Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
You're welcome.
But thank Jon and Ben
I wouldn't be surprised if we get a PR this week or next week that answers questions Jon didn't reply to. Something that is more PR worthy, IMO.
I've had discussions with Ben regarding questions to some of the past PR's. He was able to compile some of the more common questions shareholders had and send them to Jon for answers. Below are Jon's direct responses.
_____________________________________________________________
How much of the $8 Million Yorkville Advisors financing referred to just Prodigy, how much was allocated for the third-party producer and what was it used for?
We raised that money long before we engaged with 3rd party producers. Prodigy will remain as the central operations point for our work in Vietnam and we will fund it as such. Our objective is for this facility to operate as an egg producer and quality control center for all production in Vietnam, internal and outsourced. 3rd party production allows us to scale to level far greater and, as such, will, in the long term, represent an increasing expense that is directly linked to increasing revenues and profits. 3rd party production increases and expenses will be directly tied to sales, revenues, & profits.
What’s the difference between the multiple-strain hybrid silkworm model, multi-line hybrid production models, and single-line cross-hybrids? What’s the difference between the single strain hybrids and dual strains that will be rolled out?
Our original spider silk transgenic silkworms were developed at Notre Dame using silkworm strains that were targeted for research purposed and not optimized for commercial production. Since bringing technology development in-house with our own development team we have transitioned away from the use of research strains of silkworms and now work directly with commercial production silkworm lines. The “Single-line” or “Single-strain” cross-hybrids are the product of using a single commercial silkworm line that has been modified to incorporate our recombinant spider silk proteins. These lines are intended to initially be raised and mated within the single line for successive production batches of silkworm, cocoons and silk.
The second step in this process is to create multiple lines of these “single-strain” cross-hybrids. Industrial silkworm egg production is done using a multi-step process where multiple lines of silkworms are first raised independently and then mated between strains to increase overall robustness and cocoon size. While a slightly more complex process it yields great amounts of silk, increased robustness, and lowers overall production costs. The cross mated offspring are deemed to be “multi-line cross-hybrids”. These multi-line cross hybrids are raised for a single generation which is all used for silk production. Successive generations of these multi-line cross hybrids are created by re-crossing the single-strain hybrids to generate more first-generation hybrids.
Please see graphics below
Single-Strain Hybrids
2 Strain Multi-line Cross-Hybrid production Model
If R&D lab is already ramping up the multi-line hybrid production models and expected to transition to production in Q1 2023, why do you believe that you can’t produce quantity until late 2023?
Deployment of the Multi-Line hybrid production system is expected to begin in early 2023. The multi-line model required at least 2 generations of silkworm rearing to get to final production eggs and cocoons. We will also be implementing the four strain multi-line hybrid system to further improvements in yields and performance. These technologies will be rolled out in a continuous wave of production improvements which we will update everyone with as they are put into operation. We will continue to produce the current Dragon Silk strains and transition to these newer cross-mating technologies as they are finalized for large scale production.
How is the quality of the spider silk that you have in inventory for SpydaSilk?
We have not observed any deviations in material quality from our 3rd party producer. Post processing of the silk cocoons to raw and finished silk has been one focus area of our production partner. Transitioning from manual to semi-automated to fully automated cocoon reeling has been a significant focus as it has impacts on the quality and quantity of finished reeled silk that can be collected per ton of cocoon.
What’s the plan if they go with another lockdown?
Assuming the question concerns another potential lockdown in Vietnam.
Prodigy Textiles was able to continue operations during the restricted travel permissions in Vietnam linked to COVID. As an agricultural operation it is a sustaining business for local farmers and workers. During the lockdown members of the Prodigy team resided at the facility to sustain our silkworm colonies and keep operations moving.
The Company also created self-reliance at our factory in Vietnam by planting mulberry field’s at the factory to supply on-site and continuous access to mulberry year round.
Is the third-party producer using a climate-controlled environment or is it strictly outdoors?
They use traditional systems for rearing which is a blend of different levels of control based on egg production, young larva, and adult caterpillars. No production occurs outdoors.
____________________________________________________
Also, It sounds like the company will start to communicate some of the more pressing questions that shareholders have in the form of upcoming PRs. I don't know what these answers will be but hopefully it clarifies the substantial amounts of silk that have been produced concurrent with these upgraded lines.
There is so much wrong with this that it is hard to tell where to start.
Since I don't feel like playing Fisher Price scientist to explain, all I will say is that trying to discuss homozygosity and it's probability is useless unless you indicate whether it's dominant or recessive.
This is where my engagement ends.
I can't tell if you know that you proved my point
Lots of efforts to try and minimize todays PR. It is, indeed, good news.
Genetics is much more nuanced than that high school biology understanding.
The company already created commercial sized cocoons and announced it almost 5 years ago. You can read about it in the April 3rd, 2018 PR. The increase of cocoon size in the July 6th, 2022 PR is different. It's iterative.
Haha. It's not a flaw. It's a feature. And an extremely smart one that insures that our IP is protected. I have written about this type of hybridization on this board years ago. I've said how I thought this would be a way to prevent theft. It looks like it's been implemented.
I really like todays news.
First, the 2 new strains have already been delivered in the first quarter of 2023 as promised. And as the company likes to sit on news, this info might already be weeks old.
But mostly, I like the explanation of how they are cross breeding to create hybrids. I've always suspected that this was going to be a necessary method in order to secure our IP and prevent theft of our technology (at least it makes it much harder). Hybridization has it's benefits because you can get the best traits out of a line the passes to all the offspring, and in this case, you get offspring that are infertile. This means that prodigy hands over the eggs to the third-party contractor, but the contractor can't breed them because they are all infertile.
You can almost think of it the way a mule is made. You breed a horse with a donkey which gives you a large working animal that is infertile.
Like I said, I always suspected that this was the best way to keep out lines secure and it looks like thats what the company is doing.
I also liked this PR because it confirms that these silkworms are all still producing the same mechanical properties as their dragonsilk line. A line that they reported to measure at an ultimate tensile strength of over 2GPa. And the silkworm size is the same as regular commercial silkworms. It sounds like the 4-strain will be introduced later once we are already producing with our 2-strain lines. The 4-strain will likely include traits for the even larger (50% larger than normal commercial silkworms if I remember correctly).
All in all this is good news and it looks like they are getting this production started early in 2023
Thanks for sharing this info.
Is VH2020 supposed to be the strain KBLB is using? or is it the commercial strain that they crossbred with?
Thanks for sharing.
This is great. It's different from the other expertise that KBLB already employs.
This position focuses on electroporation. I've been following this field for a couple years now and it is very exciting. A few gene editing companies I follow use this technique in order to get AAV's past the Blood Brain Barrier in order to get the genetic payloads into hard to reach areas of the brain.
Electroporation is basically a technique where you apply an electric field to a membrane and it vibrates (for simplicity sake) the wall of the membrane and allows your target to pass through the barrier. It's a pretty fast growing field.
I had never heard of this technique being used in insect eggs but I suppose it makes a lot of sense. Theoretically, you could use electroporation to insert plasmids across an egg shell just like you would to any other cell membrane (considering all eggs are just a single cell), and you could do it on a large scale very quickly and efficiently. This would save a ton of time compared to the normal technique of microinjecting the plasmid into the egg and literally supergluing the hole (yes, that is the how the field currently does it).
This technique will allow for large amounts of eggs to be edited in very short order. Kraig labs will always be improving their genetic constructs and creating custom inserts for customers so this could help them create custom fibers very quickly.
Great find and thanks for the share
Thank you for reconciling this.
So basically, besides 2018, the company usually communicates soon after the Thanksgiving holiday. I expect them to do the same over the next week or two. I would also expect it to be regarding production.
There are not a lot of shares for sale until we get to .048 and even then there aren't many. This thing could rise fast even without news.
This is what it looks like without downward pressure from yorkville. They want this to go up now. So we should see this get to .05 before the weekend, IMO
My take on todays PR:
I think this is Kim signaling that we will be returning to more frequent communication (maybe weekly).
It wouldn't have had the most impact to release a production PR during a holiday week, but the company wanted to still communicate.
There is still a production PR we are owed and the company is fully aware that we are waiting for it. I wouldn't be surprised if they release it next week.
As of today, our relationship with Yorkville is done. The last 5.9 million shares were placed today for the remaining $150k plus the very small amount of accrued interest from the last 3 days. KBLB has paid them back fully with equity.
Yorkville has always had it in their best interest to get as many shares for as cheap as possible. I never thought they could take it down this low but they did. Now that is over. They no longer need to tank the share price for their own benefit. In fact, from now on, they need to share price to increase to take advantage of the cheap shares they got.
With this headwind now becoming a tailwind, we can finally start to move up.
I'm guessing the PR today was necessary for the upcoming video. I wouldn't be surprised if we still get the video this week (or next week at the latest) and it shows the operations inside the Lam Dong facility.
I'm also happy to see that they have implemented the use of the S7-CB strain. I remember researching these various mulberry strains a few years ago and hoping KBLB would eventually use them. So this was a nice surprise/confirmation. Mulberry availability will be the limiting factor for this operation moving forward, so having a high yielding plant is a definite plus.
With this new yield, we should roughly be able to produce about half a ton of finished spider silk fiber per hectare per year. With KBLB's higher margins on their finished products, they should be able to offer mulberry farmers a much better rate for purchasing mulberry leaves than mundane silk farmers. It will be interesting to see how long it takes farmers to switch over to selling mulberry to KBLB. Lam Dong currently has more than 15,000 hectares of mulberry, with plans to develop more. Now that the governing bodies of Lam Dong are on board, it will be interesting to see how much of the mulberry is diverted to spider silk production.
My comments:
<
For anyone who still doesn't understand the revenue potential of KBLB's monster/dragon silk, I implore you to follow this launch of Spibers collaboration with Pangaia on June 7th
Here are the facts:
-Pangaia's normal cotton hoodie cost about $160.
-Pangaia's organic cotton hoodie costs $220
-Pangaia's organic cotton blend with Spiber's "brewed protein" costs $395
-Pangaia/Spiber hoodie is 88% organic cotton and %12 brewed protein
A normal hoodie weighs about 450-700 grams.
So lets say this Pangaia/Spiber hoodie is 600 grams. That means about 72grams of that hoodie is "brewed protein". That 72 grams of fiber was able to increase the sales price of that hoodie by $175.
So just 1 kilo of "brewed protein" was able to increase the value of about 14 hoodies from $3080 to $5530. So to Pangaia, the value of 1 kilo of Spibers brewed protein is $2450. Thats for 1 kilo! that value would be equal to $2.45 million per ton of their "brewed protein".
I think it's funny that some people can't understand how KBLBs Monster/Dragon silk can't command over $300 per kilo ($300,000 per ton). Especially now that they are working with Kings to go direct to consumer, which allows them to capture the retail market, as opposed to just being a spider silk wholesaler.
It is very plausible to see a scenario that Kings and KBLB are capturing over a million $ per ton of their spider silk. Especially because their product is far superior than Spibers "brewed protein".
Here is a description of the "brewed protein" hoodie on Pangaia's website:
Entogenics, like many other labs, had the right idea, but wrong approach. Kim was the one who figured out where in the genome to express the genes.
I agree. It is very difficult to gauge their current production capacity just from the language of "samples". I Think it is very possible that we are currently producing tonnes.
I guess it would be easy for people to get razzle-dazzled by the language of "sequestering carbon dioxide and nitrogen from the atmosphere", but in reality, thats what virtually all photosynthetic organisms do. Even KBLB silkworms sequester by consuming the leaves that pull CO2 out of the atmosphere.
Kim needs to stop with these sales. Functionally, they do nothing. But Optically they look bad. I think he's so scared of regulators that he refuses to cancel these planned sales that he made years ago, when he thought the company would have taken off by now