There are several things to note. The PR stated that the 1,200 pounds of cocoons is more than all that the company had produced in the past. We don't know exactly how much reeled silk will be produced from these cocoons, but I suspect 25% is a generous assumption. Let's work through the math, giving Thompson the benefit of the doubt. 1250 pounds of cocoons x 25% silk = 312.5 pounds = 142 kilos of silk. I haven't checked the quarterly reports for inventory evaluations, but I believe it was in the neighborhood of $6,000. Let's assume (again being generous) that KBLB had 140 kilos of silk before this year and that was valued at $6,000. That is about $43 per kilo. This year KBLB produced another $6,000 or so in silk.
The PR makes it clear that KBLB fell short of their prediction they would produce a metric ton of silk by the end of 2024. Everyone claiming KBLB had already produced a metric ton or more of silk is wrong. Thompson ought to have acknowledged the shortfall in his video. "I know we projected a metric ton of silk in 2024 and we didn't reach that mark. However, it was vitally important that our production facility become self-sustaining: able to expand production without any new infusions of silkworm eggs from the lab. We have done that. Our last crop of silkworms had mostly parental line silkworms that we have cross-mated to produce a large inventory of hybrid eggs for silk production. This will help us ramp up production early in the coming year." Did we get that kind of honesty from Thompson? I must have missed it.
Even combining all of the silk KBLB has ever produced, we are almost certainly talking about less than 280 kilos of silk. It is pretty clear why Thompson has been tight-lipped about the actual quantities of silk produced because they are unimpressive.
Nevertheless, I believe that 2025 could be a good year for KBLB. Thompson indicated that 1.5 tons of finished spider silk yarn was needed to open the pipeline for deliveries of product to customers/partners. Thompson doesn't make it clear whether that yarn is 100% Bam-1 or the cotton/Bam-1 blend they plan for Spydasilk. Blends can be as low as 10% to 20%. At the high end, we might see a 50/50 split. Using the conservative estimate of 50/50, Thompson would need 3/4 of a metric ton of Bam-1. Producing a total of 10,000 pounds (about 5 metric tons) of 'spider silk yarn' in 2025, we might be looking at the May/June timeframe to reach the 1.5 metric tons of finished spider silk yarn. (This estimate incorporates the time needed to reel the silk and to blend the fiber with cotton to create the yarn Thompson wants.) If we assume a sale price of $50/kilo for the blended yarn (this price is quite high), KBLB could realize $250,000 in sales next year. (I think the actual value will be significantly less.) That doesn't make KBLB a profitable company, but it slows down the bleeding.
Thompson wants another $5 million to build up his production levels and a sales department. The funds needed might well come at a considerable expense to current shareholders in the form of dilution. But don't worry! Thompson can give himself all of the shares he wants, so he will be protected no matter what happens to the rest of us.
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