), you are looking at $8.50 per share.

It would be extreme malpractice to then offer shares in the $4.25 to $6.25 range. This range is not immutable. I believe the 9% dilution would be a reasonable ceiling for the dilution unless more money was raised. If the share price is higher, then the offering share price will be higher.