"One of the reasons we're looking at Vietnam is because of the excellent infrastructure that they have in place for silk production. We know from our current pilot production program that our technology can fit in very nicely,very quickly and efficiently into existing silk infrastructure.
Vietnam has the infrastructure in place for not only producing silk and allowing us to ramp up productively quickly but also for quality control. That's something that really is frankly lacking in our current pilot production facility; quality control. And so we're looking for a place to invest where there is current excellent silk production, where there are trained people and expertise and everything that's necessary to produce a quality product in large volume.
I think fair to say that we are getting very close to a finalized deal with the Government of Vietnam. We have a proposal in place right now a full agreement has been drafted and in going through their comment process and we have someone in Vietnam right now who is shepherding the agreement through that process. We're looking at the potential to set up our project in Lam Dong Province and we are also working right now on creating a Kraig Labs subsidiary in Vietnam.
This has been a lengthy process; there are a number of steps both mechanical and bureaucratic that have had to have been accomplished in order to get where we're at in that process because this is a unique, one of a kind project; no one has ever launched a project quite like what we are talking with Vietnam about doing here. We have signed on an office in Ho Chi Minh City and we are looking right now for a suitable production facility in Lam Dong Province."
2) COO Jon Rice Excerpt From CC :
"Dragon silk, which we introduced earlier this year, is now a product that's ready for scale and sale.
While R & D will continue to happen, it's no longer a necessary step for us to create products that are ready for market.
It will be the first of our new material that we will be delivering to partners and collaborators for market.
In recent months, we've teamed with a globally recognized performance apparel innovator, to develop applications for our silk. The first test articles were just produced in late November and we're excited for the next step in that partnership.
Working with Warwick Mills,we've recently produced our first hybrid woven fabrics combining Monster silk with a synthetic. As we'd hoped, the materials blended well and opens the opportunity for future blended fabrics and products.
We're now in the process of developing pure silk fabrics, which we will be evaluating for their ballistics performance."
3) Jon Rice Thanks Notre Dame/Scientists During CC
"First i'd like to thank The University of Notre Dame. The collaborative research agreement we have in place between Dr. Fraser's lab and ourselves has been a fundamental for the material science and the breakthroughs that we've achieved to date.
Dr. Fraser, Dr. Youngsoo Kim and Dr. Sohn have been instrumental in the incredible scientific progress we've made to date. Any announcements coming from Kraig Labs is really a reflection of the scientific breakthroughs that have come from thousands of hours of the work of that team."
4) Q & A: Advantages/Disadvantages:Technology vs. Competitors
CEO Kim Thompson states:
"We believe that theres a very significant market for these advanced materials for spider silk based polymers and so of course with those dollars at stake, it's no surprise that other companies are attempting to develop their own technology.
We believe that we have some significant competitive advantages over those technologies.
The competitors that i'm somewhat familiar with, are attempting to prove spider silks based upon fermentation and genetic engineering of bacteria and one of the essential components of that process is incredibly high production costs.
The last estimates I saw, were in excess of one hundred thousand dollars per kilogram.
Now undoubtedly progress has been made to reduce those costs and most companies will continue to make, I hope, rapid progress in reducing the costs.
But there is an inherent efficiency to the Kraig Lab System which relies upon the domesticated silkworm and that's because the domesticated silkworm is already a commercial producer of quality fabrics.
About five billion dollars a year at the raw fiber level of silk is produced currently with current mundane production methods.
And so it's our genetically engineered silkworm specifically engineered to produce spider silk polymers and proteins is a natural fit and there is a tremendous,in my opinion, cost advantage we have over all the rival systems I have seen.
In additionally there are some environmental advantages; our system is clean and green, whereas many of these other system require doping chemicals in order to put the proteins into, to dissolve the proteins and to enable them to be extruded into a fiber.
So I think we've got some significant advantages environmentally, importantly cost-effectively and in the natural formation of our silk proteins into silk fibers by the various silkworms themselves.
I think overall we have the best technology."
5) Q & A: Did KBLB Produce Metric Ton Capacity?
CEO Kim Thompson states:
"We are not producing metric ton quantities at the pilot production facility.
That facility does have that capacity and I do believe that we could produce many metric tonnes of material at that facility.
We did report early on that production was increasing and it was and we have an ability to increase it further.
We also began looking at the quality of the material coming out of that facility.
And although we can produce a very large quantity of material, or a very large quantity; many metric tonnes, it didn't make any sense when looking at the quality of this material.
In short, when we ship product sample to a potential customer, or a potential collaborative partner, it's important that that material reflect the properties of spider silk; of the strength and elasticity, so that these potential partners can see what our material can do.
And frankly we weren't seeing that out of the QC of the production facility.
The main problem really with quality control was local infrastructure.
Yes we have infrastructure necessary for actually producing raw fiber; but not the infrastructure necessary to take that fiber, process it and spin it into a quality product that maintains our standard of quality control.
And we feel strongly; with the custom that we have potentially one real chance at making that impression and study for a material that's coming out into the market.
It's one of the reasons we've been looking more and more at countries like Vietnam that have very established production of silk and excellent quality control.
Because we know from what what we've seen at the pilot production program, that we can take our genetically modified silkworm, feed that into that infrastructure and what we're going to get out is something similar in quality control as to what they're producing natively there, in terms of, not the material strength; certainly our material strength is going to be significantly improved compared to any other silk product; in terms of general quality control over silk.
And that's the reason we haven't ramped up production there to the metric tonne levels.
We could've done that; we could've spent the money to do that but to what effort?
So that we could put out a press release saying we've produced metric tonnes?
I didn't really see the point in that; not in producing material and warehousing it.
We want to produce material that we can stand behind,have confidence in, send it out to potential development partners and have it knock their socks off."
6) Q & A: DragonSilk:Increasing Tensile Strength
COO Jon Rice states:
"Absolutely,we are definitely looking to continue to improve and look forward to new materials; without a doubt.
Yes we've reported 1.79 gigapascals in strength for our materials.
We have seen improvements in excess of that; we are now seeing as high as two gigapascals and above from the DragonSilk line and that's come through our process of selective breeding.as we move forward.
We're looking to move DragonSilk into a larger batch production here in early 2016.
And to your last question regarding publicly released information....
I think that's one area where I think the company has done a better job than anyone else in the industry,
If you notice we're the only ones talking about the actual elasticity of our materials or the tensile strength of our materials.
Our competitors aren't doing that.
Our competitors aren't having their data peer reviewed by scientific publications.
This is one area I think Kraig Labs is certainly leading the industry.
IR Ben Hansel Q: So there is an ongoing effort to create even stronger fibers to top the strength of DragonSilk?
CEO Thompson and COO Rice A: Absolutely."
7) Q & A: Company Following Up On Press Releases
IR Ben Hansel: "I believe that the company's done an amazing job of information flow for an R & D biotech company and there's an easy way to quantify that.
All you have to do is an internet search and see how many results come up for this company. I think it compares quite favorably to big board listings actually."
CEO Kim Thompson: "Thank you Ben.
Let me put in a couple of two cents here too.
We are a biotechnology company; which is competing in what we believe to be a market of significant size; with aggressive competitors.
I think that if you look at what other biotechnology companies are putting out about the state of their R & D; the properties of their materials,their plans for early-stage commercialization, I think; trying to be objective about it, I think that we put out more information than most other companies in that category.
Certainly than any other company involved in spider silk .
But I do understand the shareholders are an integral part of what we're doing here.
They have an investment in the company and are eager to know what's happening on a continuous basis within the company.
And so I understand this question and I hope the shareholders understand too, that certain information about our technologies is being safeguarded from others who want to use that information against us.
I know as a fact, that there's a laboratory somewhere in the world; i'm not going to identify, that has a large number of scientists and as of two years ago; the last time I had information about this, at every workstation in that laboratory was a printout of the screenshot of Kraig Laboratories websites; on every desk; that's what i've been told by a reputable source.
So I know that people in high technology are following what we do; they look at every word of our press releases,; maybe they are gracing us with their presence here on this conference call and they're certainly reading everything that we put out in the scientific literature.
So have at it gentlemen; it's a pleasure to meet you in the marketplace, competing for ideas.
We think we have have the best idea but we also think that we could do a better job of communicating; especially with our shareholders.
Jon has really taken the lead in creating Spider Sense, which is our quarterly newsletter.
We hope to continue to implement that and expand it.
And I think I could do a better job in communicating with our shareholders; even if it's sometimes to say we can't tell you about some detail of this but here's what we can tell you about.
Jon and I are very much aware of what we owe our shareholders."
8) Q & A: KBLB Agreement With Warwick Mills
CEO Kim Thompson states:
"Our agreement with Warwick Mills is a development agreement and it's an agreement predicated on our collaborating with Warwick to develop new textiles.
Now Warwick Mills has excellent capacity well beyond developing new textiles and frankly we'll have to see in the coming months, where that takes us."
TRUISM
I've never claimed to have all the answers but feel i'm beginning to corner the market in questions worthy of them.
