Merry Christmas, Happy Hanukkah, and Season’s Greetings to all our Shareholders.
Dear Shareholders
The other morning, I came across an article published on RealClearScience about the Christmas spider. This is a tale from Eastern Europe about a spider who spins a beautiful web in a family’s home on Christmas Eve. The glistening web then transforms to silver, a joy and blessing to the family, the value of which elevates them from poverty to prosperity[1].
I was vaguely aware of this story and had been gifted a small ornamental spider years ago, which is always hanging in my home. Reading that story this morning makes me think about the immediate future of Kraig Biocraft Laboratories and the blessings I believe we are poised to gift to the world over this coming year.
2025 was a year of growth and evolution for Kraig Labs. Together, we’ve achieved significant milestones that have strengthened our Company and positioned us for greater success in 2026.
This year kicked off with a series of operational and scientific breakthroughs that I believe will underpin a new year of growth and advancement across the core pillars of our business, spider silk production, end-market commercialization, and research and development of advanced materials.
Our R&D achievements in 2025 expanded both the breadth and depth of our technology platform. Early in the year, we announced the successful development of a recombinant Darwin Bark Spider silk, demonstrating our ability to engineer and express increasingly complex silk proteins with unique performance characteristics. We quickly followed this up with the creation of a Caddis Fly silk, opening the door to entirely new classes of biomaterials with potential for adhesion and underwater performance.
Our introduction of an advanced gene-splicing technology spurred the rapid pace of these developments. This work ultimately led Kraig Labs to a scientific breakthrough that set the world record, doubling the largest known gene insert in silkworm (opening the door for more advanced materials). Collectively, these advancements strengthen the technological foundation upon which all future new materials at Kraig Labs will be built.
2025 marked a stressful, yet pivotal, year in the evolution of our production operations. This year, we set a production record for advanced spider silk reeling utilizing automated reeling equipment – a key breakthrough needed to achieve multi-ton production. However, we fell short of our ultimate total production target.
In late 2025, we released the new BAM-1 ALPHA hybrid (“ALPHA”) that moved us fully into a true production diapausing hybrid. A huge advancement in production that we had been working on for years.
The ALPHA hybrid produces the same recombinant spider silk as the original BAM-1. The difference lies entirely in the background genetics that affect almost every other part of the silkworm, except the transgenic silk sequences. In other words, ALPHA contains no altered transgenic traits from the original BAM-1. What differentiates ALPHA from the original BAM-1 is that the parental strains (which both carry the original trans genes) are from a different lineage and are as distinct from the originals as a Golden Retriever is from a Rottweiler.
The improved background genetics results in a critical 22% boost in silk yield compared to the parental strains. That 22% is very significant for increased production and commercialization. ALPHA also boasts improved reeling efficiency on automated machines, all while maintaining the same strength and materials performance, a game-changer for us in 2026.
To support the increased output of the ALPHA hybrids, we added parallel manufacturing facilities, allowing multiple production streams to operate simultaneously. The operational flexibility, capacity, and resilience of this model were key to our fourth-quarter production breakthrough. We’ve produced more than one million ALPHA eggs, which are ready for deployment to make finished spider silk yarn. These achievements reflect years of selective breeding and targeted design efforts that are now translating into meaningful scale and robustness.
Our accomplishments this year were not made alone. In 2025, we were granted operating licenses by two Southeast Asian countries, providing production security and diversification as we continue to leverage the capabilities of our new production spider silk transgenics. We also signed a strategic multi-year collaboration agreement with a key government agency in Southeast Asia, supporting our production growth and providing key resources, facilities, and land. This agreement was the result of several years of groundwork by our team to secure critical support and resources for our operations and the expansion of spider silk production. As we enter 2026, these collaborations are expanding with the granting of lease rights on additional mulberry gardens to supply our growing production capacity.
The addition of parallel manufacturing facilities and our strategic multi-country licensing expansion further diversified our production base, reduced operational risk, and positioned the Company for sustained, scalable growth across Southeast Asia.
Perhaps most exciting, 2025 marked the beginning of Kraig Labs’ transition from development to commercialization and spider silk sales. This year, we engaged with market leaders in the performance sportswear, sports equipment, and luxury fashion segments. The excitement from these segments to explore applications for our spider silk in their product offerings can now be met with near-term product capacity. In November, we secured our first commercial trial order, an important validation of both our technology and our readiness to serve customers in real-world applications. We believe this is just the first of many orders and opportunities for spider silk.
As we look toward 2026, we do so with growing excitement. The accomplishments of 2025, many of which are not yet reflected in our metrics, have built a rock-solid foundation for the years ahead. Our science is stronger, our production is larger and more resilient, our footprint is expanding, and early-stage commercialization is now underway.
On behalf of the entire Kraig Biocraft Laboratories team, we thank you for your patience, belief, and continued support. We look forward to sharing the next chapter of this journey with you.
From all of us at Kraig Biocraft Laboratories, we wish you a peaceful holiday season and a healthy, prosperous New Year. Warmest holiday greetings and sincere appreciation to you and yours.
With gratitude, resolve, and with the warmest wishes for a Merry Merry Christmas and Happy Hanukkah
Kim K. Thompson
Founder & Chief Executive Officer
On behalf of the entire Kraig Labs family
[1] https://www.zmescience.com/feature-post/culture/culture-society/christmas-spiders/