Replies to post #28993 on Kraig Biocraft Laboratories Inc (KBLB)

[saintcalvus]

They are not getting "paid up front" as you say. They are given stock under restricted conditions only for the cash that's needed at the time. Have you read the agreement? I'll provide a link for you if you haven't and if you have any questions about the terms, good or bad, we can discuss them openly on this board instead of in someones backroom troll haven.


http://www.faqs.org/sec-filings/110629/Kraig-Biocraft-Laboratories-Inc_8-K/f8k062811ex10i_kraigbio.htm

[saintcalvus]

Whoever put up the facebook page deserves at least 50k shares from Ben's stash IMO.

Which brings up an interesting observation. If we have all these shareholders on this board willing to invest their time and money in this stock, without any other compensation. How much more the PR guy who is also a shareholder btw, his salary and working capital fund for his business, be willing to be "all in" also? Before we hear any more criticism of Ben on this board, lets see if they know anything about his "day" and bring up a 3 year chart on KBLB, step back a few steps, squint your eyes and fit a line over that mountain range and tell me we're not headed in the right direction.

::pulls the rabbits ears:: edited out for tos

[ZincFinger]

The problem is not with the agreement, the problem is with the IMHO absurd use of the term "loan":

RE: "Who else get's paid up front for a "loan?"

There is nothing whatsoever strange about this arrangement: despite the highly misleading usage of the term "loan" (and again, I know it's not you that chose to use that term) what is really happening is that CSC is acting as a broker to sell the shares on the behalf of KBLB and receiving a commission for doing that (in the form of a 20% discount which is pretty standard practice in the market for companies doing secondaries or the equivalent of them (which is what the CSC agreement really is: essentially an ongoing secondary)

I know it's not you that decided to use the term "loan" in that fashion. But standard practice or not, the use of the term "loan" to describe agreements similar to the CSC agreement is inherently misleading in that it uses the term in a way that goes strongly against standard usage.

My point is that the description of the agreement as a "paid up front loan" sounds absurd not because there is anything whatsoever strange about the agreement but because the term "loan" is used in a very strange way that goes strongly against the usual uses of the term.
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There are a few similarities with a conventional loan (which may be why the term "loan" is sometimes used to describe it): in both the CSC agreement and a conventional loan, something is given as collateral to back up the money and in both the amount of money given is directly related to the value of the collateral.

But the very marked difference is that in a conventional loan the sale of the "collateral" by the lender to recover their money is only as insurance and is not the intended result but a fallback in case of default. In the CSC agreement the sale of the "collateral" is the intended method for the lender to recover their money. Because of that difference the "lender" may sell the "collateral" at any time of its choosing starting immediately after its receipt of it.


We all know that the CSC agreement is not really a loan and we all know what its terms are as they have been discussed repeatedly here in excruciating detail. We are all well aware that CSC is just acting as a broker to sell the shares and is under no obligation to hold them for any length of time. Now did you really fail to realize all that or are you just trying to take advantage of an unusual use of a term to vent your frustration on the company?