Holiday Letter to Shareholders

Dear Friends,

Merry Christmas, Happy Hanukkah and Seasons Greetings to all of our Shareholders!

Christmas is a season not only of rejoicing but of reflection. — Winston Churchill

As we look forward to the New Year, let us all take a moment to reflect upon the events of 2017…

2017 was a year full of major milestones and a series of firsts for Kraig Labs.  In our first quarter, Kraig saw advancements in nearly all aspects of our production operations.  We signed a land lease and planted 2,000 mulberry trees on our own mulberry plantation in Texas, strengthening our domestic production capability base.  We held a series of successful meetings and gained strong support from foreign government officials in our efforts to open international production operations, bringing us to the verge of an international production launch.  We produced and shipped the first production batch of Dragon Silk cocoons for processing under our contract with the US Army, proving that our technology can be quickly and efficiently scaled.  But this was just the beginning.

Through the balance of the year, we have continued to make major changes and advancements to the business.  In August, Kraig announced that the US army exercised their option to increase our contract for spider silk to more than $1.0 Million, nearly ten times the original contract value.  In September, we announced the termination of our long term equity line financing with Calm Seas Capital.  This move has freed the Company to grow and explore better financing options.

In October, we more than tripled the size of our domestic production operations, moving from our pilot location in Indiana to our new research and production headquarters in Michigan.  This move has for the first time brought our research and production teams under one roof, vastly improving our efficiency and economies of scale on every level.  That effort alone has already borne fruit in the cross-pollination of ideas and training among all our staff.  Not to mention, the move was seamless, and production at the new facility was up and fully running within less than 30 days!

In the last quarter, Kraig’s team built out a laboratory, for a fraction of the cost of a traditional lab build-out, with the capacity and capability to create new and exciting transgenics.  With Kraig’s move in the third quarter and the accompanying lab build-out at the new facility, the Company has moved most of its molecular biology from the university laboratory into our own facility with our own full time staffing.  We are already working to develop the next generation designs for stronger and tougher spider silk in our new in-house laboratory. 

With so many firsts and so many advancements from the fundamentals all the way through to a million dollar contract with the US Army, one cannot help but wonder why our market valuation has lagged.  Isn’t the Company stronger after the US Army executed its million dollar contract to deliver spider silk than it was before?  It is, and remains, the opinion of Company management that our valuation remains disjointed from the fundamental reality of the accelerating progress we’re seeing in our business every day.  In particular, we have seen dramatic positive changes in our internal fundamentals over the last two quarters. 

In addition to all of the progress we’ve made domestically in production, in R&D, and in our Army contract, we are also making significant progress establishing overseas production.  We believe that production at a location with existing silk infrastructure is key to unlocking substantial value for our shareholders, better aligning the Company valuation to the fundamentals of our business, and bringing our revolutionary materials to mass market.  We believe that given the foundation we have laid in 2017, it is merely a matter of time before we are able to launch that larger scale international production.  The holdup on that front is regulatory approval, the timing of which is not within the Company’s control.

It has been said many a time before, that the holidays are the most wonderful time of the year.  That sentiment is ringing truer than ever at Kraig Biocraft Laboratories.  We are proud of the significant strides Kraig Biocraft has made in improving our technological and competitive position this year.

As we review 2017 and how far we’ve come, we look forward towards building upon that foundation and making 2018 spectacular.  We thank you for your faith and continued support.  We believe that we have the most passionate shareholders, and that you are vital to our successful navigation of this emerging industry.

2017 was full of operational and business model improvements, even if those have not yet been reflected in our valuation.  The year has brought us many moments to celebrate, and we stand on the cusp of clearing a number of significant Company milestones, including the potential for international production volumes.

We see substantial opportunity in the various markets we are targeting.  We enter 2018 on a fundamentally solid footing, with great expectations for what the New Year holds for our technology.

It is in this spirit of the holidays that we extend our warmest greetings and best wishes for the New Year.  We accomplished much in the last year, but there is no doubt in our mind that our best days are in front of us. 

The Kraig Labs’ team kindly thanks you for your trust and continuing loyalty. We hope that you are surrounded by love, and warmth, this holiday season and that the holidays bring you many reasons to smile.

Kim K Thompson                                                                              Jon Rice

Founder and Chief Executive Officer                                                Chief Operations Officer

 

 About Kraig Biocraft Laboratories, Inc.
Kraig Biocraft Laboratories, Inc. (www.KraigLabs.com), a fully 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”, “spectacular”, “dramatic”, 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 letter 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

 

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