WebSlinger
6 minutes ago
A Standby Equity Purchase Agreement (SEPA) can offer public companies a convenient way to raise capital, but it comes with several potential downsides. Here are some of the cons:
1. Dilution of Existing Shares:
When shares are issued to the investor under a SEPA, it increases the total number of shares outstanding, which dilutes the ownership percentage of existing shareholders. This can lead to a decrease in the value of each share if the market does not absorb the new shares at a favorable price.
2. Share Price Impact:
The issuance of new shares might pressure the stock price downwards, especially if the market perceives the equity financing as a sign of financial weakness or if the shares are sold at a discount to the market price.
3. Cost and Fees:
SEPAs often come with various fees, such as commitment fees, structuring fees, and possibly legal and administrative costs. These can reduce the net proceeds the company receives from the equity sale.
4. Investor Control:
Depending on the terms, the investor might gain rights like board representation or veto rights over certain decisions, potentially impacting the company's strategic direction or autonomy.
5. Market Perception:
Frequent use of SEPAs might signal to the market that the company is in need of cash, potentially harming the company's reputation and investor confidence. This perception can make future capital raises more difficult or expensive.
6. Restrictive Covenants:
Agreements might include covenants that restrict the company's operational flexibility, such as limits on further debt, dividend payments, or additional equity issuance.
7. Timing and Control Over Funding:
While SEPAs provide flexibility in terms of when to issue shares, this can also be a disadvantage if the company needs funds urgently but market conditions are not favorable for share issuance.
8. Regulatory and Compliance Burden:
Public companies must adhere to securities regulations when issuing new shares, which involves compliance costs, disclosure requirements, and potentially triggering review by regulatory bodies.
9. Potential for Misalignment of Interests:
The investor might not always act in the best interest of all shareholders, especially if their investment strategy differs from long-term company growth or stability.
10. Complex Terms:
The terms of SEPAs can be complex, potentially leading to misunderstandings or disputes over execution, especially if market conditions change dramatically.
Each of these cons should be weighed against the benefits of a SEPA, considering the specific circumstances and strategic goals of the company. It's crucial for management to analyze whether the immediate access to capital justifies these potential drawbacks.
Zenaku
2 hours ago
Kraig Biocraft Laboratories Secures $10 Million SEPA to Support Spider Silk Production Growth and Commercialization
ANN ARBOR, Mich., – January 21, 2025 –Kraig Biocraft Laboratories, Inc. (OTCQB: KBLB) ("the Company" or "Kraig Labs"), a leading developer of spider silk-based fibers, announces that it has secured $10 million in a standby equity purchase agreement ("SEPA") with YA II PN, Ltd. ("Yorkville"). This agreement will provide the Company with access to the working capital necessary to continue production expansion for its revolutionary recombinant spider silk fibers and materials.
Kraig Labs structured the SEPA to allow the Company to access capital over the next 36 months, when and how it determines best for the growth of spider silk production and end-market development. The Company is under no obligation to utilize this funding, has no minimum use requirements, and it does not impose any restrictions on the Company's operations. This agreement gives the Company the flexibility to access the capital necessary to bridge its transition to revenue generation.
“We have worked with Yorkville in the past and we are excited to renew and strengthen that relationship. This strategic financial relationship provides Kraig Labs with the flexibility to support the growth of spider silk commercialization," said Founder and CEO, Kim Thompson. "The SEPA provides access to significant growth capital, allowing us to focus on executing our vision for eco-friendly, cost-effective spider silk production. We will put this capital to work, building out our production capacity and spider silk inventory, developing new consumer products, and establishing partnerships with market channel sales partners."
For details about other recent advancements the Company has made, please see the Company's investor conference at www.kraiglabs.com/videos or on the Company's YouTube Channel https://www.youtube.com/@kraigbiocraftlaboratories2270.
To view the most recent news from Kraig Labs and/or to sign up for Company alerts, please go to www.KraigLabs.com/news
The securities described herein have not been registered under the Securities Act of 1933, as amended, and may not be sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Kraig Biocraft Laboratories, Inc.
Kraig Biocraft Laboratories, Inc. (www.KraigLabs.com), a reporting biotechnology company is the leading developer of genetically engineered spider silk-based fiber technologies.
The Company has achieved a series of scientific breakthroughs in the area of spider silk technology with implications for the global textile industry.
Cautionary Statement Regarding Forward Looking Information
Statements in this press release about the Company's future and expectations other than historical facts are "forward-looking statements." These statements are made on the basis of management's current views and assumptions. As a result, there can be no assurance that management's expectations will necessarily come to pass. These forward-looking statements generally can be identified by phrases such as "believes," "plans," "expects," "anticipates," "foresees," "estimated," "hopes," "if," "develops," "researching," "research," "pilot," "potential," "could" or other words or phrases of similar import. Forward looking statements include descriptions of the Company's business strategy, outlook, objectives, plans, intentions and goals. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security.
Ben Hansel, Hansel Capital, LLC
(720) 288-8495
ir@KraigLabs.com
Money4Nothing-M4N
2 hours ago
Benefits of a Standby Equity Purchase Agreement for Companies
The benefits of a SEPA are numerous, particularly for growing companies that need flexibility in how they manage their capital raising. Here are some of the primary advantages:
1. Flexibility
A SEPA offers unmatched flexibility compared to other capital-raising methods. Companies can access funds as needed, rather than raising a lump sum upfront. This can be beneficial for companies with fluctuating cash flow needs.
2. Cost-Effective
By avoiding the need for a full-scale private placement, companies can save on costs associated with legal fees, underwriter fees, and other administrative expenses that typically accompany more traditional capital-raising mechanisms.
3. Minimal Shareholder Dilution
Since shares are sold over time and at more favorable prices, a SEPA can minimize the dilution that shareholders might face in a more traditional capital-raising scenario, where large numbers of shares are issued at once.
4. Favorable Market Timing
A SEPA gives companies the ability to time the issuance of shares to take advantage of favorable market conditions, helping them raise more capital per share sold.
5. No Debt Incurred
Unlike loans or bonds, SEPA capital does not add debt to the company’s balance sheet. This can help improve the company’s financial stability and make it more attractive to investors.
fza
3 hours ago
NEWS!!
ANN ARBOR, Mich., – January 21, 2025 –Kraig Biocraft Laboratories, Inc. (OTCQB: KBLB) (“the Company” or “Kraig Labs”), a leading developer of spider silk-based fibers, announces that it has secured $10 million in a standby equity purchase agreement (“SEPA”) with YA II PN, Ltd. (“Yorkville”). This agreement will provide the Company with access to the working capital necessary to continue production expansion for its revolutionary recombinant spider silk fibers and materials.
Kraig Labs structured the SEPA to allow the Company to access capital over the next 36 months, when and how it determines best for the growth of spider silk production and end-market development. The Company is under no obligation to utilize this funding, has no minimum use requirements, and it does not impose any restrictions on the Company’s operations. This agreement gives the Company the flexibility to access the capital necessary to bridge its transition to revenue generation.
“We have worked with Yorkville in the past and we are excited to renew and strengthen that relationship. This strategic financial relationship provides Kraig Labs with the flexibility to support the growth of spider silk commercialization,” said Founder and CEO, Kim Thompson. “The SEPA provides access to significant growth capital, allowing us to focus on executing our vision for eco-friendly, cost-effective spider silk production. We will put this capital to work, building out our production capacity and spider silk inventory, developing new consumer products, and establishing partnerships with market channel sales partners.”
For details about other recent advancements the Company has made, please see the Company’s investor conference at www.kraiglabs.com/videos or on the Company’s YouTube Channel https://www.youtube.com/@kraigbiocraftlaboratories2270.
To view the most recent news from Kraig Labs and/or to sign up for Company alerts, please go to www.KraigLabs.com/news
The securities described herein have not been registered under the Securities Act of 1933, as amended, and may not be sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Kraig Biocraft Laboratories, Inc.
Kraig Biocraft Laboratories, Inc. (www.KraigLabs.com), a reporting biotechnology company is the leading developer of genetically engineered spider silk-based fiber technologies.
The Company has achieved a series of scientific breakthroughs in the area of spider silk technology with implications for the global textile industry.
Cautionary Statement Regarding Forward Looking Information
Statements in this press release about the Company’s future and expectations other than historical facts are “forward-looking statements.” These statements are made on the basis of management’s current views and assumptions. As a result, there can be no assurance that management’s expectations will necessarily come to pass. These forward-looking statements generally can be identified by phrases such as “believes,” “plans,” “expects,” “anticipates,” “foresees,” “estimated,” “hopes,” “if,” “develops,” “researching,” “research,” “pilot,” “potential,” “could” or other words or phrases of similar import. Forward looking statements include descriptions of the Company’s business strategy, outlook, objectives, plans, intentions and goals. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security.
Ben Hansel, Hansel Capital, LLC
(720) 288-8495
ir@KraigLabs.com
bananarama
4 days ago
Trainer.....I look at it this way. Kim has a lot on his plate right now. He will not begin releasing any of the good news until he is ready. That means until he feels comfortable with the amount of SS he has. The biggest mistake any OTC CEO can make is to up list without enough product. This is how many OTC companies go bankrupt. They just cannot meet the demand of their products, and they go bust.
Do you think there will be any demand for our SS? It will be through the roof, meaning Kim needs the silk and tons of it. So, I predicted this year would start off slowly. However, at some point, things will turn around very quickly, and when it does, I plan on being here. I have bought 200,000 more shares in the low nines over the last few weeks.
I tell everyone to load up now before the news begins. That is exactly what I have been doing. Sit back; be patient; enjoy the ride. IT IS COMING!
GO KBLB!
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