Replies to post #20209 on Kraig Biocraft Laboratories Inc (KBLB)

[ZincFinger]

You make some good points. Actually all forms of raising cash have one thing in common: you're forking over cash (so something of value than can be converted to cash) in the future for cash now.

And loans are just another form of dilution, as are deals, because the payment for them comes off the bottom line in the future whether it's cash or a share of royalties (which is just another form of cash.

But there are differences and those differences could be important in deciding which is the best method for KBLB. One of the most important differences is sharing of risks. Deals that involve royalties and/or ownership of shares (which include both secondaries and some kinds of deals) involve sharing of risks. And shared risk means a higher ultimate cost. But, as you noted, conventional loans are not a realistic option because of the collateral issue.

One very important consideration about secondaries is the question of who handles it. There can be a huge difference between how it's handled by different organizations. SGMO (the company that owns the zinc finger IP and licensed non-therapeutic applications to SIAL who sublicensed the silkworm ZFs to KBLB) had a bad experience with the first secondary it had, due to how it was handled, so it switched to a much better financial organization the second time and it went much better. So who handles it is very important.

[igotthemojo]

"The thing about dilution here is Kim could dilute, and unlike most pinks, the money he gets from the shares will raise share holder value"

you might hope that dilution would raise value but that is not guaranteed....and if it does, we are talking down the road a ways....immediately kblb stock would take a hit..how big a hit depends on big the dilution....and that IS a guarantee..

"Kim is not going to dilute unless he absolutely has to"

if kim wants a well equipped lab, well trained techs, etc etc etc, that will cost a lot of money....he has 2 choices....buy a lottery ticket and hope for the best or dilute..
the idea that he will only dilute if he has too is meaningless...he WILL dilute..

unfortunately the rest of your post is nothing more than wishfull thinking...