Wyoming
|
83-0459707
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
120 N. Washington Square, Suite 805,
Lansing, Michigan
|
48933
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
þ
|
(Do not check if a smaller reporting company)
|
PAGE
|
||||
PART I
|
||||
ITEM 1.
|
DESCRIPTION OF BUSINESS
|
3 | ||
ITEM 2.
|
DESCRIPTION OF PROPERTY
|
9 | ||
ITEM 3.
|
LEGAL PROCEEDINGS
|
9 | ||
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
9 | ||
PART II
|
||||
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
10 | ||
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
12 | ||
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
16 | ||
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
40 | ||
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
40 | ||
ITEM 9B.
|
OTHER INFORMATION
|
41 | ||
PART III
|
||||
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
42 | ||
ITEM 11.
|
EXECUTIVE COMPENSATION
|
43 | ||
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
45 | ||
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
46 | ||
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
46 | ||
PART IV
|
||||
ITEM 15.
|
EXHIBITS
|
48 | ||
SIGNATURES
|
●
|
Within 30 days of the date of this agreement, a warrant for six hundred thousand (600,000) shares of the Company’s common stock to be exercisable on the 14 month anniversary of this agreement for a period of 12 months with a cashless exercise provision. Such warrant has been issued as of the date of this report.
|
●
|
Within 30 days of the date of this agreement, a warrant for one million shares (1,000,000) of the Company’s common stock to be exercisable on the 20 month anniversary of this agreement for a period of 12 months with a cashless exercise provision. Such warrant has been issued as of the date of this report.
|
●
|
Within 30 days of the date of this agreement, a warrant for two million (2,000,000) shares of the Company’s common stock to be exercisable on the 32 month anniversary of this agreement for a period of 12 months with a cashless exercise provision. Such warrant has been issued as of the date of this report.
|
●
|
Based on the consultants reaching two sets of benchmarks, two separate warrants for one million five hundred thousand (1,500,000) shares of the Company’s common stock to be exercisable on the 28 month anniversary of this agreement for a period of 12 months with a cashless exercise provision. Such warrant has not been issued as of the date of this report.
|
●
|
On the three year anniversary, assuming the consultant acted in good faith and the Company’s board of directors approval, a warrant for one million five hundred thousand shares (1,500,000) of the Company’s common stock to be exercisable on the 28 month anniversary of this agreement for a period of 12 months with a cashless exercise provision. Such warrant has not been issued as of the date of this report.
|
●
|
Calm Seas has purchased an aggregate of $7,500,000 of our Class A common stock; or
|
●
|
The second anniversary from the Effective Date.
|
●
|
Medical textiles;
|
●
|
Geotextiles;
|
●
|
Textiles used in Defense and Military;
|
●
|
Safe and Protective Clothing;
|
●
|
Filtration Textiles;
|
●
|
Textiles used in Transportation;
|
●
|
Textiles used in Buildings;
|
●
|
Composites with Textile Structure;
|
●
|
Functional and Sportive Textiles.
|
Material Toughness
1
|
Tensile Strength
2
|
Weight
3
|
||||||||||
Dragline spider silk
|
120,000-160,000
|
1,100-2,900
|
1.18-1.36
|
|||||||||
Steel
|
2,000-6,000
|
300-2,000
|
7.84
|
1 | Measured by the energy required to break a continuous filament, expressed in joules per kilogram (J/kg). A .357 caliber bullet has approximately 925 joules of kinetic energy at impact. |
2 | Tensile strength refers to the greatest longitudinal stress the fiber can bear, measured by force over area in units of newtons per square meter. The measurement here is in millions of pascals. |
3 | In grams per cubic centimeter of material. |
Marks
|
Registered Owner
|
Country
|
Status
|
Monster Silk
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Spiderpillar
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Spilk
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Big Red
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Monster Worm
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Spider Worm
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Spider Moth
TM
|
Kraig Biocraft Laboratories
|
United States of America
|
issued
|
Low Price
|
High Price
|
|||||||
Fourth Quarter 2014
|
$
|
0.04
|
$
|
0.05
|
||||
Third Quarter 2014
|
$
|
0.03
|
$
|
0.06
|
||||
Second Quarter 2014
|
$
|
0.06
|
$
|
0.07
|
||||
First Quarter 2014
|
$
|
0.05
|
$
|
0.09
|
||||
Fourth Quarter 2013
|
$
|
0.0465
|
$
|
0.065
|
||||
Third Quarter 2013
|
$
|
0.051
|
$
|
0.086
|
||||
Second Quarter 2013
|
$
|
0.06
|
$
|
0.136
|
||||
First Quarter 2013
|
$
|
0.0363
|
$
|
0.1
|
●
|
We estimate having spent approximately $35,000 per month between January 2015 and March 2015 on collaborative research and development of high strength polymers at the University of Notre Dame. We expect to spend approximately $44,000 per month between April 2015 and March 2016 on collaborative research and development of high strength polymers at the University of Notre Dame. With this increase in funding we plan to accelerate both our microbiology and selective breeding programs as well as providing more resources for our material testing protocols. If our financing will allow, management will give strong consideration to accelerating the pace of spending on research and development within the University of Notre Dame’s laboratories.
|
||
●
|
We expect to spend approximately $13,700 on collaborative research and development of high strength polymers and spider silk protein at the University of Wyoming over the next twelve months. This level of research spending at the university is also a requirement of our licensing agreement with the university. If our financing will allow, management will give strong consideration to accelerating the pace of spending on research and development within the University of Wyoming’s laboratories.
|
||
●
|
We will actively consider pursuing collaborative research opportunities with other university laboratories in the area of high strength polymers. If our financing will allow, management will give strong consideration to increasing the depth of our research to include polymer production technologies that are closely related to our core research
|
||
●
|
We will consider buying an established revenue producing company in a compatible business, in order to broaden our financial base and facilitate the commercialization of our products. We expect to use a combination of stock and cash for any such purchase.
|
||
●
|
We will also actively consider pursuing collaborative research opportunities with both private and university laboratories in areas of research which overlap the company’s existing research and development. One such potential area for collaborative research which the company is considering is protein expression platforms. If our financing will allow, management will give strong consideration to increasing the breadth of our research to include protein expression platform technologies.
|
||
●
|
We plan to actively pursue collaborative research and product testing, opportunities with companies in the biotechnology, materials, textile and other industries.
|
||
●
|
We plan to actively pursue collaborative commercialization, marketing and manufacturing opportunities with companies in the textile and material sectors for the fibers we developed and for any new polymers that we create in 2015.
|
||
●
|
We plan to actively pursue the development of commercial scale production of our recombinant materials including Monster Silk
TM
.
|
Year ended 12/31/2014
|
Year ended 12/31/2013
|
|||||||
General and Administrative Expenses
|
$ | 896,079 | $ | 1,309,923 | ||||
Officer’s Salary
|
$ | 318,144 | $ | 237,134 |
–
|
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
|
–
|
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
|
PAGE
|
17
|
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
PAGE
|
18
|
BALANCE SHEETS AS OF DECEMBER 31, 2014 AND DECEMBER 31, 2013.
|
PAGE
|
19
|
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2014 AND DECEMBER 31, 2013.
|
PAGE
|
20 |
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2014 AND DECEMBER 31, 2013.
|
PAGES
|
21
|
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE PERIOD FROM DECEMBER 31, 2012 TO DECEMBER 31, 2014.
|
PAGES
|
23-39
|
NOTES TO FINANCIAL STATEMENTS.
|
Kraig Biocraft Laboratories, Inc.
|
Balance Sheets
|
ASSETS
|
||||||||
December 31, 2014
|
December 31, 2013
|
|||||||
Current Assets
|
||||||||
Cash
|
$ | 495,036 | $ | 295,381 | ||||
Prepaid expenses
|
1,000 | 1,743 | ||||||
Total Current Assets
|
496,036 | 297,124 | ||||||
Property and Equipment, net
|
43,191 | 14,093 | ||||||
Total Assets
|
$ | 539,227 | $ | 311,217 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 522,586 | $ | 427,157 | ||||
Current portion of loan payable
|
- | 3,981 | ||||||
Royalty agreement payable - related party
|
64,720 | 64,720 | ||||||
Accounts payable and accrued expenses - related party
|
1,177,603 | 1,016,761 | ||||||
Total Current Liabilities
|
1,764,909 | 1,512,619 | ||||||
Commitments and Contingencies
|
||||||||
Stockholders' Deficit
|
||||||||
Preferred stock Series A, no par value;
|
||||||||
2 and 2 shares issued and outstanding, respectively
|
5,217,800 | 5,217,800 | ||||||
Common stock Class A, no par value; unlimited shares authorized,
|
||||||||
673,974,429 and 635,241,994 shares issued and outstanding, respectively
|
9,812,845 | 7,810,920 | ||||||
Common stock Class B, no par value; unlimited shares authorized,
|
||||||||
no shares issued and outstanding
|
- | - | ||||||
Common Stock Issuable, 1,122,311 and 1,122,311 shares, respectively
|
22,000 | 22,000 | ||||||
Additional paid-in capital
|
1,900,018 | 2,053,236 | ||||||
Accumulated Deficit
|
(18,178,345 | ) | (16,305,358 | ) | ||||
. | . | |||||||
Total Stockholders' Deficit
|
(1,225,682 | ) | (1,201,402 | ) | ||||
Total Liabilities and Stockholders' Deficit
|
$ | 539,227 | $ | 311,217 |
Kraig Biocraft Laboratories, Inc.
|
Statements of Operations
|
For the Years Ended
|
||||||||
December 31, 2014
|
December 31, 2013
|
|||||||
Revenue
|
$ | - | $ | - | ||||
Operating Expenses
|
||||||||
General and Administrative
|
896,079 | 1,309,923 | ||||||
Professional Fees
|
180,599 | 178,373 | ||||||
Officer's Salary
|
318,144 | 237,134 | ||||||
Research and Development
|
439,536 | 489,434 | ||||||
Total Operating Expenses
|
1,834,358 | 2,214,864 | ||||||
Loss from Operations
|
(1,834,358 | ) | (2,214,864 | ) | ||||
Other Income/(Expenses)
|
||||||||
Gain on forgiveness of debt
|
30,652 | 6,775 | ||||||
Bad debt expense
|
- | (6,238 | ) | |||||
Interest income
|
- | 47 | ||||||
Loss on settlement of accrued payroll - related party
|
- | (5,187,800 | ) | |||||
Interest expense
|
(69,281 | ) | (65,605 | ) | ||||
Total Other Income/(Expenses)
|
(38,629 | ) | (5,252,821 | ) | ||||
Net (Loss) before Provision for Income Taxes
|
(1,872,987 | ) | (7,467,685 | ) | ||||
Provision for Income Taxes
|
- | - | ||||||
Net (Loss)
|
$ | (1,872,987 | ) | $ | (7,467,685 | ) | ||
Net Income (Loss) Per Share - Basic and Diluted
|
$ | (0.00 | ) | $ | (0.01 | ) | ||
Weighted average number of shares outstanding
|
||||||||
during the period - Basic and Diluted
|
662,490,382 | 616,313,968 |
Kraig Biocraft Laboratories, Inc. | ||||||
Statements of Cash Flows |
For the Years Ended December 31,
|
||||||||
2014
|
2013
|
|||||||
Cash Flows From Operating Activities:
|
||||||||
Net Loss
|
$ | (1,872,987 | ) | $ | (7,467,685 | ) | ||
Adjustments to reconcile net loss to net cash used in operations
|
||||||||
Depreciation expense
|
7,159 | 5,888 | ||||||
Gain on forgiveness of debt
|
(30,652 | ) | (6,775 | ) | ||||
Stock issued for services
|
111,600 | - | ||||||
Loss on settlement of accrued payroll - related party
|
- | 5,187,800 | ||||||
Warrants issued to consultants
|
574,642 | 1,132,899 | ||||||
Bad debt expense
|
- | 6,238 | ||||||
Decrease in interest receivable
|
- | (46 | ) | |||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) Decrease in prepaid expenses
|
743 | 527 | ||||||
(Decrease) in accrued expenses and other payables - related party
|
110,625 | 223,749 | ||||||
Increase in accounts payable
|
194,311 | 117,251 | ||||||
Net Cash Used In Operating Activities
|
(904,559 | ) | (800,154 | ) | ||||
Cash Flows From Investing Activities:
|
||||||||
Purchase of Fixed Assets and Domain Name
|
(41,805 | ) | (3,473 | ) | ||||
Net Cash Used In Investing Activities
|
(41,805 | ) | (3,473 | ) | ||||
Cash Flows From Financing Activities:
|
||||||||
Proceeds from Notes Payable - Stockholder
|
- | 150,000 | ||||||
Repayments of Notes Payable - Stockholder
|
- | (150,000 | ) | |||||
Repayment of loan payable
|
(3,981 | ) | (4,774 | ) | ||||
Proceeds from issuance of common stock
|
1,150,000 | 1,050,000 | ||||||
Net Cash Provided by Financing Activities
|
1,146,019 | 1,045,226 | ||||||
Net Increase (Decrease) in Cash
|
199,655 | 241,599 | ||||||
Cash at Beginning of Period
|
295,381 | 53,782 | ||||||
Cash at End of Period
|
$ | 495,036 | $ | 295,381 | ||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for interest
|
$ | - | $ | - | ||||
Cash paid for taxes
|
$ | - | $ | - | ||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Shares issued in connection with cashless warrants exercise
|
$ | 736,816 | $ | 400,000 | ||||
Shares issued for settlement of accrued payroll - related party
|
$ | - | $ | 30,000 | ||||
Settlement of accounts payable with stock issuance
|
$ | 3,509 | $ | - | ||||
Gain on the sale of the fixed asset to a related party
|
$ | 8,956 | $ | - | ||||
Fixed asset sold to related party to cancel accounts payable - related party
|
$ | 5,548 | $ | - |
Grant 10,000,000 warrants for services
|
- | - | - | - | - | - | - | - | 736,816 | - | 736,816 | |||||||||||||||||||||||||||||||||
Grant 8,000,000 warrants for services, net of M2M adjustment for unvested warrants
|
- | - | - | - | - | - | - | - | 396,083 | - | 396,083 | |||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2013
|
- | - | - | - | - | - | - | - | - | (7,467,685 | ) | (7,467,685 | ) | |||||||||||||||||||||||||||||||
Balance, December 31, 2013
|
2 | 5,217,800 | 635,241,994 | 7,810,920 | - | - | 1,122,311 | 22,000 | 2,053,236 | (16,305,358 | ) | (1,201,402 | ) | |||||||||||||||||||||||||||||||
Stock issued for cash ($0.04/share)
|
- | - | 27,051,006 | 1,150,000 | - | - | - | - | - | - | 1,150,000 | |||||||||||||||||||||||||||||||||
Exercise of 10,000,000 warrants in exchange for stock
|
- | - | 9,821,429 | 736,816 | - | - | - | - | (736,816 | ) | - | - | ||||||||||||||||||||||||||||||||
Grant 10,200,000 warrants for services
|
- | - | - | - | - | - | - | - | 574,642 | - | 574,642 | |||||||||||||||||||||||||||||||||
Settlement of accounts payable with stock issuance ($0.06/share)
|
- | - | 60,000 | 3,509 | - | - | - | - | - | - | 3,509 | |||||||||||||||||||||||||||||||||
Shares issued for services ($0.062/share)
|
- | - | 1,800,000 | 111,600 | - | - | - | - | - | - | 111,600 | |||||||||||||||||||||||||||||||||
Gain on the sale of the fixed asset to a related party
|
- | - | - | - | - | - | - | - | 8,956 | - | 8,956 | |||||||||||||||||||||||||||||||||
Net loss for the year ended December 31, 2014
|
- | - | - | - | - | - | - | - | - | (1,872,987 | ) | (1,872,987 | ) | |||||||||||||||||||||||||||||||
Balance, December 31 ,2014
|
2 | $ | 5,217,800 | 673,974,429 | $ | 9,812,845 | - | $ | - | 1,122,311 | $ | 22,000 | $ | 1,900,018 | $ | (18,178,345 | ) | $ | (1,225,682 | ) |
December 31,
2014
|
December 31,
2013
|
|||||||
Stock Warrants (Exercise price - $0.001/share)
|
18,000,000
|
18,000,000
|
||||||
Convertible Preferred Stock
|
2
|
2
|
||||||
Total
|
18,000,002
|
18,000,002
|
2014
|
2013
|
|||||||
Expected income tax recovery (expense) at the statutory rate of 34%
|
$
|
(636,816)
|
$
|
(2,539,012)
|
||||
Tax effect of expenses that are not deductible for income tax purposes (net of other amounts deductible for tax purposes)
|
222,901
|
2,153,127
|
||||||
Change in valuation allowance
|
413,915
|
385,583
|
||||||
Provision for income taxes
|
$
|
-
|
$
|
-
|
Years Ended
December,
|
||||||||
2014
|
2013
|
|||||||
Deferred tax liability:
|
$
|
-
|
$
|
-
|
||||
Deferred tax asset
|
||||||||
Net Operating Loss Carryforward
|
2,829,510
|
2,415,595
|
||||||
Valuation allowance
|
(2,829,510)
|
(2,415,595)
|
||||||
Net deferred tax asset
|
-
|
-
|
||||||
Net deferred tax liability
|
$
|
-
|
$
|
-
|
-
|
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period; and
|
-
|
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
|
° |
Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. We believe our carrying value of level 1 instruments approximate their fair value at December 31, 2014 and December 31, 2013.
|
° |
Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.
|
° |
Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. We consider depleting assets, asset retirement obligations and net profit interest liability to be Level 3. We determine the fair value of Level 3 assets and liabilities utilizing various inputs, including NYMEX price quotations and contract terms.
|
December 31,
2014
|
December 31,
2013
|
|||||||
Level 1
|
$
|
-
|
$
|
-
|
||||
Level 2
|
-
|
-
|
||||||
Level 3
|
-
|
-
|
||||||
Total
|
$
|
-
|
$
|
-
|
As of
December 31,
2014
|
As of
December 31,
2013
|
|||||||
Automobile
|
$
|
41,805
|
$
|
25,828
|
||||
Office Equipment
|
5,560
|
5,560
|
||||||
Less Accumulated Depreciation
|
(4,174
|
)
|
(17,295
|
)
|
||||
Total Property and Equipment
|
$
|
43,191
|
$
|
14,093
|
Expected dividends
|
0
|
%
|
||
Expected volatility
|
283.23
|
%
|
||
Expected term
|
10 years
|
|||
Risk free interest rate
|
1.69
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected dividends
|
0
|
%
|
||
Expected volatility
|
183.35
|
%
|
||
Expected term
|
5 years
|
|||
Risk free interest rate
|
1.50
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected term
|
3 years
|
|||
Risk free interest rate
|
1.45
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected term
|
2 years
|
|||
Risk free interest rate
|
1.53
|
%
|
||
Expected forfeitures
|
0
|
%
|
Grant Date
|
||||
Expected dividends
|
0
|
%
|
||
Expected volatility
|
86.94
|
%
|
Expected term
|
2 years
|
|||
Risk free interest rate
|
1.53
|
%
|
Expected term
|
3 years
|
|||
Risk free interest rate
|
1.53
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected term
|
3 years
|
|||
Risk free interest rate
|
1.53
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected term
|
3 years
|
|||
Risk free interest rate
|
1.53
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected term
|
3 years
|
|||
Risk free interest rate
|
1.53
|
%
|
||
Expected forfeitures
|
0
|
%
|
Expected term
|
3 years
|
|||
Risk free interest rate
|
0.85
|
%
|
||
Expected forfeitures
|
0
|
%
|
|
Number of
Warrants
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life
(in Years
)
|
|||||||||
Balance, December 31, 2013
|
18,000,000
|
$
|
0.001
|
2.9
|
||||||||
Granted
|
10,200,000
|
$
|
0.001
|
|||||||||
Exercised
|
(10,000,000
|
)
|
$
|
-
|
||||||||
Cancelled/Forfeited
|
-
|
|||||||||||
Balance, September 30, 2014December 31, 2014
|
18,200,000
|
$
|
0.001
|
2.1
|
||||||||
Intrinsic Value
|
$ |
801,900
|
||||||||||
Exercise Price
|
Warrants
Outstanding
|
Warrants
Exercisable
|
Weighted Average
Remaining Contractual Life
|
Aggregate
Intrinsic Value
|
||||||||||||||
$
|
0.001
|
18,200,000
|
-
|
2.1
|
801,900
|
Exercise Price
|
Warrants
Outstanding
|
Warrants
Exercisable
|
Weighted Average
Remaining Contractual Life
|
Aggregate
Intrinsic Value
|
||||||||||||||
$
|
0.001
|
28,000,000
|
18,000,000
|
2.9
|
918,000
|
●
|
Common stock Class A, unlimited number of shares authorized, no par value
|
●
|
Common stock Class B, unlimited number of shares authorized, no par value
|
●
|
Preferred stock, unlimited number of shares authorized, no par value
|
Series A
PS Valuation
|
||||
Debt converted – related party
|
$
|
(30,000
|
)
|
|
Valuation of Series A PS issued as consideration
|
5,217,800
|
|||
Loss on settlement of debt
|
$
|
5,187,800
|
●
|
Calm Seas has purchased an aggregate of $7,500,000 of our Class A common stock; or
|
●
|
The second anniversary from the Effective Date.
|
●
|
Within 30 days of the date of this agreement, a warrant for six hundred thousand shares of the Company’s common stock to be exercisable on the 14 month anniversary of this agreement for a period of 12 months with a cashless exercise provision.
|
●
|
Within 30 days of the date of this agreement, a warrant for one million shares of the Company’s common stock to be exercisable on the 20 month anniversary of this agreement for a period of 12 months with a cashless exercise provision.
|
●
|
Within 30 days of the date of this agreement, a warrant for two million shares of the Company’s common stock to be exercisable on the 32 month anniversary of this agreement for a period of 12 months with a cashless exercise provision.
|
●
|
Based on the consultants reaching two sets of benchmarks, two separate warrants for one million five hundred thousand shares of the Company’s common stock to be exercisable on the 28 month anniversary of this agreement for a period of 12 months with a cashless exercise provision.
|
●
|
On the three year anniversary, assuming the consultant acted in good faith and the Company’s board of directors approval, a warrant for one million five hundred thousand shares of the Company’s common stock to be exercisable on the 28 month anniversary of this agreement for a period of 12 months with a cashless exercise provision.
|
– |
Lack of internal audit function
. During 2014, the Company, upon review of the independent auditors, made some adjustments to its financial statements, including, adjusting salary amounts and the related tax accruals, allocating the “related party gain” to be donated capital and adding the liability due to our attorney that should have been recorded. Management believes that the foregoing is due to the fact that the Company lacks qualified resources to perform the internal audit functions properly and that the scope and effectiveness of the internal audit function are yet to be developed. Specifically, the reporting mechanism between the accounting department and the Board of Directors and the CEO was not effective, therefore resulting in the delay of recording and reporting.
|
– | No Segregation of Duties Ineffective controls over financial reporting : As of December 31, 2014, we had no full-time employees with the requisite expertise in the key functional areas of finance and accounting. As a result, there is a lack of proper segregation of duties necessary to insure that all transactions are accounted for accurately and in a timely manner. |
– | Lack of a functioning audit committee : Due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, and no audit committee has been elected, the oversight in the establishment and monitoring of required internal controls and procedures is inadequate. |
– |
Written Policies & Procedures
: Due to lack of written policies and procedures for accounting and financial reporting, the Company did not establish a formal process to close our books monthly and account for all transactions.
|
1.
|
We will continue to educate our management personnel to increase its ability to comply with the disclosure requirements and financial reporting controls; and
|
2.
|
We will increase management oversight of accounting and reporting functions in the future; and
|
3.
|
As soon as we can raise sufficient capital or our operations generate sufficient cash flow, we will hire personnel to handle our accounting and reporting functions.
|
NAME
|
AGE
|
POSITION
|
DATE APPOINTED
|
||
Kim Thompson
|
53 |
President, Chief Executive Officer, Chief Financial Officer and Director
|
April 25, 2006
|
||
Jonathan R. Rice
|
35 |
Chief Operating Officer
|
January 20, 2015
|
Name and principal position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)
|
Option Awards
($)
|
Non-Equity Incentive Plan Compensation
($)
|
Nonqualified Deferred Compensation Earnings ($)
|
All Other Compensation
($)
|
Total
($)
|
|||||||||||||||||||||||||
Kim Thompson
|
||||||||||||||||||||||||||||||||||
President, CEO, CFO and Director
|
2014
|
$ | 265,120 | $ | 53,024 | 0 | $ | 0 | 0 | $ | 0 | $ | 18,456 | (2) | $ | 336,600 | ||||||||||||||||||
2013
|
$ | 237,134 | 0 | 0 | $ | 0 | 0 | $ | 0 | $ | 8,793 | (1) | $ | 245,927 | ||||||||||||||||||||
Jonathan R. Rice COO (3)
|
2014
|
$ | 0 | 0 | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||||
2013
|
$ | 0 | 0 | 0 | $ | 0 | 0 | $ | 0 | $ | 0 | $ | 0 |
1)
|
In 2013, Kim Thompson received $8,793 in medical insurance and medical reimbursement pursuant to an employment agreement entered into with us.
|
2)
|
In 2014, Kim Thompson received $18,456 in medical insurance and medical reimbursement pursuant to an employment agreement entered into with us.
|
3) | Mr. Rice was appointed as the Company's Chief Operating Officer on January 20, 2015. |
Title of Class
|
Name and Address of Beneficial Owner
|
Amount and Nature
of Beneficial Owner
|
Percent of
Class (1)
|
|||||||
Class A Common Stock
|
Kim Thompson
|
261,661,041
|
(2)
|
38.66 |
%
|
|||||
120 N. Washington Square, Suite 805
|
||||||||||
Lansing, MI 48933
|
||||||||||
Class A Common Stock
|
Jonathan R. Rice
|
2,000,000
|
(3)
|
*
|
||||||
120 N. Washington Square, Suite 805
|
||||||||||
Lansing, MI 48933
|
||||||||||
Class A Common Stock
|
All executive officers and directors as a group (1 Person)
|
263,661,041
|
38.95
|
%
|
||||||
Series A Preferred Stock
|
Kim Thompson
|
2
|
100
|
%
|
||||||
120 N. Washington Square, Suite 805
|
||||||||||
Lansing, MI 48933
|
||||||||||
Series A Preferred Stock
|
All executive officers and directors as a group (1 Person)
|
2
|
100
|
%
|
●
|
approved by our audit committee; or
|
●
|
entered into pursuant to pre-approval policies and procedures established by the audit committee, provided the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities to management.
|
1.
|
List of Financial Statements.
|
●
|
Reports of Independent Registered Public Accounting Firms.
|
●
|
Balance Sheets at December 31, 2014 and 2013
|
●
|
Statements of Operations for the years ended December 31, 2014 and 2013
|
●
|
Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2014 and 2013
|
●
|
Statements of Cash Flows for the years ended December 31, 2014 and 2013
|
●
|
Notes to Financial Statements for the years ended December 31, 2014 and 2013
|
2.
|
List of all Financial Statement Schedules.
|
10.3
|
Securities Purchase Agreement between Kraig Biocraft Laboratories and Lion Equity
(1)
|
|
10.4
|
Amended Letter Agreement, dated September 14, 2009, by and between Kraig Biocraft Laboratories and Calm Seas Capital, LLC
(3)
|
|
10.5
|
Exclusive License Agreement, effective as of May 8, 2006, by and between The University of Wyoming and Kraig Biocraft Laboratories, Inc.
(2)
|
|
10.6
|
Addendum to the Founder’s Stock Purchase and Intellectual Property Transfer Agreement, dated December 26, 2006, and the Founder’s Stock Purchase and Intellectual Property Transfer Agreement dated April 26, 2006
(3)
|
|
10.7
|
Intellectual Property/Collaborative Research Agreement, dated March 20, 2010, by and between Kraig Biocraft Laboratories and The University of Notre Dame du Lac.
(2)
|
|
10.8
|
Letter Agreement, dated June 28, 2011, by and between Kraig Biocraft Laboratories and Calm Seas Capital, LLC
(4)
|
|
10.9
|
Letter Agreement, dated April 30, 2013, by and between Kraig Biocraft Laboratories and Calm Seas Capital, LLC
(5)
|
|
10.1
|
Letter Agreement, dated October 2, 2014, by and between Kraig Biocraft Laboratories and Calm Seas Capital, LLC
(10)
|
|
10.11
|
License Agreement, dated October 28, 2011, between the Company and University of Notre Dame du Lac.
(12)
|
|
10.12
|
Intellectual Property / Collaborative Research Agreement, dated June 6, 2012, between the Company and University of Notre Dame du Lac.
(12)
|
|
10.13
|
Collaborative Yarn and Textile Development Agreement, dated September 30, 2013, between the Company and Warwick Mills, Inc.
(12)
|
|
10.14
|
Employment Agreement, dated January 19, 2015, between the Company and Mr. Jonathan R. Rice
(11)
|
|
10.15
|
Intellectual Property / Collaborative Research Agreement, dated March 4, 2015, between the Company and University of Notre Dame du Lac.*
|
|
14.1
|
Code of Business Conduct and Ethics
(13)
|
|
31.1
|
Certification of Chief Executive Officer/Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
|
|
31.2
|
Certification of Chief Executive Officer/Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *
|
|
101
|
Interactive data files #
|
Kraig Biocraft Laboratories, Inc.
|
|||
Dated: March 31, 2015
|
By:
|
/s/ Kim Thompson | |
Kim Thompson
|
|||
President, Chief Executive Officer and Chief Financial Officer
|
|||
(Principal Executive Officer and Principal Financial and Accounting Officer) |
Signature
|
Title
|
Date
|
||
/s/
Kim Thompson
|
President, Chief Executive Officer, Chief Financial Officer and Sole Director
|
March 31, 2015
|
||
Kim Thompson |
1.
|
Number of Shares
. Warrant Holder shall be entitled to Exercise the Warrant for a total amount of 2,000,000 shares of Common Stock Pursuant to the terms and conditions herein.
|
2.
|
Exercise Price
. The Exercise price shall be set at $0.001.
|
3.
|
Date
: This Warrant is dated January 23, 2015 and is fully vested as of such date.
|
4.
|
Term and Exercise
. The warrant shall be exercisable on February 2, 2016
,
and for a period expiring on January 19, 2018. The term of this Warrant shall expire at the end of the day on January 19, 2018.
|
5.
|
Cashless Provision
.
|
(a)
|
Cashless Exercise
. The Warrants, as provided herein, may be exercisable in whole or in part for cash or through as cashless exercise as set forth below.
|
(b)
|
Shares of KBLB Common Stock upon exercise hereof thereunder, this Warrant may be exercisable in whole or in part for cash or through as cashless exercise as set forth below. Payment upon exercise may be made at the option of Warrant Holder either in (i) cash or by certified or official bank check payable to the order of the KBLB equal to the applicable aggregate Strike Price, (ii) by delivery of Common Stock issuable upon exercise of the Warrants in accordance with Section (a) ABOVE or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such form (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the terms of this Warrant) and the holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.
|
(c)
|
Notwithstanding any provisions herein to the contrary, if the Fair Market Value or Market Value of one share of Common Stock is greater than the Strike Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being cancelled) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Notice of Exercise in which event the Company shall issue to the holder a number of shares of Common Stock computed using the following formula:
|
(d)
|
X=
Y (A-B)
|
|
Y=
|
the number of shares of Common Stock purchasable under the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised (at the date of such calculation)
|
|
A=
|
the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)
|
|
B=
|
Purchase Price (as adjusted to the date of such calculation)
|
6.
|
Covenants of Warrant Holder
. Pursuant to the terms and Conditions of the Consulting Agreement and as a condition to receiving this Warrant, the Warrant Holder represents, warrants and covenants to the KBLB that:
|
(a)
|
it has not and will not knowingly take any action, directly or indirectly that would cause the Transaction to violate the provisions of the Act, the Securities Exchange Act of 1934 (the “
1934 Act
”), the respective rules and regulations promulgated there under (the “
Rules and Regulations
”) or applicable “blue sky” laws of any state or jurisdiction and it will, insofar as is under its control, conduct the Transaction in a manner prescribed by Rule 506 of Regulation D;
|
(b)
|
Purchase Entirely for Own Account.
This Agreement is made in reliance upon Warrant Holder’s representation to Company, which by Warrant Holder’s execution of this Agreement, KBLB hereby confirms, that the Warrants to purchase Company's Common Stock are being acquired for investment purposes for the Warrant Holder’s own account and not with a view for resale or distribution of any part thereof except in accordance with applicable federal and state securities laws.
|
(c)
|
Receipt of information
.
Warrant Holder has received all information set forth and referenced to in Company’s press releases and business plan. Furthermore, Warrant Holder has received all information necessary for it to make an informed investment decision.
|
(d)
|
Investment Experience
. Warrant Holder represents that it is experienced in evaluating and investing in restricted securities and in companies similar to Company and acknowledges that it can fend for itself, can bear the economic risk of its investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment. Warrant Holder further represents that it has not been organized solely for the purchase of the Company’s Common Stock.
|
(e)
|
Accredited Investor
.
Warrant Holder represents that it is an "accredited investor" as that term is defined in SEC rule 501(a) of Regulation D, 17 C.F.R.501(a).
|
(f)
|
Restricted Securities
.
Warrant Holder understands that the Warrants to purchase the Company's Common Stock issued hereunder may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Company's Common Stock, or an available exemption from registration under the Securities Act, the Common Stock must be held indefinitely. In particular, Warrant Holder is aware that the Common Stock may not be sold under Rule 144 unless all of the conditions of that rule have been met.
|
(g)
|
No Trading Market.
The Warrants issued hereunder are not traded or listed on any exchange including but not limited to the electronic pink sheets and the over the counter bulletin board. There is no secondary market or trading for said Warrants.
|
(h)
|
Legends
.
To the extent applicable, each certificate or other document evidencing the Company's Common Stock shall be endorsed with the following restrictive legend.
|
7.
|
Manner of Exercise.
The Warrant Holder may Exercise this Warrant in whole or in part by presenting a Notice of Exercise to KBLB (Kraig Labs) at its main offices.
|
8.
|
Maximum Exercise
. The Warrant Holder shall not be entitled to exercise this Warrant on an exercise date, in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Consultant and its affiliates on an exercise date, and (ii) the number of shares of Common Stock issuable upon the exercise of this Warrant with respect to which the determination of this limitation is being made on an exercise date, which would result in beneficial ownership by the Warrant Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Company on such date. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Consultant shall not be limited to aggregate exercises which would result in the issuance of more than 4.99%. The restriction described in this paragraph may be revoked upon seventy-five (75) days prior notice from the Warrant Holder to KBLB. The Warrant Holder may allocate which of the equity of the Company deemed beneficially owned by the Warrant Holder shall be included in the 4.99% amount described above and which shall be allocated to the excess above 4.99%.
|
9.
|
Assignment
. The Warrant Holder may assign this Warrant in whole or in part subject only to the applicable Securities Laws.
|
10.
|
Stock Splits
. In the event of any stock split (whether forward or reverse) all references to the number of shares described in this Agreement shall be adjusted in proportion and in accordance with such split.
|
11.
|
Investment Representations
. KBLB represents and warrants that it has provided Consultant with access to all information available to the Company concerning its condition, financial and otherwise, its management, its business and its prospects. The Company represents that it has provided to Consultant access to the Company’s SEC filings, financials, merger documents, press releases for the prior twelve (12) months, if any, (the “Disclosure Documents”) made under the rules and regulations promulgated under the Act, as amended, or the Exchange Act, as amended including but its SEC filings and all other documents relating to its trading on the Over the Counter Bulletin Board. Warrant Holder acknowledges that Warrant Holder has been provided with the documents, or access to the documents described above, including without limitation, SEC filings and audited financials for the past three years, that the acquisition of the securities to be issued to Warrant Holder involves a high degree of risk. Warrant Holder represents that it and its advisors have been afforded the opportunity to discuss KBLB with its management and that KBLB and its management have made no verbal representations of any kind relating to this warrant or to KBLB’s past, present of future prospects or performance. The Company represents that it will promptly notify Warrant Holder upon the filing of any registration statement or other periodic reporting documents filed pursuant to the Act or the Exchange Act.
|
12.
|
Acceptance and Consulting Agreement
. This Warrant is attached hereto as an Exhibit to the Consulting Agreement as if contained word for word in said Agreement. By executed the Consulting Agreement the parties agree to be bound hereto to this Exhibit and Warrant.
|
1.
|
I have reviewed this Annual Report on Form 10-K of the registrant for the year ended December 31, 2014;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
|
|
4.
|
I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding their reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 31, 2015
|
|
/s/ Kim Thompson
|
|
Kim Thompson
President, Chief Executive Officer and Chief Financial Officer
(principal executive officer, principal financial officer and principal accounting officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly represents in all material respects, the financial condition and results of operations of Kraig Biocraft Laboratories, Inc.
|
Date: March 31, 2015
|
|
/
s/ Kim Thompson
|
|
Kim Thompson
President, Chief Executive Officer and Chief Financial Officer (principal executive officer, principal financial officer and principal accounting officer)
|
|
c)
|
Grant of Rights
|
|
d)
|
Background Intellectual Property
|
Kraig Biocraft Laboratories, Inc.
By:
_/s/ Kim Thompson
________________
Kim Thompson
Chief Executive Officer
Date: ___
2/23/2015
___________________
|
The University of Notre Dame du Lac
By: _
/s/ Greg Luttrell
________________
Greg Luttrell
Director, Research Contracts & Awards
Date: __
3/4/2015
___________________
|